All the world's a stage but is Australian politics playing its part, with Laura Tingle and Peter Hartcher
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The first thing has to be investment. We need to build national power. This is a conversation, an agenda Australia doesn't address. We've never really had to stand on our own. We've stood behind the Brits and then we've stood behind the Americans and we've not thought about ourselves as a generator and creator of national power.

We now need to because we're in this compromise position where we've put all our eggs in the American security basket and way too many eggs in the Chinese trade basket. And we now find they're both completely unreliable. And yet we are compromised in our sovereignty because we are so structured around those two.

You have to start means testing things. You have to start targeting things. You have to start going back into the language, which we don't hear in politics now of language

conspicuous trade-offs you know we're going to hurt you here but we're going to give you something here we're going to do this because it's good for the economy and our national security but we'll get a benefit down the road and we've lost that discourse in the last 20 years you know it's all been how much can we give you and i think that you know at the really basic

architectural foundations of our national discussion, we've got to be able to talk in those sorts of terms again if we're going to get the sorts of changes that we need, which do involve us becoming more self-reliant in a whole range of ways.

Welcome to Stop the World, the Aspie podcast. I'm David Rowe. And I'm Olivia Nelson. So the election is almost upon us and the reviews from political observers about the substance of the campaign are not good, Liv. There's been a lot of criticism in recent weeks that all sides of politics are failing to address the geopolitical and geoeconomic problems Australia faces and to have the policy debates about how we respond over the long term. Quite right, Dave. If this were a Broadway show, the director would be looking for a new career.

That's why we've brought in two of the best minds on the intersection of Australian politics with the global outlook. That's the ABC 730 program's political editor, Laura Tingle, and the Sydney Morning Herald and Age's political and international editor, Peter Harcher. Yes, and it really shows, surprise surprise, just how much wisdom and experience count. Laura and Peter are among the pinnacle of political journalists who consistently capture a sense of the big picture.

They talk about the deficiencies of the national political debate, both in terms of leadership, but also the resistance that voters often show to big and difficult ideas. They talk about the serious need for economic reform, the big strategic decisions Australia faces under Donald Trump, the threat from China, the need for defence investment, the reliability of AUKUS and much more.

With the election just a couple of days away, folks, we've got the right minds on the job. And just to be clear, while we've timed this episode ahead of the election, it really remains relevant well into the future because these are challenges that Australia is going to face for months and years ahead. And that's the whole point. So if you don't catch it before Saturday the 3rd of May, you'll get a whole lot out of it well after that. Now let's hear from Laura and Peter. I'm here with Laura Tingle and Peter Harcher. Laura, Peter, thanks for coming on the podcast. Pleasure, David. Nice to be speaking, David and Peter.

So the reviews on the federal election campaign are in and they're not positive. Commentators, including yourselves, are in various ways marvelling at the paucity of discussion about the geopolitical and geoeconomic upheaval that's happening and its impact on Australia. And that's what we'll be talking about today. So in other words, when and how does Australian political debate start to search for adequate responses that are clearly needed?

I want to start with an overview from each of you before we get into details. Peter, perhaps starting with you, can you just outline what you see as the deficiencies of the campaign and the period leading up to it and what you wish had been discussed and debated? What we wish? Well, I suppose we're allowed to dream, aren't we, David? In print, I've described this as a Truman Show campaign where the

The campaign is being conducted in an artificial reality, pretending that the big, wide and slightly scary outside world isn't there. The imperative for the two leaders is to reassure us that our cost of living complaints and gripes and problems are going to be addressed and that we're going to be assured that we're safe in Donald Trump's mad world.

With those imperatives, which are essentially to reassure rather than to reform, then we were just never going to get an honest reckoning with the Australian people about what is going on and what our real needs are. So I think an insight into the myopia, the willful myopia,

of the campaigns was the moment where on the ABC leaders debate, David Spears asked the two leaders, what are the big reforms you want to be remembered for? And Anthony Albanese said cheaper childcare. And Peter Dutton said cheaper energy. Now, they're perfectly fine

desirable, even maybe admirable ambitions to have. They don't address the national position. They are an abrogation of national leadership by both major parties. So you've got Donald Trump joining the Predators.

