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Transcript of joint doorstop interview: 19 March 2012: capability announcement; Timor-Leste election; Belgian Defence Minister; Joint Strike Fighter; Defence Budget; border protection



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The Hon. Jason Clare MP Minister for Defence Materiel

Minister for Defence and Minister for Defence Materiel - Doorstop 19 March 2012

TRANSCRIPT: MINISTER FOR DEFENCE & MINISTER FOR DEFENCE MATERIEL - DOORSTOP

TRANSCRIPTION: PROOF COPY E & OE

DATE: 19 MARCH 2012

TOPICS: Capability announcement; Timor-Leste election; Belgian Defence Minister; Joint Strike Fighter; Defence Budget; Border Protection

STEPHEN SMITH: Firstly I’m here with Jason Clare, the Minister for Defence Materiel and Home Affairs. We have three important capability announcements. I’ll make some remarks then hand to Jason and then we’re happy to respond to your questions.

Firstly over the weekend the Government entered into a contract for the purchase of an offshore support vessel to complement our heavy amphibious lift fleet, HMAS Choules and HMAS Tobruk.

This was at the cost of some $130 million.

Importantly, in addition to being available for Defence use, for humanitarian assistance and disaster relief in the heavy amphibious lift area, once the Landing Helicopter Docks arrive in the middle of this decade, the ship will be transferred to customs and border protection to perform customs and border protection work in the Great Southern Ocean.

The ship that’s been purchased is effectively the sister ship of the Ocean Protector and has a sub-Antarctic capability. So this is a very effective and efficient and value-for-money purchase so far as the Commonwealth is concerned.

This now completes the work that we’ve been doing on our heavy amphibious lift capability since February of last year when in the face of Cyclone Yasi, very regrettably, no heavy amphibious lift capability was available. Since that time we’ve seen the purchase of HMAS Choules and the leasing of various support vessels to ensure that HMAS Tobruk was covered in terms of capability gap and now the purchase of this offshore support vessel which will be ready for service by about the middle of this year. So that’s been over 12 months of effective work by the Government and good work by Jason Clare, as Defence Materiel Minister, in this area.

Secondly, we’re announcing today the purchase of a sixth C-17A Globemaster heavy lift aircraft. This effectively doubles our heavy aircraft lift, our C-17 capability as a result of increasing our fleet from March of 2008 from four to six. This purchase, at the cost of some $280 million, is done through the United States foreign military sales process That plane will become available towards the end of this year and, as a consequence of that, we’ve effectively doubled our operational capacity in the C-17 heavy lift area.

Over the past period, the recent period, we’ve seen the great utility that we can put the C-17s to. We’ve seen that from the floods in Queensland through to our work in Christchurch, through to the work in Japan following on from the tsunami. So doubling effectively that capability from a fleet of four to a fleet of six is a very significant and very important acquisition.

Finally we’re also announcing today the purchase, at the cost of some $15 million, of some long lead items for Bushmasters.

You might recall that last year the Government agreed to purchase an additional 101 Bushmasters for use in Afghanistan. At the end of last year we also down-selected Thales in Bendigo and its proposed Hawkei which is a protected Land Rover vehicle, chose Hawkei as the down-selected for a protected Land Rover.

To ensure that there is continuity of skills in Thales’ workshops in Bendigo we indicated at the time that we

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would examine the purchase of additional Bushmasters to ensure the skill set remained at Thales in Bendigo until Hawkei is fully developed which we expect to be in 2016 if that development phase goes well.

So these long lead items are purchased to give the Government the flexibility and the capability of purchasing additional Bushmasters on top of the 101 that we announced last year.

I’ll let Jason make some remarks and then we’re happy to respond to your questions. Jason?

JASON CLARE: Thanks, Stephen. This is my first press conference back in the portfolio for this year and we’re doing here what we did last year, which is delivering more equipment for our troops, more equipment for Army, more equipment for Navy and more equipment for Air Force.

In our last press conference last year we foreshadowed that we were pursuing the purchase of another amphibious ship. In our first press conference back we’re announcing that we’ve purchased that ship.

