Former Home Affairs boss Mike Pezzullo warns Australia could face strategic challenges if Donald Trump reconsiders the future of AUKUS

Sky News AU

02-07-2025

Former home affairs secretary Mike Pezzullo has said Australia may be forced to lift its defence spending, depending on the outcome of a critical AUKUS review in Washington and views of President Donald Trump.
The Biden-to-Trump transition has put the AUKUS deal under a new light with Mr Pezzullo believing that this issue remains very much alive, particularly within the Pentagon, but that the current review of the AUKUS agreement will come down to President Trump.
Speaking to Sky News' Laura Jayes, Pezzullo said the current review of the AUKUS agreement – due to conclude within days – could usher in significant changes.
'The review might well be quite difficult for Australia, because it might demand for instance more defence spending or it might put a pause on the potential transfer and sale in 2032, but if that's not President Trump's view, it'll just get shelved,' he told Sky News.
'If the White House takes the view that Europe has to do more and they apply that same rubric to Japan, Australia and others, then I think that's going to be quite a willing discussion. If that's not the President's view, then I think a very different outcome will arise.'
Pezzullo said the Pentagon remains wary about the availability of Virginia-class submarines, with concerns over whether the US can spare vessels for Australia.
'From the Pentagon's point of view, the concern is if we sell one to the Australians in 2032 . . . then that's one fewer that we have,' he said.
He also suggested there may be growing pressure for Australia to strengthen its military posture – particularly by enabling more direct US operations from its territory, while noting that the Pentagon may want to see Australia 'lift its game in terms of its own military capability' and deepen integration with US force posture initiatives.
'The ability to launch military strikes from Australia, the ability potentially to fire missiles from Australia, the ability to sail at submarines, as they will be able to do from Perth in a couple of years' time. Is that the White House's view? That's what I'm not clear about,' he said.
These comments come as Foreign Minister Penny Wong met US Secretary of State Marco Rubio in Washington, where the AUKUS pact was high on the agenda.
Prime Minister Anthony Albanese is yet to meet face-to-face with President Trump eight months since his election win and has faced criticism from the Coalition for not pushing harder to meet with him earlier.
However, Senator Wong said she used talks with US Foreign Secretary Marco Rubio to discuss a future meeting between Mr Albanese and Mr Trump.
'I don't think that American policy in relation to the Indo-Pacific is as settled as what a lot of the commentators think,' Pezzullo said.
'President Trump has been so focused and so consumed, just in terms of time and attention, on the European theatre, both with what's happening in Ukraine and Russia, with NATO military capability, and obviously the Middle East … I don't think agencies want to get ahead of the President.'
He said the bigger question that continues to hang over Washington is whether the US intends to actively counter China's ambitions in the Indo-Pacific – or step back.
'Is America going to confront China and seek to deter their use of aggression and force, or will they cede them space in the Indo-Pacific and take a step back?' he said.
'Until that question gets resolved, I think we're in a holding pattern in the Indo-Pacific.'