PRIME MINISTER, ANTHONY ALBANESE: Good morning. I am very grateful for the opportunity to meet Prime Minister Sanchez today, and I was very honoured to be the first Australian Prime Minister to make a bilateral visit to Spain. Our discussion was very warm and it was productive, reflecting the deep and long standing relationship between our two nations. We discussed the NATO summit, which begins tomorrow and the important role that Australia and its Asia Pacific partners can play. And I certainly indicated to the Prime Minister, my thanks for NATO's increased focus on the Indo-Pacific. Like Australia, Spain has strongly condemned Russia's actions in Ukraine. It has provided military and humanitarian support there. Our shared commitment to upholding the international rules-based order is more important than ever in the wake of Russia's invasion of Ukraine. Our discussion went across a wide range of areas for over an hour. And it was, I think, symptomatic of the strength of the relationship that the Prime Minister gave Australia so much time in that bilateral meeting in the day before he hosts the NATO summit. We did discuss the implications for Europe of what is happening post the Russian invasion of Ukraine. The pressure, of course, on oil prices and access to energy. The Spanish Prime Minister Sanchez indicated that we have a similar response to the Australian response here in Spain. It's been a reminder of the need to step up when it comes to renewables and to step up the transition to clean energy by taking action on climate change, and Spain is playing a central role in Europe, and I commend Spain and Europe for their leadership. We also had an extensive discussion about trade diversification and Australia of course, has been having discussions with Europe about a trade deal. Those discussions essentially have stalled. There was one discussion only in the last 12 months, which is not the way that these deals progress to completion. And it was clear that there were two impediments there. One was the Australian relationship with France and the breakdown that had occurred in recent times, given France's leadership role in Europe. And the second was Australia's position on climate change, where the perception by Europe and indeed by the world was that Australia was a handbrake on global action on climate change was clearly hindering our capacity to enter into economic relationships with our European friends. The EU trade deal is critical. Europe is Australia's second largest trading partner. It is the second largest investor in Australia. The European economy is $24 trillion AUD strong and with 450 million people. This is a market where Australia can really benefit from progressing this trade deal. The Spanish Prime Minister indicated very much his support for that deal. Going ahead, there will need to be more discussions. And this afternoon when I have further meetings, including with the Prime Minister of the Netherlands, it will be a common theme that I will take to the bilaterals here in Madrid. In addition, this afternoon I have a meeting, a bilateral with the President of the Republic of Korea. And after those discussions, I will attend the function commemorating the beginning of the NATO Summit being hosted by the King and Queen of Spain. I'm happy to take questions.
JOURNALIST: Prime Minister, when do you hope you might be able to get an EU trade deal now that you have support from Mr. Sanchez? And also, given that you're headed to Paris for a relationship reset with Mr. Macron?
PRIME MINISTER: Well, for an EU trade deal to progress, there needs to be a fair bit of advance by the beginning, first quarter of 2023 given when European elections are on, given that it takes round about 12 months, to then progress through the stages where it would have to progress, both in Australia and in Europe. So I'm hoping for coming months to really see an acceleration of that process. I have after the meeting with the Prime Minister, Sanchez, I had a discussion with Don Farrell as well, our Trade Minister. The Spanish Trade Minister will be visiting Australia very soon, as well as there are a couple of other visits of Trade Ministers from Europe visiting Australia for discussions. I welcome those. We will make the announcements in partnership with all our friends in Europe, in those European countries at the appropriate time.
JOURNALIST: Prime Minister, you said that Australia's previous position on climate change was hindering an EU trade deal. Could you explain exactly how that is? What you mean by that? Where exactly was Australia's position preventing us from making deals on issues that would also go beyond?
PRIME MINISTER: Australia just wasn't seen as being fair dinkum, to use as Australian term, about taking action on climate change. And that was something that was having an impact on our relations with our friends here in Europe. Europe is considering, for example, penalties on nations that aren't taking action on climate change. And it was very clear that the changed position of Australia has been noticed, has been welcomed, and Prime Minister Sanchez reflected that today.
JOURNALIST: Prime Minister, just on the warfare destroyer, did it come up and what was your response to Prime Minister Sanchez's comments?
PRIME MINISTER: It was raised. The Spanish have provided support for seven different naval vessels, three destroyers, as well as all other naval craft, and they have done that in a way which has benefited both Spain and Australia. Spain are looking at the option, the offer, to provide more support. What I indicated to the Prime Minister was that would be considered in the context of the Defence Force Forward Posture Review that is taking place. I will be appointing someone independently to conduct that review, which will be about our assets, our capabilities and how we go forward. Given that, I've indicated we will need to increase defence spending in the future. But what we need to do is to make sure that we get every dollar of that spending goes to improving our capability. And that's the context in which we give consideration to it.
JOURNALIST: The G7 looks set to push ahead with a global price cap on Russian oil imports. Do you support that? And what advice are you getting as to what impact that could have on world prices and therefore Aussie fuel prices?