Already, we have Vladimir Putin, we have Xi Jinping as predators preying on any country that they feel like attacking, intruding on, and then Donald Trump joins in as well. This is a shakeup of historic proportions where he's dismantling the entire worldwide structure that we have. Anybody alive today in Australia has no memory of anything earlier.

than the system. And yet, parties won't confront it. And it's not all terrible. There are real opportunities here. For example, as the economist Warwick McKibben has pointed out, and I'll quote Warwick, he said, when the US is getting rid of the risk-free asset that holds down the global financial system, and he's talking there about US treasury bonds, because they have acquired more risk since Donald Trump has taken over, then says McKibben,

There will be a lot of capital seeking a home and Australia would seem to be an attractive place to invest it. So here is a terrific opportunity, right, for leaders to talk about how Australia can prosper in this disrupted world. But you won't get any reckoning of that.

The abrogation of responsibility on Australian national defence and the obvious ructions to the global alliance system, nobody wants to talk about that either. And the offerings from both sides are inadequate. The coalition is at least offering a larger envelope of money in the years ahead. But it's a number, GDP percent, floating out there, not attached to any capability or reality. So it's more a political slogan than a policy.

I think that might be a fair beginning of our deficiencies in this campaign, David. Fantastic. Thank you. And Laura, your thoughts on that overarching question? Thanks, David. Look, I think without going too far back in history, if we just think about

where we were up to in a strategic policy discussion sense when we came into the campaign. Essentially, both sides had signed up to the AUKUS agreement. Now, whether that's a good, bad or indifferent agreement, that dominated

the talk space if you like and it was sort of like oh well we've fixed defense for now we fixed our defense strategy you know hashtag orcas for the last two or three years they've signed up to it despite you know growing questions particularly with the return of donald trump neither side wants to talk about that at the same time of course labor's spent a lot of effort in the last three years

both trying to, shall we say, normalise our relationship with China, but also build bridges into the region. So there's a lot of stuff that's been going on in a strategic sense out there. I suppose, I think, as Peter says, you know, nobody sort of really wants to talk about it, but it would also not be true to say that Donald Trump hasn't been a huge feature of this campaign. He's loitered over the whole thing, both in terms of

you know, tactics in terms of the sort of spectre of what he is doing. And as Peter says, you know, the threat that that poses at some sort of existential level

people know that it's out there and yes, the politicians have been talking about cost of living and energy and things like that. But I think that reflects the fact that there's always at least two speeds in an election campaign. And these days it's all the more so because you have this really disengaged population now. So a lot of

a lot of people will be lucky to actually know what those cost of living type issues are, even or what the policy announcements are. But then there's a lot of people who are engaged who are going,

you know, what's going on here? This is sort of rather alarming. What are they going to do about it? And there's been no real discussion in that space about where we go. The glaring gap is, of course, that I think the debate, if you could call it that, about AUKUS in the last five years has really meant that

you know that sort of more general discussion about where Australia's interests lies has just been sort of left fallow it's just it's just not been going on and I think the threat or the challenge that Trump throws up which I don't think is really capable of being really embraced in the hot house of an election campaign is that it's not just about you know how much you spend on defense

It's going to be, as Peter says, the coalition has said they're going to spend gazillions of extra dollars and there's a perfectly legitimate argument for saying that. But what I'd say it's not attached to is any strategy. I mean, are they still saying we're going to just keep Orcas and just do a lot of other stuff? I mean, what's our...

strategic position in a world where we cannot rely on our ally over the last 80 years, but more so that our ally might actually be a threat to us in a whole range of ways. And also that

