Friday 27 June 2025

Topics: Defence spending, US tariffs

E&OE………

NATALIE BARR: For their take let's bring in Health Minister Mark Butler and Liberal Senator Dave Sharma. Morning to both of you. Mark, are you worried we are now going to be hit with more tariffs if we don't lift our defence spending even more?

MARK BUTLER: Well, obviously that the discussion at night so was held in the context of a very large land war in Europe, initiated by the big nuclear power to their east, which really is the reason for NATO existing in the first place, and that is Russia. Now we face our own strategic, strategic challenges here and that's why we're in the process of rolling out the biggest increase in peacetime years to defence spending in our history. $10 billion over the coming four years, $50 or $60 billion over the coming ten years. And that's something we've been in conversation with the US about. So no one's ever called Australia a free rider. We've had a very close relationship, served alongside the Americans in conflict after conflict. We're deepening those ties with US Marines rotating through Darwin, US subs rotating through Fleet Base West over in Perth. But we know it's a conversation that we'll continue to have with our American friends and partners.

NATALIE BARR: Yeah, the problem is that the US has already said we are way behind. So we're spending 2.02%. We're going to lift it to 2.3. That's in eight or nine years. The US has already said very clearly to us they want three and a half. How are we going to do that?

MARK BUTLER: Well, as I said, it was a conversation we're continuing to have. Our Deputy Prime Minister and Defence Minister Richard Marles met with his counterpart only in the last couple of weeks. That's a conversation they had in Singapore when they had that meeting. We’ll continue to have it. And I can say as a member of the government's budget committee, when the Defence Department comes to us with a capability it says it needs to protect Australians, they get a very, very good hearing from government.

NATALIE BARR: So, if you're on the budget committee, what are you saying? Are we anywhere near those figures away? Are we able to lift it anywhere near the three and a half the US wants?

MARK BUTLER: Well, as I said, we are lifting it right now. The biggest expansion in Australia, obviously, I mean now, but as many, many billions of dollars buying new capabilities in our naval capability, new long-range missiles as well. Obviously, our economy grows much faster than the European economy. So, a percentage of a growing economy is adding tens of billions of dollars to our already very significant capability. But we know that we have our own strategic challenges in the Indo Pacific. We know this is a conversation we're going to have to continue to have with our American allies.

NATALIE BARR: Yeah, we know you're still talking. So, if you're on the budget committee and you know that the US in their current form with Trump, who's pretty aggressive on this, you know they're coming to you and say, we want three and a half from Australia. What are you going to say?

MARK BUTLER: Well, what we've done is to respond to Defence's requests for additional capability. So not a figure plucked out of the air, but, but a response to a request that's framed by our Defence Strategic Review that says we need a certain capability in our navy, we need a certain additional capability around long-range missiles. And we've supported that request from Defence every time they've come to us.

NATALIE BARR: Yeah, that's from Defence. I'm talking about the US. So what happens if Trump ties extra tariffs with our lack of defence spending?

MARK BUTLER: Well, we'll cross that bridge when we come to it. As I said, we've got a very constructive discussion going with the Americans. The Americans understand the significant additional investment we've already committed to, as I said, the biggest in peacetime history and we're deepening our ties with the Americans as well. So, you know, obviously this is a request that the, the new US Administration has made of all allies. But there are slightly different strategic circumstances in the Indo Pacific compared to, I guess the long run, long running discussion that President Trump has had with NATO allies going back to his first administration.

NATALIE BARR: Okay, Dave, do you think this is going to be enough? Do you think we're going to appease the US by increasing on our terms, not on Trump's terms?

DAVE SHARMA: Well, I'd say, look what NATO has agreed to here Nat is to increase defence spending to 5% of GDP by 2035. Now what the Labor government has promised to do is to increase defence spending to 2.5% of GDP by 2033. That is a long way short. And this isn't about appeasing the United States or Donald Trump. This is about Australia's own national security interests, our ability to protect and defend our country and to maintain our freedom and our sovereignty. And when you have the government's own experts in the Defence Strategic Review saying this is the biggest deterioration in our strategic circumstances since the post war era or in the post war era, then we need defence spending to match that level of, level of risk and level of danger.

NATALIE BARR: Yep. Ok. So it will be interesting to see what happens and and what Trump does, if he does tie the tariffs to it. We thank you both. We'll see you next week.

[ENDS]

‍