In our second last press conference in December last year we announced we’d downselected the Hawkei armoured vehicle as the next generation armoured vehicle. We also foreshadowed, at that time, that we’d be working with Thales in the area of whether additional Bushmasters were required to maintain that skill in building armoured vehicles and today is the next step in that process by purchasing those long lead items for the next step in purchasing more Bushmasters.

Last year we bought a fifth C-17. This year we’ve announced today that we’re purchasing a sixth and, as Stephen said, it effectively doubles our operational capability from two aircraft at any one time to four aircraft.

What this amounts to is equipment that we’re delivering for our troops in Army, in Navy and in Air Force. It’s worth close to half a billion dollars worth of new equipment for our troops and importantly these are all proven capabilities.

Bushmasters are working in Afghanistan right now, saving Australian lives. The C-17 proved its worth last year with the floods, with the cyclone, in Japan and in New Zealand, supporting all the work that we needed to do after that natural disaster.

And the amphibious ship, well, I think that speaks for itself. This time last year we had no amphibious ships available. The Minister and I made no secret of our disappointment with that. We’ve now gone from zero to three with the purchase of Choules, the upgrade of Tobruk and now the purchase of this new vessel which makes sure that we’re set up for the transition from these amphibious ships through to the introduction into service of the landing helicopter dock ships in the middle of the decade.

STEPHEN SMITH: All right. Thanks, Jason. Just before we respond to your questions, just a couple of issues I’ll make some brief remarks on.

Firstly we welcome very much the successful holding of the first round of the presidential election in East Timor over the weekend. As you of course would be aware, we have nearly 400 Australian Defence personnel in East Timor as part of the stabilisation force. We welcome the fact that the election was well conducted. The expectation of course is that there’ll be a second round of the presidential election. That takes place in the middle of April and subsequently we have parliamentary elections in June.

On the basis that the first stage has gone well, and we look forward to the next two stages going well, in terms of the second round of presidential and parliamentary elections, then that puts us in a good position to commence discussions with the United Nations, with East Timor, with New Zealand, about a drawdown of our stabilisation force in East Timor, so very welcoming conduct of the election over the weekend.

Secondly, can I just mention in passing that the Belgian Defence Minister, Pieter De Crem, was due to conduct a visit to Australia today. Over the weekend he was forced to cancel that visit. He’s been very heavily involved in the aftermath of the terrible tragedy in Switzerland which saw the death of 22 children and six adults.

This morning, earlier this morning, I signed a condolence book at the Belgian embassy and I just take this opportunity to regret the fact that Pieter is not able to be here but also to formally extend my condolences to him and the condolences of the Australian government and the Australian people to the Government and people of Belgium at what is the aftermath of a terrible tragedy.

Jason and I are happy to respond to your questions.

JOURNALIST: [Indistinct]

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STEPHEN SMITH: In terms of the offshore support vessel, that will come from this year’s budget so from 2011-2012 budget funds. So far as the C-17 is concerned, that’ll be spread over more than one financial year. The bulk of the upfront purchase funds will come from 2012 funds and then there will be progressive payments over the next two or three financial years.

As you know, in last year’s budget we had a very substantial underspend, an underspend of some $1.6 billion. As a consequence of that one of the reforms that we put into place has been an exhaustive assessment of our capacity to get these estimations better and right.

We’re a little bit too early in the budget cycle to be coming to conclusions about what underspend, if any, there may be, but the reason we’ve picked up these two pieces of equipment at the cost of more than $400 million is that in terms of heavy amphibious lift, the offshore support vessel, concludes or completes, if you like, the need for additional capability in that area, and has the efficacy and the symmetry of being then available to Justice and Customs, and everyone has seen the capability capacity that the C-17s provide us.

So one purchase out of 11/12 funds, the C-17 over a number of years, this can be done effectively out of Defence’s existing resources, and as we get closer into the budget cycle, we’ll then be making judgements and also comments about any underspend this year.

As a general proposition, I’ve made the point previously, last year Defence made a contribution to the Government’s budget bottom line, this year Defence has to expect likewise.

One thing we will not allow will be any adverse implications so far as operations is concerned, whether that’s Afghanistan, whether that’s East Timor, whether that’s the Solomon Islands, but these matters will now obviously fall into the budget context in the budget cycle.