Beyond defence issues, national security is going to be very much determined in trade terms in a world where you've got essentially the risk of two trade blocks developing around China and America. So that question that has been posed in the defence debate or the national security debate over the last 10 years about do we go with our trade partner or our ally,

That's going to be not thought out in terms of a defence question necessarily. It's going to be thrown up at us possibly

possibly much earlier in a much more complex way and the question of who do we side with if it comes down to trade blocs. You've touched on a few things there that I want to come back to but this question of Trump's influence on the Australian campaign, we might as well just cover that. Well, we might as well just cover the Canada situation quickly now because it is a fascinating one. I mean, Trump for us,

might have influenced the campaign in a vibe kind of a way rather than a let's have a reasoned policy discussion about how we respond kind of way. But...

Noting that Canada's situation is quite different from Australia's, obviously he hasn't threatened or trolled, depending on how you look on it, to annex us. We've been part of the tariff imposition, but nothing quite as punitive as he's thrown towards Canada. But Laura, perhaps sticking with you, any top of the head thoughts on the lessons out of Canada for Australia?

Well, I think without doubt, I mean, Canada's obviously had a much more sort of primal, if that's the word, experience of Donald Trump than we have.

been much more aggressive in so many different ways. And obviously that's sort of backfired very badly for conservative politics in Canada. I think without a doubt, you know, we've seen the same thing sort of happening here that you saw Peter Dutton using a lot of Trump-like tactics, I think, and Trump-like language

In the lead up to the campaign and in the early days of the campaign, his whole line about how he could talk better to Trump than anybody else, saying Trump was a big thinker, all of those things. And he had to back off at a million miles an hour when it clearly wasn't working and a lot of voters were getting alarmed. I think

One of the interesting things, just as the campaign comes to a close, is that there's now this sort of view that's taken off amongst the pollsters and some of the political aficionados that

the last great hope of the coalition may be that it can pick up some of those outer suburban seats in the big cities on the back of really big preference swings from One Nation and Clive Palmer's party. The polling suggests that unusually the preferences might be breaking as high as 90% to the coalition and that this might be its salvation in some form against a really terrible result.

And you've seen Peter Dutton move back into a lot more of that sort of language in the last few days, which might appeal to people who are attracted by Trumpian politics. Fascinating. Peter, your thoughts on that? Yeah, isn't it fascinating, the Canadian result? A complete reversal of fortune, thanks to Donald Trump's threat to annex the country.

Because the Liberal Party in Canada, their central left party has won. If you superimpose their policy offerings on Australian Labour, because our central party obviously, there is a very heavy overlap until you get to sovereignty questions. So, Carney's first, the overriding theme is standing up to America, of course.

As he said overnight after winning, he said, America wants to break us so they can own us. They never will. This is stirring wartime stuff. I agree. Amazing. Yeah. After that, his biggest offering is tax cuts for the middle class. Then Canada's most ambitious housing plan since the Second World War. Sound familiar? Then there's covering the cost of apprenticeship training for skilled trades, trades of Albanese's pre-TAFE.

And then you quickly get into the sovereignty debate, protecting Canadian auto workers and agriculture workers from American trade policy, rebuilding and reinvesting in the Canadian armed forces. These are the top-line policy offerings from Mark Carney. Diversified Canadian trade by improving Canadian trade-enabling infrastructure. And get this one, protect Canada's national identity by strengthening CBC.

their equivalent of the ABC. So it is a very specific set of policy responses to the threat to Canada's sovereignty. And we have had none of that. What we have had, as Laura said, has been it's changed the atmosphere, not the policy offerings. And the atmosphere it's created is one of anxiety, which has increased the electoral appetite for reassurance. And that's what the two leaders have been doing. Trump has gone from being

an attractive prospect for the Australian Liberal Party to being radioactive. And just an hour ago, I was listening to an interview with the deputy leader of the Liberal Party, Susan Lee, where the interviewer said to her, Trump has said he'll talk to the incoming Australian prime minister, whoever it is. Surely you'd want that to be Peter Dutton on the phone with Donald Trump.

