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July 7, 2026
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TRUDY MCINTOSH: Well, let's bring in the Shadow Defence Minister James Paterson, he's also a Melbournian. I mean, this man up there said he wants to remove all the taxes. Ultimately, it's taxpayer money that's used to take off that graffiti, isn't it, and the cops who had to be down there making sure he didn't fall off.
SENATOR JAMES PATERSON: Well, coincidentally, Trudy, I actually drove underneath it twice this morning on my way to and from the airport, and it's a long way up, and I had to wonder how he got up that high or why he thought that was a good idea. Love the fighting spirit against Victoria's higher taxes. I think that anger is well placed, but this is not the way to fight against higher taxes. Much better would be to vote Liberal and National in November and elect Jess Wilson and her team to cut taxes rather than causing a stunt like this.
MCINTOSH: It's a valiant pivot for you, James Paterson. Let me, my turn now. I want to shift to what the Prime Minister has been doing in the Pacific. He called China's military test a provocative action. How destabilising is what we saw yesterday from Beijing?
PATERSON: I think it's right to call it provocative, I think its right to call it destabilising. I'd also say it's coercive and intimidatory and I think it is designed to threaten Pacific Island nations in particular and intimidate them. And it's about demonstrating China's capabilities, military capabilities which are very formidable. But I think the People's Republic of China should think very carefully about the long-term consequence of this. I think ultimately it's just going to demonstrate why Pacific security is best delivered by Pacific nations, including Australia, which is exactly why PNG has entered into the alliance it has with Australia. It's exactly why Fiji has entered into the alliance it has with Australia. It's exactly why the new Prime Minister of the Solomon Islands, Matthew Wale, is talking about a regional security pact. Pacific Island nations are voting with their feet and choosing trusted and reliable partners like Australia who would not engage in behaviour like this, and they are turning away from the PRC because of these tactics.
MCINTOSH: I thought it was interesting to see the Solomon Islands Prime Minister today say, note that they have been friends with China, James, but this is not the act of a friend in his words. Is it your view that effectively China's actions here are counterproductive in the region, they actually push countries like the Solomons into the arms of countries like Australia?
PATERSON: I think that's perfectly put by the Solomon PM, this is an unfriendly act by a country which says it is a friend of the Pacific, it says it's a friend of Australia. But like their circumnavigation of Australia in February last year, it sends a very menacing message to the region about China's intentions and their capabilities and it is what inspires countries to act then in their own self-interest, in their own defence to reach regional security arrangements and to invest in their own defence, to hopefully deter and prevent conflict in the region. So I think it is entirely counterproductive but that wouldn't be the first time that the PRC has engaged in counterproductive efforts like this.
MCINTOSH: Are you satisfied with how the Prime Minister and Foreign Minister have responded to this? I saw Penny Wong saying she's promising to take this up at the next opportunity with her counterpart. Is that quick enough? Would be better to pick up the phone now?
PATERSON: Look, from what I've seen from the government so far, I think they have handled this appropriately. They have made clear that Australia disapproves of it. They say that they have already raised this with China, although it's not exactly clear to me where they've done that. It's possible they've have done so in China through our embassy, or it's possible they've been done so in Australia through China's embassy. I think it would be appropriate for the Foreign Minister to raise it with her counterpart, or the Prime Minister to raise it with his counterpart, because we would be objecting to this conduct not just on our own behalf, but also on behalf of our Pacific family. And Pacific leaders are very clear, they want their region to be conflict free and they want it to be a nuclear free zone as well. And while this ballistic missile was not equipped with a nuclear warhead, it is capable of being equipped with a nuclear warhead and testing it and flying it over Pacific Islands and their exclusive economic zones and ultimately landing in the Pacific, near Pacific Islands, is exactly contrary to what they've asked for from the region. I think Australia's got an obligation to stand up for ourselves and for them.
MCINTOSH: Australia now has two new alliance partners in the region, the Fiji Defence Alliance, inked yesterday by Prime Minister Albanese, follows the one with Papua New Guinea last year. Given the details of this means that Australia is obligated to help protect these two countries in the event of a threat, does Australia's current defence funding and capability ensure that we actually could come to the defence of these nations?
PATERSON: Well, we certainly welcome the arrangements with PNG and Fiji, and you're right, though, to ask about our capabilities. It would depend entirely on the contingency. If we were dealing with a low-level security incident in a region, a domestic disturbance, something like that, yes, the ADF is well-equipped and capable of dealing with that, along with its intelligence agency partners, AFP partners. But if we're contemplating a more serious conflict in our region, a high intensity conflict between superpowers, then no, absolutely not. We are not spending anywhere near enough, and we are not ready enough for that conflict. And we may have no control over that, whether or not that conflict occurs. We're in the business of preventing conflict through deterrence, and we're not doing enough to do that, and we aren't doing anywhere near enough to survive a conflict if it is initiated outside of our control. So the government really needs to match their rhetoric with their investment and ensure we have the defence spending we need, so we could come to the aid of our allies and friends and our own interests should that need arise.
MCINTOSH: Part of the detail of the Fiji deal left the door open to other countries joining. The foreign minister didn't want to get into which countries that could potentially be. In your view, is there a clear option of other nations in the region that would be fit to join this sort of expanding alliance?
PATERSON: We're very supportive of the bilateral arrangements that the government is entering into with Pacific partners, but I think there is value in entering into a multilateral security arrangement if that has the consensus support of the Pacific Island nations. And the new Prime Minister of the Solomon Islands, Matthew Wale, has put that on the agenda. He's proposed a regional security pact. One of the advantages of a multilateral pact like that is that it is mutually self-reinforcing. We're all making commitments to each other and it is stronger than just the bilateral relationship between any two members of the Pacific Islands. So I think we should get behind that proposal of the Solomon Islands' Prime Minister. I think we should support that. And if we can ink that and secure that, I think that would be in Australia's national interest. And of course, the government would have the opposition's bipartisan support to do so.
MCINTOSH: James, I want to shift attention to the budget fallout. One of the world's biggest banks, HSBC, its economist, Paul Bloxham, is now forecasting that house prices will fall by up to 8% by the end of next year. I had Deloitte Access Economics on earlier in the show. They don't believe it's going to be that significant, but they are still expecting a blip. At what point would you believe we need to see intervention to stop this crisis of confidence in Australia's housing market?
PATERSON: Well, I think that what the government has done with capital gains tax and negative gearing is wrong in its own right because it's a broken promise and wrong because it leads to higher taxes on Australians that was not earned through a mandate at the last election, and it should be abandoned for that reason. But if it does precipitate a crisis in the housing market, that would be even more reason for the government to reconsider. The problem when house prices fall like this is not just the impact it has on Australians' sense of wealth and security, which does flow through to things like consumer spending, they're much less confident spending and that can have a negative effect on economic growth. It also actually makes it harder for first home buyers to enter the market. Because if you're a buyer looking to enter into the market and you think prices are going to continue to fall, then you hold off and you wait to buy. And if you are a seller and you know prices are falling, then unless you have to sell, you also hold off selling. And that's why we've seen such a collapse in auction clearance rates, and why we're also seeing sales volumes decline, they could continue to decline precipitously. And then for the government's objective of getting more first home buyers in the market is not going to be achieved. So I really think this has been a very clumsy intervention by the government. It's already having adverse unintended consequences. They really should go back to square one and start again.
MCINTOSH: James Paterson, Shadow Defence Minister, we're right out of time. Thanks so much for joining us.
PATERSON: Thank you for having me.
ENDS