SPEECH TO THE LOWY INSTITUTE | MELBOURNE

Acknowledgements omitted.

 

The conflict in the Middle East has placed an added focus on Australia’s capabilities, our resilience – indeed our very sovereignty.

It has made clear our dependence on our sea lines of communication – the physical connection of our trade with the world. And with trade forming a growing part of our national prosperity these sea lanes are obviously critical to our welfare and security.

In the midst of disrupted global fuel supply chains we have had to work hard to ensure our own fuel security. We are left to rue that during the previous Coalition government four of the six Australian refineries closed their doors. At the same time we are appreciating in a new way the importance of the two refineries which remain open.

The attention given to refining capacity has asked the question as to what other industrial capabilities are central to our resilience. The ability to make plastics and fertilisers, medical supplies and bitumen for roads all come to the fore as being central to our economy.

As we talk with our traditional suppliers of fuel in Asia about maintaining supply, the full breadth of our relationship with these countries – as a reliable economic and security partner – is being put to the test. And that test is being passed. So too is the test of building new relationships to find alternative sources of fuel. And all of this highlights the importance of Australia’s independent standing in the world.

The consideration of each of these fundamental attributes of nationhood – industrial capability, national resilience, our place in the world – which rightly feel so paramount in this moment, leads us all to the consideration of another fundamental underpinning our sovereignty: Australia’s defence.

For decades, the Liberals have enjoyed a brand advantage when it comes to defence. The truth is that when organisations like the Lowy Institute ask the question as to which party is more trusted on the issue of defence, more people nominate the other team.

But the gap between perception and reality is sometimes a chasm. And all of us know the dangers of believing your own publicity. So another truth is that when it comes to defence this brand advantage has made the Liberals lazy.

The conceit of opinion polls has profoundly shaped the Liberals’ view of defence. And this is most obviously observed in the speed with which they churn defence ministers through the portfolio.

Over the last 44 years both Labor and Liberal have governed federally for about the same amount of time. In those years, the Liberals have had 12 different defence ministers, only one of whom has served for more than three years. By comparison in the same period, Labor has had seven defence ministers, four of whom have served for more than three years.

In politics as in life, it takes time to effect change, time to make a difference. It takes time to build substance. And in defence, it is hard to achieve any of that in just eighteen months.

Labor has always demonstrated a seriousness about defence policy. We seek to improve. We seek to make a difference. We seek to build substance. We see defence as the policy challenge that it is.

But the Liberals have other motives. While their laziness leaves them indifferent to defence policy, the shiny lure of the defence portfolio makes it a prized political trophy. And their addiction to the defence minister revolving door evidences their desire to award that trophy to as many people as possible.

The Liberals have carried the defence trophy obsession from government to opposition. Over the last four years, while Labor’s defence ministerial team has remained unchanged, the Liberals are now onto their third shadow defence minister. While this may satisfy the politics of any given moment, over the journey it has most definitely short-changed the nation. So long as this churn characterises the Liberals’ posture, whatever the qualities of the individual, inexperience remains their dominant and permanent condition.

No government demonstrated the cost to the nation of the Liberals’ defence failure more than the Abbott‑Turnbull‑Morrison Government. For it must surely rank as the worst defence government in Australia’s history.

In its nine years from 2013 until 2022 the world, and our region, underwent a profound change.

In 2012 Xi Jinping became China’s President. By 2013 China had started to reclaim land in the Spratly Islands and build military bases where previously there had been just sea. In 2016 the Permanent Court of Arbitration at The Hague handed down a decision declaring these actions in breach of international law. But despite this decision China established facts on the ground which changed the game in the South China Sea, a body of water through which so much of Australia’s trade travels.

For the record our government continues to express our serious concerns over the situation there, particularly dangerous and coercive actions by China against Philippine vessels.

In 2013 China had 77 warships. By 2022 it had 140.

In 2013 China had around 15 long range missiles. By 2022 it had 500.

In 2013 China had a fleet of 60 submarines. Ten times the size of our own fleet.

In total this represented the biggest conventional military build-up the world had seen since the Second World War, without transparency or strategic reassurance.

Over these nine years great power contest intensified, while the rules‑based order was being placed under extreme pressure. And all of this gave rise to the most challenging set of strategic circumstances that Australia had faced since World War Two.

