Transcript

Why is the Strait of Hormuz crisis about more than crude oil, and what does it reveal about Australia’s hidden supply-chain vulnerabilities? 

What should investment in supply chain resilience look like for Australia? 

Does the green transition reduce Australia’s energy security risks, or does it shift our dependence to new materials, technologies and supply chains? 

How can Australia move from a ‘just in time’ to a ‘just in case’ approach to national resilience? 

In this episode, Walter Colnaghi and David Leaney join Sharryn Parker to discuss what the Hormuz crisis means for Australia’s economic security. 

(This transcript is AI-generated and may contain inaccuracies.) 

Walter Colnaghi

In economic security, there are no rules. There are no rules that constrain China from doing what it's doing. There are no rules that that constrain the United States for doing what it's doing across many areas.

David Leaney

But it does reinforce that thing we've spoken about earlier in this podcast about the importance of investing in sovereign capability and sovereign capacity.

National Security Podcast 

You're listening to the National Security Podcast, the show that brings you expert analysis, insights and opinion on the national security challenges facing Australia and the Indo-Pacific produced by the ANU National Security College.

Sharryn Parker

Welcome to the National Security Podcast. I'm Sharryn Parker, and it is my privilege to acknowledge the Ngunnawal and Ngambri people who are the traditional custodians of the Canberra land on which we record today. When we hear Hormuz now, we think oil or crude. However, as modern Australia is discovering, oil is only part of the riddle. The real crisis is downstream, where supply chains we trimmed are now brittle. Our fragile, international and maritime-based supply systems are exposed. The barrel per day makes the news, but as Australia is discovering, the real shock is further down the stream. Where more costly, resilient systems have been systematically excluded to deliver efficiency. In answering the ultimate economic question Australians have had, we are now discovering the subject of supply chain risk. In this episode, we'll step through three Hormuz Straight horizons. What shortages actually look like in practice, what immediate responses can keep essential systems running, and what longer-term changes are reshaping energy security. From industrial bottlenecks and the green transition to binding supply chain agreements and the shift from efficiency to resilience as a core national security principle. So how then do we square these circles? To consider these issues, our two guests today are Walter Colnaghi and David Leaney. Walter is an extensively published graduate from the University of Turin, the London School of Economics, and is a PhD candidate at the ANU School of Politics and International Relations, who favours research across the impacts of economic security and industrial policy on the national security landscape. David Leane y is a lecturer at the ANU College of Business and Economics. He holds a degree in Electronics and Master's degrees in Science and Business, and David has been called a five year futurist and plans his portfolio of work between running a management consultancy and lecturing on strategic management and the global supply chain. Gentlemen, welcome.

David Leaney

Thanks, Sharryn. Lovely to be here.

Walter Colnaghi

Lovely to be here.

Sharryn Parker

Can we start with you, Walter, to consider the downstream shortage crisis from Hormuz and the idea that it's not just an oil story?

Walter Colnaghi

Well, you've touched it already on your introduction, where we see Iran weaponising a geographical choke point, throwing the world economy into disarray because we can't get enough of this very basic feedstock, which is crude oil. But we've seen something very interesting, which is when we see obviously prices going up and indexes for crude oil price like internationally going up. They haven't skyrocketed, at least not even to the same extent that they did in 2022 when Russia invaded Ukraine. But what we see, it's the spread between the price of crude oil and the cost of the refined products. That's actually where the crisis is hitting. So we see all the products that actually have like economic utility that we use crude oil for, such as fuels, fertilisers, semiconductor manufacturing components that are very useful and for obviously basic components for many healthcare applications. So where we see this crisis hitting is not at the first level, which is the one of the crude product, but it's really hitting at the second level, which is how do you transform the crude product into something with actual real world application? And we're discovering now that the ability to turn the crude into something with economic utility is very concentrated. For Australia in particular, this ability to transform crude into many things that we use every day, from fuel to, you know, medical treatment. That's very concentrated in Northeast Asia, China obviously, because of its large industrial capacity, but also other countries such as Japan and South Korea. So while there is obviously an impact to the supply of the crude material, what's even more constrained and even more costly is what we can get out of it. The fertilisers to make food. The crude that we actually turn into fuel to move transport and all the other applied industrial applications that are very important, very niche, that we tend to overlook, but very important to the functioning of the modern economy.

