As the Morrison government tries to push China back into the Pacific, it used Tuesday’s budget to address the long-standing wound over the former Northern Territory government’s 99-year lease of Darwin Harbor in Landbridge .
The budget documents included $1.5 billion to fund a wharf, offloading facility, and dredging of the shipping channel to support the development of the Middle Arm industrial area, across the harbor from the existing port.
While funding has been granted to develop a new port for the export of critical minerals and hydrogen, Finance Minister Simon Birmingham has admitted the facilities could also support military activity.
“This port is for economic development. It can also have advantages for the defense, they should not be ignored,” he said.
Defense Minister Peter Dutton reported further announcements.
“There is massive government engagement in the Northern Territory and indeed in the region of Australia,” Mr Dutton said.
“It looks at the development of the port and ways in which we could look at support through defense contracts, for example, the foundation of a business model, and we will have more to say about that in due course.”
Landbridge Australia chief executive Matt Wallach declined to answer questions about whether building a rival port would trigger compensation for the company, but said he welcomed the investment for Middle Arm.
“We look forward to continuing to work cooperatively with the Northern Territory Government and industry stakeholders to help make this exciting opportunity a reality,” Mr Wallach said.
Director of the Australian Strategic Policy Institute’s Northern Australian Strategic Policy Centre, John Coyne, said the scale of funding and proposed activities suggested the government was seeking to establish an amphibious base, in conjunction with US Marines deployed in Darwin. .
But he said he was ‘building around the issue’ as Landbridge would remain a major player in the port.
Last year, Mr Dutton commissioned a review of the 2015 lease with Landbridge, but found there were no new security grounds for terminating the lease.
A Parliamentary Budget Office analysis requested by the late Labor Senator Kimberley Kitching last year found that the Federal Government would have to pay Landbridge $30 million in compensation if it terminated the deal, as well as $690 million dollars to buy out the lease, although he warned the costs were highly uncertain.
Meanwhile, Joint Defense Forces chief of operations Greg Bilton said the prospect of a Chinese naval base in the Solomon Islands would change the army’s “patrol patterns”.
“It changes the math if Chinese navy ships are operating from the Solomon Islands. They are much closer to mainland Australia, obviously, and that would change the way we would undertake our day-to-day operations, particularly in the air and at sea,” he said.
Federated States of Micronesia President David Panuelo became the first Pasifika leader to oppose the security pact, saying it “poses a risk of increasing geopolitical tensions” in the region.
“You and I are aware – and I think you will agree that this is clearly seen – that the United States and China are increasingly at odds,” Mr. Panuelo said in a letter to Mr. Sogavare. .
“My fear is that we – the Pacific Islands – are at the epicenter of a future confrontation between these great powers.”
“I argue that this possibility is only too plausible; and that obliges me…to ask you very respectfully to give your deepest consideration to the longer term consequences for the whole Pacific region, if not the whole world, which may well flow from a decision of ‘welcome the establishment of an army presence of China in your country.