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The Age
16 hours ago
- Business
- The Age
Oil prices have jumped. Do you need to run to the petrol station?
Chalmers has spent the week spruiking his latest plans to boost our living standards – but oil prices have clearly trickled to the front of his mind. This might have consequences for Australians at the petrol bowser, he told ABC Radio on Thursday, but there's also a lot of concern about what it might mean for inflation, and it's a 'dangerous time' for the global economy. But how much of a worry should it really be? Well, first, it's important to remember just how much we rely on oil. In 2022-23, oil was our most important type of fuel, making up nearly 40 per cent of Australia's energy use. That's not even accounting for the other ways we use it: to produce plastics, chemicals, lubricants and the sticky stuff we use to pave roads. Petrol is the single biggest weekly expense for most households, and it affects transport and energy costs for nearly all our businesses. Basically, changes in the price of oil ripple through nearly every crevice of the country. Loading A shortage of oil makes business harder – and in some cases, impossible – to do, strangling the supply of many goods. If Iran decides to shut the Strait of Hormuz – a key shipping route that carries tens of millions of barrels of oil every day – the delays and additional costs of taking longer routes will drive up costs further. Those costs will probably be passed on through higher prices by businesses – and not just those directly dealing the stuff through petrol pumps. The price of oil itself is determined, like most things, by the forces of demand and supply. But it's also affected by expectations of supply and demand. Most of the time, the physical product doesn't even change hands. Instead, the market is largely made up of buyers and sellers who enter into 'futures' contracts, which are legal agreements to buy or sell something (in this case, oil) at a particular price and time in the future. It's a bet of sorts: buyers are hoping the price they lock themselves into will be lower than it will be in the future, and sellers are hoping it will be higher. When Brent Crude Oil and the US West Texas Intermediate (WTI) – two types of oil futures – surged 13 per cent last week, that reflected worries, not just about a short-term dip in supply, but concerns that the conflict could worsen. But even so, the oil market hasn't moved as crazily as we might have expected. As Dr Adi Imsirovic points out, Iran itself only accounts for about 2 per cent of the world's oil supply, shipping most of it to China, and while a sudden drop in Iranian oil exports would usually trigger stronger panic, there's a few factors keeping it in check – for now. Loading First, Iran is part of a big group of oil exporters known as the Organisation of the Petroleum Exporting Countries (OPEC), which produces about 40 per cent of the world's crude oil. OPEC, because of the huge share of oil it produces, tends to co-ordinate the amount of oil its members supply to the world to keep prices from falling through the floor (and profits from slipping too much). It just so happens that OPEC is in the middle of reversing production cuts it imposed early in the COVID-19 pandemic, leaving it with an unusually large spare capacity of roughly 4 million barrels a day – mostly held by Saudi Arabia and the United Arab Emirates. And although there are worries about the Strait of Hormuz being closed, Imsirovic says there are alternative supply routes. That's not to say we won't feel anything here in Australia. The increased risk of wider conflict in the Middle East means oil prices – and especially oil futures – have jumped. And shipping costs have sailed higher, including the cost of insurance for ships travelling through the Strait of Hormuz which has climbed 60 per cent since the start of the war. Loading We don't import our oil directly from Iran, buying most of it from countries such as South Korea, the United Arab Emirates and Singapore. But the cost of petrol in Australia will probably rise over the next few weeks because Australian fuel prices are pegged to international benchmarks. And because Australia doesn't exist in a vacuum, the slowdown in economies worldwide – from the uncertainty, higher costs and delays – will undoubtedly have a knock-on effect for our economy. Slower growth and higher inflation will challenge the Reserve Bank, which next month must decide which way to take the country's interest rates. If the US central bank's decision this week is anything to go by, the Reserve Bank will probably keep rates on hold to see how things play out. The panic in oil markets has seemed to wear off a little since Israel's attack on Iran, but it will only last so long as the conflict doesn't escalate. There's no crisis in oil markets yet, but your bill at the bowser might come in a little higher over the next few weeks. As long as the global economy is stuck in limbo, don't be surprised if our economy isn't running like a well-oiled machine.
Sydney Morning Herald
16 hours ago
- Business
- Sydney Morning Herald
Oil prices have jumped. Do you need to run to the petrol station?
