September 16, 2025 • 48 mins
Stop the World is hosting a short series of conversations with Australian politicians that transcend daily politics and breaking news to get to the fundamental strategy and security challenges Australia faces.
In the first of the series, we speak with Shadow Finance Minister, Senator James Paterson. James shares frank views on Australia’s strategic risks, the need to deter authoritarian powers, his advocacy for higher defence spending—despite his instinctive fiscal prudence—and the role technology can play in boosting the economy so Australia doesn't get left behind by the transformative power of artificial intelligence.
He talks about balancing his classical liberal support for an open economy with the need to safeguard strategic industries and technologies, the responsibilities of the tech industry, the maintenance of the Australia-US alliance under the unconventional Trump administration, and the need to prioritise future generations so young people don’t become disillusioned with politics.
James has been a Senator for Victoria since 2016 and has previously served as Shadow Minister for Home Affairs and Cyber, and chair of the Parliamentary Joint Committee on Intelligence and Security.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Stop the world. Welcome to STOP THE WORLD.
I'm David Rowe. And I'm Olivia Nelson.
Today we have the first of a series of conversations with
Australian politicians about strategy and security, the
challenges our nation faces and what to do about them.
To kick things off, we have Liberal senator and shadow
(00:22):
finance minister James Patterson.
James is one of the most thoughtful people in Parliament
on strategic and national security issues.
He's had strong involvement in security and defence for many
years, including a shadow Home Affairs minister and chair of
the Parliamentary Joint Committee on Intelligence and
Security. And it really comes through in
this conversation. He's very clear at a high level
on what the issues are, but alsovery nuanced about the
(00:42):
complexities, the balancing thatany government has to consider
the trade offs of the Australianpeople and the dramatic shifts
that are taking place around theworld.
For instance, he's a champion ofthe US alliance, but he's not
shy about the fact that the US is going through what he calls
an unconventional moment in politics.
Yeah, it's Admiral, admirable understatement.
I in fact, I'm stealing somebodyelse's joke here, but he could
(01:04):
be given the honorary UK citizenship for understatement
there, if not for the fact that you can't sit in the Parliament
and have dual citizenship, of course, as we painfully found
out a few years ago. So anyway, we're aiming for
these conversations not to be overtly political or partisan or
too reactive to breaking news. That said, the French government
had just collapsed for the second time in a year when James
(01:24):
and I were speaking. So we, we got that into the
conversation. But really we're talking about
the issues that transcend Daily Politics.
So James and I talked about key strategic challenges facing
Australia. The need to deter authoritarian
powers, particularly China. The need for clarity about what
we're doing, why we're doing it.The role for higher defence
spending and how to achieve it in a fiscal sense.
(01:46):
The role for technology in boosting our economy so that we
don't get left behind by the transformative power of AI in
particular. Finished with AI again this
week, Dave James also talks about the responsibilities of
the tech industry, the risks of tech dependence on China, the
value of an open economy balanced against the need to
safeguard strategic and criticalindustries, and ultimately how
(02:08):
we knit all this together to strengthen the nation and
prepare ourselves for the rest of the century.
And he finishes on a really strong point about prioritising
the needs of future generations so that they don't become
disillusioned. It's a very fairpoint.
You're closer to the future generations than I am.
But yes, it's, it's hard to denyand, and it's good that James is
(02:29):
prepared to talk about these bigthings.
Anyway, it was a good conversation and we felt that it
was important to give our elected representatives the
chance to talk not just about, you know, the, the, the Daily
Politics, but also the bigger picture.
So we will be back with more episodes of the MPs series soon,
but in the meantime, listen out for our regular episode later
this week. Senator James Patterson, thanks
(02:51):
for joining STOP THE World. Thank you for having me.
So I want to get a sort of overview from you.
To start with, you've held a number of roles that are very
relevant, PJCIS chair, shadow minister for Home Affairs and
Cybersecurity and now oppositionspokesman for finance.
So you've got that rare vantage point on the, the intersection
(03:12):
of security, economy, technology, which is really what
I want to be talking about. That's just a, a, a broad start.
Give me a a quick burst on what you see as the key strategic
challenges facing Australia at the moment.
Well, the defining strategic issue for my generation and for
the country as we know it today is the changing geopolitical
(03:35):
environment, which is being driven by rising authoritarian
powers. You don't need to have access to
classified intelligence to say that the Chinese government is
engaged in the largest build up in peacetime of military
capability since World War 2. And they're accompanying that
build up with pretty menacing rhetoric about how they intend
to use it. And I think history teaches us
(03:56):
that when authoritarian states engage in massive acquisition of
military capability and then tell us how they plan to use it,
we should take that very seriously and we should respond.
And the only way that a self respecting liberal democracy and
a regional power like Australia that has global interests can
respond to something like that is to try and work with like
(04:17):
minded partners to prevent conflict through deterrence.
And what that requires of us is a couple of things.
One, we need to be very clear about what it is we're trying to
deter, who it is we're trying todeter, what it is we're trying
to deter them from doing. We need to clearly communicate
our intent to do so. And we need to work with like
minded partners to invest in ourcapability so that we are
(04:39):
credible when we communicate those messages.
But if any of those elements fall down, if we're not clear
what we're trying to deter, if we're not clear what we're
trying to deter them from, if wedon't invest in the capability
needed to do so, and if we don'twork with our allies and clearly
communicate our intent, then we will fail.
And the consequences of failing could be catastrophic.
Great, great start and lots to unpack there.
(05:01):
Perhaps we we should actually start with the extent to which
we are and are not working well with like minded allies.
I mean, and not just from Australia's perspective, but I
suppose the coalition of liberaldemocracies that at least we can
look to for that kind of cooperation to have a shared
(05:23):
deterrence. I mean, there are a lot of
reasons to be a bit despondent about that.
I'm going to go straight to the recent news.
As we're speaking, there's been a collapse of the French
government for the second time in less than a year, obviously
coming at a time when Europe is facing severe interference from
(05:46):
Russia and when we're really relying on those major European
powers, notably France and Germany, to be strong and
decisive. It's very, very difficult to see
that happening. We can see populists no doubt
coming along with fairy tale solutions, you know, at both
ends of the political spectrum and, and, and that, you know,
that that tends to have its consequences that we've seen
(06:08):
before. I just want to note a quote from
the outgoing French Prime Minister.
Bairu, we you sorry, I'll start this again, He told the
parliament. You have the power to topple the
government, but you don't have the power to erase reality.
I thought that summed it up really well.
Perhaps just your reflections onthat and I suppose just the the
(06:30):
the broader concern about chaos in liberal democracies,
political chaos, the potential for vulnerabilities that are
exploited by rivals. Just your reflections on that
please. Well, for obvious reasons, I
don't want to comment on domestic French politics and
cause an international diplomatic incident, but I
(06:51):
probably should observe the context that this is not the
first time a French government has fallen over a budget issue.
This is a, you know, a common occurrence in French politics.
But at this strategic moment it is a worrying one.
Let's be candid about that because we do need liberal
democracies to step up and recognise the reality of the
strategic moment that we are in and respond.
(07:13):
And we cannot allow outside forces to to take advantages,
take advantage of our system of government, and weaponize our
divisions to try and weaken us. Because if they're successful in
doing so, then we will not be able to effectively respond to
the challenge that they pose to us.
And I understand for democracieswe are called upon right now to
make hard choices, but there is no avoiding those hard choices.
(07:36):
I'm a classical liberal. I believe in free markets and
small government. I would much rather be cutting
taxes and returning as much money to taxpayers as we could
then to be increasing defence spending.
But I recognise that we have responsibility to the existence
of our nation state and future generations to invest in defence
(07:57):
now as deterrent because ultimately it's a false economy.
If you under invest in your defence deterrent and you find
yourself failing to deter adversaries and finding yourself
in conflict, you'll ultimately pay far more than just in
dollars. And you will also pay in dollars
if you fail to do so. And in the case of what Europe
is facing right now, this is nota theoretical future threat or
(08:18):
risk. It's a ever present real one
that they're facing today. And deterrence did fail in
Ukraine. That's why we have a war today,
because the deterrent was not sufficiently credible and
serious. And what Europe has discovered
is if you under invest in your defence industrial pace for
decades as they did, that it cannot respond just by flicking
on a light switch. It's not going to be there when
you need it to be just by increasing defence spending.
(08:40):
It takes years to rebuild that industrial capability to
respond, and in the meantime, your adversaries can make great
gains at your expense. So identifying who we need to
deter seems to be less of an issue for Europe, for European
leadership and presumably for European populations then
(09:02):
perhaps is the case in Australia.
I mean, we, we Europeans seem toknow who they're where their
strategic risk is coming from. It's just a question of whether
that then flows down to political action that actually,
you know, and, and, and whether it flows down to a preparedness
to make sacrifices and make someof the adjustments that they
(09:23):
clearly need to make. It's a slightly different
question for Australia. And I think probably what we
need to think about is are we having an honest public
conversation about the level of strategic risk that we face and
what we need to do to deter it and where it's coming from?
What do you want to just give meyour thoughts on that?
(09:45):
So, I mean, without getting into, say, partisan politics, I
mean, I suppose it's just more the, the question of how, you
know, how ready is the Australian community, how, how
active is that conversation at the moment?
And I mean, are you concerned about that?
And what do you feel needs to bedone to improve it?
My very strong long standing view is that the political class
(10:08):
has failed to be sufficiently honest with the Australian
public about how dire our strategic moment is, how high
the risk of conflict is and how catastrophic the consequences of
that would be, and therefore what is necessary and required
to hopefully prevent that. And we should take very
seriously the warnings of peoplelike Sir Angus Houston, a very
(10:30):
mild mannered person with a lot of perspective and understanding
of history. When he says this is the most
dangerous moment in Australia's history since the end of World
War 2, he's not speaking in riddles.
It's not hard to decipher what that means.
And yet the response in public policy terms is nowhere near
serious enough to meet the the level of that threat.
And defence spending is just oneof those issues, but it is
(10:53):
probably the most important. I suspect if the public really
knew the state of the AustralianDefence Force readiness, the the
risk of conflict and the consequence of conflict, they
would be clamouring to politicians for us to do more
and spend more and invest more to to upgrade that capability
and hopefully prevent that conflict from occurring.