Donald Trump has now become so radioactive, David, that Susan Lee completely skirted the question to avoid saying that Peter Dutton would have a phone call with Donald Trump. I mean, it's gone from being maybe a little imprudent to being completely negligent, really, I suppose.

And if I may, sort of the interesting thing I think is, that's a really interesting point that Peter makes about those specific sovereignty policies. But I suppose the other thing that just reminds me of is, I think it changes the nature of our campaign as we've discussed, but presuming Anthony Albanese wins on Saturday, I think it's also already changed the nature of the way he does politics.

or reinforced it, shall we say. I mean, I think that there would have been a really strong inclination on the Prime Minister's part to fight Trump on tariffs, to reciprocate, and the government didn't do that, but they were very prepared. And I think the one thing you would give a kick to Labor for is that

Remember the sort of attack on Anthony Albanese was always that he was very weak, you know, from the coalition. And you will notice that they've sort of dropped using that terminology so much now they just say he's a liar. But that sort of position of being reassuring, which has sort of been forced upon Anthony Albanese, has sort of played into the fact that he was running this very middle of the road line on politics in general, you know, right from the beginning. And I'm trying to be a consensus builder and all that sort of stuff. And I think...

you know, if he emerges from the election on Saturday as the winner, that will sort of start to characterise the way he plays

on the international stage now. It's boosted his confidence that that's the right way to go and it's a natural place for him to go. I really think that just in the same way he says, "I'd like to fight Tories," I think his natural street fighter instincts would have been possibly in the beginning to take a much more aggressive approach. And I think

It's a really fascinating outcome of what's happened in the last couple of months that the government has taken this very much, you know, we're the parent, we're the grown-up in the room.

Yeah, yeah. I mean, certainly reciprocating on tariffs would have been insane in my view. I mean, it would have been a mosquito bite to the Americans and simply brought more chaos our way. And one thing that I find reassuring about the Canadian outcome is that Canadians have fled towards the very embodiment of

dull, internationalist technocrat. I mean, you couldn't find a more perfect embodiment of those ideas. So that's where people are finding reassurance in response to issues of, to challenges to sovereignty and those sorts of things, rather than populism. And I personally give a shout out to boring technocrats around the world.

May they prosper. I did see him dancing somewhere this morning. It's a sight you don't want to see too often, I think. I'm sure it wasn't great. So, look, let's just look at the economy quickly and then we'll get on to geopolitics and defense. But coming from the point of view of a national security think tank and thinking about economic strength and economic security from the point of view as an element of national power, the big question we really need to be talking about is what do we want our economy to look like

from about 2050 onwards, quite apart from the immediate responses to tariffs and these sorts of things that we need to think about. But in this sort of changing world, how do we want to start shaping our economy so that it's something to be reckoned with in the second half of the century? What to you guys are the basic, and we've touched on some of them, but what are the basic parameters of the economic debate that we should be talking about? Peter, you first.

Well, the first thing has to be investment. We need to build national power. This is a conversation, an agenda Australia doesn't address. We've never really had to stand on our own. We've stood behind the Brits and then we've stood behind the Americans and we've not thought about ourselves as a generator and creator of national power. We now need to.

Because we're in this compromised position where we've put all our eggs in the American security basket and way too many eggs in the Chinese trade basket. And we now find they're both completely unreliable. And yet we are compromised in our sovereignty because we are so structured around those two. We just need to build independent power.