Chalmers has spent the week spruiking his latest plans to boost our living standards – but oil prices have clearly trickled to the front of his mind. This might have consequences for Australians at the petrol bowser, he told ABC Radio on Thursday, but there's also a lot of concern about what it might mean for inflation, and it's a 'dangerous time' for the global economy. But how much of a worry should it really be? Well, first, it's important to remember just how much we rely on oil. In 2022-23, oil was our most important type of fuel, making up nearly 40 per cent of Australia's energy use. That's not even accounting for the other ways we use it: to produce plastics, chemicals, lubricants and the sticky stuff we use to pave roads. Petrol is the single biggest weekly expense for most households, and it affects transport and energy costs for nearly all our businesses. Basically, changes in the price of oil ripple through nearly every crevice of the country. Loading A shortage of oil makes business harder – and in some cases, impossible – to do, strangling the supply of many goods. If Iran decides to shut the Strait of Hormuz – a key shipping route that carries tens of millions of barrels of oil every day – the delays and additional costs of taking longer routes will drive up costs further. Those costs will probably be passed on through higher prices by businesses – and not just those directly dealing the stuff through petrol pumps. The price of oil itself is determined, like most things, by the forces of demand and supply. But it's also affected by expectations of supply and demand. Most of the time, the physical product doesn't even change hands. Instead, the market is largely made up of buyers and sellers who enter into 'futures' contracts, which are legal agreements to buy or sell something (in this case, oil) at a particular price and time in the future. It's a bet of sorts: buyers are hoping the price they lock themselves into will be lower than it will be in the future, and sellers are hoping it will be higher. When Brent Crude Oil and the US West Texas Intermediate (WTI) – two types of oil futures – surged 13 per cent last week, that reflected worries, not just about a short-term dip in supply, but concerns that the conflict could worsen. But even so, the oil market hasn't moved as crazily as we might have expected. As Dr Adi Imsirovic points out, Iran itself only accounts for about 2 per cent of the world's oil supply, shipping most of it to China, and while a sudden drop in Iranian oil exports would usually trigger stronger panic, there's a few factors keeping it in check – for now. Loading First, Iran is part of a big group of oil exporters known as the Organisation of the Petroleum Exporting Countries (OPEC), which produces about 40 per cent of the world's crude oil. OPEC, because of the huge share of oil it produces, tends to co-ordinate the amount of oil its members supply to the world to keep prices from falling through the floor (and profits from slipping too much). It just so happens that OPEC is in the middle of reversing production cuts it imposed early in the COVID-19 pandemic, leaving it with an unusually large spare capacity of roughly 4 million barrels a day – mostly held by Saudi Arabia and the United Arab Emirates. And although there are worries about the Strait of Hormuz being closed, Imsirovic says there are alternative supply routes. That's not to say we won't feel anything here in Australia. The increased risk of wider conflict in the Middle East means oil prices – and especially oil futures – have jumped. And shipping costs have sailed higher, including the cost of insurance for ships travelling through the Strait of Hormuz which has climbed 60 per cent since the start of the war. Loading We don't import our oil directly from Iran, buying most of it from countries such as South Korea, the United Arab Emirates and Singapore. But the cost of petrol in Australia will probably rise over the next few weeks because Australian fuel prices are pegged to international benchmarks. And because Australia doesn't exist in a vacuum, the slowdown in economies worldwide – from the uncertainty, higher costs and delays – will undoubtedly have a knock-on effect for our economy. Slower growth and higher inflation will challenge the Reserve Bank, which next month must decide which way to take the country's interest rates. If the US central bank's decision this week is anything to go by, the Reserve Bank will probably keep rates on hold to see how things play out. The panic in oil markets has seemed to wear off a little since Israel's attack on Iran, but it will only last so long as the conflict doesn't escalate. There's no crisis in oil markets yet, but your bill at the bowser might come in a little higher over the next few weeks. As long as the global economy is stuck in limbo, don't be surprised if our economy isn't running like a well-oiled machine.