But I think I'm not unreasonably.
(11:14):
They're busy with their lives. They have other preoccupations.
They don't have time to considerin depth and in detail at the
state of defence readiness. And they just would assume that
politicians who have better access to information to them,
including classified intelligence, will be doing
whatever is necessary to make the strategic moment.
And so if we tell them that 2% of GDP is sufficient, then they
(11:34):
will believe us and they will trust us that that is right.
But of course, everyone in the the Security and intelligence
community knows that that's not enough, that we must do more,
and that if we fail to do more, we may find ourselves in a very
difficult position if events getout of our control.
Yeah, Now I, I think that's spoton.
The, the, I mean, it's not, it'sno disrespect to, you know,
(11:57):
sections of the Australian public that they are not across
every, every detail of, you know, complicated foreign policy
and strategic policy. They have their own issues to
focus. I mean, there are a million
things that I know nothing about.
And I'm, I'm sure it's the case for, for a lot, a lot of other
people who work in specific areas.
(12:17):
And therefore it really is aboutthe, the, the, the leadership,
the, you know, the political leadership and also, I mean,
whether it's the business community, the think tank
community, various others who actually do need to communicate
that. So let's just stick with defence
spending then for a moment. What what's the disparity right
now do you think, between the social licence that's required
(12:41):
to persuade Australians that they may need to make some some
trade offs elsewhere? So, you know, between where we
are now and where we need to be in order to get to the sort of
levels that I think you've advocated publicly for some
time. I mean, this is the challenge of
public policy. There are inherent trade offs in
every decision you make. And that's none more obvious
than when you're making budget decisions because there is a
(13:03):
finite amount of money that the federal government can spend and
every dollar you spend on one thing cannot be spent twice.
And there are a lot of good causes that the community puts
to government that gets debated around the table of an
expenditure review committee. And difficult choices do have to
be made between very worthy investment in, you know, social
initiatives, for example, like the National Disability
Insurance Scheme and defence spending.
(13:25):
But defence spending is unique in that it is a form of
insurance in against a future risk.
Not every form of government spending has that quality.
And you can, in periods of history under invest in your
defence and get away with it just like you could with your
own insurance. You could get lucky for a while
and not have insurance on your home or your car.
(13:46):
But if that moment of, you know,unexpected surprise occurs and
you don't have adequate insurance to meet your needs,
you find yourself in a very difficult position.
And obviously the stakes are much higher when you're talking
about potential conflict in our region, which, you know, it
dispassionate independent analysts have assessed to be
potentially existential for Australia in countries like
(14:07):
Australia in the Indo Pacific ifit were to occur.
And so I think politicians in a calm and measured way need to
bring the Australian public along with us for the journey
and educate them about the nature of the risk without
alarming them. There is no sense in alarming
people. And it would be particularly
harmful if we gave people a sense of fatalism that things
were so bad and so out of control that there was nothing
(14:28):
we could do about it. Because there are things that we
can do and sensible, timely investments can make a real
contribution to a material deterrent effect that we intend
to have along with our allies. But of course, the other element
of that is it does require strong cohesion between our
allies. And we do find ourselves in a
moment of history where our principal security ally of the
(14:49):
United States is undergoing, youknow, a very unconventional
moment in its politics and is not resembling the traditional
ally that it used to. In fact, that only strengthens
the case even further for defence spending, whether you're
a supporter of the US Alliance as I am, whether you're a
supporter of orcas as I am, or whether you're a critic of both.
In any scenario going forward, whether Australia has to be
(15:10):
completely self reliant or whether we are reliant within
alliance structure with the United States, we're going to
have to be spending more to meetthe challenges that we face.
Yeah, yeah. Thank you.
You've reminded me to check in on my home and car insurance
because I'm not entirely sure where it's up to.
So added benefit, let, I mean you, you've and I want to come
back to the US in a moment, but I mean you mentioned that you're
(15:33):
a classical liberal and I don't want to get you into any kind of
trouble here. But I mean it, it just seems to
any kind of rational observer that that revenue and spending
do need to be both considered given the, the extent of of, of
uplift that we need in certain areas in national security.
(15:55):
I mean, we can't, we probably can't cut our way elsewhere to
getting to something like three,3 1/2% of defence spending.
I suppose one way to pose the question is are we as an
advanced democracy at the momentin Australia really kind of up
(16:16):
for those hard discussions abouttrade offs and sacrifice?
So I mean, one thing that concerns me is that we've we've
lost that a little bit in our political discourse.
Like it's very tempting for political leaders to go to each
election and say, you know, we're going to promise you
everything. We're not going to demand
anything back from you. And, and that that will actually
(16:37):
need to change. I mean, but you know, the, it
can change over time, but it does need to evolve into
something more like, you know, the sort of, you know, the, the
JFK famous quote about us, not what your country can do for
you, et cetera. Do you have views on that?
Yeah, I'm not just a classical Liberal, I'm also the shadow
finance minister. And so by disposition you would
expect me to be hostile to any increase in government spending
(17:00):
in any field, including defence spending.
But I recognise where we are andI accept the reality and the
advice that we've had from our best informed experts that say
we must do more and we must do it quickly.
And so the challenge for people like me is to make the numbers
add up, to add those thumbs up, and to be mindful that we face
other important challenges in our economy that are not
existential, like our security challenges are.
(17:21):
But they're pretty profound, like the productivity crisis
that we face and the threat thatposes to our living standards
over the medium and long term, and the enormously disruptive
technological changes that are coming with things like
artificial intelligence. So my very strong starting point
is that if we have a productivity crisis as we do in
this country, if we have a business investment crisis as we
(17:43):
do in this country, higher taxesare probably not the way you're
going to solve that problem. And we do need a highly
productive economy, both for itsown sake and the virtue that
brings in higher living standards, but also frankly, to
meet the burden of higher defence spending in the future.
There's when you set a target asa percentage of GDP on defence
spending, there are two ways that you can effectively finance
(18:05):
that. And one is 1 is by growing the
economy faster than you grow government and, and that and we
can have a very strong Defence Force if we have a strong
growing economy. So I'm very reticent to open the
door to a net tax increase. But we have said that we're in
favour of tax reform and that we're open to a conversation
with government about how we canraise revenue more efficiently
in this country that's less distortionary.
(18:26):
And you know, we will be mature and bipartisan and constructive
if the government wants to go down that road.
I. Mean, do you raise an important
point there about the role of technology in our future?
I mean, obviously productivity growth, I mean, that's, that's,
that's in a very serious circumstance at the moment.
But you know, broader GDP growthas well.
(18:47):
You know, there's been an economic reform roundtable
recently that has touched on some of these issues.
How do you, what's, what's your sort of guiding North Star, I
suppose, for how we, how we integrate technology into our
into our industry, into our economy in ways that mitigate
(19:08):
and and manage the risks that itthat it will introduce.
You know, whether it's sort of cyber risks or, you know,
dependency and supply chain risks down the track.
And ensuring that we don't actually see our, our national
power and influence in the worldgradually erode over the next
1020, fifty years by just missing the boat on some of
(19:29):
these amazingly productive technologies.
What's a sort of guiding principle that you try to follow
on that? In the history of economic
growth is really instructive here.
There are two things really which drive rapid increases in
living standards. 1 is economic reform, and we had successful
periods of that in the 80s and 90s in Australia.
But you can only float the dollar once, you can only cut
(19:52):
tariffs once, you can only privatise the Commonwealth Bank
and Qantas once. And once those first big gains
from economic reform happen, thefuture economic gains from
reform are still achievable, butthey're just not as dramatic.
And so there are things we should do to reform public
policy to make our economy more efficient, but the massive gains
in productivity are unlikely to come from that route.
(20:13):
The other way that you get significant economic growth and
productivity growth is the deployment of new technology,
and that requires. Investment and we need to make
ourselves an attractive place toinvest and it also requires
policy settings which are encouraging of the adoption of
new technology and the testing and exploration of new
technology. My concern at the moment with
artificial intelligence is thereis a risk that jurisdictions
(20:35):
like Australia do miss the boat and don't get the upsurge and
the benefit to productivity thatcould come from the deployment
of that technology because our policy settings are not as
encouraging as they should be for that technology.
It's long been the case that theUnited States has been an engine
room for this growth because they have very pro investment,
(20:55):
very pro technology policy settings by default, but lower
taxes, less regulation, you know, and amazing talented
workforce that has come togetherin a perfect storm to create
this amazing world betting technology.
Where other jurisdictions in theworld, notably the European
Union, also have talent, also have lots of people also have
lots of money, but haven't produced anywhere near the
(21:15):
levels of innovation because their public policy settings are
much more hostile to it. So we can't afford to make that
mistake, particularly as a as a relatively smaller economy in
the world. And we want to be play a really
key role in having, you know, artificial intelligence adoption
in Australia. So we need to make sure that all
our policy settings are encouraging of that and not
hostile to that. Otherwise, we will get left
behind. I think you're absolutely right
(21:38):
about about about making sure that we don't miss the boat.
What do you see as the key elements of that?
There are obviously things like encouraging investment in the
form of data centre constructionhere in Australia and there's
some interesting conversations going on around that is also the
(21:58):
encouragement of integration by all industries of of
particularly AI and the impact that could have on jobs.
And clearly that is going to increasingly can raise some
concerns among among the electorate as well.
I mean, I suppose what, what do you see as the sort of the key
(22:20):
pillars of getting a, a, a balanced policy, right that
encourages investment, that encourages deployment, but
doesn't create risks either in the form of unemployment, which
could have, you know, all sorts of political and, and social
impacts of, you know, some sort of rise of populism or expose us
(22:40):
to, you know, to the, again, thesupply chain or the cyber risks
as well. Yeah.
So Australia's not does have significant AI innovation
occurring, but we're not the primary source of development of
new AI technology or software. And so effectively in this
world, we are a price taker and we can't afford to make
ourselves unattractive for investment of these global firms
(23:02):
who can choose to base their technology and their workers and
their data centres anywhere in the world.
