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Transcript of Interview with Barrie Cassidy: ABC, Insiders: 11 November 2012: AUSMIN; US election; Defence Budget; US Marines; HMAS Stirling; China



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Minister for Defence

Interview with Barrie Cassidy, Insiders

11 November 2012

TRANSCRIPT: INTERVIEW WITH BARRIE CASSIDY, INSIDERS

TRANSCRIPTION: PROOF COPY E & OE

DATE: 11 NOVEMBER 2012

TOPICS: AUSMIN; US election; Defence Budget; US Marines; HMAS Stirling; China.

BARRIE CASSIDY: Well we can raise these matters directly now with the Defence

Minister, Stephen Smith who is in Perth preparing to welcome Hillary Clinton and Leon

Panetta to his home town as it happens.

Minister, good morning, welcome.

STEPHEN SMITH: Good morning Barrie.

BARRIE CASSIDY: We will get that the issue of the defence cuts in a minute. There is no

doubt is there now that this will be Hillary Clinton’s last visit to Australia as secretary of

state, that she will be leaving the position?

STEPHEN SMITH: It will be her last visit as Secretary of State to Australia. She will be

doing the AUSMIN (Australia-United States Ministerial Consultations) talks in Perth and

then going to Adelaide, and then heading onto Asia and the East Asia Summit in due

course.

So it will be a good opportunity for us to thank her for her very fine efforts as Secretary

of State but also to continue our Australia-US Ministerial consultations which each year

covering the broad span of regional and global issues of concern.

BARRIE CASSIDY: Have you mapped out a program for her and Leon Panetta beyond the

four walls of a summit, given that it’s your home town?

STEPHEN SMITH: I am very pleased that we’re doing it in Perth, my home town. They’ll

be able to see the delights of Perth. I think in recent years we have seen Condoleezza

Rice come to Perth, and we’ve had of course the CHOGM (Commonwealth Heads of

Government Meeting) meeting in Perth. And that has exposed Perth as a modern vibrant

city and people are now much more attuned to not just the delights of Perth, but how

vibrant Perth is economically and socially. But because we’re on the Indian Ocean it’s

also an opportunity to make the strategic point, which is Perth is very well placed as we

look to the growth of India and the importance strategically of the Indian Ocean rim.

So it’s important to make that point as well. And of course we’ve got HMAS Stirling here,

our Indian Ocean port. So there’s strategic reasons to be here; but from a selfish

personal point of view it’s a good chance to show off Perth and Western Australia. And

I’m sure Leon Panetta and Hillary Clinton will appreciate it very much.

BARRIE CASSIDY: How much will she be missed by the Obama administration?

STEPHEN SMITH: Well the fact that President Obama’s been re-elected does give you

continuity. And whilst Australia will deal with whatever team the United States election

process delivers, continuity is a good thing from our personal perspective. I think she’s

been a very fine Secretary of State.

She made the point essentially from her first day that she wanted to make the Asia-Pacific a focus. Her first overseas trip as Secretary of State was to Japan and China and

she’s continued that. She’s listened to Australia’s views about the importance of the rise

of the importance of the Asia-Pacific and the Indian Ocean, she’s been a good friend of

Australia. But in the end we’ve got an alliance relationship here which has lasted more

than 60 years.

So whilst it is always productive to be working with quality people, it is not a relationship

which depends on personalities. It’s an alliance relationship that’s served us well,

through whether it’s Liberal or Labor governments here or Republican or Democrat

administrations in the United States.

BARRIE CASSIDY: It may not depend entirely on personalities but if Hillary Clinton goes,

General Petraeus now of course has had to quit as head of CIA (Central Intelligence

Agency) because of an extra-marital affair and there’s talk of the Leon Panetta as the

Defence Secretary moving on as well. Can they really afford that?

STEPHEN SMITH: Whether Secretary for Defence Panetta continues or not will of course

entirely be a matter for him and the President. There is continuity of course with the

President himself and the Vice-President.

Leon Panetta has been a very effective Secretary for Defence. He followed in the

footsteps of Bob Gates who was very widely regarded as one of the best Secretaries of

Defence, and Leon Panetta has slipped into that role and done it very well. Again, he’s a

good friend of Australia and we have been working closely with him. So obviously we

would look forward to continuing that relationship with him.

But in the end, that will be a matter for the President and the administration itself. But

he has been, as well, a very effective Defence Secretary and a very good friend of

Australia.

BARRIE CASSIDY: What will you say to the Americans, if and when they raise concerns

this week about the level of defence spending in Australia?

STEPHEN SMITH: Well, in the run-up to AUSMIN as chance would have it, yesterday I

spoke to US Ambassador to Australia Jeffrey Bleich and also to our own Ambassador Kim

Beazley, both of course who are attending AUSMIN, to talk about arrangements. And I

spoke, in the course of my conversation with Ambassador Bleich, about the story in

yesterday’s paper. He made the point, which I think he’s made publicly, that Kurt

Campbell believes that he’s been somewhat misconstrued.