The Advertiser
4 days ago
- Politics
- The Advertiser
'Deeply concerned': Australia urges calm in Middle East
Australia will continue to press the case for a de-escalation of a tit-for-tat bombing campaign between Iran and Israel amid fears of an escalation of the conflict, the acting prime minister says. Israel and Iran began trading missile blows on Friday after the Israeli military launched attacks with the stated aim of wiping out Iran's nuclear and ballistic missile programs. Iran vowed to "open the gates of hell" in retaliation, with the conflict continuing into Sunday. Acting Prime Minister Richard Marles expressed concern that the bombing could escalate into a larger conflict in the region. "We're all deeply concerned about the potential for where this now goes in terms of escalation and broadening out into a wider conflict, and that's why we are urging for diplomacy and dialogue in this moment," he told ABC Radio on Monday. "That is why we are exercising our voice, along with countries like the United States, like France, Germany, the UK, to urge for diplomacy and dialogue." The missile attacks are set to be a key focus of talks at the G7 summit in Canada, which Prime Minister Anthony Albanese is attending. Iran's health ministry said 224 people have been killed in the attacks since Friday. Spokesman Hossein Kermanpour said on social media that 1277 other people were hospitalised, and asserted that more than 90 per cent of the casualties were civilians. Israeli rescue teams combed through the rubble of residential buildings destroyed by Iranian missiles on Sunday, using sniffer dogs and heavy excavators to look for survivors after at least 10 people, including children, were killed, raising the two-day toll to 13. Mr Marles said Australian diplomatic staff in Iran and Israel have all been accounted for, as have military personnel in the region. He reiterated safety warnings to Australians in the Middle East, with the situation remaining volatile. "There are actually thousands of Australians who are in both Iran and Israel, the travel advice for both Israel and Iran right now is do not travel," he said. "Our diplomats who are engaged, who are in both our embassies in Tehran and Tel Aviv, are safe and are all accounted for, but we will continue to monitor their safety." Despite the calls for de-escalation, Liberal senator Andrew Bragg said Israel was doing the world a favour, given Iran is a state sponsor of terrorism. "If we were in Israel's shoes, we would not tolerate a country nearby us getting a nuclear weapon," he told Today. "And so I think Israel is trying to stop that from happening - that's a good thing for humanity, because these guys are the worst regime anywhere on the planet." Mr Marles said Israel had a "right to self defence" following the attacks. "We understand the risk that the Iranian nuclear and ballistic missile program represents, but right now the focus has to be on diplomacy and dialogue," he said. Australia will continue to press the case for a de-escalation of a tit-for-tat bombing campaign between Iran and Israel amid fears of an escalation of the conflict, the acting prime minister says. Israel and Iran began trading missile blows on Friday after the Israeli military launched attacks with the stated aim of wiping out Iran's nuclear and ballistic missile programs. Iran vowed to "open the gates of hell" in retaliation, with the conflict continuing into Sunday. Acting Prime Minister Richard Marles expressed concern that the bombing could escalate into a larger conflict in the region. "We're all deeply concerned about the potential for where this now goes in terms of escalation and broadening out into a wider conflict, and that's why we are urging for diplomacy and dialogue in this moment," he told ABC Radio on Monday. "That is why we are exercising our voice, along with countries like the United States, like France, Germany, the UK, to urge for diplomacy and dialogue." The missile attacks are set to be a key focus of talks at the G7 summit in Canada, which Prime Minister Anthony Albanese is attending. Iran's health ministry said 224 people have been killed in the attacks since Friday. Spokesman Hossein Kermanpour said on social media that 1277 other people were hospitalised, and asserted that more than 90 per cent of the casualties were civilians. Israeli rescue teams combed through the rubble of residential buildings destroyed by Iranian missiles on Sunday, using sniffer dogs and heavy excavators to look for survivors after at least 10 people, including children, were killed, raising the two-day toll to 13. Mr Marles said Australian diplomatic staff in Iran and Israel have all been accounted for, as have military personnel in the region. He reiterated safety warnings to Australians in the Middle East, with the situation remaining volatile. "There are actually thousands of Australians who are in both Iran and Israel, the travel advice for both Israel and Iran right now is do not travel," he said. "Our diplomats who are engaged, who are in both our embassies in Tehran and Tel Aviv, are safe and are all accounted for, but we will continue to monitor their safety." Despite the calls for de-escalation, Liberal senator Andrew Bragg said Israel was doing the world a favour, given Iran is a state sponsor of terrorism. "If we were in Israel's shoes, we would not tolerate a country nearby us getting a nuclear weapon," he told Today. "And so I think Israel is trying to stop that from happening - that's a good thing for humanity, because these guys are the worst regime anywhere on the planet." Mr Marles said Israel had a "right to self defence" following the attacks. "We understand the risk that the Iranian nuclear and ballistic missile program represents, but right now