And So what do we need to make that attractive?
We need to make sure that they can generate a safe and stable
return on investment for their deployed capital.
And they will want assurances around, you know, taxation
levels and protection of intellectual property and other
important things. We can make ourselves an
(23:22):
attractive place to build data centres to process.
And that means having, you know,predictable planning laws,
affordable energy, you know, high quality workforce.
And we also need to make sure that the roll out of that
technology once it is here is not impeded by unreasonable
demand, for example, that have been made by the union movement
that workers in a workplace should be able to veto the roll
(23:43):
out of AI in a particular workplace.
I mean, that would just guarantee that that firm became
uncompetitive as its competitorsrolled out that technology and
all of those jobs will be lost. But you're also right that
Australians and people all around the world are anxious
about what AI means for them. Is it, is it going to make their
job redundant? Is it going to have other sorts
of, you know, unappealing socialconsequences when it comes to
(24:03):
safety and security and exploitation of children?
And it's really important that we reassure people of that.
And frankly, the technology industry has a very important
responsibility to play in responsible deployment of this
technology to reassure the public.
It's critically important that business leaders are sensitive
to workforce needs and don't putset this up as a one versus the
(24:25):
other. We don't need a 0 sum game here
and it shouldn't need to be thatway.
It's also really important that tech platforms are responsible
in the way they're designed, this technology.
You know, we saw a scandal when Reuters reported about a month
ago that Metre in the training of one of its chatbot AIS had
instructed the AI to allow it toengage in flirtatious,
sexualized conversations with underage children.
(24:47):
Now, this wasn't a rogue output from a model that was
unpredicted. This was actually human
initiated direction from, you know, engineers and the
developers at Meta as to how they wanted the the chatbot to
operate. That's incredibly reckless and
irresponsible. And if companies make bad
choices like that, then they canexpect governments to respond
with really deleterious regulation, which will make it
(25:09):
much harder for them to operate.Yeah, no, absolutely.
Fair enough. I mean, you've talked a little
bit there about about the removal of obstacles, what about
sort of active government incentives?
It seems that that has to be another significant part of it.
I think our, you know, our private R&D investment as a
(25:31):
proportion of GDP has has been low for for years and years.
Of course, you know, Silicon Valley famously benefited from a
lot of sort of government input in its early days.
So, you know, it's it's not somesort of libertarian created
Wonderland as it's sometimes made out to be.
(25:54):
I mean, what do you see as the role?
And again, what do you see as the sort of broad parameters for
more active government encouragement of things like
adoption and integration? Well, in addition to my
responsibilities as Shadow Minister for Finance, I'm also
Shadow Minister for the Public Service and Shadow Minister for
Government services. And there is enormous potential
to revolutionise the delivery ofservices to the public by
(26:18):
government by adopting technology like AI.
It could both significantly improve the efficiency of that
delivery of services by removingthose repetitive tasks and
allowing public servants to focus on those higher order
tasks and reasoning that only human being should ever do.
And it can potentially significantly improve the user
experience on the other end by making the system far more easy
(26:40):
to navigate and far more intuitive than it currently is.
So government has a really important leadership role to
play here in adopting this technology and rolling out and
demonstrating that it can be done safely.
We shouldn't be wild in our experimentation with these
things because there are very sensitive systems and very
sensitive public services like the Australian Taxation Office
(27:00):
and Centrelink and, you know, Medicare, which need to be, you
know, very carefully managed from a privacy and security
point of view. But we shouldn't allow fear of
getting it wrong, stop us from trying to get it right because I
think there really is huge potential and it should.
It should pave the way for otheremployers and other businesses
to do the same. So you can potentially improve
governments, build trust with the the broader community and
(27:23):
the private sector. And what does that include
having the the federal government as an anchor customer
in some ways as well to, you know, from the point of view of
Australian businesses, you know,start UPS or scale UPS.
Yeah, absolutely. I think there are government
agencies which are already experimenting with this with
some success in Australia but also overseas.
(27:44):
There are some impressive examples of time saving
technology that's been introduced which has really
improved the efficiency of public services and and some
which have also improved that user experience as well.
It's very difficult for the public to navigate government
services often. They often come to their members
of Parliament to effectively provide a concierge service so
they know who to talk to about what thing.
(28:05):
And really it shouldn't be that complex.
We should have an ambition to make it easier to navigate and
this technology offers a potential to do that if we get
it right. Is it fair to say though, if
we're risk averse on all of these things?
I mean, it seems to me that really technological capability
equals national power. I mean, that's always been the
(28:28):
case to some extent. You know, obviously, you know,
countries in previous centuries that, that you know, that
invented, whether it's, you know, gunpowder or, or, you
know, these sorts of things. I mean, I'm talking specifically
there about about weaponry, but it but it goes beyond that.
But really technology power is national power.
I mean that we that we do risk. If we if we are risk averse,
(28:52):
then we we are, we are we face the peril of becoming a kind of
a an economic and and political backwater.
That's exactly right. I I gave a speech at the
American Enterprise Institute a couple of years ago on exactly
this topic. The reason why the United States
and its allies won the Cold War is because they won the economic
arms race and the technology arms race.
(29:14):
And the this technology AI, but also quantum and other emerging
technologies will be at least asdecisive on the geopolitical
contest of the 21st century as it was in the 20th century.
And if it's authoritarian stateswho successfully develop and
deploy this technology before democracies do, it will be them
that get not just economic advantages, but also military
(29:37):
and strategic advantages as well.
And we have to remember in this contest that they are not bound
by the same conventions that we are.
They are not of law democracies that do not have the same regard
for individual rights and freedoms, that do not have the
same regard for privacy or intellectual property or any of
those things. And so in many ways we have a
very fierce competitor who will not be bound by the rules.
(29:57):
And that means we must make sureour systems are geared towards
competing with them and mindful that this is of strategic
importance, not just economic importance.
So that's a great segue into issues like TikTok, which you've
spoken and, and dealt with through the parliament and, and
through, through committees a lot.
(30:19):
Talk to me a little bit about how we balance the, the, the
adoption of new technologies coming from authoritarian
countries. So let's, I mean, we can focus
on China a little bit here. Obviously it is technologically
competitive with the United States at the moment.
(30:43):
TikTok was a good kind of case study of how, you know, without
active government regulation or without, you know, active
government policy, it was very easy for that to become highly
integrated into not just our oursort of social interactions, but
our economic interactions as well.
(31:03):
You know, a lot of people were actually using it for business
purposes. And so that was a that was a
test case of where we perhaps went too far down a kind of a
dependency before people startedto wake up to the fact that this
was creating a risk. Just talk to me a little bit
about about how you see China's increasing technological prowess
(31:31):
as as creating risks for Australia, including in terms of
the just the dependencies that we might actually start to form
on powerful technologies. I mean, DeepSeek is another good
example that that if even if they don't pose a sort of
defined national security risk to us, although they may well do
(31:52):
that, they also create dependencies which create longer
term strategic risks for us. Well, social media platforms
today are the public square in democracies where issues get
debated, where consensus is formed and and public policy is
influenced and ultimately decided in, in in elections.
And they perform the same role today that a television station
(32:16):
or a newspaper or a radio would have in the 20th century.
And if someone had proposed in the 20th century that we should
allow our public forums to be controlled by an authoritarian
foreign government, if the Soviet Union proposed by a
television station in Australia,people would have thought you
were completely mad and that that that should never be
permitted. But effectively, without making
(32:37):
any conscious decision at all, we've allowed that to happen
just through, you know, rapidly successful startups like TikTok.
But not only TikTok. And now we have handed over
control over our public square to companies that are directly
influenced by authoritarian foreign governments.
And that comes back to your veryfirst question about, you know,
the dilemmas for democracies andmaking hard choices when
(33:00):
authoritarian states want to make those hard choices even
more difficult. So when we have difficult
debates about spending more on defence and less on, you know,
social care, for example, why would you allow a foreign
government to dictate the terms or influence the terms of that
debate through a social media platform they control?
It makes it even harder for a democracy to achieve consensus
and make difficult decisions in a contested strategic
(33:22):
environment. And it contested information
environment. So I think there's a very strong
case for democracies to be assertive about which social
media platforms we allow to operate in our jurisdiction and
under what conditions. And I was very attracted to the
model before the US Congress that contemplated separating
TikTok from its parent company, Byte Dance, to sever the link
between the company and the China's Communist Party.
(33:45):
Now, that is subject to the ultimate implementation of the
Trump administration. We should continue to watch that
very closely. But I've said on the record for
many years that if the Trump administration, if the US
administration is successful in ensuring A safer version of
TikTok is available to Americansfree from the influence of an
authoritarian foreign government, Australians should
(34:05):
want to have access to that too.And I hope that our government
will be working closely with theUS administration as they settle
these issues to make sure we're part of that solution.
How dismayed are you that that has not gone the way that the
Congress actually voted that it should go?
Look, I think it is a really interesting case study in the
relationship between the executive presidency and the
legislature in the United States.
(34:26):
And I'm a former congressional intern, and I've studied that
with great interest from an academic perspective.
And I won't weigh on indirectly on how the US administration
seeks to navigate these issues, but the Trump administration
itself has just continued to defer that deadline for the
enforcement of that law and spared prosecution of the
technology platforms that host, continue to host TikTok,
(34:47):
effectively in defiance of a actof Congress.
And that will have to come to a resolution of some kind at some
point that can't continue in perpetuity, even the US system.
And so it'll be very important to see where that lands.
There's been some reporting coming out of the administration
that they think that there is a possible deal hit there, that a,
that AUS technology company can take a majority mistake in AUS
(35:07):
headquartered, you know, Tiktok platform, that there can be
structural separation. You know, those details will be
really important because the Biden administration tried for
the best part of four years to negotiate a settlement with
Tiktok that was called Project Texas that would have achieved
that. And ultimately, the intelligence
community advising the Biden administration advised them that
it wasn't going to be possible to have sufficient degree of
(35:29):
confidence that they wouldn't bethat ultimate influence from the
parent company. Yeah.
Let's broaden it out a little bit on the economic security
issue. We've talked for years about the
need for diversification and that was turbocharged by both, I
suppose, COVID and also the period of economic coercion from
China. So you know, both in the sense
(35:50):
of our supply chains and our export destinations.