Yet in that period the Liberal government issued one Defence White Paper in 2016. And this did almost nothing to rethink our strategic posture. As a consequence, throughout their entire time in office, the Liberals were operating off strategic settings which had their origins in the Cold War era of the 1980s.

Australia’s most important military capability is embodied in our long‑range submarines. The Collins class Submarines, which came into service from the mid‑1990’s, had a planned end of life in the 2020’s. Accordingly, through the Rudd Government’s 2009 Defence White Paper the process for replacing these submarines began.

When the Liberals came to office they first set about doing a deal with Japan to build the replacement for the Collins class submarines, but within two years they had walked away from this deal. Then in 2016 they entered into a deal with France to build the future Attack class submarines. By 2021 they had walked away from that deal as well.

The cumulative impact of these indecisions resulted in a 20 year delay to Australia’s plans to introduce the next class of submarines into the Royal Australian Navy. By 2022, plans to acquire a replacement submarine had slipped from the 2020’s to a situation where Australia was not expected to get its first submarine until the 2040s.

At this critical time in world affairs, the Liberals had succeeded only in opening up a capability gap with Australia’s most important military platform.

By now much depended on carefully extending the life of the Collins class submarines.

A life of type extension for a capability as complex as a submarine fleet requires deliberate, careful planning. These decisions need to be taken a decade in advance.

Unfortunately for the country, the Liberals failed to prepare and implement a thoughtful plan for the life of type extension for the Collins fleet.

By 2020, there was still no decision. The ANAO lamented that planning remained “at an early stage”.

It was not until 2021 that the former government announced a plan. But this too was ill conceived. On the same day that the Liberals announced the pivot on submarines from the Attack class program to AUKUS, they also announced a high-risk LOTE plan based on making the Collins class interoperable with the same French submarines they had just cancelled.

These plans suffered from a lack of funding. In the Liberals’ 2020 Force Structure Plan, they allocated just $6 billion to the life of type extension out to the 2040s. To put this in perspective, our government has provisioned almost double that with $11 billion over the next decade alone to sustain and support the Collins class fleet.

But it was not just the LOTE program where there were problems. Stewardship of the Collins class has ebbed and flowed over the past three decades, and too often it has drifted under the Liberals.

Within the first five years of the fleet under the Howard Government, the Collins class was already experiencing periods of near zero operational availability with an extensive range of faults and deficiencies. And they were introduced without a strategy for sustainment throughout their intended life.

Nearly a decade later, the Coles Review found that despite a temporary improvement in the early 2000s, Collins availability was again declining by 2006. This was only turned around after the Rudd and Gillard Governments intervened.

And more recently, a $120 million efficiency dividend applied in 2020 under the former government directly reduced sustainment activities for our submarines.

The Liberals’ failure with our submarines was reflected more broadly in their defence project management. Over their nine years in office they oversaw 28 different projects running a combined 97 years over time.

They adopted the political practice of announcing capability decisions without a meaningful corresponding provision in the Budget. This meant that by the time they left office in 2022 there was $42 billon worth of unfunded defence projects.

As a result, over‑programming in the defence budget was on track to hit 32%, which meant that fully one quarter of what defence was expected to acquire it had no money for.

Recruitment and retention were in crisis. By 2022 the separation rate in defence was 11.2% – well above average – while Defence was struggling to attract new people to its ranks. Accordingly, in the last two years of the Morrison Government the permanent ADF workforce actually shrank by 1,422.

But for all this, the Liberals’ most egregious sin lay in its failure to properly fund the defence force. During this momentous period the Liberals provided one funding boost for Defence of $30 billion as part of the 2016 Defence White Paper. But within two years about $20 billion of this was redistributed away from Defence, including $15 billion transferred to other agencies or returned to the general budget under the banner of a “strategic reserve adjustment” and “efficiency dividends.” The net result was that the Liberals increased defence expenditure by a mere $10 billion over the planning decade and even then most of this was earmarked for the final years of that decade.

The combined effect of it all was that the six different defence ministers of the Abbott‑Turnbull‑Morrison Government were responsible for giving Australia nine lost defence years when the nation could least afford it.

On being elected to office in 2022 our government’s first step in defence was to have Sir Angus Houston and Stephen Smith conduct the Defence Strategic Review. The DSR of 2023 undertook the most extensive reassessment of Australia’s strategic posture in 37 years.