Sharryn Parker

Thanks Walter. David, you heard it from Walter then, you know, Hormuz is a multi- commodity choke point. It's not just about crude. What's your perspective?

David Leaney

That's a very important point and spot on. Most people would understand that crude oil is one of the primary things that we rely on that come out through the Strait of Hormuz. Actually goes into the Strait of Hormuz as well for refining some aspects of it. And that's been redirected elsewhere. We'll get on to that topic. But the ones that people would not necessarily think of; natural gas is a very big export, particularly from Qatar, or it used to be before the Iranians blew it up. And then urea, the nitrogen basis for most of our food fertilisers, which is one that that Walter picked up on. And then of course a range of things around metals, chemicals, other gases, and again, just to pick on one of Walter's points about semiconductor manufacture and the medical technology, that's where helium is actually a really important commodity because it's used in the manufacture of semiconductors. One of the world's biggest consumers of is the Taiwan Semiconductor Manufacturing Corporation (TSMC) in Taiwan, which has its own choke point worries, which I'm sure we'll be able to get onto. And it's also used in the operation of magnetic resonance imaging (MRI) scanners. So lots of things we depend on. And it turns out that the Strait of Hormuz has the choke point from the Gulf of Oman, the Persian Gulf, happens to be representing twenty to thirty percent of some of those commodities.

Walter Colnaghi

If I may just jump in, it's incredible like the extent to which this crisis is hitting many parts of the economy. Another a[IJ1] pplication I can think of is, you know, we turn crude into naphtha and naphtha, you know, it's the main ingredient to make plastics and like other petrochemicals, of which we're discovering that we're very dependent on. This has many obviously implications, like obviously is the fragility of our supply chains and how concentrated they are. But also there are many things that we can't wean ourselves off. We'll still need crude in the future because we still need to make these very important things. And the plastic is not just to wrap things such as food. Like we can't get rid of it by substituting it with paper, for example, because we still need plastic in our applications such as like an -

David Leaney

Medical technology, of course. The importance of particular plastics not only in medical devices and equipment, but in the whole medical processes is absolutely vital.

Sharryn Parker

Yeah, I think it's really interesting that, you know, and most Australians would absolutely understand crude is oil, oil is fuel, and the simple process of getting it, you know, from one country to ours for our use. But the real constraint that you've both highlighted today isn't always that simple supply. It's actually the conversion of that crude into all its different elemental, you know, components. And the one I think that is probably, you know, quite shocking for many of us is that medical supply.

David Leaney

Mm. Yeah, it's an interesting one because crude oil, there's three products that everybody inherently understands that crude oil is made into: petrol, diesel and jet fuel. But at the lighter end of the scale you get a whole stack of hydrocarbon gases and right at the heavier end of the scale, just from a single refinery, you'll get greases and oils and those sorts of things. And then the byproducts go into things like fertiliser and all these many other things that we're talking about. So crude oil probably feeds about twenty different supply chains and the three main fuel ones that we think of: petrol, diesel and kerosene. So jet fuel is kerosene, essentially.

Walter Colnaghi

And yeah, that's also that also highlights like the importance of obviously refining capacity and the capacity to turn these feed stocks into something actually, you know, useful to many applications. I've done my own research about this and seems to be like obviously dealing with industrial policy, we've sort of realised that ever since the era of like hyper efficiency driven globalisation, actually supply chains have been concentrated. And one of these concentration has happened into manufacturing or like turning a raw material into something useful or that can be used. Many of these, it’s obviously, to no surprise, they're concentrated in China. And we're now working up to the fact that they can be disrupted by political decision. But not necessarily with malice, but because they are concentrated in countries that also experience a shortage of this feedstock, would like to sock by or like keep for themselves the products of their industrial capacity to stabilise domestic markets. So not having this backup capacity to turn this feedstock or like not having agreements in place where you have crisis mechanisms where you can share the products of industrial capacity can really hit hard. And we’ve sort of like woken up to this reality that we're paying the price for. Resilience is even more important now, but we sort of assume that like we'll have these peacetime conditions where trade could just like flourish freely and let free trade or market mechanisms deal with these very important problems. But like free markets can fail, like as assistance and resilience is a premium to pay and we need to factor in into our decision making and the way we shape markets in the future.

