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RUBY:

From Schwartz Media, I’m Ruby Jones. This is 7am.

Australian defence officials are currently deciding whether to buy warships off Germany or Japan.

It’s an 11 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 war ships will send a signal about whether the relationship is reciprocated.

These considerations have been sharpened by the recent appearance of the Chinese navy off our shores, and by the Trump administration's reshaping of American foreign policy.

Today, special correspondent for The Saturday Paper Jason Koutsoukis on the frigate deal that could cement the Japan-Australia alliance, or sink it.

It’s Thursday, April 3.

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RUBY:

So, Jason, you lived and worked in Japan for several years, didn't you? Can you tell me about it?

JASON:

Ruby, I did live there for three and a half years, in fact. I was working for the Japanese media company Nikkei, which most Australians probably know as having something to do with the Nikkei index. Nikkei 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.

RUBY:

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

JASON:

I think Japan does really still think of Australia the way it thought of Australia in the 1980s. 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. But I do think since Australia signed a defence agreement with Japan a few years ago under then Prime Minister Scott Morrison, more Japanese are starting to take Australia more seriously as a real kind of security partner.

Audio excerpt — News Host:

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

JASON:

Of course, Japan and Australia are both in this four-nation group known as the Quad, and I think when the AUKUS agreement was announced, that also got a lot more Japanese people sort of sitting up and taking Australia more seriously.

Audio excerpt — News Reporter in translation:

“US President Biden, British Prime Minister Sunak, and Australian Prime Minister Albanese held the AUKUS summit.”

RUBY:

OK, 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?

JASON:

Well, I think there's no better sign of how Australia is viewed by Japan than a speech last week given by the Japanese ambassador to Australia, Kazuhiro Suzuki. He was speaking at the 8th annual Japan Symposium at the University of Western Australia, and Ambassador Suzuki 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 equal sides and one shorter side. And I guess for him, Japan and the US are two big, strong, influential players when it comes to the Indo-Pacific, so: is Australia ready to step up and start contributing as much to the triangle as Japan and US?

RUBY:

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

JASON:

Well I think Australia has said a lot of good things about Japan in the past five to 10 years, it has aggressively courted Japan as a security partner. We have the Quad, and Australia signed a defence and security partnership with Japan, it's the only partnership of its kind that Japan has with any other nation except the United States.

And now Australian defence officials have established this new frigate programme called the C3000 general purpose frigate programme. And Japan has been shortlisted as one of two possible designers for this new frigate. It's a programme that will eventually see 11 frigates built for the Royal Australian Navy. Frigates, of course, are a smaller, more versatile kind of warship. And under this programme, Australia envisages that the first three frigates will be built overseas at a foreign shipyard, and then after that, the remaining eight ships will be built probably in Western Australia.

And the government is at the stage where it's down to these two tenders for this general purpose frigate: one is from Japan, where the prime contractor would be Mitsubishi Heavy Industries, the other design is from Germany, and the contractor there is ThyssenKrupp Marine Systems.

Audio excerpt — News Host (Sky):

“The ordering of 11 new warships. They've got a $10 billion 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,”

RUBY:

Okay. So what would you say are the main differences then Jason between the two proposals?

JASON:

Well, let's start with the German frigate, which is called the MEKO A-200. 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 a proven 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 design is also a bit more affordable, they're smaller, they have a lighter weapons load. They are basically IKEA ships.

On the other hand, the Mogami-class from Japan.

Audio excerpt — Toru Yoshioka (MHI representative):

“I will explain about the current status of the Mogami-class constructions. From 2018, we have started construction of the Mogami-class.”

JASON:

It's a new design, it's an upgrade on the Mogami-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.

Audio excerpt — Toru Yoshioka (MHI representative):

“This is a flexible modular design capability. So you can modify this kind of mast with a powerful radar as a foreign country's or foreign manufacturer's radar systems.”

JASON:

One defence official told me that, in theory, the Mogami-class is a better ship. The problem is it hasn't been tested in the water yet. What can't be ignored in this decision is that the Japanese ships do carry a lot more strategic weight.

Japan is a crucial partner for Australia and they've shown that they're very strategically invested in the outcome, and if Australia picked the Japanese consortium, I think that would send a very strong signal to Tokyo that Australia wants to deepen its partnership.

But we've come close to a deal like this with Japan before and it didn't end well.

RUBY:

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

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RUBY:

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.

JASON:

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

Audio excerpt — Tony Abbott:

“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!”

JASON:

It was back in 2014 when Tony Abbott was prime minister, and he did a handshake deal with his Japanese counterpart Shinzo Abe and promised him that Australia would select Japan to build 8 Soryu-class submarines for Australia to replace our Collins-class submarines.

Audio excerpt — Labor MP:

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

Audio excerpt — The Speaker:

“I call the Honourable the prime minister.”

Audio excerpt — Tony Abbott:

“Well, Madam Speaker, of course we're exploring the potential for defence cooperation with Japan. Is this another outbreak of xenophobia amongst members of the opposition?”

JASON:

Abbott made the proposal without knowing which submarine would actually best suit Australia both technically and strategically. He told Shinzo Abe that he would award Japan the 50 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.

Audio excerpt — News Host (ABC):

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

JASON:

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

Audio excerpt — Tony Abbott:

“I've had discussions about submarine partnerships with Japan, I've had discussions about submarine partnership 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.”

JASON:

And by February 2015, Abbott had formally reneged on this deal with Shinzo Abe, and eventually the contract was awarded to France.

RUBY:

And then we famously backed out of that deal and signed up to buy the US subs, right?

JASON:

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

RUBY:

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?

JASON:

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 behind the scenes. And I think that's pretty accurate. They will definitely be very polite about it, but under the surface, I think the Japanese would be very puzzled as to the real reasoning behind Australia not investing in the partnership with Japan. And it would take quite a bit of time for Australia to really recover from that.

Mitsubishi Heavy, the company that's going to build these frigates, they've done everything possible to make clear to the Australians that they can meet every technical specification that they need in the ship. And I think if Japan doesn't succeed this time, they'll really start to wonder whether Australia does take it seriously as a real kind of security and industrial partner.

RUBY:

Jason, thank you so much for your time.

JASON:

Oh, thanks, Ruby. Thanks for having me on 7am.

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RUBY:

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’, will report directly to the Treasurer and cabinet, and will have legislated powers to hold government agencies to account for bureaucratic delays on major national projects.

And, the Victorian parliament has approved new anti-vilification laws, which the government says will protect more people from hate speech or harmful conduct.

The new laws extend anti-vilification protections to cover disability, gender and sexual identity, as well as those who have a personal association with someone who has a protected attribute.

I’m Ruby Jones, 7am will be back tomorrow.

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