And we need to think about that in an active way. So investment is a priority, an absolute priority to build our economy. Our population is always going to remain relatively small, but our economy is already the size of Russia's. We don't have a tiny, minuscule economy, and we need to build the size and dynamism of it absolutely. At the same time, we have to have

Obviously, we have to impose some discipline on how much we spend in that enterprise, but we can't be panicked. We do need to be able to tolerate some debt so that the state can co-invest and generate private sector investment. So I think that's the overriding priority. If you look at our position on the globe, we're in a position to project power across about a third of the planet. It's a tremendously, potentially powerful position.

position that we're in. We've never thought about it in those terms, and we need to think about it in those terms. In economic power, in defence power, in cultural and soft power, we need to think about all these dimensions. The economy is the wellspring of national power because it creates

the dividend to pay for everything else, and that's where we have to start. Laura, to you, are there any particular economic ideas that we should be pursuing in order to do what Peter's describing there, i.e., build some sort of long-term industrial power that we can rely on? Well, I think, unfortunately, we've got to go right back to the basics, I think, David.

I mean, I agree that, you know, absolutely we've got to sort of stand on our own two feet. And that has a whole heap of implications now. And it means a transformation of a lot of our discussions into the really big picture ideas. For example, you know, talked about debt and deficits for what seems like my entire lifetime. And I think that Peter's right, you know, debt is here to stay. We have to have a tolerance for debt. We can't just immediately go, debt's terrible. But I think

what we do need to sort of do is say, well, what do we want governments to do now? You know, what do what is the role of government? And it's not just about all the deficits too big. It's about what is the nature of the interventions that we are prepared or demand of government to back that investment. Now, government interventions can be anything from sort of sort of Soviet style investments through to something much more subtle. And I think

there's sort of a natural tendency for sort of big government interventions, once again from the PM if he had his druthers, but you know not in an unintelligent way, but

you know, we've already sort of seen with things like the Future Made in Australia debate, this sort of really jumbled sort of series of priorities, some of which are really sensible ideas, which came out of the pandemic about, you know, being less vulnerable on supply chains and, you know, being self-reliant in some areas and all those sorts of things. But then having some, you know, favoured little projects stuck on this side of it, which basically sort of discredits the whole thing. So I think we need to have

a very clear-eyed view about what the nature of government interventions are to back that. We need to redefine, obviously, the defence strategy and what the implications of that are for defence industries in Australia.

But I think it also does mean that if you think about the first path to be done politically once these election dust has settled is that you go, well, obviously it's not so much that we've just been spending ridiculous amounts of money, but we've slipped into this world where everybody gets something. You have to start means testing things. You have to start targeting things. You have to start going back into the language, which we don't hear in politics now of

conspicuous trade-offs you know we're going to hurt you here but we're going to give you something here we're going to do this because it's good for the economy and our national security but you'll get a benefit down the road and we've lost that discourse in the last 20 years you know it's all been how much can we give you and i think that you know at the really basic

architectural foundations of our national discussion, we've got to be able to talk in those sorts of terms again if we're going to get the sorts of changes that we need, which do involve us becoming more self-reliant in a whole range of ways. Yeah, yeah. Can I just, first of all, just compliment you, Laura, on bringing that absolutely central factor of, it's really a factor of leadership into the discussion.

You can see why our leaders don't propose anything difficult, because whenever they have, the electorate punishes them. So, for example, there's a clamour in this campaign, why don't you index the tax bracket? Let's have indexation.

Malcolm Fraser threw up that idea when he was prime minister and the whole country yawned. No other government's going to propose that. Housing policy, why don't you, the Greens insist that the government of the day reduce the benefits of investing in housing, negative gearing, capital gains, taxes. Well, Bill Shorten did that and he was punished for it. No other government's going to embrace that.

The Australian electorate has shown our leaders that it is not interested in absorbing pain or making sacrifices. We're not getting any, even the vaguest hint of that from this campaign, which leads me to the conclusion that we are only going to get to that point of being able to make sacrifices

in the interest of better national outcomes if we have a crisis. Obviously, the crises we've had so far haven't been enough, so I fear it's going to be something much more serious to jolt our political system and, most importantly, our electoral mentality into a more realistic mind space. Well, I agree, Peter. I suppose, you know, being an eternal optimist, you know, we do have a crisis now and the question will be,