How do you think we're actually going on following through on a
lot of that rhetoric that we've that we've been engaged in for a
long time? Well, this is a shared problem
between the business community and the government and we have
to work together to solve this problem.
I don't ever want to live in a society or an economy where the
(36:12):
government directs trade and tells companies, you know,
outside exceptions where we havesanctions obviously, that they
should trade at a lesser price with some country because that's
preferable to the government of the time.
That's not a free market, you know, economy and that's not a
road to prosperity for a countrylike Australia which is an open
trading economy. But by the same token, I think
(36:32):
we've all learnt lessons both from the Covic pandemic and
Chinas economic coercion that itis not healthy or strategic to
have so much dependence on either the export front or
frankly on the import front. Either from a country which is
willing to link economics and trade to politics and
geostrategic issues and willing to wield leverage over the
(36:55):
economy to achieve, you know, political outcomes.
And so the best thing that politicians can do is help clear
the pathway with as many other jurisdictions in the world
through free trade agreements sothat exporters have other
choices. And then I'm, I'm dismayed by
the failure to conclude an European Union free trade
agreement between Australia and EU that has even more strategic
(37:15):
merit today than it ever has at also has very strong economic
merit. And the failure to resolve that
has been, I think, one of the one of the significant trade
failures of this government, which they should, you know,
seek to remedy, particularly because they came to government
promising to conclude it within 12 months and clearly haven't
done so. And then I think we also need to
think about what other measures of resilience do we need on the
(37:37):
other side of the equation, which is on our imports.
We never want to be dependent ona country that could withhold
imports from us that we need to operate in a time of crisis.
And we have to think about, you know, what are the steps we can
take to make our economy more resilient to those sort of
shocks. I mean, I love the, the fact
that you are still committed to basic ideas of, you know, sort
of open economies and again, those classical liberal
(38:00):
principles and I and I look, I, I, I share a lot of them myself
too, I suppose. And, and you've, you've
addressed this to some extent, but how many sacrifices are we
going to have to make, do you think over the next decade or
two on those, those principles which are clearly beneficial?
(38:24):
I mean, anyone, I'm not an economist and I don't have great
knowledge of, of economics, but I understand enough about
comparative advantage to recognise that, that, that, that
that trade has been enormously prosperous.
Trade within a set of, of rules has been enormously beneficial
(38:45):
for the whole world. I mean, how do you feel, given
your sort of philosophical background about the degree to
which we're going to have to putaside some of those principles
and and accept some, you know, some just hard headed decisions
that if they're going to do it to us, we're going to have to
respond in turn in some way? We have to be very judicious
(39:06):
about how we do this because we could find ourselves in a
situation where every industry comes to Canberra, cap in hand,
making an argument that they're strategically important and they
deserve government intervention and assistance to protect them,
to protect the nation. And if we follow that through to
its logical conclusion, we end up with an economy that's closed
off from the world and far poorer than it could otherwise
(39:29):
be. But the other side of that coin
is that resilience is deterrence.
If we are more resilient and ouradversaries know that we're more
resilient, that will make them think twice before engaging us
in conflict and threatening our interests.
Conversely, if we're seen to be vulnerable and dependent, that
increases the risk of conflict in the future that we are not in
(39:49):
a position to respond to becauseour adversaries look at these
things very closely. And they look at in terms of our
ability to sustain our economy in a time of crisis.
Could we continue to fuel our economy?
Could we continue to provide medicines and other essential
services to our citizens? But they also look at it in
terms of our things like our critical infrastructure and
their cyber vulnerabilities. And so one of the things I have
(40:09):
to grapple with is Intelligence Committee chair in the previous.
Government was how much more power should we give government
over private companies that run infrastructure which is
systemically important to our country because of their cyber
vulnerabilities. Because we had intelligence in
the open source which told us that foreign nation states were
looking to damage those, weaponize those vulnerabilities
(40:30):
and damage those services to weaken us as a country.
And we had to accept that there was a trade off there, that we
had to accept a greater role forthe state in directing private
companies to invest better in their own cyber defences because
they didn't just have a duty to their shareholders and their
employees and their customers. They had a broader duty to the
economy because they are systemically important.
And so we have to have lots of those conversations.
(40:51):
We shouldn't allow mission creepbecause if every everything
becomes critical and nothing is critical, we have to choose the
things that are most critical. And we don't want to become a
centrally planned state economy.But there is a role for
government in, you know, assessing the risk, assessing
the strategic strategic environment and directing
private sector within limits to do things to protect themselves
(41:12):
from it. I'm conscious of time, but I did
promise to come back to the United States.
I mean, you mentioned AI can't remember if it was unpredictably
or or uncertainty was that was the term that you you used.
But I mean, recognising the the,the, the sort of dual issues of
(41:32):
the importance of the alliance, in fact, the indispensability of
the alliance to Australia's strategic position, our need to
to do more, you know, to, to share some more of the burden
through things like increased defence spending.
But then the the question of reliability of the United
(41:54):
States, and it's well, and, and the the president's proclivity
for sometimes treating allies and adversaries as
interchangeable, I suppose sometimes feeling as if
something like tariffs can actually be sort of punitive.
(42:15):
Of course, we've got Orcas on the table as well, hopefully
with a, with a positive decisioncoming soon.
I mean, recognising that you're more constrained on this than I
am, just give me your sort of broad assessment of, you know,
just how difficult those sorts of balances are going to be to,
(42:36):
to manage over the next three years or so.
Yeah, look, I'm very fond of theUnited States.
I've I've lived there twice, I've visited probably more than
30 times, have good relationships with friends in
Congress and think tank community and and the
administration. But anybody can recognise that
this is an unconventional administration which is pursuing
(42:59):
a non traditional foreign policyand it has raised questions in
lots of US allies about it's reliability.
Now, I'm very much of the schoolthat the response to that is
that we should double down on the alliance, that it is
indispensable and that we need to make some very big
contributions towards that alliance in the form of high
defence spending, which is a keyconcern of not just this
(43:23):
administration, but actually previous US administrations,
including democratic administrations that they want
better burden sharing with theirallies.
And they want us to take our responsibility as part of
collective deterrence to make a meaningful contribution to that
and not to free ride on on theirattempts to do so.
And I think we should double down on August.
We should accelerate the timelines for delivery of, you
(43:46):
know, pillar one and Pillar 2. But let's say I'm wrong, that
let's say that the US Alliance is, you know, no matter what we
do, you know, can't be relied upon, that orcas is going to be
withdrawn from us in some future.
Well, the answer is still the same.
We still need to spend more on defence and become more self
reliant and protect our own interests more by doing more for
ourselves. Whether you believe in the US
(44:07):
Alliance or a sceptic of the US Alliance, the strategic
environment is what dictates what we need to do, not just
what our allies posture might be.
And so if we want to try and find our way in the world
without Americans, it's going tobe a lot more 3% of GDP that
we'll be spending. But I think there's a way that
we can find our way within the alliance that upholds the
alliance. That also means Australia does
(44:29):
our fair share of the burden sharing, but it will require a
big lift in defence spending to do that.
Yeah, Yeah, No, I agree. And I, I, I very much hope that
you're correct on that. All right.
I'm gonna wrap it up with a, with a just a question about,
about looking forward to the future.
I mean, without sort of, I mean it's cheaply personalising it.
I mean, you and I, I think both have relatively young families.
(44:50):
We think obviously about not just what our own children are
going to do and what kind of future they're going to face,
but all young Australians. How confident or concerned are
you that that, that kids today are going to grow up in a
(45:11):
country that is secure, that is reasonably prosperous, that has
a kind of standard of living that that you and I and perhaps
our parents enjoy it. I mean, there, there does seem
to be some sort of reasonable questions about that.
And it's, you know, for the first, you know, it's, it's
basically reversing historical trends that we've come to take
(45:33):
for granted for, for at least a couple of generations since
probably the the 1945 period. What what are your feelings
about that? I am optimistic, but my optimism
is much more measured and guarded and cautious than it
would have been if you had askedme that question 5 or 10 years
ago. We do face some very serious
(45:57):
headwinds, both strategically, which is my overwhelming
concern, but also economically. And future generations,
including my children and your children, should be more
prosperous and more wealthy thanour generation has been if we
navigate this period well and ifwe take advantage of the
opportunities that present us with new technology.
(46:17):
But they faced some obstacles that previous generations did
not, you know, chiefly, you know, participating in the
economic system in our country, of getting in onto the housing
market, you know, building wealth for their families,
having aspiration and getting ahead.
And there is intergenerational despair in this country right
now. And all the public polling
demonstrates that young people are very pessimistic about their
(46:40):
own personal prospects and aboutthe prospects of our country.
And I think we have an urgent national task to restore that
sense of hope and optimism to younger generations.
They deserve to be hopeful or optimistic about the future, but
it depends on the choices we make to prioritise their
interests, to give them opportunities so that they do
inherit a country from us that is stronger, that is more secure
(47:01):
and that is more free. And that should be all of our
ambition. I.
Mean political schisms are always bad, but it feels like an
intergenerational political schism could be like one of the
worst things that that a democracy could possibly face.
Edmund Burke said a society is acompact between the the living
and the dead and the yet to be born.
And if that breaks down it is utterly corrosive to democracies
(47:24):
in particular. And we do have to deal with what
is actually rising into generational resentment where
young people feel that older generations have prospered at
their expense. That doesn't have to be true,
but we do have to make active policy decisions that, for
example, make it easier for themto get into the housing market,
that make it easier for them to build wealth for themselves and
family, that gives them that of aspiration again, Otherwise that
(47:46):
that resentment will grow and isa recipe for a divided society,
not a strong and cohesive society.
And at a time in the world wherewe need to be strong or we need
to be cohesive, where there are so many pressures, this is 1
pressure that we have to deal with quite urgently.
Because I am worried that young people feel so disillusioned by
the system that they're opting out of it.
And you can see it in their voting patterns when they vote
(48:07):
for more extreme and marginal parties.
And that's not just the case in Australia, but all around the
Western world. But you can see it just from the
disengagement with the politicalsystem at all, at all.