the focus has to be on diplomacy and dialogue," he said. Australia will continue to press the case for a de-escalation of a tit-for-tat bombing campaign between Iran and Israel amid fears of an escalation of the conflict, the acting prime minister says. Israel and Iran began trading missile blows on Friday after the Israeli military launched attacks with the stated aim of wiping out Iran's nuclear and ballistic missile programs. Iran vowed to "open the gates of hell" in retaliation, with the conflict continuing into Sunday. Acting Prime Minister Richard Marles expressed concern that the bombing could escalate into a larger conflict in the region. "We're all deeply concerned about the potential for where this now goes in terms of escalation and broadening out into a wider conflict, and that's why we are urging for diplomacy and dialogue in this moment," he told ABC Radio on Monday. "That is why we are exercising our voice, along with countries like the United States, like France, Germany, the UK, to urge for diplomacy and dialogue." The missile attacks are set to be a key focus of talks at the G7 summit in Canada, which Prime Minister Anthony Albanese is attending. Iran's health ministry said 224 people have been killed in the attacks since Friday. Spokesman Hossein Kermanpour said on social media that 1277 other people were hospitalised, and asserted that more than 90 per cent of the casualties were civilians. Israeli rescue teams combed through the rubble of residential buildings destroyed by Iranian missiles on Sunday, using sniffer dogs and heavy excavators to look for survivors after at least 10 people, including children, were killed, raising the two-day toll to 13. Mr Marles said Australian diplomatic staff in Iran and Israel have all been accounted for, as have military personnel in the region. He reiterated safety warnings to Australians in the Middle East, with the situation remaining volatile. "There are actually thousands of Australians who are in both Iran and Israel, the travel advice for both Israel and Iran right now is do not travel," he said. "Our diplomats who are engaged, who are in both our embassies in Tehran and Tel Aviv, are safe and are all accounted for, but we will continue to monitor their safety." Despite the calls for de-escalation, Liberal senator Andrew Bragg said Israel was doing the world a favour, given Iran is a state sponsor of terrorism. "If we were in Israel's shoes, we would not tolerate a country nearby us getting a nuclear weapon," he told Today. "And so I think Israel is trying to stop that from happening - that's a good thing for humanity, because these guys are the worst regime anywhere on the planet." Mr Marles said Israel had a "right to self defence" following the attacks. "We understand the risk that the Iranian nuclear and ballistic missile program represents, but right now the focus has to be on diplomacy and dialogue," he said. Australia will continue to press the case for a de-escalation of a tit-for-tat bombing campaign between Iran and Israel amid fears of an escalation of the conflict, the acting prime minister says. Israel and Iran began trading missile blows on Friday after the Israeli military launched attacks with the stated aim of wiping out Iran's nuclear and ballistic missile programs. Iran vowed to "open the gates of hell" in retaliation, with the conflict continuing into Sunday. Acting Prime Minister Richard Marles expressed concern that the bombing could escalate into a larger conflict in the region. "We're all deeply concerned about the potential for where this now goes in terms of escalation and broadening out into a wider conflict, and that's why we are urging for diplomacy and dialogue in this moment," he told ABC Radio on Monday. "That is why we are exercising our voice, along with countries like the United States, like France, Germany, the UK, to urge for diplomacy and dialogue." The missile attacks are set to be a key focus of talks at the G7 summit in Canada, which Prime Minister Anthony Albanese is attending. Iran's health ministry said 224 people have been killed in the attacks since Friday. Spokesman Hossein Kermanpour said on social media that 1277 other people were hospitalised, and asserted that more than 90 per cent of the casualties were civilians. Israeli rescue teams combed through the rubble of residential buildings destroyed by Iranian missiles on Sunday, using sniffer dogs and heavy excavators to look for survivors after at least 10 people, including children, were killed, raising the two-day toll to 13. Mr Marles said Australian diplomatic staff in Iran and Israel have all been accounted for, as have military personnel in the region. He reiterated safety warnings to Australians in the Middle East, with the situation remaining volatile. "There are actually thousands of Australians who are in both Iran and Israel, the travel advice for both Israel and Iran right now is do not travel," he said. "Our diplomats who are engaged, who are in both our embassies in Tehran and Tel Aviv, are safe and are all accounted for, but we will continue to monitor their safety." Despite the calls for de-escalation, Liberal senator Andrew Bragg said Israel was doing the world a favour, given Iran is a state sponsor of terrorism. "If we were in Israel's shoes, we would not tolerate a country nearby us getting a nuclear weapon," he told Today. "And so I think Israel is trying to stop that from happening - that's a good thing for humanity, because these guys are the worst regime anywhere on the planet." Mr Marles said Israel had a "right to self defence" following the attacks. "We understand the risk that the Iranian nuclear and ballistic missile program represents, but right now the focus has to be on diplomacy and dialogue," he said.
