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June 12, 2025 16 mins

As Anthony Albanese heads to the G7 summit, the future of Australia’s most important defence pact is suddenly uncertain. 

The Trump administration is reviewing AUKUS, pushing for more military spending, and condemning Australia’s new sanctions on Israeli ministers – all signs of a once stable alliance under pressure. 

Today, press gallery journalist and columnist for Inside Story, Karen Middleton, on what’s testing the US–Australia relationship, and whether a meeting on neutral ground can strengthen the longstanding alliance.

 

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Guest: Press gallery journalist and columnist for Inside Story, Karen Middleton.

Photo: Bianca De Marchi

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Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
From Sports Media. I'm Daniel James. This is seven AM.
As Anthony Alberinezi heads to the G seven, the future
of Australia's most important defense pact is suddenly uncertain. The
Trump administration is reviewing UCAS, pushing for more military spending,

(00:21):
and condemning Australia's new sanctions on Israeli ministers. All signs
of a once stable alliance under pressure. Today Press Gallery
journalist and columnists for Inside Story Karen Middleton on what's
testing the US Australia relationship and whether a meeting on
neutral ground can patch things up. It's Friday, June thirteen.

Speaker 2 (00:54):
Well, the future of Australia's most expensive and expansive security agreement.
He's under a cloud this morning, with the Pentagon undertaking
a review of the aucust Defense Agreement between the US,
UK and Australia.

Speaker 1 (01:06):
Karen Anthony Albernez. He is heading to Canada for the
G seven, where he's hoping to meet face to face
with President Trump. His administration has just confirmed that they
are reviewing orcast to make sure it's aligned with their
America First agenda. What does that mean for US?

Speaker 3 (01:23):
Well, from the government's point of view, it's not terrific news.
They'll be concerned that any review might lead to some
kind of revision downward to the US commitment to ucas.
Australia has thrown an awful lot into that agreement that
was forged under the Morrison government four years ago, and
we've just handed over hundreds of millions of dollars towards

(01:44):
the US's submarine development program to try and make sure
that Australia gets the submarines that it's ordered. So they'll
be watching that review with a great deal of interest.

Speaker 4 (01:55):
Richard Miles joins you.

Speaker 5 (01:57):
He's Defense Minister and Deputy Prime Minister.

Speaker 4 (01:59):
Good morning, morning rap. How are you? I'm okay. Can
you guarantee that we'll get submarines out of this deal? Well,
I'm very confident this is going to happen.

Speaker 3 (02:07):
Certainly the Minister, Richard Miles, is playing down the significance
of it.

Speaker 4 (02:12):
Look, I think the review that's been announced is not
a surprise. We've been aware of this for some time.
We welcome it. It's something which is perfectly natural for
an incoming administration to do.

Speaker 3 (02:25):
But I'm sure given the unpredictability of the Trump administration
that there'll be some level of anxiety in the Australian
government about it.

Speaker 1 (02:32):
What do we know about the review so far? What
have the TRAP administration officials said about it?

Speaker 3 (02:38):
Not a lot really, the reporting suggesting that it could
be completed within about thirty days. It seems to be
instigated by the Undersecretary for Defense, Elbridge Colby, who we
know from his previous comments, has been a bit of
a skeptic.

Speaker 5 (02:53):
About the Orchest deal.

Speaker 3 (02:55):
So that also will be adding to the Australian anxiety.

Speaker 5 (02:59):
I think yeah, as you said that.

Speaker 3 (03:00):
They're looking at the whole arrangement, which was struck under
a previous Australian government and a previous US administration under
the Biden administration, just to measure it up against the
current President Donald Trump's America First policies.

Speaker 1 (03:15):
We know that TRIUM administration has called on Australia to
top up our defense spending to three point five percent
of GDP, something alban Easy has rejected. So is this
review part of the US strategy to pull us into line?

Speaker 3 (03:28):
Well, there's been some speculation I guess since the review
emerged overnight Thursday night, that maybe this is associated with
adding extra pressure to the Australian government. What we saw
in terms of the sequence of events was the US
Defense Secretary Pete Hegzef went to the annual Shangri La
Security Dialogue in Singapore, as did Richard Miles, and that

(03:52):
is where they had a meeting on the sidelines, and
then Secretary Hegzef issued a sort of readout from that
meeting and interestingly put on the record that he had
asked for an increase in Australian defense spending to three
and a half percent.

Speaker 5 (04:05):
Now currently it's just over two percent.

Speaker 3 (04:07):
It's dudiized to about two point three within the next
few years or so, but it is certainly not scheduled
to rise as high as the Americans want. So when
Richard Marles was asked about this, he said on the
record that he was happy to have the conversation. He
seemed to be amenable to talking about an increase in spending,
but when the Prime Minister was asked about it, he

(04:29):
put the kibosh on it.

Speaker 6 (04:31):
Well, I think that Australia should decide what we spend
on Australia's defense, simple as that. That's my view. Now
if others think that that's not the case, then it's
up to them to make that case.