JOURNALIST: Why not a fast catamaran?

STEPHEN SMITH: Well, one of the possibilities that we considered, if you rewind, as Jason did earlier, back to February of 2011, where in the face of Cyclone Yasi we had no heavy amphibious capability available to us, Manoora and Kanimbla have been decommissioned, Tobruk had to undergo a very substantial maintenance and sustainment program, one of the options that we considered was a catamaran, or a trimaran, and we have a couple of Australian producers in that respect.

When we did our exhaustive assessment, firstly you’ll recall we picked up HMAS Choules, which is a most considerable asset, Choules has the capacity or the capability of effectively double that of Manoora and Kanimbla combined, so we picked that up first, we then made judgements about what was the best option, so far as a third ship was concerned, in addition to Tobruk and Choules, and came to the conclusion that the offshore support vessel is the best fit for us.

The difficulty with the catamaran is yes, we’ve used a catamaran in the past, and most famously I think in delivering of troops to East Timor, the difficulty with a catamaran is it requires a port to port capability. Choules, Tobruk and the offshore support vessel give us a capacity to offload troops, to offload kit, to offload stores, without the need for port to port access.

But we’ve done those exhaustive assessments, and we’re very pleased with the capability that we’ve now picked up, in very many respects the purchase of those assets, plus the good work done by Paul Rizzo in his review of amphibious capability and the implementation of that, whilst one never is complacent or can be complacent, we are now, in my view, very well placed in the heavy amphibious capability area, until we receive the Landing Helicopter Docks in the middle of this decade, and as you know, we’re expecting two of those, and the integration of those two will be done in Melbourne at Williamstown.

JOURNALIST: With the former Joint Strike Fighter a strongly mixed message was coming from around the globe on the Joint Strike Fighter, I noticed that some of the briefings happening from American delegations in Australia recently, the Canadians suggested that they might actually not go ahead with the purchase, and the Japanese are looking at coming on board, what’s the situation as far as you can see of the plane, and of Australia’s-

STEPHEN SMITH: Well, I make this point very strongly, there is no mixed message so far as Australia is concerned. Australia’s message for some six or more months now has been that we will not allow a gap in our air combat capability to emerge or arise, and as a consequence of that in the course of this year, we’ll be making very careful judgements about whether, as a result of the scheduling of the Joint Strike Fighter moving to the right, to use the jargon, there is a need for us to consider other or additional capability.

In terms of our commitment to the joint strike fighter, we are contractually obligated to purchase two, and that is still on track to be effective in 2014, that’ll be done in the United States for testing and training purposes, we’ve announced that we will purchase an additional 12, and we’ll make a judgement in the course of this year, or early next year, about the timing, or the timetable, of the delivery of those 12, and any judgement or decision by the Government about any future purchases, will be done in an orderly fashion, once we’ve dealt with those issues.

Recently in Australia we had a meeting of the Joint Strike Fighter project management team or committee, that was chaired by Warren King, the CEO of the Defence Materiel organisation, I met with a number of the people attending that meeting, and made those points, which is now a longstanding Australian Government position.

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The United States position is now comparable in the course of December of last year, and January of this year, with various announcements made by anyone from Secretary of State for Defence Panetta, to his deputy, Ash Carter, to Admiral Venlet, to Acting Secretary Kendall, we are now essentially in the same space so far as the Joint Strike Fighter is concerned, which is making a judgement about gap in capability, as the United States is doing, now looking at the maintenance program for their F-16s, and then looking at the timetable for purchase of additional Joint Strike Fighters to which we’re not currently contractually obligated.

JOURNALIST: Is the Government still committed to buying self-propelled [indistinct]

STEPHEN SMITH: Well that’s the project which is currently on our books, it hasn’t yet fallen to the National Security Committee, or Government consideration, that’ll occur in due course.

JOURNALIST: [Indistinct]

STEPHEN SMITH: Well let me make a number of points about that. It’s a bit hard to use the phrase logjam, when last year we saw a record number of projects approved, 49 projects approved. I think that’s an under-appreciated fact.