The Advertiser
4 days ago
- Business
- The Advertiser
Minister plays down American review of AUKUS deal
A US review of a deal to provide Australia with nuclear submarines is routine, the defence minister says, despite calls for a backup plan in case the Trump administration scraps AUKUS. The Pentagon on Thursday announced a review of the three-nation pact that would give Australia nuclear submarines, to see if the agreement lined up with President Donald Trump's "America First" agenda. But Defence Minister Richard Marles has downplayed the significance of the review, saying it's standard procedure. "We engaged with the United Kingdom when they did their review, which is perfectly natural, and of course, when we did the defence strategic review, we also went to both the United States and the United Kingdom and sought their views," the acting prime minister told ABC Radio on Monday. "It's a pretty natural process that we all engage in each other's reviews. "We'll engage with the reviews and the (US) Department of Defense about how AUKUS is tracking in Australia." The AUKUS deal is set to be raised when Prime Minister Anthony Albanese meets with Mr Trump for a one-on-one meeting on the sidelines of the G7 meeting in Canada on Tuesday. The American review has prompted calls for the federal government to consider a contingency plan in the event the submarine deal is called off. One-time coalition deputy prime minister Barnaby Joyce said the US review was a concern. "You should have a contingency plan, as soon as the United States said 'we're reviewing AUKUS', alarm bells should have rung everywhere," he told Seven's Sunrise program. "We absolutely should have a contingency plan, but I haven't heard of any contingency plan." Under the $368 billion program, Australia will buy at least three Virginia-class submarines from the US sometime in the early 2030s. A new class of nuclear submarines will be built in Adelaide to be delivered in the 2040s. Former Australian ambassador to the US Arthur Sinodinos said he was confident AUKUS would survive. "There's a lot of bipartisan support for the deal, from day one in the (US) Congress, both Republican and Democrat," he told the Seven Network. "Trump himself would see that we're pulling our weight, we're going to spend $370 billion." Mr Sinodinos, who was ambassador when the deal was announced in 2021 under then-prime minister Scott Morrison, said if the US backed away from the agreement, that would play into the hands of China. "If we look at any stage like we're second guessing ourselves, or we're not committed to really doing this ... the Chinese will say, 'well, look at the end of the day, they're all paper tigers'," he said. "The Americans see that by having more subs actually built in the region, and being serviced in the region, that enhances their capacity to do things in the region. "We don't need a plan B." A US review of a deal to provide Australia with nuclear submarines is routine, the defence minister says, despite calls for a backup plan in case the Trump administration scraps AUKUS. The Pentagon on Thursday announced a review of the three-nation pact that would give Australia nuclear submarines, to see if the agreement lined up with President Donald Trump's "America First" agenda. But Defence Minister Richard Marles has downplayed the significance of the review, saying it's standard procedure. "We engaged with the United Kingdom when they did their review, which is perfectly natural, and of course, when we did the defence strategic review, we also went to both the United States and the United Kingdom and sought their views," the acting prime minister told ABC Radio on Monday. "It's a pretty natural process that we all engage in each other's reviews. "We'll engage with the reviews and the (US) Department of Defense about how AUKUS is tracking in Australia." The AUKUS deal is set to be raised when Prime Minister Anthony Albanese meets with Mr Trump for a one-on-one meeting on the sidelines of the G7 meeting in Canada on Tuesday. The American review has prompted calls for the federal government to consider a contingency plan in the event the submarine deal is called off. One-time coalition deputy prime minister Barnaby Joyce said the US review was a concern. "You should have a contingency plan, as soon as the United States said 'we're reviewing AUKUS', alarm bells should have rung everywhere," he told Seven's Sunrise program. "We absolutely should have a contingency plan, but I haven't heard of any contingency plan." Under the $368 billion program, Australia will buy at least three Virginia-class submarines from the US sometime in the early 2030s. A new class of nuclear submarines will be built in Adelaide to be delivered