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Smith defends criticism of ADFA chief -

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Defence Minister Stephen Smith has stood by comments he made last year about the handling of the
Defence academy Skype sex scandal in the wake of a report on the matter.


TONY JONES, PRESENTER: After missing out on a return to the foreign ministry, Stephen Smith is back
in the hot seat in his old defence portfolio tonight. Almost 800 plausible complaints of abuse have
been exposed in the investigation that followed last year's Skype sex scandal at the Australian
Defence Force Academy. And military chiefs have pulled rank on the minister to demand the academy's
chief be returned to duty after Stephen Smith stood him aside.

Political correspondent Tom Iggulden reports from Canberra.

TOM IGGULDEN, REPORTER: Last year's Skype sex scandal has triggered an avalanche of abuse claims in
the military, stretching back six decades.

There's already talk of a potential Royal Commission and a compensation scheme to deal with 755
allegations, described today as "plausible" and "potentially criminal".

DUNCAN LEWIS, DEFENCE SECRETARY: The initial part of the report is in my view unpleasant and
sobering reading.

TOM IGGULDEN: A separate report triggered by the scandal was sobering for the Defence Minister. It
found the actions of the Australian Defence Force Academy's chief, commandant Rod Kafer were not at
fault in the wake of the scandal and that Defence has no option but to reinstate him as head of the

STEPHEN SMITH, DEFENCE MINISTER: And indeed on the contrary, if he didn't return to ADFA there'd be
a risk of legal action to require him to be so reinstated.

TOM IGGULDEN: The Defence Minister still argued against the reinstatement when the report was first
delivered to the Government in December.

STEPHEN SMITH: There's a difference between a difficult conversation and a conversation about a
difficult matter.

TOM IGGULDEN: But the military brass pulled rank.

DAVID HURLEY, DEFENCE FORCE CHIEF: My authority under the act is quite clear in terms of
positioning of individual people - and managing people within the ADF.

TOM IGGULDEN: Mr Smith effectively removed Commandant Kafer last year after he conducted an
unrelated disciplinary hearing into the cadet who'd complained she'd been filmed having sex without
her consent by fellow students. The disciplinary hearing, Mr Smith said, put the cadet's character
into question.

STEPHEN SMITH (April 6, 2011): The fact that it went ahead shows anywhere from complete
insensitivity to complete stupidity.

(Today): I don't realise from any of those remarks. ... I might be old-fashioned, but that's my
view. ... I stand by everything I did and said at the time.

TOM IGGULDEN: Despite the rift, Mr Smith says he has full confidence in the top brass.

NEIL JAMES, AUST. DEFENCE ASSOCIATION: The minister's trying to squeeze out of the fact that he's
pilloried this bloke, scapegoated him for nearly 12 months and now refuses to apologise.

CHRIS UHLMANN, JOURNALIST (on 7.30): Do you think that as a result of the ADFA affair that the
leader's of the Australian Defence Force have lost confidence in you?

STEPHEN SMITH: Absolutely not.

TOM IGGULDEN: No fewer than seven reports were commissioned in the wake of the Skype sex scandal.
Of the two most controversial, one's been withheld while the other's been heavily censored.

Meanwhile, Wayne Swan may have wished he could have blacked out some of the figures in the latest
economic update released today.

WAYNE SWAN, TREASURER: The number today is somewhat softer than many people expected.

TOM IGGULDEN: December quarter growth was about half that forecast, dragging down the annual growth
rate down to 2.3 per cent. It's the last major economic update before May's budget. The
Government's still committing to a surplus.

WAYNE SWAN: I think in some ways it's gonna be the hardest of them all because of the reasons that
I've been through today.

JOE HOCKEY, SHADOW TREASURER: He's never had a tough budget because he's never delivered a surplus.
So, I think Wayne Swan is gilding the lily yet again.

TOM IGGULDEN: The Shadow Treasurer's also insisting only the Opposition can be trusted to produce

JOE HOCKEY: Based on the information available today, we will deliver a surplus in our first year
in office and every year after that.

TOM IGGULDEN: That's despite a warning from the Treasury chief today of a drastic fall in
government revenue over recent years.

MARTIN PARKINSON, TREASURY SECRETARY: Surpluses are likely to remain at best razor-thin without
deliberate efforts to significantly increase revenue or reduce expenditure.

TOM IGGULDEN: And there were more questions today about where the Opposition would find the money
for its paid parental leave scheme.

TONY ABBOTT, OPPOSITION LEADER: I'm not going to apologise to the big businesses of our country for
asking them to pay this modest levy given that they are receiving, they will receive a modest
compensating tax cut.

TOM IGGULDEN: Or as the Treasurer put it ...

WAYNE SWAN: Arguing he's somehow going to cut company taxes whilst he simultaneously increases

TOM IGGULDEN: The Opposition Leader says the scheme's staying.

Tom Iggulden, Lateline.