And the the reason for that's understandable.
If they feel like the system is not working in their interest,
well, what is their interest in preserving a system which has
actually worked very well for ustoday?
I love a good Edmund Burke quoteand that's a belter, so thank
(48:30):
you. Great chat, James.
I really appreciate your time. That's a very fascinating
conversation. Thank you.
Thank you for having me. That's all we have time for
today on Stop THE World. We'll be back with another
episode later this week.
Stop the world. Welcome to STOP THE WORLD.
I'm David Rowe. And I'm Olivia Nelson.
Today we have the first of a series of conversations with
Australian politicians about strategy and security, the
challenges our nation faces and what to do about them.
To kick things off, we have Liberal senator and shadow
(00:22):
finance minister James Patterson.
James is one of the most thoughtful people in Parliament
on strategic and national security issues.
He's had strong involvement in security and defence for many
years, including a shadow Home Affairs minister and chair of
the Parliamentary Joint Committee on Intelligence and
Security. And it really comes through in
this conversation. He's very clear at a high level
on what the issues are, but alsovery nuanced about the
(00:42):
complexities, the balancing thatany government has to consider
the trade offs of the Australianpeople and the dramatic shifts
that are taking place around theworld.
For instance, he's a champion ofthe US alliance, but he's not
shy about the fact that the US is going through what he calls
an unconventional moment in politics.
Yeah, it's Admiral, admirable understatement.
I in fact, I'm stealing somebodyelse's joke here, but he could
(01:04):
be given the honorary UK citizenship for understatement
there, if not for the fact that you can't sit in the Parliament
and have dual citizenship, of course, as we painfully found
out a few years ago. So anyway, we're aiming for
these conversations not to be overtly political or partisan or
too reactive to breaking news. That said, the French government
had just collapsed for the second time in a year when James
(01:24):
and I were speaking. So we, we got that into the
conversation. But really we're talking about
the issues that transcend Daily Politics.
So James and I talked about key strategic challenges facing
Australia. The need to deter authoritarian
powers, particularly China. The need for clarity about what
we're doing, why we're doing it.The role for higher defence
spending and how to achieve it in a fiscal sense.
(01:46):
The role for technology in boosting our economy so that we
don't get left behind by the transformative power of AI in
particular. Finished with AI again this
week, Dave James also talks about the responsibilities of
the tech industry, the risks of tech dependence on China, the
value of an open economy balanced against the need to
safeguard strategic and criticalindustries, and ultimately how
(02:08):
we knit all this together to strengthen the nation and
prepare ourselves for the rest of the century.
And he finishes on a really strong point about prioritising
the needs of future generations so that they don't become
disillusioned. It's a very fairpoint.
You're closer to the future generations than I am.
But yes, it's, it's hard to denyand, and it's good that James is
(02:29):
prepared to talk about these bigthings.
Anyway, it was a good conversation and we felt that it
was important to give our elected representatives the
chance to talk not just about, you know, the, the, the Daily
Politics, but also the bigger picture.
So we will be back with more episodes of the MPs series soon,
but in the meantime, listen out for our regular episode later
this week. Senator James Patterson, thanks
(02:51):
for joining STOP THE World. Thank you for having me.
So I want to get a sort of overview from you.
To start with, you've held a number of roles that are very
relevant, PJCIS chair, shadow minister for Home Affairs and
Cybersecurity and now oppositionspokesman for finance.
So you've got that rare vantage point on the, the intersection
(03:12):
of security, economy, technology, which is really what
I want to be talking about. That's just a, a, a broad start.
Give me a a quick burst on what you see as the key strategic
challenges facing Australia at the moment.
Well, the defining strategic issue for my generation and for
the country as we know it today is the changing geopolitical
(03:35):
environment, which is being driven by rising authoritarian
powers. You don't need to have access to
classified intelligence to say that the Chinese government is
engaged in the largest build up in peacetime of military
capability since World War 2. And they're accompanying that
build up with pretty menacing rhetoric about how they intend
to use it. And I think history teaches us
(03:56):
that when authoritarian states engage in massive acquisition of
military capability and then tell us how they plan to use it,
we should take that very seriously and we should respond.
And the only way that a self respecting liberal democracy and
a regional power like Australia that has global interests can
respond to something like that is to try and work with like
(04:17):
minded partners to prevent conflict through deterrence.
And what that requires of us is a couple of things.
One, we need to be very clear about what it is we're trying to
deter, who it is we're trying todeter, what it is we're trying
to deter them from doing. We need to clearly communicate
our intent to do so. And we need to work with like
minded partners to invest in ourcapability so that we are
(04:39):
credible when we communicate those messages.
But if any of those elements fall down, if we're not clear
what we're trying to deter, if we're not clear what we're
trying to deter them from, if wedon't invest in the capability
needed to do so, and if we don'twork with our allies and clearly
communicate our intent, then we will fail.
And the consequences of failing could be catastrophic.
Great, great start and lots to unpack there.
(05:01):
Perhaps we we should actually start with the extent to which
we are and are not working well with like minded allies.
I mean, and not just from Australia's perspective, but I
suppose the coalition of liberaldemocracies that at least we can
look to for that kind of cooperation to have a shared
(05:23):
deterrence. I mean, there are a lot of
reasons to be a bit despondent about that.
I'm going to go straight to the recent news.
As we're speaking, there's been a collapse of the French
government for the second time in less than a year, obviously
coming at a time when Europe is facing severe interference from
(05:46):
Russia and when we're really relying on those major European
powers, notably France and Germany, to be strong and
decisive. It's very, very difficult to see
that happening. We can see populists no doubt
coming along with fairy tale solutions, you know, at both
ends of the political spectrum and, and, and that, you know,
that that tends to have its consequences that we've seen
(06:08):
before. I just want to note a quote from
the outgoing French Prime Minister.
Bairu, we you sorry, I'll start this again, He told the
parliament. You have the power to topple the
government, but you don't have the power to erase reality.
I thought that summed it up really well.
Perhaps just your reflections onthat and I suppose just the the
(06:30):
the broader concern about chaos in liberal democracies,
political chaos, the potential for vulnerabilities that are
exploited by rivals. Just your reflections on that
please. Well, for obvious reasons, I
don't want to comment on domestic French politics and
cause an international diplomatic incident, but I
(06:51):
probably should observe the context that this is not the
first time a French government has fallen over a budget issue.
This is a, you know, a common occurrence in French politics.
But at this strategic moment it is a worrying one.
Let's be candid about that because we do need liberal
democracies to step up and recognise the reality of the
strategic moment that we are in and respond.
(07:13):
And we cannot allow outside forces to to take advantages,
take advantage of our system of government, and weaponize our
divisions to try and weaken us. Because if they're successful in
doing so, then we will not be able to effectively respond to
the challenge that they pose to us.
And I understand for democracieswe are called upon right now to
make hard choices, but there is no avoiding those hard choices.
(07:36):
I'm a classical liberal. I believe in free markets and
small government. I would much rather be cutting
taxes and returning as much money to taxpayers as we could
then to be increasing defence spending.
But I recognise that we have responsibility to the existence
of our nation state and future generations to invest in defence
(07:57):
now as deterrent because ultimately it's a false economy.
If you under invest in your defence deterrent and you find
yourself failing to deter adversaries and finding yourself
in conflict, you'll ultimately pay far more than just in
dollars. And you will also pay in dollars
if you fail to do so. And in the case of what Europe
is facing right now, this is nota theoretical future threat or
(08:18):
risk. It's a ever present real one
that they're facing today. And deterrence did fail in
Ukraine. That's why we have a war today,
because the deterrent was not sufficiently credible and
serious. And what Europe has discovered
is if you under invest in your defence industrial pace for
decades as they did, that it cannot respond just by flicking
on a light switch. It's not going to be there when
you need it to be just by increasing defence spending.
(08:40):
It takes years to rebuild that industrial capability to
respond, and in the meantime, your adversaries can make great
gains at your expense. So identifying who we need to
deter seems to be less of an issue for Europe, for European
leadership and presumably for European populations then
(09:02):
perhaps is the case in Australia.
I mean, we, we Europeans seem toknow who they're where their
strategic risk is coming from. It's just a question of whether
that then flows down to political action that actually,
you know, and, and, and whether it flows down to a preparedness
to make sacrifices and make someof the adjustments that they
(09:23):
clearly need to make. It's a slightly different
question for Australia. And I think probably what we
need to think about is are we having an honest public
conversation about the level of strategic risk that we face and
what we need to do to deter it and where it's coming from?
What do you want to just give meyour thoughts on that?
(09:45):
So, I mean, without getting into, say, partisan politics, I
mean, I suppose it's just more the, the question of how, you
know, how ready is the Australian community, how, how
active is that conversation at the moment?
And I mean, are you concerned about that?
And what do you feel needs to bedone to improve it?
My very strong long standing view is that the political class
(10:08):
has failed to be sufficiently honest with the Australian
public about how dire our strategic moment is, how high
the risk of conflict is and how catastrophic the consequences of
that would be, and therefore what is necessary and required
to hopefully prevent that. And we should take very
seriously the warnings of peoplelike Sir Angus Houston, a very
(10:30):
mild mannered person with a lot of perspective and understanding
of history. When he says this is the most
dangerous moment in Australia's history since the end of World
War 2, he's not speaking in riddles.
It's not hard to decipher what that means.
And yet the response in public policy terms is nowhere near
serious enough to meet the the level of that threat.
And defence spending is just oneof those issues, but it is
(10:53):
probably the most important. I suspect if the public really
knew the state of the AustralianDefence Force readiness, the the
risk of conflict and the consequence of conflict, they
would be clamouring to politicians for us to do more
and spend more and invest more to to upgrade that capability
and hopefully prevent that conflict from occurring.
But I think I'm not unreasonably.
(11:14):
They're busy with their lives. They have other preoccupations.
They don't have time to considerin depth and in detail at the
state of defence readiness. And they just would assume that
politicians who have better access to information to them,
including classified intelligence, will be doing
whatever is necessary to make the strategic moment.
