AUKUS and defence spending headaches for Albanese ahead of possible Trump meeting at G7 summit

Australia Broadcast Center

a day ago

It's peak grizzly season in the Canadian Rockies where the prime minister lands this weekend.
Hyperactive after winter hibernations, the bears are breeding and hunting for protein.
Anthony Albanese can take comfort in the notion he's among friends — a heady gang of G7 leaders.
This week's summit is hosted by Canadian PM Mark Carney, like the prime minister still radiating in the afterglow of a thumping election win built on voter allergy to Trumpism.
Hanging with Emmanuel, Keir and Friedrich (that'd be Germany's chancellor Merz — obviously nobody has heard of him much as he only got the job in May) amidst the peaks, lakes and forests of Alberta's Kananaskis resort should generate good vibes.
It also offers a measure of herd protection against apex predators.
Both of the Ursus arctos horribilis kind and the grizzlies that lurk in the White House.
Australia's closest ally is giving a spirited impression of behaving like a cantankerous bear.
Its president is at war — almost literally — with his own people in California and foreigners alike. He's started fights in every corner of the world.
Despite sheltering in the safety of the group, the prime minister's problem is that the Trump administration appears to have fixed its Eye of Sauron on him.
That's creating anxiety-inducing headaches and opportunities alike for the PM.
News this week that the Pentagon is about to reconsider and review the AUKUS deal has angered and dismayed some inside the Australian government.
The timing — just days before the G7 summit and only shortly after Albanese pointedly shot down US calls for greater spending on defence — is being seen as both calculated and targeted.
As the Americans no doubt hoped would happen, reports of the review triggered another round of fevered domestic debate over the merits or otherwise of the vastly expensive submarine deal.
Of how it erodes Australian sovereignty, costs too much and leaves the country with no "plan B" should the deal collapse.
Pentagon deputy secretary Eldridge Colby's review will reveal AUKUS "for what it always has been," Paul Keating said.
"A deal hurriedly scribbled on the back of an envelope by Scott Morrison, along with the vacuous British blowhard Boris Johnson and the confused president Joe Biden — put together on an English beach, a world away from where Australia's strategic interests primarily lie," the former Labor PM said.
But beneath the headline-making row over AUKUS festers a deeper debate about defence resourcing.
Ostensibly it's about spending relative to gross domestic product.
In reality, it's about fundamental differences of political ideology, history and purpose between the US and Australia.
Colby's chief concern is that the huge and growing cost of AUKUS is forcing defence to cannibalise its budget, sapping resources from other military priorities.
It's a view backed by former defence chiefs like Sir Angus Houston, former Labor leader Kim Beazley, and respected think-tanks like ASPI.
Albanese is having none of it.
This month he pointedly rejected US Defence Secretary Pete Hegseth's demand that Australia raise its spending to 3.5 per cent as soon as possible.
As ABC's Jake Evans reported, the US demand would increase nominal spending to almost $100 billion a year from its current level of about 2 per cent of GDP, or nearly $60 billion.
"What you should do in defence is decide what you need, your capability, and then provide for it. That's what my government is doing," Albanese said.
Albanese's incremental approach to spending infuriates defence planners, particularly inside the Canberra military complex.
The alliance clash over funding goes to the core of most of Canberra's budget woes.
They usually start the same way. Politicians make big hairy promises to voters — Labor favours social programs while the Coalition loves a defence spend — without ever managing the true long-term cost.
The bigger the promise, the more likely it's in the distant future, beyond four-year budget cycles.
AUKUS is a prime example. The real impact comes late this decade when Canberra has to pay Americans for real boats, assuming they'll exist.
In the meantime, the government is accused of nickel-and-diming the defence budget's myriad other commitments, opening holes in the country's security.
One reason for the prime minister's unwillingness to directly address the giant AUKUS shaped elephant in the room is because he knows it threatens his political strategy of focusing on households.
Albanese has repeatedly said his government was "working" on plans to expand paid childcare and free dental services.
Both are huge Medicare-sized future commitments that will coincide with existing promises for things like universal Medicare bulk billing and the NDIS.