Moving away from an omnibus defence force, it called for a focused force wholly directed to our most consequential strategic risk: coercion by an adversary. Understanding the nature of being an island nation surrounded by oceans, our risk lay less in an invasion of our territory and more in the disruption of our connection to the world. As a trading nation with a growing proportion of our national income being derived from trade this meant that our greatest need was the protection of our sea lines of communication: our trading routes.

The defence of Australia was observed to be intimately connected with the peace and stability of our immediate neighbourhood: the Pacific, South East Asia, and the North East Indian Ocean.

All of this meant that the geography of our national security lay well beyond our coastline. And in turn this required a defence force that could engage in impactful projection.

Accordingly over the last three years our government has reprioritised over $80 billion in the defence budget to provide for a more amphibious army, more capable northern bases which can project our air force further, longer range missiles, a much enhanced cyber capability, a more lethal surface fleet for our Navy with new warships being fast tracked into service, and a greatly enhanced submarine capability through AUKUS. These decisions have been difficult. But acting within a clear strategic framework we have been able to ensure that every dollar of defence spending is working to produce the defence force that we need.

Indeed, for the first time in decades the Australian Defence Force now has a contemporary and relevant strategic direction. And through our biennial process of National Defence Strategies we have a mechanism to ensure that this strategy remains up to date.

While the Morrison Government deserves credit for establishing the AUKUS partnership with the UK and US, when we came to office this was not expected to provide Australia with a new submarine until the early 2040s. The plans for acquiring a nuclear­‑powered submarine capability were embryonic. But within a year we had evolved AUKUS into a detailed plan that will deliver Australia its first nuclear‑powered submarine ten years earlier, thus substantially closing the capability gap the Liberals had created.

AUKUS is now properly funded and its milestones are on track. And developing our nuclear‑powered submarine capability alone represents the biggest leap in our military capability in more than a century and the largest industrial project in our nation’s history.

We have also put the extension of the life of the Collins class submarines back on track.

In 2023, we commissioned the independent assurance activity by Gloria Valdez on the most appropriate approach to the extension of the Collins class and the state of industry’s preparedness to deliver this project. This work validated our concerns that the program as envisaged by the Liberals was unachievable and unaffordable, based on outdated plans focused on interoperability with the cancelled Attack class submarines.

In 2024, we listed the Collins class submarine capability as a Product of Concern to increase ministerial oversight and management of the capability.

And today I can confirm that we will commence the life of type extension program at the end of the month. This will see a pivot in our approach that reduces risk, upgrades capability and maximises availability for the Navy.

We will prioritise sustainment and accelerate upgrades for the fleet’s youngest submarines. The program will reduce engineering risk by sustaining existing systems where appropriate while continuing to upgrade critical capabilities, including weapons and combat systems. It has the transition to our future fleet of conventionally‑armed, nuclear-powered submarines as a key consideration. It will also involve a detailed engineering assessment period for HMAS Farncomb, as one of the oldest boats with the highest number of sea days.

This approach will ensure our Collins class submarines remain a potent and highly capable undersea platform today and for years to come.

Our government has fast tracked key projects which are essential to meeting the strategic moment. Whereas the Liberals had dreams of manufacturing missiles in Australia sometime in the 2030s, we have brought this forward so that it is now already a reality. Whereas the Navy was not planning to have a new warship in service until the mid-2030s, this has been sped up so that our first new Mogami class general purpose frigate will arrive by the end of 2029. Indeed, by the mid-2030s we will have four new warships in service. And whereas autonomous systems and drones had virtually no place in our force structure, now they are central.

In fact with Ghost Bat – the world’s leading collaborative combat aircraft – and Ghost Shark – the world’s most capable long range autonomous submarine – Australia is leading the world in the development of large autonomous systems.

Defence force recruiting is now at its highest levels since the early 2000s and the separation rate is well below the average. This means that the full-time force is the largest it has been in twenty years and is growing again.

Much needed reform of the Defence establishment is being pursued. The creation of the Defence Delivery Agency will place a much greater focus on project management and project delivery that is on time and on budget. The Defence Estate Audit is ensuring that Defence’s landholdings properly reflect Defence’s needs. Together these are the biggest reforms to the public administration of defence in our nation’s history.

Over-programming of the defence budget is being brought back to sensible and manageable levels so that defence actually has the money for the equipment it needs. And most importantly aggregate defence spending has dramatically increased. In total, the Albanese Government has increased defence spending by $30 billion over the forward estimates and by $117 billion over the planning decade. The Federal Budget now provides for defence spending to hit 3% of GDP by 2033. This is the largest peacetime increase in defence spending in Australia’s history.