The next best, if it’s not 39, is 36, so last year we in terms of first past or second past for other approvals, we had a record number of approvals, and that included some of the matters that Jason and I have spoken about, the Choules, the fifth C-17, 101 Bushmasters, it also included a number of important projects which you find in the DCP, for example, 24 Naval Attack Helicopters.

I have made the point repeatedly since I became Defence Minister, that in my view, we have to be very careful about the Defence capability plan, it is over-programmed, and we have to be, in my view, much more forensic about the projects that are in the DCP.

Previously we’ve indicated the DCP will become more closely aligned to the Defence guidelines, that process is occurring, but the DCP always falls for regular annual consideration, this year that’ll occur in the budget context, but the notion that there is a logjam I reject entirely, a record number of approvals last year, and we are continuing this year to deliver on that front, and the three announcements we’ve made today, reflect that.

JOURNALIST: With the success of the East Timor elections, does that adjust the time [indistinct]

STEPHEN SMITH: Well firstly, we will continue with the nearly 400 stabilisation force members that we have until we come to a decision jointly with New Zealand, who have about 70 troops in the stabilisation force, and with the United Nations, and with the Government of East Timor.

I was in East Timor at about this time last year and by this time last year everyone had come to a similar conclusion which was that security circumstances had improved dramatically since the assassination attempt on President Ramos-Horta, and that if we saw good outcomes in terms of full and free and well conducted elections in the course of this year, the presidential election with the potential for two rounds and then the

parliamentary elections by the middle of the year, that in the aftermath of successfully conducted elections, both East Timor, Australia, New Zealand, the United Nations and the international community could look to an orderly drawdown of that stabilisation force. And one of the things that I did in East Timor when I was there at

about this time last year was to essentially open up discussions for a bilateral defence development agreement between Australia and East Timor.

So I regard that very much as being on track on the basis of what we saw over the weekend we’re confident that we will see successfully conducted elections, but we can’t prejudge that; we need to let those circumstances flow. But on the basis of successful election outcomes, then together with out friends in East Timor, together with New Zealand, together with the United Nations, we will then start the work of an orderly drawdown of the stabilisation force in East Timor.

JOURNALIST: Could that begin this year?

STEPHEN SMITH: On the basis of successful election, certainly the plan for that can occur in the second half of this year. Whether the drawdown would start this year, time would tell. We need to do it, obviously, in a coordinated and orderly fashion. But on the basis of successful Presidential and Parliamentary elections, then

we’re in good shape to do that detailed work in the second half of this year with an orderly drawdown to take place in the aftermath of that.

JOURNALIST: And how much are you likely to save?

STEPHEN SMITH: I haven’t done those calculations. I just make this very important point. I made the point earlier that any implications for the budget so far as Defence is concerned will not have an adverse impact on our operational commitments - East Timor, Afghanistan, the Solomon Islands - and in these areas it’s always

best when you’re looking at the drawdown of a stabilisation force to make the policy judgements first and worry about what financial implications flow second.

JOURNALIST: How long does normally a drawdown take? When you said [indistinct] government likely to affect a timeframe-STEPHEN SMITH: When I was in East Timor, everyone I spoke to, whether it was members of the Government or Leader of the Opposition Alkatiri, or United Nations officers, or New Zealand officials; everyone was on the same page. And so I’m not going to make any comment on what might be the outcome of either

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the Presidential or the Parliamentary elections. But I think it’s true to say that the political system in East Timor is on the same page as we are.

I don’t want to be too definitive about timetables. I think that if there is successful well held, well conducted elections, we can do the intense planning in the course of this year with a drawdown to occur next year in 2013.

JOURNALIST: [Indistinct] ask Minister Clare about the customs - police raid late last week uncovered a large number of handguns coming into the country. Are you able to say how they bypass the Customs barrier? Or - do we need an inquiry to get the to get where - how the heck this all happened?

JASON CLARE: Thanks, Max. I saw the comments from the Opposition about this. My response to that would be the Opposition needs to catch up.

I announced a national investigation into the firearms illegal market more than a month ago and it’s headed up by Australia’s most powerful law enforcement agency, the Australian Crime Commission, that have got the powers of effectively a standing Royal Commission; the powers to coerce criminals to give up information and to trace weapons and to trace bullets.