The idea that these things can all happily coexist without politically painful trade-offs like higher taxes or spending cuts is the very definition of peak "delulu".
At a speech in London this week, conservative NATO secretary general Mark Rutte urged the military alliance to make a "quantum leap in our collective defence".
He said Britain could ignore his call for a 5 per cent of GDP target and maintain its much-vaunted National Health Service.
"But you better learn to speak Russian," he warned.
Australian Admiral David Johnston made a similar, if veiled, point this month.
"Of course, defence spending is an opportunity cost for government on a range of other outcomes."
No kidding, an American like Colby might say.
Responsible for managing America's military alliances, Colby is known for his 2021 book The Strategy of Denial: American Defence in an Age of Great Power Conflict.
His thesis is that allies need to maintain internal strength to be useful and credible in a coalition.
The Trump White House, as well as the former Joe Biden administration, continue to fret that Australia is not doing its share and will call on America when crisis strikes for basic capabilities like missile defence systems at the very moment they are most in demand.
"Colby is coming off the long run," said Mike Pezzullo, a former home affairs boss and lead author of a 2009 defence white paper.
"The more we're under 3.5 per cent, which is what the Americans spend, the more we're a liability in a fight.
"They're not saying spend more because it's a shakedown or payment to Donald.
"It's because you can't defend yourself. We actually want your airfields protected and ports cleared of mines," Pezzullo said.
The Colby view is buttressed by long-standing bipartisan Washington grievances over its role as the world's security guarantor.
Many Americans would love the benefits of an Australian-style social welfare state, goes the argument, but one of the reasons they can't walk into a Medicare clinic with "only a green card" is because a greater proportion of US tax dollars goes to the military.
At the same time, they argue, countries like Australia benefit from the US umbrella.
After all, it was American ships and missiles that countered Houthi attacks in the Red Sea, so critical to world trade.
The Trump/Colby doctrine is all about shaking up that convention. Not by spending more on US welfare, but by forcing other countries to meet its military output.
It's still not yet known whether Albanese and Trump will meet in Canada over the coming days.
So far the omens are not positive.
Government sources are briefing that it would not be the end of the world if there was no Kananaskis hook-up. A likely visit by the PM to the UN in September could be an alternative opportunity for the two leaders to connect.
James Curran, University of Sydney professor of modern history, said it's not unusual for the Americans to play hardball with a junior ally "and even scare us a bit".
"That's what Richard Nixon did to Gough Whitlam, General Douglas MacArthur to John Curtin, and Bill Clinton to John Howard.
"But there hasn't been an administration quite so pointed," added Curran, who said past US criticism of Australian military "freeloading" had tended to be from the occasional general or admiral.
"But this is a defence secretary saying we've got to review it all in the context of Australia having to do more.
"It's been a good 25 years since we've had a sticky spot with an administration like this," Curran said.
Curran disagrees with the US argument over spending, saying Washington "has chosen those responsibilities and those burdens".
"Now they're saying we can't do what John F Kennedy said in his 1961 inaugural address that American can 'pay any price' to assure the world's survival and liberty."
"But they have a very different view of the role of government, which comes out of the revolution of independent self-sufficient yeoman farmers. Government had to be limited.
"Whereas in Australia, the way it was settled, you needed an interventionist government, regulating the banks and agriculture.
"Americans also fail to understand that we're so dispersed.
"They just look at it in cold hard realpolitik terms that 'you had it easy with all those golden years during the Cold War where we carried you'."
"This is the painful reckoning that they want allies to have; you have to cough up more. You can't have your NDIS."
Albanese may yet get his moment with Trump. But he's not going there to beg. The long-standing convention that prime ministers should get their legitimacy via the White House could be about to collapse.
"Albanese is like John Curtin, who saw defence spending as a diversion from Labor's social justice mission," Curran said. "In that sense he's pretty traditional Labor. He's drawn a red line and he can't back down."