[Theme Music Starts]

RUBY:

From Schwartz Media I’m Ruby Jones, this is 7am.

The AUKUS agreement has brought a rare political sight this week: the government and the opposition are agreeing with each other.

Both major parties support the deal, if anything they’re competing to show who can support it more strongly.

But how will we pay for it? Will we cut spending on other services? Or try to increase tax revenue?

Today, columnist for The Saturday Paper, Paul Bongiorno on how $368 billion in spending is inevitably getting political.

It’s Friday, March 17.

[Theme Music Ends]

RUBY:

So, Paul, politics this week revolved around the new submarine deal that the Prime Minister, Anthony Albanese, has signed up for. And to talk about the politics of it because this really has bipartisan support and that's quite rare, isn't it?

PAUL:

Well, on the surface, yes, it is. Ruby. Peter Dutton has offered his backing to AUKUS. He says come hell or high water. And he said the liberals well they've got a prior ownership to the plan and they back Albanese landing it. And Dutton was out this week making suggestions about how we could pay for it.

Archival tape -- Peter Dutton:

“Well, the Americans definitely wanted to see a bipartisan position, not just support from the coalition in government, but to know that if there was a change of government, which obviously transpired to be the case, that it would be supported by the Labor Party as well.”

PAUL:

On Monday night, Sarah Ferguson on the ABC asked the Opposition Leader if he was prepared to quote, “think outside the usual partisan box to give the government leeway to make budget savings.”

Archival tape -- Peter Dutton:

“Well, the short answer is yes, Sarah, I mean, my budget-reply speech last October, I said that we would work with the government if they had tough decisions to take for example…”

PAUL:

Although he added, there will always be points of difference about where spending priorities lay.

Archival tape -- Peter Dutton:

“This is over a long period of time. The numbers you're talking about can span into the 2050s and perhaps beyond that, the immediate time of the forward estimates over the next four years. That's the most sort of crucial period to focus on. But we would encourage the government to be transparent about the money that's involved…”

PAUL:

Dutton nominated off the top of his head looking for efficiencies in the National Disability Insurance Scheme, while at the same time warning Albanese and Marles, the Defence Minister, not to cannibalise Army or Air Force budgets in looking for the $3 billion of savings over the next four years that the government has nominated. But Ruby, under this veneer of bipartisanship, the truth is this is already deeply political, and I have to say it's always been that way. AUKUS was the booby trap Scott Morrison thought he was setting for Labor back in September 2021. Well, Albanese is now making it completely his own. On Tuesday, he said the agreement, quote, “represents the biggest single investment in Australia's defence capability in our history.” Albanese is determined to steal the security mantle from the Liberals. The domestic politics of the multi-billion dollar three decade timeline of the AUKUS nuclear powered submarine project, well, it has the Dutton led coalition as much in its sights as any potential threat from China. The core of the AUKUS deal, which is up to $368 billion total project cost out to at least 2050 is, as the government admits, a guesstimate. But no one doubts it's still billions and it will define the economic management debate from here on.

RUBY:

And Albanese is spending potentially far more money than the former coalition government had actually committed to these submarines. But this political contest Paul, it's really not over bringing that figure down is it? It appears to be more about how to actually fund the bigger commitment.

PAUL:

Well, you remember, Ruby, that last week was still dominated by the government's decision to slash tax breaks for the wealthiest superannuants. And that's all part of the much bigger budget repair the Albanese government wants to embark on. And Albanese sees the opportunity to use the Liberal's claimed total support for AUKUS as a weapon to demolish their other default claim to be the better money managers. The PM has accused the Opposition of a quote, frankly juvenile response for voting against his government's super changes and the PM sees this defence spend as a way to pressure the Opposition over the need to repair the budget they left in deep debt. A senior minister tells me Albanese will not tire from reminding Australians who were the major excavators of the budget black hole over the past decade.

