Transcript | Sky News AM Agenda | 13 June 2025

‍Friday 13 June 2025
Interview on Sky News AM Agenda
Topics: Albanese Trump meeting, AUKUS submarines, defence spending must increase

E&OE………………………………………………………………………………………………….

LAURA JAYES: Okay, let's go to James Paterson now. He is the Shadow Finance Minister. James, thanks so much for your time. I want to talk about AUKUS and some of those comments that Mike Pezzullo has made this morning. You've met Colby Eldridge. He has never been a big fan of AUKUS. Does that worry you?

JAMES PATERSON: Good to be with you, Laura. That's right. In the lead-up to the last US presidential election, understanding the possibility that a Trump administration could be re-elected, along with Andrew Hastie and Peter Dutton on two separate occasions, I went to Washington DC to meet with a range of administration and potential administration officials, including Bridge Colby, and we had detailed discussions with him about AUKUS. Now, I don't want to breach the confidences of those conversations, but he's been on the public record on these issues pretty candidly. His primary concerns are whether or not the US defence industrial base can be expanded sufficiently to increase US submarine production so they can meet their own needs as well as meeting ours. And we have a good story to tell on that issue. We have made or we are making a $3 billion commitment towards the US defence industrial base and we're working very closely with the key companies like Huntington Ingalls and Electric Boat to make sure that they can up that production level. The second concern though that he's been very candid about is that many allies, Australia included in his view, do not spend enough on defence. And he's concerned about that from a burden sharing point of view, that it's inequitable morally that the United States should bear a greater burden of upholding security in the globe. But he's also concerned on a very practical level on a question of something like AUKUS. How can Australia maintain our other ADF capabilities while taking on Virginia class submarines without meaningfully increasing our defence spending and he's not alone holding that view.

LAURA JAYES: As Mike outlined in the last hour as well, this comes down to that shared burden issue, as you've articulated as well. During the election, you were committing to a bigger defence spend than the government, sure. But that was only at 3%. The US want 3.5%. Are you changing your position from Opposition on that?

JAMES PATERSON: Well, we're very proud of the commitment that we took to the last election, and it was reflective of the advice of people like Sir Angus Houston and Professor Peter Dean, who conducted the Defence Strategic Review for the Albanese Government. And as part of that review, they had access to classified intelligence, they were briefed by our intelligence agencies, defence opened their books to them. There are no two private citizens in Australia better informed about our defence capability and readiness than Professor Peter Dean and Sir Angus Houston. And they have both said, we need to be spending at least 3% of GDP. So I think we should take their advice. In Sir Angus Houston's case, he says that the AUKUS submarines must be a net addition to our defence capability and it will only be a net addition to our defence capability if we're spending 3% of GDP. Anything less than that, like what the Albanese Government plans, is going to cannibalise our other defence capability, and many other commentators have made this point too. And this is not a theoretical future concern, it's happening right now. I mean, this is a government that's reduced our orders of infantry fighting vehicles and self-propelled howitzers, reduced our order of the Hunter class frigates, cancelled the military communications satellite, cancelled the fourth squadron of joint strike fighters. These are real defence capabilities that could have arrived over the next five to ten years, even before nuclear submarines, that this government has cancelled in order to pay for those future submarines. So I think it's critically important that the government listen to that advice, heed that advice and act quickly.

LAURA JAYES: Ok but are we agreeing that it's around 3% and it doesn't matter what Hegseth says?

JAMES PATERSON: If the United States said tomorrow, actually we think Australia is spending enough on defence, in fact you could reduce your defence spending to 1% of GDP, I would still be advocating for spending more on defence, I would still be advocating for that 3% of GDP because that's what our best informed experts are arguing and it is in our national interest that we do so. And if you don't like Sir Angus Houston or Professor Peter Dean, you could go with Mike Pezzullo or you could with Dennis Richardson, the former Secretary of Defence and DFAT and ASIO, or indeed you could go to Kim Beazley, the former Labor leader and defence minister. I mean you will not find a defence or national security expert in Australia who believes we're spending enough right now. The consensus is incredibly robust and this is a government that says it follows the advice of experts. They've got uniform advice from experts here and they are ignoring it and that is reckless.

LAURA JAYES: OK, but I mean, Anthony Albanese is on his way to see Trump at the moment. Do you agree with the, at least the premise of what he said at the National Press Club is that well, Australia should decide what level of defence spending is at. We shouldn't be dictated to by the US. But are we being bullied?

