Sky News – Paul Keating and AUKUS



Subjects: AUKUS announcement, Paul Keating Press Club address 

LAURA JAYES (HOST): Paul Keating has accused Labor of making its worst decision in a century, signing a $368 billion AUKUS agreement. The former PM also denied that there’s any imminent threat from China. Joining me live is Labor MP Peter Khalil. Would you call it vintage Keating yesterday? How would you describe it?  

PETER KHALIL, FEDRAL MEMBER FOR WILLS: Yeah, vintage is a good way to describe it. Obviously, though, those pithy one-liners are very headline grabbing, but look, Laura, the former Prime Minister was a great Prime Minister, I have great deal of respect for him, that his achievements as Prime Minister will stand the test of time, it doesn’t mean you have to agree with every comment he makes, and he’s entitled to his views. But frankly, when you set aside the kind of personal attacks or playing the woman or the man instead of the ball, which I think is that type of politics, catches the headline, but it doesn’t actually deal with the substance. I think he’s misrepresented the government’s approach on AUKUS, and he’s also misrepresented or, or he’s willfully blind to the changed strategic circumstances that we face today in 2023. And so I think he’s fundamentally wrong in his strategic assessment and I’m happy to you know counter all of those points on, you know, a matter of substance.  

JAYES: OK, it sounds like you’re saying that he’s lost it. He’s lost touch.  

KHALIL: Well, he has a particular view, he’s entitled to that view. We are not in the 1990s, the benign environment which, when he was operating as Prime Minister, is no longer the case, and what’s interesting here is that – let’s take on merit here, his views. He has an assessment of the strategic environment which is one that, that China and other actors in this environment, which is quite volatile, is benign. That flies in the face of the reality that we’re facing today in the sense that it ignores or is blind to the fact that China has, particularly in the last half decade deployed aggressive economic coercion with trade barriers, militarised the South China Sea, there are the human rights issues, the brutal suppression of democracy in Hong Kong, the human rights issues in Xinjian, Tibet; that doesn’t factor let alone the grey zone area of cyber security and that kind of activity that we’ve seen in the last couple of years as well. So that strategic environment is very volatile and this is the really important point: the AUKUS decision is a defence capability decision. It’s meant to actually provide a defence capability and work with a collective deterrence with our partners in order to avoid confrontation, to avoid conflict. The greater your capability, the greater your deterrence, and it makes adversaries, whether they be state actors or non-state actors think twice about using force to achieve their strategic ends. 

JAYES: Sure. Whilst I thought there’s a lot of personal criticisms, I agree with you. One thing I did find myself nodding along to is that we should be facilitating this contest of ideas, not just in politics as a whole, but particularly when it comes to the $368 billion deal. And I think because there is bipartisan agreement, we’re depriving the public of a debate around costs and what this actually does for the region. Do we need to be honest and say, OK, by actually doing this deal, partnering up with the US and the UK, yes, we have drawn the ire of China, and that might make us more of a target? 

KHALIL: Well, there’s two parts to your question. The first one around the point about a public discourse, I agree with you wholeheartedly. I think it’s extremely important that we have a debate, a discussion and engagement with the Australian people, both at the political level, but more broadly in the media and elsewhere around our strategic choices, our strategic circumstances. And that discourse is very important because the environment has changed, as I was saying earlier, and this is a conversation we have to have with the people. So, in that sense, Paul Keating does us a service by getting the media involved in this. I will say, though, that there has been a lot of engagement or op-eds and discussion around AUKUS for a long time, for a number of years now. But people maybe are not interested or maybe are not connected the way that media is fractured, we won’t go into all of that – but you understand the way that media platforms work now, kind of direct people through algorithms to certain types of stories and so on.  

JAYES: But it’s not just the media. It’s kind of where we go in the political debate. Sure, it’s how us here at Sky News have covered it, but I think that we have certainly done that, Peter Stefanovic’s documentary and talking about it day in, day out. The one thing that I still think is unanswered and we’ve heard from both the opposition and Richard Marles that this $368 billion cost for up to 8 nuclear submarines is somehow modest. How is it modest and why are we paying four times as much than we did for the French subs and, and $368 billion – I mean, no one is talking about the sacrifices we’re all going to have to make to get them.  

KHALIL: So, a couple of points of clarity around that figure that’s been bandied about: the estimates are between $268 billion and $360 billion.  