And so if we tell them that 2% of GDP is sufficient, then they
(11:34):
will believe us and they will trust us that that is right.
But of course, everyone in the the Security and intelligence
community knows that that's not enough, that we must do more,
and that if we fail to do more, we may find ourselves in a very
difficult position if events getout of our control.
Yeah, Now I, I think that's spoton.
The, the, I mean, it's not, it'sno disrespect to, you know,
(11:57):
sections of the Australian public that they are not across
every, every detail of, you know, complicated foreign policy
and strategic policy. They have their own issues to
focus. I mean, there are a million
things that I know nothing about.
And I'm, I'm sure it's the case for, for a lot, a lot of other
people who work in specific areas.
(12:17):
And therefore it really is aboutthe, the, the, the leadership,
the, you know, the political leadership and also, I mean,
whether it's the business community, the think tank
community, various others who actually do need to communicate
that. So let's just stick with defence
spending then for a moment. What what's the disparity right
now do you think, between the social licence that's required
(12:41):
to persuade Australians that they may need to make some some
trade offs elsewhere? So, you know, between where we
are now and where we need to be in order to get to the sort of
levels that I think you've advocated publicly for some
time. I mean, this is the challenge of
public policy. There are inherent trade offs in
every decision you make. And that's none more obvious
than when you're making budget decisions because there is a
(13:03):
finite amount of money that the federal government can spend and
every dollar you spend on one thing cannot be spent twice.
And there are a lot of good causes that the community puts
to government that gets debated around the table of an
expenditure review committee. And difficult choices do have to
be made between very worthy investment in, you know, social
initiatives, for example, like the National Disability
Insurance Scheme and defence spending.
(13:25):
But defence spending is unique in that it is a form of
insurance in against a future risk.
Not every form of government spending has that quality.
And you can, in periods of history under invest in your
defence and get away with it just like you could with your
own insurance. You could get lucky for a while
and not have insurance on your home or your car.
(13:46):
But if that moment of, you know,unexpected surprise occurs and
you don't have adequate insurance to meet your needs,
you find yourself in a very difficult position.
And obviously the stakes are much higher when you're talking
about potential conflict in our region, which, you know, it
dispassionate independent analysts have assessed to be
potentially existential for Australia in countries like
(14:07):
Australia in the Indo Pacific ifit were to occur.
And so I think politicians in a calm and measured way need to
bring the Australian public along with us for the journey
and educate them about the nature of the risk without
alarming them. There is no sense in alarming
people. And it would be particularly
harmful if we gave people a sense of fatalism that things
were so bad and so out of control that there was nothing
(14:28):
we could do about it. Because there are things that we
can do and sensible, timely investments can make a real
contribution to a material deterrent effect that we intend
to have along with our allies. But of course, the other element
of that is it does require strong cohesion between our
allies. And we do find ourselves in a
moment of history where our principal security ally of the
(14:49):
United States is undergoing, youknow, a very unconventional
moment in its politics and is not resembling the traditional
ally that it used to. In fact, that only strengthens
the case even further for defence spending, whether you're
a supporter of the US Alliance as I am, whether you're a
supporter of orcas as I am, or whether you're a critic of both.
In any scenario going forward, whether Australia has to be
(15:10):
completely self reliant or whether we are reliant within
alliance structure with the United States, we're going to
have to be spending more to meetthe challenges that we face.
Yeah, yeah. Thank you.
You've reminded me to check in on my home and car insurance
because I'm not entirely sure where it's up to.
So added benefit, let, I mean you, you've and I want to come
back to the US in a moment, but I mean you mentioned that you're
(15:33):
a classical liberal and I don't want to get you into any kind of
trouble here. But I mean it, it just seems to
any kind of rational observer that that revenue and spending
do need to be both considered given the, the extent of of, of
uplift that we need in certain areas in national security.
(15:55):
I mean, we can't, we probably can't cut our way elsewhere to
getting to something like three,3 1/2% of defence spending.
I suppose one way to pose the question is are we as an
advanced democracy at the momentin Australia really kind of up
(16:16):
for those hard discussions abouttrade offs and sacrifice?
So I mean, one thing that concerns me is that we've we've
lost that a little bit in our political discourse.
Like it's very tempting for political leaders to go to each
election and say, you know, we're going to promise you
everything. We're not going to demand
anything back from you. And, and that that will actually
(16:37):
need to change. I mean, but you know, the, it
can change over time, but it does need to evolve into
something more like, you know, the sort of, you know, the, the
JFK famous quote about us, not what your country can do for
you, et cetera. Do you have views on that?
Yeah, I'm not just a classical Liberal, I'm also the shadow
finance minister. And so by disposition you would
expect me to be hostile to any increase in government spending
(17:00):
in any field, including defence spending.
But I recognise where we are andI accept the reality and the
advice that we've had from our best informed experts that say
we must do more and we must do it quickly.
And so the challenge for people like me is to make the numbers
add up, to add those thumbs up, and to be mindful that we face
other important challenges in our economy that are not
existential, like our security challenges are.
(17:21):
But they're pretty profound, like the productivity crisis
that we face and the threat thatposes to our living standards
over the medium and long term, and the enormously disruptive
technological changes that are coming with things like
artificial intelligence. So my very strong starting point
is that if we have a productivity crisis as we do in
this country, if we have a business investment crisis as we
(17:43):
do in this country, higher taxesare probably not the way you're
going to solve that problem. And we do need a highly
productive economy, both for itsown sake and the virtue that
brings in higher living standards, but also frankly, to
meet the burden of higher defence spending in the future.
There's when you set a target asa percentage of GDP on defence
spending, there are two ways that you can effectively finance
(18:05):
that. And one is 1 is by growing the
economy faster than you grow government and, and that and we
can have a very strong Defence Force if we have a strong
growing economy. So I'm very reticent to open the
door to a net tax increase. But we have said that we're in
favour of tax reform and that we're open to a conversation
with government about how we canraise revenue more efficiently
in this country that's less distortionary.
(18:26):
And you know, we will be mature and bipartisan and constructive
if the government wants to go down that road.
I. Mean, do you raise an important
point there about the role of technology in our future?
I mean, obviously productivity growth, I mean, that's, that's,
that's in a very serious circumstance at the moment.
But you know, broader GDP growthas well.
(18:47):
You know, there's been an economic reform roundtable
recently that has touched on some of these issues.
How do you, what's, what's your sort of guiding North Star, I
suppose, for how we, how we integrate technology into our
into our industry, into our economy in ways that mitigate
(19:08):
and and manage the risks that itthat it will introduce.
You know, whether it's sort of cyber risks or, you know,
dependency and supply chain risks down the track.
And ensuring that we don't actually see our, our national
power and influence in the worldgradually erode over the next
1020, fifty years by just missing the boat on some of
(19:29):
these amazingly productive technologies.
What's a sort of guiding principle that you try to follow
on that? In the history of economic
growth is really instructive here.
There are two things really which drive rapid increases in
living standards. 1 is economic reform, and we had successful
periods of that in the 80s and 90s in Australia.
But you can only float the dollar once, you can only cut
(19:52):
tariffs once, you can only privatise the Commonwealth Bank
and Qantas once. And once those first big gains
from economic reform happen, thefuture economic gains from
reform are still achievable, butthey're just not as dramatic.
And so there are things we should do to reform public
policy to make our economy more efficient, but the massive gains
in productivity are unlikely to come from that route.
(20:13):
The other way that you get significant economic growth and
productivity growth is the deployment of new technology,
and that requires. Investment and we need to make
ourselves an attractive place toinvest and it also requires
policy settings which are encouraging of the adoption of
new technology and the testing and exploration of new
technology. My concern at the moment with
artificial intelligence is thereis a risk that jurisdictions
(20:35):
like Australia do miss the boat and don't get the upsurge and
the benefit to productivity thatcould come from the deployment
of that technology because our policy settings are not as
encouraging as they should be for that technology.
It's long been the case that theUnited States has been an engine
room for this growth because they have very pro investment,
(20:55):
very pro technology policy settings by default, but lower
taxes, less regulation, you know, and amazing talented
workforce that has come togetherin a perfect storm to create
this amazing world betting technology.
Where other jurisdictions in theworld, notably the European
Union, also have talent, also have lots of people also have
lots of money, but haven't produced anywhere near the
(21:15):
levels of innovation because their public policy settings are
much more hostile to it. So we can't afford to make that
mistake, particularly as a as a relatively smaller economy in
the world. And we want to be play a really
key role in having, you know, artificial intelligence adoption
in Australia. So we need to make sure that all
our policy settings are encouraging of that and not
hostile to that. Otherwise, we will get left
behind. I think you're absolutely right
(21:38):
about about about making sure that we don't miss the boat.
What do you see as the key elements of that?
There are obviously things like encouraging investment in the
form of data centre constructionhere in Australia and there's
some interesting conversations going on around that is also the
(21:58):
encouragement of integration by all industries of of
particularly AI and the impact that could have on jobs.
And clearly that is going to increasingly can raise some
concerns among among the electorate as well.
I mean, I suppose what, what do you see as the sort of the key
(22:20):
pillars of getting a, a, a balanced policy, right that
encourages investment, that encourages deployment, but
doesn't create risks either in the form of unemployment, which
could have, you know, all sorts of political and, and social
impacts of, you know, some sort of rise of populism or expose us
(22:40):
to, you know, to the, again, thesupply chain or the cyber risks
as well. Yeah.
So Australia's not does have significant AI innovation
occurring, but we're not the primary source of development of
new AI technology or software. And so effectively in this
world, we are a price taker and we can't afford to make
ourselves unattractive for investment of these global firms
(23:02):
who can choose to base their technology and their workers and
their data centres anywhere in the world.
And So what do we need to make that attractive?
We need to make sure that they can generate a safe and stable
return on investment for their deployed capital.
And they will want assurances around, you know, taxation
levels and protection of intellectual property and other
important things. We can make ourselves an
(23:22):
attractive place to build data centres to process.
And that means having, you know,predictable planning laws,
affordable energy, you know, high quality workforce.
And we also need to make sure that the roll out of that
technology once it is here is not impeded by unreasonable
demand, for example, that have been made by the union movement
that workers in a workplace should be able to veto the roll
(23:43):
out of AI in a particular workplace.