In the same way, I mean, if you think about sort of the '84 election campaign, it was all sort of, you know, sunlit uplands and all that sort of stuff. There wasn't any sort of great sense of the crisis that we were feeling we were in by 1986 in the Banana Republic. So the question is, to me, we do have this crisis and do we have politicians canny enough to say,

okay, I'm going to seize this moment to change the discussion and also that I know where I'm going to go with it. I mean, that's the real issue in a way, isn't it? That there is this never waste a good crisis, as they say. This one is so transformative that it does have the capacity, given people are seeking reassurance. I mean, that's one thing you do get out of the campaign. They want people to sort of look like they know what they're doing. Do our politicians have the capacity to go, right, okay, we're going to go with it?

we're often racing here. Look, fantastic last five or seven minutes or so and I've enjoyed and it's brought up lots of things for me. One thing that I often think about is, remember when Malcolm Turnbull came in as Prime Minister and he declared at the start that he was going to take a new approach, he was going to put forward ideas for debate

have the debate and then reach some policy conclusions. We remember how long that lasted. It was about six weeks and it fell in a heap. Maybe it was just hopeless political naivety on his part, but it just didn't seem to work in the political culture that we had at that time, which I think has probably only become more difficult. Peter, the point that you raise about

The unwillingness and the resistance of the voters, the Australian public to unpalatable ideas, the ideas like sacrifice, the ideas like that we might need to actually give something over for the long-term interest, there's a real hostility towards that and that dynamic

between, well, good leadership to overcome that. Where is the great, wonderful, rhetorical, wonderful speech-making leadership that can actually break through that negative instinctive reaction that sometimes the public might have to big, bold policy ideas versus how much of it is just all of our fault because we just don't have the attention span or the tolerance for

those sorts of big ideas. It's just too difficult and maybe we do need more of a crisis, Laura, than we've currently got to shake ourselves out of it. But look, one quick summary on what you've both just been talking about. What I love there is you've both mentioned debt tolerance and you've both mentioned the idea of investment in the future, leaving aside one-off things like Future Made in Australia, bigger ideas for let's accept some debt and

put that into the future of the country, both in economic building and security building terms. I mean, talking about the budget situation for a moment, our federal debt to GDP ratio is about 32%. Now, that is lower than almost all other OECD countries. Germany, of all places, I mean, Germany considers debt to be a kind of mental disorder, and yet they're talking about borrowing huge amounts

to invest in defence and industry. Are you both in agreement that we really need to sort of get over this juvenile allergy towards debt and actually accept it in at least the medium term in order to invest in the future? Laura, for you? We have to have a more sophisticated approach to it, without a doubt. You know, debt for its own sake obviously isn't good, but I mean, I think I remember writing a piece for...

with Business Review Weekly in the 80s, which was saying, you know, we get to 25% debt or something, you know, the world will end, which was quoting the economists of the day. It's all relative, as they say, you know, it's about your capacity to service debt and where the debt is being used for, you know, the greater investment in economic capacity down the track, which is always the trick rather than consumption. But I think we do have to get over it. We have to make it more sophisticated and

And at some point we have to make the tax base work for us, but let's not get into that because it just makes everybody feel tired. But yeah, we just have to have a more sophisticated discussion than, you know, X number is terrible. Peter? I'm in serious agreement with Laura, David. So can I take the economic debate on a slightly different tack, which is trade? And Laura touched on this at the beginning that the world is developing into two trade blocs.

This is a big, big issue that we need to tackle. Fortunately, the Americans have made it easy for us by putting this 19th century mercantilist wall up around the US economy with Trump's bizarre tariffs. It's bizarre because he's been promising to bring prices down during the campaign and then as soon as he has power, he puts prices up for American consumers.

But that wall he's put up only surrounds 14% of the global economy. The other 86%, everywhere else, in other words, is outside Trump's wall. And that's the rest of the world that is now more available, more open and more willing to trade with Australia. And it already was pretty open and pretty willing, and it's now even more so.

