The $11 billion warship decision testing Australia’s alliances

From Schwartz Media. I'm Ruby Jones. This is seven AM. Australian defense officials are currently deciding whether to buy warships off Germany or Japan. It's an eleven billion dollar decision with consequences that go well beyond that. Given Japan describes Australia as its most important security partner after the United States, our decision on the warships will send a signal about

Ruby, I did live there for three and a half years. In fact, I was working for the Japanese media company Nike, which most Australians probably know as having something to do with the Nike Index. Nik does still own the index. They also own a big newspaper there, and they've been trying to expand overseas, so that's why they've been hiring people like me to help them with their English language expansion. And it was a fascinating experience.

And so, as an Australian journalist working for a Japanese media company, what did you observe about how Japan sees its relationship with Australia.

I think Japan does really still think of Australia the way I thought of Australia in the nineteen eighties. Australia is still very much just a tourist destination. It's also a place where they buy their iron ore and their natural gas, and it hasn't really, in the minds of most Japanese people on the street, developed much beyond that.

Talks are reportedly underway to arrange a four way somewhere between the United States, Japan, Australia and India. The so called Quad Framework, apparently to counter the influence of China in the region.

Of course, Japan and Australia are both in this four nation grouping known as the CORD and I think when the Orcas Agreement was announced that also got a lot more Japanese people sort of sitting up and taking Australia more.

Seriously America by the DAYO.

Okay, well, can you tell me a bit more about that. What we've heard from Japan about the way it sees Australia and the signs that perhaps the relationship is deepening.

Well, I think there's no better side of how Australia is viewed by Japan than a speech last week given by the Japanese Ambassador to Australia, Kazahiro Suzuki. He was speaking at the eighth Annual Japan Symposium at the University of Western Australia, and Ambassador Szuki did say in his speech that the current security relationship between Japan, Australia and the US is an Isosceles triangle where you've got two

And so what is your view on that? Do we think about Japan as much as it thinks about us?

Well? I think Australia has said a lot of good things about Japan in the past five to ten years. It has aggressively courted Japan as a security partner. We have the Quad and Australia signed a defense and security partnership with Japan. It's the only partnership of its kind that Japan has with any other nation except the United States.

Ordering of eleven new warships. They've got a ten billion dollar purchase decision to make. It's come down to a choice between Japanese or German built frigates for our navy. Now the former Japanese ambassador to Australia is pushing the PM to let Japan build the warships.

Okay, so what would you say the main difference is than Jason between the two proposals.

Well, let's start with the German frigate, which is called the Miko eight two hundred. It's one of the most widely exported frigates in the world in its class. It's used in multiple navies across the world, in South Africa, Algeria, Egypt, Poland. It's approven design. These frigates are modular, so all the important stuff like the weapons, sensors and combat systems are in these discrete, self contained units that can be added or moved around independently of the ship's structure. The German

I explain about a current status with the Mogama crass constructions from twenty eighteenth. We have started contraction over mogam class today.

It's a new design. It's an upgrade on the Mcgami class, I should say, and there's a bunch of new improvements built into this ship design that will help the Australian Navy respond to China's naval capabilities.

This is a flexible modira design capabilities, so you can modify this kind of a mast with a powerful lad as a foreign countries or fording manufacturer Ladio systems.

One defense official told me that in theory, the Magami class is a better ship. The problem is it hasn't been tested in the water yet. But what can't be ignored in this decision is that the Japanese ships do carry a lot more strategic weight. You know, Japan is a crucial partner for Australia and they've shown that they're

Coming up after the break Tony Abbott and the handshake deal, he denied.

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Jason, you said that Australia and Japan have had a deal similar to this one fall through in the past, so tell me what happened.

Well, it wasn't just that a potential defense deal between our two countries fell through. It was a spectacular failure that left a lot of bitterness in Japan.

We want the best possible subs for the best possible price. We want the world's best conventional submarines, and Madam Speaker, who builds them and where they're built will depend upon a competitive evaluation process. That is as it should be.

It was back in twenty fourteen when Tony Abbott was Prime Minister and he did a handshake deal with his Japanese counterparit Shinzo Abe and promised him that Australia would select Japan to build eight sorry you class submarines for Australia to replace our Collins class submarines.

Can the Prime Minister please advise the House as to whether he or anyone acting on his behalf has entered into an agreement with Prime Minister Abe and or the Government of Japan concerning the future submarine project, and if so, what is the nature of such an agreement.

I call the Honorable the Prime Minister.

Now Madeu Spuega.

Of course, we are exploring the potential for defense cooperation with Japan. Is another is this another outbreak of xenophobia ammers?

As Abbot made the proposal without knowing which submarine would actually best suit Australia both technically and strategically. He told Chinzo Abe that he would award Japan the fifty billion dollar contract without talking to any of his cabinet colleagues, and this caused a lot of uproar in Australia and serious pressure on his leadership.

In Adelaide, the defense industry and state government are growing increasingly frustrated with the submarine contract situation.

And in order to survive a leadership challenge, he made a promise to South Australian MBS that the new fleet OF's submarines would be put on an open tender, and he tried to deny that he ever made a secret deal with Tokyo.

So I've had discussions about submarine partnerships with Japan, I've had discussions about submarine partnerships with the Germans, and I've had discussions about submarine partnerships with the French. Now it's true, it's true that those discussions up till now have been more detailed with the Japanese because the Javanese and.

By February twenty fifteen, Abbott had formerly reneged on this deal with Shinzo Abe and eventually the contract was awarded to France, and then.

We famously backed out of that deal and signed up to buy the US subs Right.

That's right, So we didn't just dug the Japanese. We, of course, perhaps even more notoriously went on to reneg on our deal to buy new submarines from France. I guess at least reneggie on the promise to Japan didn't cost us anything. Backing out of the deal with France cost Australian taxpayers are billion dollars.

So I mean we have some form here, Jason, and it seems like Japan they might be right to be cautious when it comes to making any kind of security or manufacturing deal with US. So what happens now at this stage if the Australian government decides not to go with Japan this time around.

Well, As one person who's close to the Japanese bid told me, the Japanese are pragmatic and if they lose, they will say this is unfortunate and we're disappointed because we had high hopes, and everyone in Australia will read that as a sign that they are okay about not winning the bid, but that will not be the case

Jason, thank you so much for your time.

Oh thanks Rby, thanks for having me on seven Am.

Also in the news today, Shadow Treasurer Angus Taylor has announced the Coalition will establish a new statutory body in the Treasury aimed at fast tracking private sector investment if a coalition government were elected. He says the proposed office, called Investment Australia, report directly to the Treasurer and Cabinet, and will have legislated powers to hold government agencies to