JAMES PATERSON: Well of course we should decide what our own level of defence spending is and of course we should inform that by our own best expert advice which is unambiguous and that very clearly dictates you'd be spending about 3% of GDP. But frankly I thought it was a pretty dismissive comment for the Prime Minister to imply that our American friends are somehow intervening in our sovereignty by suggesting to us as our ally and most important security partner that they don't think we're spending enough on defence. I mean the Prime Minister hasn't even used that sort of language...

LAURA JAYES: Who suggested that? Who suggested that, that they were interfering in our sovereignty?

JAMES PATERSON: The Prime Minister himself said repeatedly that this is a question of Australian sovereignty, repeatedly said that, implying that this is some inappropriate intervention. He didn't use language that strong when the People's Liberation Army Navy was circumnavigating our country, were conducting live firing exercises off our coast in the Tasman Sea. He didn't say that was a question of sovereignty, but our American friends suggesting to us that we're not spending enough on defence, as they are by the way to the Europeans and everybody else, all their other partners, that's a question of sovereignty. I thought that was a very clumsy language by the Prime Minister. Of course we should decide our own defence spending, but we've got plenty of our own reasons to do that and we don't need to be disrespectful to our American friends in doing so.

LAURA JAYES: Does there need to be more of a Team Australia front now? They're going to Washington DC. And I say that now with keeping in mind some of the comments heard from Sussan Ley this morning. Do you think it's helpful for her to say, well, Anthony Albanese hasn't done the work with Donald Trump on a personal level. That's why he can't get a meeting. Is that true when no meeting with any other world leader has been confirmed by the White House?

JAMES PATERSON: Well hang on a second Laura, the President was elected seven months ago, Anthony Albanese is now one of the only US allies and only world leaders who has not had a face-to-face meeting with the President. Look at the behaviour of Keir Starmer who got an exemption on steel and aluminium tariffs, or Emmanuel Macron, or Mark Carney or Justin Trudeau or any other important US ally. They've had multiple face-to-face sit-down meetings with the President and our Prime Minister has not bothered to try to do so until now. And I hope he is successful because it is in Australia's national interest and we back him to succeed, particularly on AUKUS but also on the tariff exemptions. But this is an administration which is run from the top down, this administration where the President is uniquely important as compared to other recent administrations in making these big decisions, very few big decisions are made without his personal input. So if you don't establish that personal rapport, if you do not establish that relationship, it makes our task much harder and I think the Prime Minister has failed to do that by waiting this long. But we hope he is successful, we back him to be successful, we want him to succeed.

LAURA JAYES: And how are you helping him do that?

JAMES PATERSON: Well, we've been calling on him to do this for months now. We've been calling on him to go to Washington, D.C. to see the President. We're providing that in a constructive, helpful way. I'm glad that he's now finally going to the G7. I hope he gets this meeting on the sidelines. But if he doesn't get a one-on-one meeting on the side lines with President Trump, he should go back to Washington D. C. as soon as possible to meet the President in the White House and have that face-to-face discussion.

LAURA JAYES: Yeah, stepping into the lion's den, which has become the Oval Office. One final question before I let you go, because I spoke to Joe Hockey about this yesterday. Albo's always insisted that the tariff talk and negotiation is very different to defence and how the US is going to deal with us as an ally in that way. There is now, you know, Mike Pezzullo backing up what Joe Hockey said is that Trump doesn't operate like that. It's all a quid pro quo. And this is how he negotiates. So everything is on the table. The defence spending affects the tariffs as well.

JAMES PATERSON: Look, I think there probably is a relationship between those two, just looking at that dispassionately from an analyst's point of view rather than an advocate or a politician. But the good news is we've got our own reasons as to why we'd want to increase defence spending and we should do that in our own best national interest. It's a bonus that it would impress and please President Trump and that it would weigh into his considerations for AUKUS or tariffs or other things. So we should never allow any other foreign country to tell us what to do on our defence and national security, we've got our own experts for that. But it just so happens that in this case what our friends want us to do and what our own best advisors tell us to do, are the same thing. And so we should do it for our own reasons and hopefully it'll be beneficial for other reasons too.

LAURA JAYES: James, always good to talk to you. Thanks so much.

ENDS

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