Australia needs to work with the non-US and, as far as possible, non-Chinese countries to maximize trade, to shape new free trade arrangements. And of course, because we have such an already an over-reliance on China, which takes a third of total exports, it's best that we find ways to diversify beyond China as well as America.

But that's an imperative. All countries are now looking at this, negotiating this already. And we need to be an early mover, not a late mover. Yeah, I think that question of...

of two trade blocks is a really interesting thing. I think you made some really good points there, Peter, about diversifying, preferably away from China. I don't consider myself a China hawk, but I do consider myself a rational CCP skeptic and looking for other places to diversify. It's a fascinating question. I think you've raised this in a piece that you wrote recently, Laura, and you've touched upon it here today as well.

about what the response might be if the US were to put pressure on Australia to alter its trade relationship with China. And the obvious one would be that if they were to ask us to start to reduce our exports of our major exports, our raw materials to China, which of course is such a huge source of our national income, I mean, I would assume the reaction would not be good.

Peter, perhaps just sticking with you for a moment, could you see that actually happening and what do you think the response of the Australian public would be? I think the answer would be no. You've shown no interest in our trading and economic interests and we're going to show about the same level of interest in yours. Not that that would be said out loud, but we also have an experiment in that already, David, at the US Study Centre.

conducted in the last two years, they conduct these annual tabletop war games. And that question came up twice, the American team asking the Australian team to cut off the Australian iron ore trade to China. And the Australian team in both years, one year led by Kim Beazley, another year led by Dennis Richardson,

said no to the American request. So they're only war games, but it gives you an insight into what senior Australian decision makers would do in that circumstance. And the answer to Washington is no.

Fascinating. I wasn't aware of that. Laurie, your quick thoughts on that? Well, yeah. I mean, I think we would have to say no. I mean, would it play out like that? It's hard to say exactly what – and would it be Trump who would lead it? Would it be the – I mean, what happens if it's the Chinese who sort of make the call? But, I mean, if you think about the nature of our relationship with the US, we can survive without the US in an economic sense much better and –

Those of us who are sceptical about AUKUS and think maybe there's better ways we could be spending our money, you know, it could actually mean that it would be a way of just saying, well, sorry, we'll just take our money and go home. And, of course, what do the Brits... I mean, what happens to AUKUS is an interesting question. What do the British do? Do we continue on with the Brits? Do we continue on with, you know, the obsession with submarines? I think we would have no choice but to say, well, thanks, Washington, but, you know...

You put whatever tariffs you like on, but we have a relationship to maintain that keeps our lights on. Yeah, thanks. Okay, now I've gone badly off script here because you've both been saying interesting things that I wanted to respond to. We'll need to wrap up, but I do just want to talk about defence and national security and defence spending.

I mean, there's a kind of a fixation in the political discussion on the percentage of GDP. I mean, for understandable reasons, it's often set as a sort of benchmark that's an expectation for countries, you know, NATO countries and so forth, that then gets used by others. But I mean, everyone knows, and Laurie, you mentioned this, I think, early on in the discussion. I mean, what we really need to do is decide what our strategic risks are, what capabilities we need to meet those, how much those will cost, and then where you find the money. And then the GDP number ends up being whatever it costs.

one reading that I think is a reasonably persuasive one is that it's difficult for any government in Australia to make the policy argument for defense capability investment when we're struggling to find the right sort of geopolitical vocabulary to talk about China as the major strategic risk. And

That's understandable up to a point. As Laura, you mentioned that both parties have been somewhat in favor of stabilizing. The government has been looking to stabilize the relationship with China and it makes it difficult in some ways for them to talk about China as our major strategic threat. Nonetheless, there's a lack of candor about the urgency and gravity and the risk that China poses and therefore not really much of a constituency for defense spending versus

other types of spending or versus higher taxes or versus greater debt. Perhaps, Laura, to you first, what are your thoughts on that? Well, it could be that it becomes easier. I mean, I suppose my sort of sense is all of these signals are basically taking us back to the Defence of Australia posture, right? But...