Speaker 3 (04:44):
We may well increase spending further, but it will all
depend on our capability needs and the strategic environment.

Speaker 6 (04:51):
There is no reason why defense shouldn't be governed by
anything other than one factor. What do we need? What
is the capability we need to keep us safe?

Speaker 3 (05:03):
Whether this review is now a sort of pushback on
that and suggestion that the US is serious and there
could be a lot at stake if we don't commit
to extra spending. People are speculating, but it's an interesting
coincidence of timing.

Speaker 1 (05:17):
Aucas hasn't exactly been popular here in Australia. Does this
in some way, shape or form give Albanies an opportunity
to reconsider that going ahead at all?

Speaker 3 (05:26):
I don't think there's any suggestion from the government that
they are reconsidering it.

Speaker 6 (05:30):
And we want to make sure as well that every
single dollar that if ED spends results in actual assets.
And under the former government there are a lot of
media releases, just not many assets.

Speaker 3 (05:43):
There isn't really a backup plan for submarines that could
get Australia submarines in a timely way other than the
ones that they are planning to buy. Firstly, we all
remember that the Morrison government canceled the contract with France
for conventionally powered submarines, and the proposal to do with
UCUS is that they would then refurbish the existing Collins

(06:04):
class submarines further to fill the gap until we've got
the new ones. I don't think anyone in government is
suggesting we're going to pull out of UCUS. So really
the government needs this to work because it's committed to it.
It's supported what the Morrison government has done, and it's
carried it on. And increasingly the United States is interested
in boosting its presence here in Australia, and certainly in

(06:27):
the readout of that conversation between Pete Hexas and Richard Marles,
the Americans also said that Secretary Hexas raised the issue
of accelerating the US force posture in Australia. So they're
clearly putting pressure on to be able to do more
in Australia. I don't see a way that Australia can
back out of it all now.

Speaker 1 (06:46):
So Albanez is going to be at the G seven
in Canada. At this stage, no meeting between him and
Donald Trump has been confirmed. Do you think that tensions
between the US and Australia are making that less likely
to happen.

Speaker 3 (06:59):
It's not very and I guess it's anyone's guests. I mean,
we've seen not only the defense spending issue. We've seen Australia,
like a whole lot of other countries, upset about the tariffs.
The imposition of steel and aluminium tariffs and the doubling
of those then up towards fifty percent, is a real
blow for Australia. So that is another sticking point between

(07:20):
the two leaders. We've seen mister Albanezi, the Prime Minister,
speak out very strongly about what he said was the
targeting of an Australian journalist.

Speaker 6 (07:29):
That footage was horrific. That was the footage of an
Australian journalist doing what journalists do at their very best.

Speaker 3 (07:38):
The Nine networks Lauren Tamarsi while she was reporting on
the Los Angeles riots.

Speaker 6 (07:44):
And so we have already raised these issues with the
US administration. We don't find it acceptable that it occurred.

Speaker 3 (07:55):
And then we've seen the imposition of sanctions against these
two sort of far right Israeli ministers, Imar Benvie and
Bezalel Smotrich that's joining with a number of other countries
in imposing those sanctions, but that has displeased the United
States as well, so it's not the most warm and
fuzzy backdrop to a possible meeting between the two leaders.

(08:17):
Of course, Anthony Albernizi is invited as an observer. We're
not a member of the G seven, that's the seven
biggest economies globally, so if that meeting with President Trump
goes ahead, it will be on the sidelines. If indeed
President Trump attends that gathering.

Speaker 1 (08:35):
After the break the beef between Australia and the United States, Karen,
we're at a time when the US alliance has never
been more tested. You mentioned that just this week Australia
committed the sanctions on two ministers in the Israeli government.

(08:58):
Can you tell me what that will mean in practice
and how to affect our relationship with the US.

Speaker 3 (09:03):
The sanctions of freezing assets and restricting travel and then
freezing assistance financial assistance to those two ministers as well.
What we don't know is what assets they might have
that might be affected by that here in Australia, or
what links they might have, So in that regard, it's
a symbolic gesture. I guess it's a number of countries
banding together to make this statement and it's certainly a

(09:26):
diplomatic tool or weapon to make it very clear from
Australia's point of view that the government is unhappy with
the comments of these two ministers. They've made very extreme
comments in relation to the creation of settlements in the
West Bank. The government says that they are undermining the
quest that all parties profess to be moving towards, which

(09:49):
is a two party solution to the current crisis in
the Middle East. So the government is saying they're not
ruling out making further steps. They haven't spelled out exactly
what they think practical implications of these ones are. But
it's definitely a diplomatic statement and it's displeased, certainly enraged Israel,
but it's also displeased the United States, and the US

(10:10):
is called it unhelpful to the peace process.

Speaker 1 (10:14):
Politically, the most pressing thing for Anthony Albanezi will be
fighting to secure an exemption from US tariffs. If he
does get a face to face with Trump, how do
you think he'll approach that conversation. Do we know what
kind of arguments he won't be putting forward.

