TV interview with Minister Butler, Sunrise – 27 June

NATALIE BARR, HOST: Donald Trump has warned Spain that they may be hit with higher tariffs after the country refused to lift defence spending above 2.1 per cent of GDP. The tariff threat serves as a potential warning for Australia, with Anthony Albanese's defence target far from the amount the US has been calling for. The American President has rebuked Spain's position, accusing them of having a free ride when other NATO members agreed to lift their budgets. For their take, let's bring in Health Minister Mark Butler and Liberal Senator Dave Sharma, morning to both of you. Mark, are you worried we are now going to be hit with more tariffs if we don't lift our defence spending even more?
 
MARK BUTLER, MINISTER FOR HEALTH AND AGEING, MINISTER FOR DISABILITY AND THE NDIS: Obviously the discussion at NATO was held in the context of a very large land war in Europe, initiated by the big nuclear power to their east, which really is the reason for NATO existing in the first place, and that is Russia. Now, we face our own strategic challenges here, and that's why we're in the process of rolling out the biggest increase in peacetime years to defence spending in our history. $10 billion over the coming four years, $50 or $60 billion over the coming 10 years, and that's something we've been in conversation with the US about. No-one's ever called Australia a free rider. We've had a very close relationship, served alongside the Americans in conflict after conflict. We’re deepening those ties with US marines rotating through Darwin, US subs rotating through Fleet Base West over in Perth. But we know it's a conversation that we'll continue to have with our American friends and partners.
 
BARR: Yeah, the problem is that the US has already said we are way behind. So we're spending 2.02 per cent. We're going to lift it to 2.3 per cent. That's in eight or nine years. The US has already said very clearly to us they want 3.5. How are we going to do that?
 
BUTLER: As I said, it was a conversation we're continuing to have. Our Deputy Prime Minister and Defence Minister Richard Marles met with his counterpart only in the last couple of weeks. That's a conversation they had in Singapore when they had that meeting. We'll continue to have it. I can say as a member of the Government's Budget Committee, when the Defence Department comes to us with a capability it says it needs to protect Australians, they get a very, very good hearing from Government.
 
BARR: So if you're on the Budget Committee, what are you saying? Are we anywhere near those figures? Are we able to lift it anywhere near the three and a half the US wants?
 
BUTLER: As I said, we are lifting it right now, the biggest expansion in peacetime history for Australia, obviously our -
 
BARR: Yeah I know, you said, but we know it’s nowhere near what they want.
 
BUTLER: But it's many, many billions of dollars buying new capabilities in our naval capability, new long-range missiles as well. Obviously, our economy grows much faster than the European economy, so a percentage of a growing economy is adding tens of billions of dollars to our already very significant capability. But we know that we have our own strategic challenges in the Indo-Pacific. We know this is a conversation we're going to have to continue to have with our American allies.
 
BARR: Yeah, we know you're still talking. So if you're on the Budget Committee and you know that the US in their current form with Trump, who's pretty aggressive on this, you know they're coming to you and say, we want 3.5 from Australia, what are you going to say?
 
BUTLER: What we've done is to respond to Defence's request for additional capability. Not a figure plucked out of the air, but a response to a request that's framed by our defence strategic review that says we need a certain capability in our navy. We need a certain additional capability around long-range missiles and we've supported that request from defence every time they've come to us.
 
BARR: Yeah, that's from defence. I'm talking about the US. So what happens if Trump ties extra tariffs with our lack of defence spending?
 
BUTLER: We'll cross that bridge when we come to it. As I said, we've got a very constructive discussion going with the Americans. The Americans understand the significance additional investment we've already committed to, as I said, the biggest in peacetime history, and we're deepening our ties with the Americans as well. Obviously, this is a request that the new US administration has made of all allies, but there are slightly different strategic circumstances in the Indo-Pacific compared to, I guess, the long-running discussion that President Trump has had with NATO allies, going back to his first administration.
 
BARR: Okay, Dave, do you think this is going to be enough? Do you think we're going to appease the US by increasing on our terms, not on Trump's terms?
 
DAVE SHARMA, SENATOR: Well, I'd say, look, what NATO has agreed to here, Nat, is to increase defence spending to 5 per cent of GDP by 2035. Now, what the Labor Government has promised to do is to increase defence spending to 2.5 per cent of GDP by 2033. That is a long way short. And this isn't about appeasing the United States or Donald Trump. This is about Australia's own national security interests, our ability to protect and defend our country and to maintain our freedom and our sovereignty. And when you have the government's own experts in the defence strategic review saying this is the biggest deterioration in our strategic circumstances since the post-war era, or in the post-war era, then we need defence spending to match that level of risk and level of danger.
 
BARR: Yep, okay, so it will be interesting to see what happens and what Trump does, if he does tie the tariffs to it. We thank you both. We'll see you next week.