As you say, people may think China is a major strategic risk, but there's not much clarification around what that means. I mean, do we expect China to invade us? I don't think anybody's actually suggesting that. But if our defence stance is about defence of Australia, I think it becomes a bit more sophisticated. And I would sort of put this in the context of the flotilla of ships that circumnavigated Australia recently from the PLA and

And also in terms of Trump sort of asserting rights to mine in international waters, I think it's going to break down once again, very much in those sort of

we could break down in those sort of trade terms where we sort of say well the sorts of things we are going to have to defend are our areas of economic interest and our waters and our mining rights and and things like that our trade routes i think if we can bring it back to those sorts of more sort of understandable issues about what we're trying to actually do here and link it into trade

That makes it a sort of more digestible political argument. Yeah, no, I agree. I mean, it's certainly, to me, it's a bit less about the invasion of Australia than it is about China's emergence. And I suppose consolidation is a kind of coercive regional hegemon that is fundamentally antithetical to Australia's interests and how we avoid that. Now, without the US, it's a bloody Herculean task working with Japan or whoever else. But anyway, Peter, your thoughts? Yeah, just two quick points I'd make, David. One,

One is that Laura's right, we're not anticipating a mainland invasion from China, but the Defence Strategic Review itself talked about the plausible threat and the one that's in most defence planners' minds, and that is the day if and when our Chinese friends, having failed to break our sovereign will through trade with trade bans, instead applies a de facto trade blockade or embargo.

All they need to do is have a couple of task forces to our northern approaches conducting extended military manoeuvres and commercial shipping and commercial air traffic wouldn't go near the place. So that's the scenario. It's already in published Australian government documents.

You're right, the leaders don't want to confront it, but our Chinese friends aren't going to let them get away with that. Because eight years ago, it was Sam Dastyari, and we learned about the Chinese government attempt to corrupt and subvert our political system, and we reacted. Then five years ago, it was the trade bans, and that really woke the country up. A few weeks ago, it was the Chinese task group conducting live fire exercises off the coast of Sydney. Our Chinese friends are not going to let us get away with avoiding the subject.

and our leaders are going to be forced to address it. The other point I'd make is I disagree with Laura, I think, about the AUKUS project. I think we are locked so deeply into the US system. We can't walk away easily. We need software upgrades at the very least, not to mention spare parts and resupply and all the other stuff. So my view is we salvage what we can from the US system.

without expecting it to continue as it's been, and we look for more independent capability. But as a part of salvaging what we can, I think we should continue with AUKUS Pillar 1 and 2, extract as much technological advantage and developmental advantage as possible from Pillar 2, and just persist with the submarines and see how far we get. Who knows? Who knows who the next president of the US will be? But not to walk away from that, we

We need to protect not only our own waters, as Laura says, but protect our interest. And one of those interests is sea lines of communication and the ability to import and export. And submarines are critical for protecting that interest. I think I was thinking more about Trump's America walking away from us on August, Peter. Yes, well, that's absolutely interesting. Yes.

Well, at the risk of overly diplomatically agreeing with both of you, I think, Peter, I do share your view that AUKUS, we are so reliant on the US alliance for our security that we need to persist with it as long as we possibly can while it's in our interests to do so. But at the same time, recognizing the realities that Laura has raised there, both about the reliability of future US engagement, but also just the practical feasibilities of pillar one are

somewhat troubling. I mean, the delivery of US Virginia class that will affect the immediate phase of Pillar 1 is a real worry. So there are also just some basic sort of like practical concerns that we need to think about. Anyway, wonderful discussion. Thank you both so much. I realize it's the busiest week of your three-year cycles probably, and I'm very, very grateful to both of you for speaking to us. We'll wrap up there. Thanks, guys. Thank you. Pleasure, David. See you, Laura. Thanks, Peter.

Thanks for listening, folks. Happy voting on Saturday if you haven't voted already. And we'll see you again next week.