David Leaney

I really love that point about resilience is an investment that we really need to pay. And that's an important one because as you pointed out, Walter, the trend over the last twenty, twenty-five years has been to thinning out and the efficiency and Sharryn mentioned it in the introduction as well. Supply chains were redesigned to take out backup, to take out duplication, to take out redundancy, to go towards an assumption of open and uninterrupted free open trade on a global basis and the fact that you could have single points of failure or choke points and it wouldn't be a problem because everything would keep flowing. Now Covid six years ago gave us a really sharp wake-up call there. There had been a move to get rid of inventory in supply chains. I don't want to hold stocks. I just want to have the right to have a flow of stock as I need it. So I don't need to hold inventory myself and the term just in time. Unfortunately, as soon as you get a disruption, that JIT also stands for jammed in traffic, and you then suffer that disruption to your supply chain. You suddenly go to your backup and you realise you don't have any backup anymore. So that robustness to stop it breaking, that resilience to get it back up and running quickly, and that redundancy so that you've got fewer single points of failure, those three R's that robustness, resilience and redundancy, I think that's the investment that will be required in the medium to long term.

Walter Colnaghi

That's right.

 

Sharryn Parker

Mm. So I wonder then, Walter, perhaps you can add you know, an example here of the AdBlue model. I know we've spoken about it earlier, but you know, industrial bottlenecks that find us then having to deal with the three R's.

Walter Colnaghi

Well, that happened during 2021/2022, I think, where China decided to control the export of fertilizer, urea in particular, to stabilise its domestic market. [IJ2] And Australia found itself all like in shortage of a critical equipment to make AdBlue, which is the diesel that we use for, you know, road transport and road freight. And so the government intervention was textbook mission industrial policy. Where you just like have a big problem, practical problem to tackle, and they poured resources into ramping up domestic capacity through the only processor domestically, and obviously coordinated throughout the region to diversify supply and like mobilise tankers to store and move this very critical component, urea, to make diesel. Now, there's a point I want to make is that while that was effective, financing long term dried up. And then even the company, I think it was like in tech pivot, it was like heavily, you know, financially supported by the government to ramp up capacity, like the financial, you know, support dried up and the company is not able to process urea into diesel anymore. So while that was effective in the long term I want to stress this like resilience isn't built overnight. You need long term commitment. That may be very hard given like political cycles and but with industrial policy, that that is true of any economic policy, but with industrial policy in particular, because the time horizon is like much more stretched out. To have industrial capacity, you need to invest and build and build not just like the physical equipment that you need to make the stuff that you need, but you need to invest also in the knowledge and the processes. And that takes time. And that takes time just to get it up and running, let alone be profitable. So, like if we want to scale, and if there are very, very, you know, steep learning curves, that takes even more time. So support is important. And another important point is the AdBlue example was reactive to a crisis. And that sort of mirrors the response that the government has taken with seeing like allocated around 15 billion in the budget to energy security that is also reactive. One important point, and it was a point that David is also making, is like know your supply chains so you can act strategically. See where the bottlenecks are, see who the major players are, see who you can work with, where you can put the money so you have more bang for your buck. It's far from me to suggest that we should have backup capacity and everything. But know your supply chains, invest in like supply chains intelligence, because that's very important. And it's illustrative. This clash is illustrative in many ways, but it's illustrative because like we didn't have a full knowledge of how the supply chain worked and was all like woken up to realising when the crisis hit. So that's the first step that I would encourage any policymaker to do. And it's just plan it strategically. Don't wait until the next crisis.

David Leaney

Yeah, don't be reactive. And actually the AdBlue one, most people will know what AdBlue is, but just in case people don't know what we're talking about, it's a it's a brand name for a diesel fuel additive. And it's there for essentially environmental reasons to make diesel engines, especially mid-age diesel engines, run a bit cleaner. And depending on your diesel engine, it can be set by the factory. And most diesel cars are in this case where you cannot run the engine without that diesel fuel additive, without that AdBlue, and it literally stops. The car would be capable of running, but it's not allowed to stop by the electronics that prevent it from running. So this is an example of where farmers, in particular, depend on diesel in more ways than we think. Yes, they require it as fuel to get their products from the farm to market. They also require it as for the byproducts to provide the fertiliser that allows them to grow the crops in the first place. They also require it to run their gen sets, so a lot of remote farms won't have mains power and they'll use diesel for their generator sets to provide electricity. And it also runs the diesel fuel additive that enables their diesel fuel engines to go, and of course those diesel engines, some of the farm machinery. So headers, combine harvesters, tractors, etc. So farmers depend on diesel in about five or six ways. And no, without diesel, Australia stops dead. 'Cause it's not just the absolute basis of our diesel road transport network. A lot of our diesel locomotives require it as well. So all road and nearly all rail stops straight away if we run out of diesel.