in the 2040s. Former Australian ambassador to the US Arthur Sinodinos said he was confident AUKUS would survive. "There's a lot of bipartisan support for the deal, from day one in the (US) Congress, both Republican and Democrat," he told the Seven Network. "Trump himself would see that we're pulling our weight, we're going to spend $370 billion." Mr Sinodinos, who was ambassador when the deal was announced in 2021 under then-prime minister Scott Morrison, said if the US backed away from the agreement, that would play into the hands of China. "If we look at any stage like we're second guessing ourselves, or we're not committed to really doing this ... the Chinese will say, 'well, look at the end of the day, they're all paper tigers'," he said. "The Americans see that by having more subs actually built in the region, and being serviced in the region, that enhances their capacity to do things in the region. "We don't need a plan B." A US review of a deal to provide Australia with nuclear submarines is routine, the defence minister says, despite calls for a backup plan in case the Trump administration scraps AUKUS. The Pentagon on Thursday announced a review of the three-nation pact that would give Australia nuclear submarines, to see if the agreement lined up with President Donald Trump's "America First" agenda. But Defence Minister Richard Marles has downplayed the significance of the review, saying it's standard procedure. "We engaged with the United Kingdom when they did their review, which is perfectly natural, and of course, when we did the defence strategic review, we also went to both the United States and the United Kingdom and sought their views," the acting prime minister told ABC Radio on Monday. "It's a pretty natural process that we all engage in each other's reviews. "We'll engage with the reviews and the (US) Department of Defense about how AUKUS is tracking in Australia." The AUKUS deal is set to be raised when Prime Minister Anthony Albanese meets with Mr Trump for a one-on-one meeting on the sidelines of the G7 meeting in Canada on Tuesday. The American review has prompted calls for the federal government to consider a contingency plan in the event the submarine deal is called off. One-time coalition deputy prime minister Barnaby Joyce said the US review was a concern. "You should have a contingency plan, as soon as the United States said 'we're reviewing AUKUS', alarm bells should have rung everywhere," he told Seven's Sunrise program. "We absolutely should have a contingency plan, but I haven't heard of any contingency plan." Under the $368 billion program, Australia will buy at least three Virginia-class submarines from the US sometime in the early 2030s. A new class of nuclear submarines will be built in Adelaide to be delivered in the 2040s. Former Australian ambassador to the US Arthur Sinodinos said he was confident AUKUS would survive. "There's a lot of bipartisan support for the deal, from day one in the (US) Congress, both Republican and Democrat," he told the Seven Network. "Trump himself would see that we're pulling our weight, we're going to spend $370 billion." Mr Sinodinos, who was ambassador when the deal was announced in 2021 under then-prime minister Scott Morrison, said if the US backed away from the agreement, that would play into the hands of China. "If we look at any stage like we're second guessing ourselves, or we're not committed to really doing this ... the Chinese will say, 'well, look at the end of the day, they're all paper tigers'," he said. "The Americans see that by having more subs actually built in the region, and being serviced in the region, that enhances their capacity to do things in the region. "We don't need a plan B." A US review of a deal to provide Australia with nuclear submarines is routine, the defence minister says, despite calls for a backup plan in case the Trump administration scraps AUKUS. The Pentagon on Thursday announced a review of the three-nation pact that would give Australia nuclear submarines, to see if the agreement lined up with President Donald Trump's "America First" agenda. But Defence Minister Richard Marles has downplayed the significance of the review, saying it's standard procedure. "We engaged with the United Kingdom when they did their review, which is perfectly natural, and of course, when we did the defence strategic review, we also went to both the United States and the United Kingdom and sought their views," the acting prime minister told ABC Radio on Monday. "It's a pretty natural process that we all engage in each other's reviews. "We'll engage with the reviews and the (US) Department of Defense about how AUKUS is tracking in Australia." The AUKUS deal is set to be raised