PRIME MINISTER: Well, we'll have discussions about that and take advice. The G7, of course, has had an important discussion over the recent days, and the context of that is very similar to the background to which this NATO summit is taking place. The Russian invasion of Ukraine is having an impact, not just on of course, most importantly is the impact on the people of Ukraine, including innocent civilians who've been targeted by Russia's illegal actions, including the rather extraordinary missile strike on a shopping mall in recent days. But it's also having an impact on Europe. It's having an impact on the world, on oil prices. And that's why we need to consider the response, which has also been, as Prime Minister Sanchez indicated, it is a chance that events, as well as the pandemic for an assessment of how do we emerge from these two events response that protects the national interest as well because Russia's invasion is having an impact on global inflation, is having an impact on global economies and is placing pressure on individuals regardless of how far away they are from the direct conflict. It is a reminder that even an island continent like Australia is not immune from these impacts, which is one of the reasons why not just myself, but the leaders of New Zealand, Japan, Korea are here as well, participating in the NATO Summit.
JOURNALIST: PM further to Andrea's question, every crisis comes with opportunity, and I imagine you're expecting leaders to come and will come to you and ask for more gas and more coal, which will cost plenty. But what concerns have you got that the crisis in Ukraine could cause or worsen shortages of supply of coal and gas in Australia?
PRIME MINISTER: Well, it is having an impact in Australia, but it's also having an impact, particularly a more severe impact, here in Europe. Spain has quite a strong renewables sector and Spain from memory, I think the Prime Minister said it was round about six to eight per cent of their energy needs are met through Russian gas. So the impact here on its economy is less than the impact on Germany, for example, but it is having an impact on Australia as well. We know that the impact because of global prices rising, is having an impact on Australian energy prices as well and on families.
JOURNALIST: Do you have advice in terms of Australia's capacity to increase production?
PRIME MINISTER: Well, Australia of course is a major supplier of gas and one of the issues that has occurred in Australia in recent times is that there has been problems in terms of coal production, due to natural disasters and flooding, impacted on the production levels, that's had an impact on our domestic market as well as on our export market. So those issues, of course, are being worked through. I think that Madeleine King, as our Resources Minister and Chris Bowen is our Energy Minister, deserve a great deal of credit for presiding over a situation which was extremely difficult. There was talk about blackouts - that didn't occur and they deserve credit for their leadership. But also what it showed was that the Australian regulator, the Australian Energy Market Operator, did I think a very good job in intervening to suspend the market when it was appropriate and then working back towards the market as it was resolved.
JOURNALIST: How do you strike that balance in terms of being part of those global efforts to, I guess, have freedom for what he's doing, but also ensuring that domestic considerations in terms of price hikes, inflation are taken care of?
PRIME MINISTER: Well, it's a false dichotomy with respect. Obviously, we have no alternative, no alternative but to stand up against Vladimir Putin's aggression. If we do not do that, if we do not do that, the consequences for the international world and the relationship between nation states, which is sovereign and with each other, in terms of Europe, are dire indeed. And the consequences then for our region as well is that if Putin is allowed to just proceed in a way in which nation states say, "this is too difficult" and not provide the support that is being provided to the people and the democratically elected government of Ukraine, then it's not just a matter of the messages that are sent, the economic consequences down the track for nation states, no matter where they are in the globe. And bear in mind, that what is happening in Russia and Ukraine is having an impact, yes, on advanced economies like here in Europe and in Australia, but is also having dire consequences in terms of food and people starving in parts of the world, including in Africa. We have, because of the embargo, the blockade which is on Ukrainian wheat and produce getting out. So this is a circumstance whereby this is a moral position, first and foremost that overrides everything, but it's also an economic position as well, whereby if you believe in good order, then you have to see that the world is right to stand up in the way that NATO countries and in the way that their partners have, including the AP4. Australia, is right to be the largest non-NATO contributor because as good international citizens, our standing and our future economic relationships as well can't be hostage to the sort of barbaric actions that we've seen from Russia in blaming a sovereign nation state and seeking to impose its will. This is one of those fundamental questions that we have. Australia stands with our friends in NATO including our friends here in Spain, and that was something that was indicated by me very strongly and that we have strong results on these issues and Vladimir Putin should be under no illusion, no illusion, that the world is just going to say, "oh this is too hard, we'll just move on".
JOURNALIST: In the context of all that, what message should China in particular take from the international community's response to Russia?
PRIME MINISTER: That the world is determined to respect international law, international order, and that the world has been united and brought together with our common sense of purpose. You have one of the issues that we discussed with the Spanish Prime Minister today was the applications of Sweden and Finland towards joining NATO. These are nations that have a history of standing apart, of neutrality, over such a long period of time. But here you have NATO strengthened. And those nations that are prepared to stand up for democratic values, for human rights, for respect of the sovereignty of nations and for the UN Charter will continue to stand up for those values and those rights. And that is something that is a message to all other countries in the world, whether they be here in Europe or in our own region. Thanks very much.