I mean, that would just guarantee that that firm became
uncompetitive as its competitorsrolled out that technology and
all of those jobs will be lost. But you're also right that
Australians and people all around the world are anxious
about what AI means for them. Is it, is it going to make their
job redundant? Is it going to have other sorts
of, you know, unappealing socialconsequences when it comes to
(24:03):
safety and security and exploitation of children?
And it's really important that we reassure people of that.
And frankly, the technology industry has a very important
responsibility to play in responsible deployment of this
technology to reassure the public.
It's critically important that business leaders are sensitive
to workforce needs and don't putset this up as a one versus the
(24:25):
other. We don't need a 0 sum game here
and it shouldn't need to be thatway.
It's also really important that tech platforms are responsible
in the way they're designed, this technology.
You know, we saw a scandal when Reuters reported about a month
ago that Metre in the training of one of its chatbot AIS had
instructed the AI to allow it toengage in flirtatious,
sexualized conversations with underage children.
(24:47):
Now, this wasn't a rogue output from a model that was
unpredicted. This was actually human
initiated direction from, you know, engineers and the
developers at Meta as to how they wanted the the chatbot to
operate. That's incredibly reckless and
irresponsible. And if companies make bad
choices like that, then they canexpect governments to respond
with really deleterious regulation, which will make it
(25:09):
much harder for them to operate.Yeah, no, absolutely.
Fair enough. I mean, you've talked a little
bit there about about the removal of obstacles, what about
sort of active government incentives?
It seems that that has to be another significant part of it.
I think our, you know, our private R&D investment as a
(25:31):
proportion of GDP has has been low for for years and years.
Of course, you know, Silicon Valley famously benefited from a
lot of sort of government input in its early days.
So, you know, it's it's not somesort of libertarian created
Wonderland as it's sometimes made out to be.
(25:54):
I mean, what do you see as the role?
And again, what do you see as the sort of broad parameters for
more active government encouragement of things like
adoption and integration? Well, in addition to my
responsibilities as Shadow Minister for Finance, I'm also
Shadow Minister for the Public Service and Shadow Minister for
Government services. And there is enormous potential
to revolutionise the delivery ofservices to the public by
(26:18):
government by adopting technology like AI.
It could both significantly improve the efficiency of that
delivery of services by removingthose repetitive tasks and
allowing public servants to focus on those higher order
tasks and reasoning that only human being should ever do.
And it can potentially significantly improve the user
experience on the other end by making the system far more easy
(26:40):
to navigate and far more intuitive than it currently is.
So government has a really important leadership role to
play here in adopting this technology and rolling out and
demonstrating that it can be done safely.
We shouldn't be wild in our experimentation with these
things because there are very sensitive systems and very
sensitive public services like the Australian Taxation Office
(27:00):
and Centrelink and, you know, Medicare, which need to be, you
know, very carefully managed from a privacy and security
point of view. But we shouldn't allow fear of
getting it wrong, stop us from trying to get it right because I
think there really is huge potential and it should.
It should pave the way for otheremployers and other businesses
to do the same. So you can potentially improve
governments, build trust with the the broader community and
(27:23):
the private sector. And what does that include
having the the federal government as an anchor customer
in some ways as well to, you know, from the point of view of
Australian businesses, you know,start UPS or scale UPS.
Yeah, absolutely. I think there are government
agencies which are already experimenting with this with
some success in Australia but also overseas.
(27:44):
There are some impressive examples of time saving
technology that's been introduced which has really
improved the efficiency of public services and and some
which have also improved that user experience as well.
It's very difficult for the public to navigate government
services often. They often come to their members
of Parliament to effectively provide a concierge service so
they know who to talk to about what thing.
(28:05):
And really it shouldn't be that complex.
We should have an ambition to make it easier to navigate and
this technology offers a potential to do that if we get
it right. Is it fair to say though, if
we're risk averse on all of these things?
I mean, it seems to me that really technological capability
equals national power. I mean, that's always been the
(28:28):
case to some extent. You know, obviously, you know,
countries in previous centuries that, that you know, that
invented, whether it's, you know, gunpowder or, or, you
know, these sorts of things. I mean, I'm talking specifically
there about about weaponry, but it but it goes beyond that.
But really technology power is national power.
I mean that we that we do risk. If we if we are risk averse,
(28:52):
then we we are, we are we face the peril of becoming a kind of
a an economic and and political backwater.
That's exactly right. I I gave a speech at the
American Enterprise Institute a couple of years ago on exactly
this topic. The reason why the United States
and its allies won the Cold War is because they won the economic
arms race and the technology arms race.
(29:14):
And the this technology AI, but also quantum and other emerging
technologies will be at least asdecisive on the geopolitical
contest of the 21st century as it was in the 20th century.
And if it's authoritarian stateswho successfully develop and
deploy this technology before democracies do, it will be them
that get not just economic advantages, but also military
(29:37):
and strategic advantages as well.
And we have to remember in this contest that they are not bound
by the same conventions that we are.
They are not of law democracies that do not have the same regard
for individual rights and freedoms, that do not have the
same regard for privacy or intellectual property or any of
those things. And so in many ways we have a
very fierce competitor who will not be bound by the rules.
(29:57):
And that means we must make sureour systems are geared towards
competing with them and mindful that this is of strategic
importance, not just economic importance.
So that's a great segue into issues like TikTok, which you've
spoken and, and dealt with through the parliament and, and
through, through committees a lot.
(30:19):
Talk to me a little bit about how we balance the, the, the
adoption of new technologies coming from authoritarian
countries. So let's, I mean, we can focus
on China a little bit here. Obviously it is technologically
competitive with the United States at the moment.
(30:43):
TikTok was a good kind of case study of how, you know, without
active government regulation or without, you know, active
government policy, it was very easy for that to become highly
integrated into not just our oursort of social interactions, but
our economic interactions as well.
(31:03):
You know, a lot of people were actually using it for business
purposes. And so that was a that was a
test case of where we perhaps went too far down a kind of a
dependency before people startedto wake up to the fact that this
was creating a risk. Just talk to me a little bit
about about how you see China's increasing technological prowess
(31:31):
as as creating risks for Australia, including in terms of
the just the dependencies that we might actually start to form
on powerful technologies. I mean, DeepSeek is another good
example that that if even if they don't pose a sort of
defined national security risk to us, although they may well do
(31:52):
that, they also create dependencies which create longer
term strategic risks for us. Well, social media platforms
today are the public square in democracies where issues get
debated, where consensus is formed and and public policy is
influenced and ultimately decided in, in in elections.
And they perform the same role today that a television station
(32:16):
or a newspaper or a radio would have in the 20th century.
And if someone had proposed in the 20th century that we should
allow our public forums to be controlled by an authoritarian
foreign government, if the Soviet Union proposed by a
television station in Australia,people would have thought you
were completely mad and that that that should never be
permitted. But effectively, without making
(32:37):
any conscious decision at all, we've allowed that to happen
just through, you know, rapidly successful startups like TikTok.
But not only TikTok. And now we have handed over
control over our public square to companies that are directly
influenced by authoritarian foreign governments.
And that comes back to your veryfirst question about, you know,
the dilemmas for democracies andmaking hard choices when
(33:00):
authoritarian states want to make those hard choices even
more difficult. So when we have difficult
debates about spending more on defence and less on, you know,
social care, for example, why would you allow a foreign
government to dictate the terms or influence the terms of that
debate through a social media platform they control?
It makes it even harder for a democracy to achieve consensus
and make difficult decisions in a contested strategic
(33:22):
environment. And it contested information
environment. So I think there's a very strong
case for democracies to be assertive about which social
media platforms we allow to operate in our jurisdiction and
under what conditions. And I was very attracted to the
model before the US Congress that contemplated separating
TikTok from its parent company, Byte Dance, to sever the link
between the company and the China's Communist Party.
(33:45):
Now, that is subject to the ultimate implementation of the
Trump administration. We should continue to watch that
very closely. But I've said on the record for
many years that if the Trump administration, if the US
administration is successful in ensuring A safer version of
TikTok is available to Americansfree from the influence of an
authoritarian foreign government, Australians should
(34:05):
want to have access to that too.And I hope that our government
will be working closely with theUS administration as they settle
these issues to make sure we're part of that solution.
How dismayed are you that that has not gone the way that the
Congress actually voted that it should go?
Look, I think it is a really interesting case study in the
relationship between the executive presidency and the
legislature in the United States.
(34:26):
And I'm a former congressional intern, and I've studied that
with great interest from an academic perspective.
And I won't weigh on indirectly on how the US administration
seeks to navigate these issues, but the Trump administration
itself has just continued to defer that deadline for the
enforcement of that law and spared prosecution of the
technology platforms that host, continue to host TikTok,
(34:47):
effectively in defiance of a actof Congress.
And that will have to come to a resolution of some kind at some
point that can't continue in perpetuity, even the US system.
And so it'll be very important to see where that lands.
There's been some reporting coming out of the administration
that they think that there is a possible deal hit there, that a,
that AUS technology company can take a majority mistake in AUS
(35:07):
headquartered, you know, Tiktok platform, that there can be
structural separation. You know, those details will be
really important because the Biden administration tried for
the best part of four years to negotiate a settlement with
Tiktok that was called Project Texas that would have achieved
that. And ultimately, the intelligence
community advising the Biden administration advised them that
it wasn't going to be possible to have sufficient degree of
(35:29):
confidence that they wouldn't bethat ultimate influence from the
parent company. Yeah.
Let's broaden it out a little bit on the economic security
issue. We've talked for years about the
need for diversification and that was turbocharged by both, I
suppose, COVID and also the period of economic coercion from
China. So you know, both in the sense
(35:50):
of our supply chains and our export destinations.
How do you think we're actually going on following through on a
lot of that rhetoric that we've that we've been engaged in for a
long time? Well, this is a shared problem
between the business community and the government and we have
to work together to solve this problem.
I don't ever want to live in a society or an economy where the
(36:12):
government directs trade and tells companies, you know,
outside exceptions where we havesanctions obviously, that they
should trade at a lesser price with some country because that's
preferable to the government of the time.