when Prime Minister Anthony Albanese meets with Mr Trump for a one-on-one meeting on the sidelines of the G7 meeting in Canada on Tuesday. The American review has prompted calls for the federal government to consider a contingency plan in the event the submarine deal is called off. One-time coalition deputy prime minister Barnaby Joyce said the US review was a concern. "You should have a contingency plan, as soon as the United States said 'we're reviewing AUKUS', alarm bells should have rung everywhere," he told Seven's Sunrise program. "We absolutely should have a contingency plan, but I haven't heard of any contingency plan." Under the $368 billion program, Australia will buy at least three Virginia-class submarines from the US sometime in the early 2030s. A new class of nuclear submarines will be built in Adelaide to be delivered in the 2040s. Former Australian ambassador to the US Arthur Sinodinos said he was confident AUKUS would survive. "There's a lot of bipartisan support for the deal, from day one in the (US) Congress, both Republican and Democrat," he told the Seven Network. "Trump himself would see that we're pulling our weight, we're going to spend $370 billion." Mr Sinodinos, who was ambassador when the deal was announced in 2021 under then-prime minister Scott Morrison, said if the US backed away from the agreement, that would play into the hands of China. "If we look at any stage like we're second guessing ourselves, or we're not committed to really doing this ... the Chinese will say, 'well, look at the end of the day, they're all paper tigers'," he said. "The Americans see that by having more subs actually built in the region, and being serviced in the region, that enhances their capacity to do things in the region. "We don't need a plan B."
7NEWS
4 days ago
- Politics
- 7NEWS
Acting Prime Minister Richard Marles expresses concern over Israel-Iran missile campaign
Australia will continue to press the case for a de-escalation of a tit-for-tat bombing campaign between Iran and Israel amid fears the conflict will escalate, the acting prime minister says. Israel and Iran began trading missile blows on Friday after the Israeli military launched attacks with the stated aim of wiping out Iran's nuclear and ballistic missile programs. Iran vowed to 'open the gates of hell' in retaliation, with the conflict continuing into Sunday. Acting Prime Minister Richard Marles expressed concern that the bombing could escalate into a larger conflict in the region. 'We're all deeply concerned about the potential for where this now goes in terms of escalation and broadening out into a wider conflict, and that's why we are urging for diplomacy and dialogue in this moment,' he told ABC Radio on Monday. 'That is why we are exercising our voice, along with countries like the United States, like France, Germany, the UK, to urge for diplomacy and dialogue.' The missile attacks are set to be a key focus of talks at the G7 summit in Canada, which Prime Minister Anthony Albanese is attending. Iran's health ministry said 224 people have been killed in the attacks since Friday. Spokesman Hossein Kermanpour said on social media that 1277 other people were hospitalised, and asserted that more than 90 per cent of the casualties were civilians. Israeli rescue teams combed through the rubble of residential buildings destroyed by Iranian missiles on Sunday, using sniffer dogs and heavy excavators to look for survivors after at least 10 people, including children, were killed, raising the two-day toll to 13. Marles said Australian diplomatic staff in Iran and Israel have all been accounted for, as have military personnel in the region. He reiterated safety warnings to Australians in the Middle East, with the situation remaining volatile. 'There are actually thousands of Australians who are in both Iran and Israel, the travel advice for both Israel and Iran right now is do not travel,' he said. 'Our diplomats ... in both our embassies in Tehran and Tel Aviv are safe and are all accounted for, but we will continue to monitor their safety.' Despite the calls for de-escalation, Liberal senator Andrew Bragg said Israel was doing the world a favour, given Iran is a state sponsor of terrorism. 'If we were in Israel's shoes, we would not tolerate a country nearby us getting a nuclear weapon,' he told Today. 'And so I think Israel is trying to stop that from happening — that's a good thing for humanity, because these guys are the worst regime anywhere on the planet.' Marles said Israel had a 'right to self-defence' following the attacks. 'We understand the risk that the Iranian nuclear and ballistic missile program represents, but right now the focus has to be on diplomacy and dialogue,' he said.