JAYES: Well, this is the problem though as well Peter Khalil. If I could quickly just interrupt – I mean, we’re told 0.15% of GDP, that’s briefed out from the Prime Minister’s office and then we’re left to extrapolate what that actual dollar figure cost would be because no one knows in normal voter land knows what 0.15% actually means? 

KHALIL: Some clarity around this, I think, is important. So first of all, those figures that are being bandied about look big, but that’s out to 2050. That’s over 27 years from 2023. We’re talking about defence spending on these capabilities out to 2050. You mentioned the 0.15% – it’s actually .15% increase in defence spending, so, rough calculations, you can say we’re talking about 10-12, maybe a little bit more billion dollars on defence spending in the budget each year over a 25 year period. But importantly in the short term that is actually offset by the fact that because of the cancellation of the French Subs deal, which is around $6 billion, and other savings that the government will be finding that come out of the defence strategic review and decisions made by the cabinet of around $3 billion. The costs of AUKUS will be offset by those savings as well. So that’s an important point for the public to understand. But in the long term there is a commitment to defence spending. In fact, defence spending as a percentage of GDP is at 2.25, it’s gonna go to I think around 2.35 projections by the end of the decade. That’s an important point that the public – we need to talk about that: why should we be spending a little bit more on defence as a percentage of GDP? Well, it is a very volatile strategic environment that we live in. It’s not the benign environment that we live in anymore. There are a lot of threats to, our democracy, our way of life and the way to deter further threats, and to deter confrontation and conflict, is to ensure that you have a very robust defence capability, and you work with your partners in a collective deterrence. The whole point of deterrence is to make adversaries think twice before they use force and violence to achieve their ends.  

JAYES: Sure. But if I could just ask this one last question, Peter Khalil, I mean, we could spend a whole hour on this, and I’m tempted to do so, but not today. We talk about deterrence, but what’s happening now? If the threat is so real – and we heard Richard Miles just the day before, say it’s the biggest conventional military build-up we’ve ever seen on our doorstep – what is 8 submarines in 30 years going to do when the threat is so real now apparently? 

KHALIL: Well, so AUKUS also has, to, to answer that directly, AUKUS also has an element of advanced capability sharing, which is extremely important for our cybersecurity. So this involves missile technology, hypersonics, AI, quantum computing, drones, other types of capability that are really important that are time sensitive. So that’s a very important element of AUKUS. It’s not just about the submarines. But to answer your question about the now: this government is different than the previous government in that our diplomatic effort and the use of the three d’s that I call them, our statecraft: diplomacy, defence, development, for example, work in conjunction. So, we have been trying to reduce tensions. Obviously, there’s been engagement with China. It’s an important economic partner, we want to engage on our economic relationship, we wanna reduce tensions, we wanna avoid confrontation. And part of doing that is obviously good diplomatic efforts both in the region and with partners and with China itself to steer all the nations towards abiding by the rules-based order that has served us so well. That’s what we wanna achieve, that’s our ends. Part of that is also making sure your defence capability is robust enough, as I said earlier, to deter others from thinking that they can use force. It is a combined effort. It is not so simplistic to say “yeah, it’s linear that you just have to do defence capability”. It’s gotta be diplomacy, it’s gotta be development assistance, it’s gotta be our engagement with Pacific partners, which we’ve done very, very well, as Penny Wong has done. And I think Keating completely misunderstands what you can achieve through soft power in diplomacy as well. That is a very important element of foreign policy and all that works together to do one thing which is our objective, which is to ensure the ongoing security of the region, the stability of the region and the ongoing prosperity that we as Australians have benefited from for decades, through the abiding by that liberal rules-based order. There are those that would seek to diminish that, frankly. And there is a strategic contest, Laura, at the heart of this, between different models of governance: authoritarian states who would like to just do whatever they want when they want, through the use of power and brute force, and liberal democracies who want, as middle powers and smaller countries, frankly, to abide by a security framework, an international rule of law which benefits them in trade and in peace and stability. And that is really seen starkly in the invasion of Ukraine by Russia, where a big authoritarian state has invaded a neighbour that is not the world we want to live in or accept, that that is a something that is the norm. And that’s what is at the heart of this. And AUKUS is one small part of the defence capability bit that, that gets us to a point where we protect that rules-based order.  

JAYES: Peter Khalil. Pleasure to talk to you. 

KHALIL: Thanks Laura.