Archival tape -- Anthony Albanese:

“You can't have a circumstance whereby you've left a trillion dollars of debt, a trillion dollars of Liberal debt, but then not be prepared to take any action whatsoever to repair the budget…”

PAUL:

The reality is that if the government is forced to rely only on borrowings or savings, then health, education and Social Security, among other outlays, will face the axe. Surely an unpalatable option for a Labor government. So if ever there was a time to rethink something like the stage three tax cuts. You'd have to think now would be it. It would save $240 billion over ten years, and that alone would go a long way to pay for the submarines.

But Peter Dutton so far is showing no signs of letting the Government off the hook, saying Labor knew they'd have to commit to AUKUS spending well before making their pre-election promise to keep the tax cuts.

RUBY:

But Paul, is it worrying that it seems like the only way for either party to really, I suppose win on defence is to spend more money than their opponents? That doesn't necessarily sound like the best way for us to get the best results on security, let alone in the budget.

PAUL:

Well, Ruby, I think it's more to do with the fact there's no cheap way to replace a fleet of submarines and Labor is as prepared as the Liberals to do it. I think that's the message there. Defence Minister Richard Marles says we're witnessing the biggest conventional military build-up we've seen since the end of the Second World War.

Archival tape -- Richard Marles:

“And it's happening within our region and it is not Australia which is doing that and we need to respond to this. A failure to do so would see us be condemned by history.”

PAUL:

And from my conversations that reflects the views inside the Parliamentary Labor Party and the Cabinet; there's no fracturing of support for AUKUS.

But Ruby, outside the government, when we turn to the broader Labor Party, well it's another matter. Labor icon, the former prime minister Paul Keating, is leading the charge against the mammoth spending for a scheme he says is based on false strategic assessments and compromises our independence and sovereignty.

RUBY:

We'll be back in a moment.

[Advertisement]

RUBY:

Paul, this week, former Prime Minister Paul Keating gave a speech at the National Press Club and it was pretty extraordinary. He blasted the AUKUS alliance as the worst decision by a Labor government in a century. So tell me a bit more about the point that Keating was making and why he chose this moment to make this kind of intervention.

PAUL:

It was an extraordinary blast Ruby.

Archival tape -- Paul Keating:

“The idea that we need American submarines to protect us. You know, three if we buy eight three at sea, three are going to protect us from the might of China. Really? I mean, the rubbish of it, the rubbish…”

PAUL:

Keating said the AUKUS agreement made by Albanese represents, quote, the worst international decision by an Australian Labor government since former Labor leader Billy Hughes pushed for conscription in World War One. Billy Hughes, by the way, is now despised as a Labor rat.

Archival tape -- Paul Keating:

“For 360 billion we're going to get eight submarines, right? It must be the worst deal in all history…”

PAUL:

The former prime minister says Labor Party branch members will wince when they see their party returning to what he described as our former colonial masters to find security.

Archival tape -- Paul Keating:

“In San Diego a day or so ago, there's three leaders standing there. Only one is paying: our bloke. Albo. The other two, you know, they got the band playing, happy days are here again, you know, the American president can hardly put three coherent sentences together…”

PAUL:

He apparently particularly hates the British component to this deal.

Archival tape -- Paul Keating:

“So then they've got to put together a global Britain, so they're looking around for suckers. Suckers. You know, global Britain. And they found “Oooh! Here's a bunch of accommodating people in Australia”…”

PAUL:

Well, Laura Tingle was the interlocutor in the highly charged conversation. He told her the deal would lock Australia into being a subordinate to Britain and the United States.

Archival tape -- Paul Keating:

“In the friction of international politics. These things turn up, but they're not threats. You can't impute threat, meaning invasion, with putting a tariff on wine…”

PAUL:

And he accused the Government of letting defence policy run roughshod over sensible foreign policy.

But it's worth saying, Ruby, that view isn't shared by all of Keating's contemporaries. Keating's former colleague in government as defence minister and former US ambassador, Kim Beazley, disagrees with him and says AUKUS is a very welcome development in our security arrangements.

RUBY:

Okay. But to stay with Paul Keating for a moment, I mean, his criticism didn't stop at the Labor Party, did it? He also fired a few shots at the media saying that there had been too much warmongering lately in the news over China. What did he make of that?