Sharryn Parker

Yeah, wow. So if the risk sits in its inputs and across industry itself, does the green transition then fix that? Or does it just shift dependence somewhere else?

David Leaney

Might kick off on that one and then I'd be fascinated to hear Walter's thoughts on this one as well. I'm gonna provide a really unusual starting point. I'm gonna talk about hard and soft tacos. All right. And the reason I'm talking about that is there was an ad that was on a year or two ago and there was this you know, it was a ad for one of the famous taco brands and they were having arguments about whether they should have hard tacos or soft tacos, and this cute little Mexican girl pops up and says, Why can't we have both? And that's the strange analogy I'm applying to the green transition. People want to talk about fossil fuels versus renewables. No, no, why can't we have both? Let's reframe that discussion. One of the reasons that we have not invested in our fossil fuel industry in the last twenty years is because the public has given absolute clear instructions to our politicians. You are not to invest in fossil fuels, you are not to invest in refineries, you're not to invest in sovereign capability when it comes to fossil fuels. Fossil fuels are bad and evil and we want renewables. With that have been reframed, renewables are absolutely part of the solution here and absolutely an important part of the way forward, but it's not a competition. It's a it's a coopetition. It's an opportunity to draw the best from both, and fossil fuels still have an absolutely vital role to play. And we can reframe that discussion and say, ‘here's where renewables can really help’. And there are actually short, medium, and long-term advantages for renewables, not the least of which is taking some of the load off the urban supply of fuel sources and then redistributing those out to the rural areas that really need it. But yeah, there's lots of advantages for renewables, but I'd just sort of kick it off by using my hard and soft taco analogy and say, let's not argue about between the two of them, let's do both.

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Sharryn Parker

If I can then put to you that interdependence is probably unavoidable, I guess the next question becomes how you manage it without turning it into a vulnerability. And I guess I'm leaning here toward the management of that interdependence. And you know, the key idea here is what are the legally binding bilateral supply agreements that we can lean on or develop to facilitate an appropriate situation?

David Leaney

Yeah. Australia actually relies on a couple of things here in terms of leverage points for our bilateral agreements. And most people would be aware from the media that we've signed improved or strengthened bilateral agreements with Singapore, with South Korea, with Brunei, Malaysia, and a few other countries. And they're important for different reasons. From a supply point of view, we get the vast majority of our petrol from and through Singapore. Our diesel comes mainly from South Korea, as in terms of biggest single supplier, not more than fifty percent, but largest single supplier and our jet fuel from China. The sort of number two, three, four nations in that, Brunei and Malaysia account in there for diesel for sure. We rely on several things. One is our reputation, and that's our ability to be a good corporate citizen, supplier and customer. We pay on time, we're easy to deal with, we're reliable, we're trustworthy, we tend not to switch off supply for political reasons. And one of the other major factors we've got there is our natural gas exports. Australia is already one of the biggest exporters of natural gas in the world, emphasised when Qatar, who was a similarly very large exporter of natural gas, had their refining capabilities destroyed in in the Middle East war recently. And so that actually improved the strategic positioning of Australia's natural gas and enabled us to have a very powerful bargaining chip to go into those varied bilateral agreements. So that the legal enforceability of the contract is nowhere near as important as the carrot and the stick that we have there, in particular with our natural gas exports.

