WEDNESDAY 26 APRIL 2023

E&OE…

PATRICIA KARVELAS: Andrew Hastie, welcome.

ANDREW HASTIE: Good morning, Patricia. Good to be with you.

PATRICIA KARVELAS: If we've been shifting from a land base to an air and maritime defence capability, then doesn't it make sense to shift resources from the army to the Air Force and Navy?

ANDREW HASTIE: Well, it does Patricia but not at the cost of our land combat power. And I think, to go to the point, this is some of the risks inherent to the Defence Strategic Review by cutting the Infantry Fighting Vehicle program from 450 to 129 vehicles to get to the details straight up.

PATRICIA KARVELAS: You've been pushing the federal government to lift Defence spending about two per cent of GDP. Richard Marles says that will happen. it was a lot clearer there with me that it will definitely happen. So what do you think that spending should be, what should be the guaranteed amount of GDP spent?

ANDREW HASTIE: Well, Patricia, there's a lot to like in the Defence Strategic Review and Sir Angus, Houston and Steven Smith have done some very significant work here. In fact, it's rock cut from the same quarry as the Defence Strategic Update and the Force Structure Plan from 2020. The threat picture aligns and of course, the investments that were indicated in the 2020 Force Structure Plan are also in the DSR - things like long range strike weapons, autonomous aircraft, such as the Ghost Bat, investment in our weapons inventories, investment in our fuel capacity, investment in our sovereign industrial capabilities, the upgrades to ports and bases and so on. There's a lot of symmetry between the documents from 2020 and the Defence Strategic Review. But what we were hoping to see was an overall increase in Defence spending but instead, what we've seen instead is cost shifting and cuts to capability, specifically, Army land power. And I'll take you back to the Force Structure Plan in 2020 where it says we must have an ability to conduct sustained close combat operations in the land domain. For that you need armour to protect your infantry and our concern is that we're going from three mechanised battle groups, one in Townsville, one in Brisbane, one in Adelaide, to only one. So we're reducing it by two to back down to one and I think that has consequences if we have to fight in a close combat scenario in our northern land or maritime spaces, or indeed, in the Pacific island chain. You've got to have that capability and there's a risk not having it.

PATRICIA KARVELAS: The Review found the Guided Weapons and Explosive Ordnance Enterprise set up by the Morrison government lacks the financial resources and the required workforce to meet its objectives. Didn't the former government leave us unprepared?

ANDREW HASTIE: Well, we can go into the history wars but really, I'm only interested in winning the next war for Australia, that's why I want this government to succeed with this Review. And I think by opening up another Guided Weapons Explosive Ordinance review, which reports in Q2 of next year, we've introduced another year of delay and uncertainty for industry, particularly when it comes to getting on with the job. There's no new money for the long range missile capabilities and that's a problem. They're cost shifting within the existing Defence budget and so for a document that claims to be ambitious and a massive reimagining as it were of Australia's Defence and strategy going forward, it comes up short, because there's no new money.

PATRICIA KARVELAS: Where would you get the new money from?

ANDREW HASTIE: Well, this is the question for government. At the moment, our Defence budget is about six per cent of overall Commonwealth spending. Right? So it's reasonably small. Every single government has to deal with scarcity, there's never enough money to pay for everything that people want and so you have to make the hard calls -

PATRICIA KARVELAS: - You do. So, if you're making the case that there should be more spending, that they shouldn't just be redirecting, you have to be able to articulate where you where else you'd cut, because ultimately, the budget is tight, you know it and we've got ballooning debt. Where does the money come from?

ANDREW HASTIE: That's a good question and it's only six per cent. So potentially, the Defence budget goes up a couple of percentage points when you consider the totality of Commonwealth spending. Again, that's a decision that you'd have to make in government and we're expecting more spending as part of this budget in May, given that we're told by the Defence Strategic Update threat picture that we're facing the most challenging strategic circumstances since the Second World War. If that is true, then it's not business as usual. It requires sacrifice and it requires investment and if we're going to take the Australian people on this journey from a bipartisan perspective, by the way, because we do have AUKUS as well, we're going to have to be frank and honest with the sacrifices that need to be made.

PATRICIA KARVELAS: We talked a lot about bipartisanship and the particular bipartisanship that's often necessary when it comes to defence, has it now broken?

ANDREW HASTIE: It's not broken, because the Coalition always wants the best for our country. It's always country over party. So I'm going to be a robust Shadow, you can expect robust debate about some of these things, but in the end, if the government succeeds, then the country also succeeds. That doesn't mean we won't be tough. And I think the Defence Strategic Review, it's a great document, it says some good things but it's severely lacking with resourcing and there isn't the necessary increase in spending that we'd hope to see. Instead, we're seeing cuts to capability and we're seeing Army's land power rundown, because I think what's happened is the threat and the strategy, which is deterrence by denial, has been built within the budgetary constraint of 2.2. We're not seeing any increase over the forwards and there's talk about increase over the midterm and over the next decade, but we need more clarity than that.

PATRICIA KARVELAS: The last time we spoke, Andrew Hastie, you acknowledged that more accountability is needed in Defence spending, do you have confidence this Review will deliver it and do you still believe that Defence should be subject as the Minister just told us to scrutiny and fiscal pressure?

ANDREW HASTIE: Yes, I think Defence absolutely needs more transparency because there's a there's a lot of money that passes through Defence and we want to make sure that every single dollar has a name. Which is why I advocated for a joint statutory Defence committee which would be a permanent part of our institutional framework in the Parliament, which would be sort of an unblinking eye looking at these questions. Whereas there's no real innovation in the Defence Strategic Review about how we monitor Defence and their progress on some of these things. We can't afford to waste a single dollar and so I welcome the point made in the document that we need to be more fiscally responsible with Defence spending, but we need more mechanisms to ensure that that accountability is possible.

PATRICIA KARVELAS: Andrew Hastie, thank you so much for joining us this morning.

ANDREW HASTIE: Thanks so much, Patricia.