What we saw last week was the work of the Australian Crime Commission by tracing one handgun that was found in Wiley Park, led to a company in Austria, then another company - a gun dealer - in Germany and then back to Australia. The tracing of one weapon led to the dismantling of that criminal syndicate.

I’ve asked the Australian Crime Commission to do that same sort of tracing analysis for the firearms that have been seized right across the country over the last 12 months, as well as tracing analysis of the bullets and the casings and all the information that had been collected at shootings across the country. That’s what will lead to more arrests and more seizures. Police rely on intelligence and the more intelligence, the more criminal

intelligence that they get, the more arrests you’ll make and the more guns you’ll seize.

JOURNALIST: Can you say just how these guns got past the customs barrier though? I presume they were being mailed into the country, but surely, there’s an x-ray process that-JASON CLARE: Yes, they do x-ray processes; they use sniffer dogs as well. We search more containers than most of our major trading partners; more than America, more than England, more than New Zealand, more than Germany, more than Japan. We search something like 1.5 million pieces of air cargo every year; more than 100,000 containers; more than 20 million air parcels; and more than 40 million letters.

And as a result of that, last year Customs stopped 40,000 pieces of illegal material getting into the country, which is a 30 per cent increase on the year before.

And just to labour this point about the importance of criminal intelligence - 96 per cent of the drugs that are seized by Customs comes from information from law enforcement agencies before the drug ever leaves another country to come to Australia. And 85 per cent of the guns and the gun parts that are seized by Customs are the result of criminal intelligence we get before the guns or the gun parts are sent to Australia.

So the key here is the criminal intelligence we get; the more intel you get, the more guns you seize; the more intel you get, the more drugs you seize. That’s why I’ve asked the Crime Commission to build a clearer intelligence picture. The more intel we get from tracing these firearms we’ve seized across the country over the last 12 months, the more arrests we’ll make and the more guns we’ll seize. JOURNALIST: Two hundred’s the acknowledged figure; it’s been suggested to me that if you’re giving 200, it’s probably more like 400.

JASON CLARE: Well, no, I don’t know that that’s the case. But let’s be very clear about this; there are more than 10,000 illegal guns out there on the streets of Australia and most of these are part of a domestic black market; guns that have been around for 10, 20, 30 years; guns that have been around as a result of loopholes or weaknesses in state laws before the big national gun law reforms of a decade or more ago. This is where most of those guns come from. And a good example of that, Max, is the seizure that New South Wales Police made on Friday where they seized a shotgun and seven rifles out of a home in Yagoona in Sydney’s west.

My advice is that those guns, like many of the ones I’ve spoken about, those more than 10,000, were old guns; guns, rifles that have been around, being used by criminals or stored in the back yards of criminals for more than a decade, sometimes more than two decades.

All right. Good. Thanks a lot. Thank you.

JOURNALIST: [Indistinct] very last [indistinct] Joint Strike Fighter and- JASON CLARE: Sure.

JOURNALIST: [Indistinct] -since capabilities, have you given any reassurances on what the plane can do, whether it [indistinct]

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STEPHEN SMITH: Well, two or three general remarks. Firstly, I’ve always been confident that in the end the project would get up because of the significant investment that the United States has made in it, firstly.

Secondly, one of the advantages that Australia has, that we chose the conventional strike fighter only so we don’t have the complications that we’ve seen in the two other variants.

Thirdly, because I’ve been confident that the project would get up, there have been some developmental issues and you’ve seen reference to the so-called concurrency issues where there was an attempt to continue to develop the plane at the same time as produce. That’s now been effectively stopped.

So there are a range of development challenges; but in the end I’m confident that the Joint Strike Fighter will end up being an effective fifth-generation plane.

My concern has been one of scheduling, one of production, one of availability; and that’s why, in that context, I am being absolutely assiduous about ensuring that we don’t have a gap in capability; we’ll make that judgement or decision in the course of this year. And I have indicated previously, as I do again today, we’ve made no conclusions about that, but additional Super Hornets is an obvious option.

Thanks.

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