Walter Colnaghi

And yeah, that’s spot on in saying that there are a number of agreements where Australia, given the fact that it has a reputation for be a reliable partner, has been able to secure commitments. In the case of for example, with Singapore even legally binding commitments for energy security to secure supply chains of fuel, where Singapore plays a major role in refining the crude that then gets used like in Australia for fuel. There are two ways in which this interdependence can be managed. One of them will be the more extreme one, which is again like the pushing full steam ahead with redundancy. We've seen these, for example, being applied in China. That's the self-sufficiency, the self-reliance model, where you sort of like, you know, way of managing interdependence is like reducing it. So you've make yourself less vulnerable to shocks because you make everything in-house. Now. That's extremely expensive. It's extremely expensive for China, let alone for a middle-sized country or like a much smaller country like Australia that has much less fiscal room. So, what is the option? The option is to try and manage this interdependence with partners. And that's what Australia has done. And we see these like also other countries in the region. New Zealand and Singapore has signed another legally binding supply chain agreement that they say is the world first. But we see countries trying to put in place the mechanisms in an area where there are none. So we see like in economic security, there are no rules. There are no rules that constrain China from doing what it's doing. There are no rules that that constrain the United States for doing what it's doing across many areas. Someone will have to step in and fill this gap. And even though there are many question marks about these legally binding agreements like did the one between Singapore, and Australia is part of a free trade agreement between Singapore and Australia. There are many questions around how do you enforce it? And, you know, will the politics like act to make this like a credible commitment? We've seen like a lot of in the public debate been talking about an LNG export tax. Obviously that would run counter to commitments of like the image that Australia portrays in the region as a reliable partner, someone they can count on. But someone will have to start and draft these rules about like how do we manage this sort of like shared vulnerabilities. I give you something, LNG, you give me something back like fuel. And in times of crisis, how do we coordinate so we can share it instead of like hoarding it and keep it up to ourself and you know like that will lead to a crisis like in no time.

David Leaney

Yeah. It's so, if we use Brunei as a really simple example here, simple because the relationship's really clear cut. We've got a great trading relationship with Brunei have had for many years. The two main things that we buy from them; diesel, fuel, which mainly goes to our farmers, and fertiliser, which goes to our farmers. And what is the number one thing that Brunei actually buys? Ninety two percent I think of its global supply from? It's food from Australia. Yeah. So it's kind of a circular moment where they provide us stuff to enable us to grow the food so that we can sell them the food. So that mutual interdependence, I think, is a stronger platform than worrying about the legal enforceability. Not that it's not important, it is, but I think if you've got fundamental things that drive the behaviour that don't rely on calling in the lawyers, I think you're on a stronger foundation than if you are relying on trying to get something in international legal agreements.

Sharryn Parker

So if our strategic framing is small and middle power, you know, parallels with others like Singapore and New Zealand, the so what of all of that is the emergence of a trusted supply network system that actually works for us, but it works for our neighbours and our partners as well.

David Leaney

Yeah. And extending that beyond just Australia, of course, to you know linking New Zealand into some of our agreements. But when we think about the upcoming problems and the upcoming increase in costs and decrease in supply of fuel in particular from a security point of view, there actually is some good news there, but there's also some bad news and there's parallels and contrasts to the nineteen seventies oil crisis, for example. We didn't get this giant spike in prices that that Walter mentioned before from the 1973-74 oil crisis and the 1979 Iranian revolution. So we didn't see that four hundred percent spike in price for a number of reasons. We're less dependent globally on the Persian Gulf than what we used to be, and the world has adjusted that twenty percent reliance is down now to probably nine or ten percent alliance for a number of mechanisms. East-West Pipeline across Saudi Arabia into the Red Sea and out through the Gulf of Aden. Until that's closed by the Houthis and the Somalian pirates joining up together, which I hope doesn't happen. And then the redirection of the refining and then the redirection and ramping up of alternate supply. So we're actually decreasing our global reliance on the Persian Gulf and our risk of exposure to the Strait of Hormuz. But the difference, that's the good news bit. The bad news bit is it's not just about the fuel. And the impact of fertiliser is going to take a farming season to appear, and that is yet to hit us. And we will still see things in the future like odd items just not available on the supermarket shelves for months because that's going to be an impact from the crops that weren't planted in April 2026.

Walter Colnaghi

There are, as a parallel with the 1970s shocks, it's pretty apt. Now we obviously have the International Energy Agency, which has been created following the oil shocks to you know put in place backup mechanisms. One of them will be like obviously reserves of oil, the crude oil reserves, so like and, there have been like massive releases, coordinated releases that have like calmed down press hit prices. So there are many points that suggests that this crisis isn't that bad. One of them is like obviously the lead time or the time that it takes for these shocks to actually hit the supermarket, to hit like everyday life. One of them is obviously, as David mentioned, is the fertiliser. It'll take like a whole farming season. The other point is even if Iran and United States that they seem to be talking and like the United States seem to be confident that they're close to a deal. But even if they reach a deal, it would take months. I think it was the CEO of the Abu Dhabi National Company that says like it would take at least it would take months to demine the Straight. It would take four months to reach eighty percent of capacity pre Iran war. And that's where you start seeing shortages hitting. Now, for countries like Australia that can afford higher prices, that shouldn't be a problem. The problem is the more constrained countries, we're seeing protests flaring up in South America and in Africa as well about rising prices for fuel. Would see probably more like given, you know, the rising prices for fertilisers and what that means for regional instability potentially, that's where I'll be more worried about.