Speaker 5 (10:28):
Well, that's an excellent question.

Speaker 3 (10:30):
We know the President is a transactional person, so you
would have to assume that Australia would be going there
offering something and seeking something in return. We've heard in
recent days that the government had already been reviewing the
arrangements for US beef.

Speaker 5 (10:46):
The sort of hardline ban on.

Speaker 3 (10:48):
US beef has been lifted some years ago, but the
problem Australia still had with US beef was that he
couldn't track it.

Speaker 5 (10:55):
It wasn't traceable.

Speaker 3 (10:56):
So if beef was going into the United States, for example,
from Mexico and Canada, live cattle being slaughtered in the
US and then brought onto Australia, Australia was requiring that
the beast to be able to be traced all the
way through that chain, and that wasn't happening. So the
government seems confident that there are things within those arrangements
that might be able to be clarified that wouldn't undermine

(11:19):
our biosecurity, but that may represent a facilitation of US
beef into Australia.

Speaker 6 (11:25):
Now we'll only sign up to things that are in
Australia's national interest, so on things like the pharmaceutical Benefit Scheme,
the media Bargaining Code, our biosecurity in agriculture. They're not
on the table as far as we're concerned. But are
there areas in which Australia and the United States can

(11:47):
have win wins? Yes, I believe that there are.

Speaker 3 (11:50):
There are a couple of other issues that Australia might
be hoping to use. Some US concern about the treatment
of the shareholders in our US style and joint venture company.
It's a complicated case, but there was a compensation plea
in relation to the treatment of this company called New Coal,
and there's a suggestion that perhaps the federal government might

(12:12):
seek to intervene between sort of the US's concerns and
the New South Wales government where this was an issue,
and whether they can offer that and.

Speaker 5 (12:19):
Put that on the table isn't clear.

Speaker 3 (12:21):
But I think Anthony Alberanezi the suggestion from his demeanor
is that he doesn't want to cowtao to the US president.
He doesn't want to go in there and acquiesce. But
at the same time you've got to walk that fine
line because we've seen how the president responds when people
push back in some cases on what he wants. Certainly
he's made an example of a couple of leaders in

(12:44):
the Oval office in front of all the cameras, so
I think the Prime Minister wouldn't.

Speaker 5 (12:48):
Be wanting that to be occurring with him.

Speaker 1 (12:50):
Finally, Cana, if we turned back domestically. This week, Anthony
Alberanezi gave a press club address which was his first
major speech since being re elected. He say, and what
did he tell us about his priorities for this term.

Speaker 3 (13:03):
Well, his big message was we're going to do what
we said we're going to do and we're not going
to overextend. So he's still trying to manage expectations among
his own constituency and support base that, having won such
a huge majority in the Parliament, that he should push
further and do more than he's already said he would do.
So he's trying to manage those expectations. At the same time,

(13:27):
he's talking about having another gathering later in the year
that is like the Jobs and Skills summit that he
held after the twenty twenty two election, where he brought
a whole lot of stakeholders together, from business, from the
union movement, from the community, sector, a range of organizations
to talk about ideas for the economy, and in this

(13:47):
case this is going to be focused on productivity, which
the government has said it is a big focus for this.

Speaker 6 (13:52):
Term, our own way, on our terms, in our interests,
not seeking to imitate low wage economies, not leaving people
behind in the scramble for some perceived advantage.

Speaker 3 (14:05):
But he's clearly very focused on taking people with him,
not getting out ahead of people, because he recognizes that
if public opinion turns as it can do during the
course of his term and he is seen to be
overextending his mandates somehow, that that could go badly for
him at the next election.

Speaker 5 (14:23):
Despite his large margin.

Speaker 6 (14:24):
My colleagues and I understand that every day in government
is a privilege and with optimism, urgency, purpose and determination,
we intend to make every single day account Thanks very much.

Speaker 3 (14:40):
He looks to other elections in the past, Campbell Newman
in Queensland being the most recent example, where there was
an enormous swing in favor of an incoming government and
then an enormous swing against in the course of one
term and he was out. And he does not want
that to happen to him.

Speaker 1 (14:58):
Karen thank you so much for your time.

Speaker 5 (15:00):
Thanks Daniel.

Speaker 1 (15:18):
Just before we go, you might have heard that there's
some news around that seven AM has been sold by
Schwartz Media. We learned this week that we've been acquired
by Solstice Media, the company behind in new Daily and
other titles. Seven Am will continue, but we will have
more information for you in the coming weeks about what
that means. In the meantime, thanks for listening. Seven Am

(15:40):
is daily show from Schwartz Media in the Saturday Paper.
Is made by Attigus Basto, Shane Anderson, Chris Dngate, Eric Jensen,
Ruby Jones, Sarah mcveee, Travis Evans, Zoltenfat Joe and me
Daniel James. Our theme music is by Ned Beckley and
Josh Hogan of Envelope Audio. A Spain siven i am

(16:00):
for this week. Thanks for listening and have a great weekend.
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