That's not a free market, you know, economy and that's not a
road to prosperity for a countrylike Australia which is an open
trading economy. But by the same token, I think
(36:32):
we've all learnt lessons both from the Covic pandemic and
Chinas economic coercion that itis not healthy or strategic to
have so much dependence on either the export front or
frankly on the import front. Either from a country which is
willing to link economics and trade to politics and
geostrategic issues and willing to wield leverage over the
(36:55):
economy to achieve, you know, political outcomes.
And so the best thing that politicians can do is help clear
the pathway with as many other jurisdictions in the world
through free trade agreements sothat exporters have other
choices. And then I'm, I'm dismayed by
the failure to conclude an European Union free trade
agreement between Australia and EU that has even more strategic
(37:15):
merit today than it ever has at also has very strong economic
merit. And the failure to resolve that
has been, I think, one of the one of the significant trade
failures of this government, which they should, you know,
seek to remedy, particularly because they came to government
promising to conclude it within 12 months and clearly haven't
done so. And then I think we also need to
think about what other measures of resilience do we need on the
(37:37):
other side of the equation, which is on our imports.
We never want to be dependent ona country that could withhold
imports from us that we need to operate in a time of crisis.
And we have to think about, you know, what are the steps we can
take to make our economy more resilient to those sort of
shocks. I mean, I love the, the fact
that you are still committed to basic ideas of, you know, sort
of open economies and again, those classical liberal
(38:00):
principles and I and I look, I, I, I share a lot of them myself
too, I suppose. And, and you've, you've
addressed this to some extent, but how many sacrifices are we
going to have to make, do you think over the next decade or
two on those, those principles which are clearly beneficial?
(38:24):
I mean, anyone, I'm not an economist and I don't have great
knowledge of, of economics, but I understand enough about
comparative advantage to recognise that, that, that, that
that trade has been enormously prosperous.
Trade within a set of, of rules has been enormously beneficial
(38:45):
for the whole world. I mean, how do you feel, given
your sort of philosophical background about the degree to
which we're going to have to putaside some of those principles
and and accept some, you know, some just hard headed decisions
that if they're going to do it to us, we're going to have to
respond in turn in some way? We have to be very judicious
(39:06):
about how we do this because we could find ourselves in a
situation where every industry comes to Canberra, cap in hand,
making an argument that they're strategically important and they
deserve government intervention and assistance to protect them,
to protect the nation. And if we follow that through to
its logical conclusion, we end up with an economy that's closed
off from the world and far poorer than it could otherwise
(39:29):
be. But the other side of that coin
is that resilience is deterrence.
If we are more resilient and ouradversaries know that we're more
resilient, that will make them think twice before engaging us
in conflict and threatening our interests.
Conversely, if we're seen to be vulnerable and dependent, that
increases the risk of conflict in the future that we are not in
(39:49):
a position to respond to becauseour adversaries look at these
things very closely. And they look at in terms of our
ability to sustain our economy in a time of crisis.
Could we continue to fuel our economy?
Could we continue to provide medicines and other essential
services to our citizens? But they also look at it in
terms of our things like our critical infrastructure and
their cyber vulnerabilities. And so one of the things I have
(40:09):
to grapple with is Intelligence Committee chair in the previous.
Government was how much more power should we give government
over private companies that run infrastructure which is
systemically important to our country because of their cyber
vulnerabilities. Because we had intelligence in
the open source which told us that foreign nation states were
looking to damage those, weaponize those vulnerabilities
(40:30):
and damage those services to weaken us as a country.
And we had to accept that there was a trade off there, that we
had to accept a greater role forthe state in directing private
companies to invest better in their own cyber defences because
they didn't just have a duty to their shareholders and their
employees and their customers. They had a broader duty to the
economy because they are systemically important.
And so we have to have lots of those conversations.
(40:51):
We shouldn't allow mission creepbecause if every everything
becomes critical and nothing is critical, we have to choose the
things that are most critical. And we don't want to become a
centrally planned state economy.But there is a role for
government in, you know, assessing the risk, assessing
the strategic strategic environment and directing
private sector within limits to do things to protect themselves
(41:12):
from it. I'm conscious of time, but I did
promise to come back to the United States.
I mean, you mentioned AI can't remember if it was unpredictably
or or uncertainty was that was the term that you you used.
But I mean, recognising the the,the, the sort of dual issues of
(41:32):
the importance of the alliance, in fact, the indispensability of
the alliance to Australia's strategic position, our need to
to do more, you know, to, to share some more of the burden
through things like increased defence spending.
But then the the question of reliability of the United
(41:54):
States, and it's well, and, and the the president's proclivity
for sometimes treating allies and adversaries as
interchangeable, I suppose sometimes feeling as if
something like tariffs can actually be sort of punitive.
(42:15):
Of course, we've got Orcas on the table as well, hopefully
with a, with a positive decisioncoming soon.
I mean, recognising that you're more constrained on this than I
am, just give me your sort of broad assessment of, you know,
just how difficult those sorts of balances are going to be to,
(42:36):
to manage over the next three years or so.
Yeah, look, I'm very fond of theUnited States.
I've I've lived there twice, I've visited probably more than
30 times, have good relationships with friends in
Congress and think tank community and and the
administration. But anybody can recognise that
this is an unconventional administration which is pursuing
(42:59):
a non traditional foreign policyand it has raised questions in
lots of US allies about it's reliability.
Now, I'm very much of the schoolthat the response to that is
that we should double down on the alliance, that it is
indispensable and that we need to make some very big
contributions towards that alliance in the form of high
defence spending, which is a keyconcern of not just this
(43:23):
administration, but actually previous US administrations,
including democratic administrations that they want
better burden sharing with theirallies.
And they want us to take our responsibility as part of
collective deterrence to make a meaningful contribution to that
and not to free ride on on theirattempts to do so.
And I think we should double down on August.
We should accelerate the timelines for delivery of, you
(43:46):
know, pillar one and Pillar 2. But let's say I'm wrong, that
let's say that the US Alliance is, you know, no matter what we
do, you know, can't be relied upon, that orcas is going to be
withdrawn from us in some future.
Well, the answer is still the same.
We still need to spend more on defence and become more self
reliant and protect our own interests more by doing more for
ourselves. Whether you believe in the US
(44:07):
Alliance or a sceptic of the US Alliance, the strategic
environment is what dictates what we need to do, not just
what our allies posture might be.
And so if we want to try and find our way in the world
without Americans, it's going tobe a lot more 3% of GDP that
we'll be spending. But I think there's a way that
we can find our way within the alliance that upholds the
alliance. That also means Australia does
(44:29):
our fair share of the burden sharing, but it will require a
big lift in defence spending to do that.
Yeah, Yeah, No, I agree. And I, I, I very much hope that
you're correct on that. All right.
I'm gonna wrap it up with a, with a just a question about,
about looking forward to the future.
I mean, without sort of, I mean it's cheaply personalising it.
I mean, you and I, I think both have relatively young families.
(44:50):
We think obviously about not just what our own children are
going to do and what kind of future they're going to face,
but all young Australians. How confident or concerned are
you that that, that kids today are going to grow up in a
(45:11):
country that is secure, that is reasonably prosperous, that has
a kind of standard of living that that you and I and perhaps
our parents enjoy it. I mean, there, there does seem
to be some sort of reasonable questions about that.
And it's, you know, for the first, you know, it's, it's
basically reversing historical trends that we've come to take
(45:33):
for granted for, for at least a couple of generations since
probably the the 1945 period. What what are your feelings
about that? I am optimistic, but my optimism
is much more measured and guarded and cautious than it
would have been if you had askedme that question 5 or 10 years
ago. We do face some very serious
(45:57):
headwinds, both strategically, which is my overwhelming
concern, but also economically. And future generations,
including my children and your children, should be more
prosperous and more wealthy thanour generation has been if we
navigate this period well and ifwe take advantage of the
opportunities that present us with new technology.
(46:17):
But they faced some obstacles that previous generations did
not, you know, chiefly, you know, participating in the
economic system in our country, of getting in onto the housing
market, you know, building wealth for their families,
having aspiration and getting ahead.
And there is intergenerational despair in this country right
now. And all the public polling
demonstrates that young people are very pessimistic about their
(46:40):
own personal prospects and aboutthe prospects of our country.
And I think we have an urgent national task to restore that
sense of hope and optimism to younger generations.
They deserve to be hopeful or optimistic about the future, but
it depends on the choices we make to prioritise their
interests, to give them opportunities so that they do
inherit a country from us that is stronger, that is more secure
(47:01):
and that is more free. And that should be all of our
ambition. I.
Mean political schisms are always bad, but it feels like an
intergenerational political schism could be like one of the
worst things that that a democracy could possibly face.
Edmund Burke said a society is acompact between the the living
and the dead and the yet to be born.
And if that breaks down it is utterly corrosive to democracies
(47:24):
in particular. And we do have to deal with what
is actually rising into generational resentment where
young people feel that older generations have prospered at
their expense. That doesn't have to be true,
but we do have to make active policy decisions that, for
example, make it easier for themto get into the housing market,
that make it easier for them to build wealth for themselves and
family, that gives them that of aspiration again, Otherwise that
(47:46):
that resentment will grow and isa recipe for a divided society,
not a strong and cohesive society.
And at a time in the world wherewe need to be strong or we need
to be cohesive, where there are so many pressures, this is 1
pressure that we have to deal with quite urgently.
Because I am worried that young people feel so disillusioned by
the system that they're opting out of it.
And you can see it in their voting patterns when they vote
(48:07):
for more extreme and marginal parties.
And that's not just the case in Australia, but all around the
Western world. But you can see it just from the
disengagement with the politicalsystem at all, at all.
And the the reason for that's understandable.
If they feel like the system is not working in their interest,
well, what is their interest in preserving a system which has
actually worked very well for ustoday?
I love a good Edmund Burke quoteand that's a belter, so thank
(48:30):
you. Great chat, James.
I really appreciate your time. That's a very fascinating
conversation. Thank you.
Thank you for having me. That's all we have time for
today on Stop THE World. We'll be back with another
episode later this week.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.