David Leaney

It would not be a good time to be in the Philippines, for example, where you've got no strategic levers and you're at the very end of the supply chain and they're suffering massive fuel shortages, for example. But it does reinforce that thing we've spoken about earlier in this podcast about the importance of investing in sovereign capability and sovereign capacity. And I think that is our that's our long term one. Coming back to your initial points, Sharryn, about short term, medium term, long term. Yes, the bilateral agreements are very important. Yes, the transition to more green energy helps take some of the pressure off. But that expensive and time consuming and long lead time investment in sovereign capability and sovereign capacity, that's the tough political sell. And that is in the tens or hundreds of billions of dollars range.

Sharryn Parker

Yeah, that's a big number. You know, as we look at efficiency versus resilience, these are the two key terms. we know that we have succeeded in the efficiency argument. There is a lot of conversation, I think, to be had around this idea of resilience. So how do we bring resilience in as part of our national security doctrine without threatening the efficiency that has also made Australia very wealthy?

David Leaney

That's a really simple question and an incredibly complicated answer, but the short version of that answer is you have to invest in it and yet it has to be a trade-off. You can't have efficiency and resilience. You can't have efficiency and backup / redundancy / multiple paths. You have to purchase that additional resilience and purchase that additional redundancy and multiple suppliers. It is about not putting all your eggs in one basket. So rather than a single contract with a single supplier that provides a hundred percent of what you need. It's better to have five contracts with five different suppliers with, you know, on average twenty percent. You know, some might be thirty-five percent, someone might be four percent. But you need to have a mix of suppliers, but you've also got to look at the secondary effects because those suppliers might be getting their suppliers from a single point of failure as well. So investment in that analysis of your supply chain at a deeper level. But it does take that trade off of investment because you have to purchase resilience, you have to purchase redundancy back up and invest to get rid of those single points of failure.

Sharryn Parker

I see, yeah, Walter.

Walter Colnaghi

Perhaps the best way to describe it would be as an insurance policy.

David Leaney

Yeah, great, great analogy.

Walter Colnaghi

Buying resilience now costs a lot of money. But the cost, it's much smaller than you know the national security and the economic consequences that will hit you if you don't have this backup capacity. If I may just jump on the way to dilute this cost will also be again, work with partners. We're seeing like line as, for example, in the rare earth space, working with the Japanese government to put up, you know, to put up alternative rare earth refining capacity in Southeast Asia. So there's a model where you like even if you're constrained and you don't have the budget to press for resilience everywhere, there's, you know, working together with partners is a way of doing it, not just by anchoring demand, but like also providing the patient capital you need for your industry to develop.

Sharryn Parker

Indeed. Walter, what's your biggest takeaway from the crisis itself?

Walter Colnaghi

It's probably the thing that we're trying to hammer out, which is resilience not as a reaction to global crisis. Of course, never waste the crisis, right? Like they always put a spotlight onto your vulnerabilities. But is the proactive investment in mapping supply chains and that insurance policy that you need to put in place to prevent this crisis from happening? That will be a tough political sell. But you need to be forthright about this. You need to be forthright about it being a cost that you incur short term to buy yourself to reap the benefits of this in the future. So short term is painful, but long term it will lead to more results and more national security, which is a very hard thing to measure benefits.

Sharryn Parker

Yeah. David, can I leave you with the last comment here for today's discussion? Are Australians ready for moving from just in time to just in case?

David Leaney

Great question. And I think if you had asked them in February, they would have said no. And a lot of people in February pre-attack on Iran by Trump would have thought that there's nothing wrong with the global supply chain. We've got over that Covid thing. We don't need to worry about investing in in additional sovereign capability or capacity. I think this has been yet another and really stark reminder that it is required. So I think now is the right time where there's the political capital and it's fresh in people's minds, now make the case for investment in resilience, make the case for investment in sovereign capability and capacity.

Sharryn Parker

Fantastic. David Leaney and Walter Colnagi, thank you very much for joining me today.

David Leaney

Thanks, Sharryn.

Walter Colnaghi

Thank you, Sharryn.