PAUL:

Well, for starters, now that he's not running for office, the shackles are off and he doesn't need to curry favour with journalists or their employers. Keating particularly mauled the series last week in The Sydney Morning Herald and The Age, warning China could invade us in three years. Keating even slammed the choice of panel used to create this doomsday scenario and said the hyped up war talk was, quote, the most egregious and provocative news coverage he'd seen in 50 years of public life.

Archival tape -- Paul Keating:

“After what you co-wrote with Hartcher last week in that shocking presentation in The Herald on Monday, Tuesday…you should hang your head in shame. I'm surprised you even have the gall to stand up in public and ask such a question, frankly. You know, you ought to do the right thing and drum yourself out of Australian journalism…”

PAUL:

Keating ended up trading barbs with one of the journalists who co-wrote the pieces, national security correspondent Matthew Knott who actually attended the event and did ask the former PM a question.

Archival tape -- Paul Keating:

“If I were you, mate, I'd hide my face and never appear again.”

Archival tape -- Matthew Knott:

“For the record, Mr. Keating, we're very proud of our journalism. And, you know, we think that's made an important contribution to the national debate. But can I just clarify, do you think that it really is in dispute about what China has been doing in Xinjiang? It's been very well chronicled by the United Nations, which issued a detailed report last year…”

PAUL:

Well, in many ways it was vintage Keating. He has a talent for colourful phrases and biting invective, certainly headline grabbing, but in many ways, just as over the top as The Herald and Age series.

RUBY:

So Paul it appears that despite the bipartisan support in Canberra, there might still be a bit of a debate over the AUKUS deal after all. And this spending, it is going to be with us for a long time. So how do you think that this policy will come to define the Albanese Government?

PAUL:

Well, Anthony Albanese is keen to use this policy as a key lever in an enduring legacy for his government. When announcing it, he reached back into history, bypassing Morrison and his Liberal predecessors who signed up to AUKUS to arrive at Labor's John Curtin, who led the nation in its darkest days of World War Two, and his successor, Ben Chifley.

Archival tape -- Anthony Albanese:

“The scale, complexity and economic significance of this investment is akin to the creation of the Australian automotive industry in the post-World War Two period.”

PAUL:

Albanese said the investment will be a catalyst for innovation and research breakthroughs that will reverberate right through the Australian economy and across every state and territory. The subtext here, Ruby, is the Liberal's destroyed Chifley legacy of manufacturing with the car industry and he will rebuild it with new age manufacturing. The strategic purpose of the subs appears to be taking second place in his emphasis, but it is a big gamble.

RUBY:

Paul, thank you so much for your time.

PAUL:

Thank you. Bye.

[Advertisement]

[Theme Music Starts]

RUBY:

Also in the news today,

Confidence in the International banking giant Credit Suisse is crumbling amid growing concerns about its liquidity.

The bank secured as much as 50 billion Swiss francs, equivalent to $80 billion Australian dollars, from the Swiss central bank yesterday after its share price plummeted – in what the bank’s management described as a ‘precautionary’ move.

And

Bruce Lehrmann has been grilled in court, appearing as a witness in a public hearing to determine whether he can proceed with his defamation case against news.com and the ten network.

The former Liberal staffer gave evidence in court yesterday, for the first time, saying he was “outraged” when the allegations of sexual assault were published – allegations he still strenuously denies and have never been proven in court.

Lehrmann was repeatedly questioned over whether he sought to engage a defamation lawyer before the allegations were even published, something which he also denied.

7am is a daily show from The Monthly and The Saturday Paper.

It’s produced by Kara Jensen-Mackinnon, Zoltan Fecso, and Cheyne Anderson.

Our technical producer is Atticus Bastow. Our editor is Scott Mitchell.

Sarah McVeigh is our Head of Audio, and Erik Jensen is our editor-in-chief.

Mixing this week by Laura Hancock, Andy Elston, and Atticus Bastow.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

I’m Ruby Jones. See you next week.

[Theme Music Ends]