In just four years we have done 12 times as much in increasing defence spending as the Liberals did in their almost decade in office.

And so, while the Liberals spent nine years handing out the defence minister trophy while ignoring Australia’s national security, Labor has spent the last four years seeking to improve our defence force, making a difference in defence spending, and building substance in defence policy.

But what is so important to understand is that the last four years of Labor action on defence is completely consistent with Labor’s entire history with defence policy. Because yet another truth is that it is Labor which is really the natural party of defence.

In his brief tenure in office Labor’s first Prime Minister, Chris Watson, made defence a priority. In Watson’s first speech to the parliament as prime minister, he challenged the false “impression [that] has got abroad in the past that the Labour Party are opposed to any adequate provision being made for defence.” He backed his defence minister, Andrew Dawson, in initiating a fundamental reorganisation of the command and administrative system that had controlled the Commonwealth Military Forces. This ultimately led to the establishment of a military board which helped bolster the control of the civilian elected government over the defence force.

Andrew Fisher’s government established the Royal Military College, Duntroon. Fisher is really responsible for the establishment of an Australian navy with the creation in his words of an “Australian owned, manned and controlled navy”. This occurred through the purchase of three torpedo boat destroyers in 1909 which made their triumphant entry into Sydney Harbour as the Australian Fleet Unit in October 1913. Fisher purchased Australia’s first submarines. He also established the first Australian Naval College which was then in Geelong.

The third of these torpedo boat destroyers, HMAS Warrego, was assembled at Cockatoo Island in Sydney Harbour: our nation’s first foray into naval shipbuilding. Fisher also established four Commonwealth Government defence factories: a cordite factory in Maribyrnong; a clothing factory in South Melbourne; a harness factory in Clifton Hill; and a small arms factory in Lithgow which still operates today. Accordingly, Fisher can rightly be claimed as the father of Australia’s defence industry.

John Curtin is our nation’s great wartime leader. But well before becoming prime minister he understood the importance of defence policy to Australia. While the Menzies Government was asleep at the wheel as to the rise of Imperial Japan, it was Curtin who understood that the Pacific could become a major theatre of World War Two, threatening Australia.

On becoming prime minister he made himself the defence minister and dramatically organised Australia’s defences in our darkest hour of 1942. In an astonishingly short period of time he doubled the size of the Australian Imperial Force and doubled the size of the Royal Australian Air Force. Under his government Australia even made fighter planes in Melbourne.

And of course Curtin challenged Churchill and in 1942 brought our troops home from North Africa to help defend Australia in Papua New Guinea and beyond. This decision redefined Australia and effectively paved the way for our independence.

As the war evolved and more than a million American troops came to Australia under the command of General Douglas MacArthur, it was Curtin’s personal relationship with MacArthur which effectively managed this US presence and Australia’s war effort.

When Gough Whitlam – himself a veteran of World War Two – came to power in 1972 he set about re-organising the public administration of defence. For the first time he brought the Departments of the Army, Air Force and Navy under a single banner creating today’s Department of Defence. He also began work on Australia’s first ever Defence White Paper – giving our defence establishment strategic direction – which was eventually handed down by the Fraser Government in 1976.

In 1985, under the Hawke Government, defence minister Kim Beazley commissioned the Dibb Review which was the major comprehensive reassessment of Australia’s strategic posture in the post-Vietnam War era. The Dibb Review was released the following year which in turn led to the 1987 Defence White Paper. This became the blueprint for Australia’s strategic and defence policy for the next three decades and more. It was relied upon by Labor and Liberal governments alike.

The 1987 Defence White Paper also identified the government’s intention to make major new investments in defence. In turn the Hawke Government developed the Jindalee Over the Horizon Radar Network. This unique world leading technology is the foundation of Australia’s northern surveillance. It is one of the most significant military technological developments Australia has ever achieved. And its imminent sale to the Canadian Government will be Australia’s largest ever defence industry export.

It would be churlish to suggest that the Liberals have no defence achievements in their own history. The signing of the ANZUS Treaty in 1951 by the Menzies Government is a case in point. But taken against the broad sweep of Australia’s history it does not bear comparison to the achievements of successive Labor governments with respect to defence.

The reason for Labor’s historical focus on defence is that our armed forces, our national security, and our defence capability goes to the very heart of our national sovereignty. The character of any country can be found in large measure by what it can actually do in military terms. Sovereignty in turn is foundational to the idea of nationhood, to the idea of Australia.

And Labor is clearly the party of the Australian project.

Australia’s conservative parties saw Federation in the context of uniting six British colonies into one British colony under the banner of free trade between the colonies while remaining absolutely British. And since then they have shown little interest in advancing Australia’s identity much further.

Yet from the outset Labor has been at the forefront of developing and building the foundations of an Australian nation.

In 1942 the Curtin Government enacted the Statute of Westminster Adoption Act which provided for the independent decision making of the Australian parliament and government and this in turn was the basis for Australia becoming an independent nation.

Having brought our troops home from North Africa in the face of Churchill’s protests, Curtin realised that Australia needed to have the independence to make its own decisions in our own national interest. This was reflected in the way Curtin saw Australia’s fundamental participation in the war. In the aftermath of Pearl Harbour Curtin made the decision for Australia itself to declare war on Japan based on Australia’s national interest.

By contrast, two years earlier Menzies had offered no independent rationale for Australia’s involvement in World War Two based on our own national interest. Instead, he simply stated that Australia was at war as a consequence of Britain having declared war on Germany.

The evolution of Australia’s own independent governance was taken a step further under the Hawke Government with the Australia Act 1986 which removed the right of appeal from the High Court of Australia to the British Privy Council. And it was the Keating Government which first placed on the national agenda the idea of an Australian Republic.

The Fisher Government settled the question of our nation’s capital being in Canberra. It enshrined the idea that every Australian must participate in our democracy through compulsory enrolment, which paved the way for compulsory voting. And it also established the Commonwealth Bank which was our first national bank and the forerunner to the Reserve Bank.

Curtin brought the power of income taxation under the banner of the Commonwealth in 1942, greatly enhancing the power of Australia’s national government.

In looking to America, Curtin fundamentally changed Australia’s place in the world away from Britain and initiated the US Alliance which remains the cornerstone of our strategic and foreign policy.

Chifley identified that Australia’s place in the world went beyond being a member of the British Commonwealth. He began the process of identifying Australia as a country connected with Asia. Chifley’s support for Indonesian independence was an extraordinary step which situated Australia’s national interest in supporting our Asian neighbours as opposed to colonial European interests.

The Whitlam Government built on this as did Paul Keating who signed the Security Treaty with Indonesia in 1995 and famously declared that Australia should find its “security in Asia, not from Asia”. This was the predecessor to the historic Treaty on Common Security with Indonesia, signed by the Albanese Government earlier this year. And the Rudd and Gillard Governments in turn handed down the Australia in the Asian Century White Paper.

Pursuing the Australian project has been an enduring theme of Labor governments throughout Australia’s history, which has been a clear point of difference with the Liberals and their predecessors. As successive Labor governments have pursued a larger and more confident Australian identity, the Liberals have continued to stubbornly hang on to the past. Indeed as recently as Tony Abbott we had a Liberal prime minister pursuing the cause of knights and dames and nostalgically saw Australia as lying within the Anglosphere.

In considering all the different facets of the Australian project nothing is more central than Australia’s defence.

Labor’s enduring focus on defence sits with Labor’s commitment to the foundational elements of the Australian project: to the importance of a strong national level of government within the Federation, to Australia taking its confident place in the world, and to an independent Australia.

And in many ways Labor’s work on the nation’s defences led its work on these other foundational questions – from the earliest days of the Federation.

As those early Labor governments were beginning the process of imagining the role for the national tier of government it was immediately clear that defence was a critical function which sat squarely with the Commonwealth Government. Moreover, having a capable and distinctly Australian defence force was central to defining Australia’s character as a polity.

Curtin understood that the role of our defence forces would define our relationship with Britain. And that marking out Australia’s own decision-making space based on our own national interest would be determined by the actions of our defence forces and which government would direct them. Controlling our own defence was the act of Australia’s independence.

And in the aftermath of the Vietnam War it has been successive Labor governments which have given the substance to Australia’s defence policy and with that Australia’s fundamental national strategy.

So it makes perfect sense, indeed it has been natural, that this work on defence has happened just as successive Labor governments have pursued the broader Australian project.

Because from Duntroon to the DSR, from purchasing our first submarines through to the building of our future nuclear powered submarines, from Fisher and Curtin to Hawke and Albanese: Labor has always been, and remains, the natural party of defence.

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