And I’ve made the point through a statement overnight that in my conversations with

Leon Panetta, and they are the conversations that I regard as the ones which crystallise

the view of the United States administration on this matter.

He’s made the point to me that we’re all going through fiscal difficulty. He’s now

managing half a trillion dollars worth of cuts over the next 10 years for the United

States. And if they don’t get the so-called fiscal cliff right, he will be managing $1.2

trillion of cuts over the next 10 years.

BARRIE CASSIDY: So what are you saying there, they are in no position to criticise?

STEPHEN SMITH: Well it’s not a matter of criticising. When I’ve have had my discussions

with Leon Panetta both before the May Budget, when I briefed him on what we were

doing, and after the May Budget on a couple of occasions I’ve made the point, and he

agrees with this point publicly and privately, that we’re not doing which will undermine

our alliance, relationship or commitment.

We are continuing with our enhanced practical cooperation with the United States

through the rotation of Marines in Darwin and the prospect of enhanced aerial aviation

down the track.

We have ring-fenced our overseas operations, so we continue to be the 10th largest

contributor in Afghanistan and the largest non-NATO (North Atlantic Treaty Organisation)

contributor and third largest Special Forces contributor. And we’ve ring-fenced important

areas of capability.

So yes, we’re going through a tough time. But the assertion that somehow the United

States are coming here to talk about our defence cuts is, frankly, a nonsense. I’ve taken

the opportunity this morning to refresh my memory of the agenda of AUSMIN, and so-

called defence cuts are not on the agenda. We are going to deal with the sweep of

strategic issues that are of importance to us.

And if in the course of conversations Leon Panetta and I have a conversation about what

Leon calls the fiscal reality, I’m sure he’ll be as much focused on his own difficulties, in

terms of managing fiscal restraint, as he will be on ours. And he has also made the point

publicly and privately to me that he regards Australia’s contribution as one which is first-class and he scoffs at suggestions that somehow we are free lead loading on the alliance.

And If I can just pick up a David Johnson point, the Liberal Party point. The one thing

the Liberal Party has not done in all of their criticisms of our fiscal restraints so far as

Defence is concerned, is committed themselves to reinstituting it. And they can’t do that

because they know the overall fiscal circumstances won’t allow it.

BARRIE CASSIDY: Alright, now you say it’s a nonsense; Kurt Campbell is a top official in

Asia, he wasn’t misconstrued on this point: he confirmed that the conference will be

addressing that topic, the topic about defence cuts, quote, “he thinks it is important”.

How do you explain that?

STEPHEN SMITH: Well firstly, it’s not on the agenda for AUSMIN and that has been set.

And notion of Australian Government Defence budget arrangements are not on the

agenda for AUSMIN. So let me make that clear.

As Ambassador Bleich said to me yesterday, and I think he said again today publicly, of

course in the course of a day and a half of conversations, we will traverse a range of

issues. We’ll traverse the challenges and opportunities. And I suspect one of the

challenges that will confront Leon Panetta as the United States looks to implementing

the so-called pivot to Asia as it rebalances the disposition of its forces from effectively

50/50 to NATO in the northern hemisphere to 40/60 to the Asia-Pacific, one of the things

upper most on his mind will be how do we manage a very difficult fiscal circumstances?

Now we’re are going through that issue as well. The United Kingdom is going through it,

New Zealand, Canada, all comparable countries face that challenge. And I’ve been quite

frank in my conversations with Leon Panetta, both before and after the budget about

how we are doing that. Not reducing military numbers, and we remain importantly in the

top 15 defence spenders throughout the world.

BARRIE CASSIDY: So it does appear that Kurt Campbell was freelancing on this. Is that

his habit?

STEPHEN SMITH: Well, Kurt Campbell, as I understand it, has made the point to

Ambassador Bleich and to others that he regards himself as having been misconstrued

on this. I do know-

BARRIE CASSIDY: No, only on one aspect of it. Not on the aspect of it being on the

agenda. He was quite clear about that.

STEPHEN SMITH: But as it’s on the aspect, which is the one that has been picked up by

media, which is concern about Australian Defence cuts. That’s the area where he says

he’s been misconstrued. He’s made a general remark about the difficulties which applies

equally to them and us. And I again make the point Barrie: this is not on the AUSMIN

agenda.

BARRIE CASSIDY: OK, let’s move on then to what will be on the agenda, and that’s the

US military presence in Australia. There are 250 Marines rotating through Darwin. How

many more than that in the years to come?

STEPHEN SMITH: We made it clear when we announced it, when the President and the

Prime Minister announced it in November of last year, that we were looking over a period

of five or six years to grow the presence to 2,500, a Marine task force group. We had

200-250 here this year. We’re looking at the same number next year. We’ve

commissioned a social and economic assessment study looking at what the impact would

be of 1,100. And so we will make a judgement over the next 12 months whether we take

that step up.

It’s gone very well and I think the review of the arrangement that we do in the course of

our AUSMIN meeting will confirm that, and our meeting will essentially be a

consolidation of the Marine arrangement.

But I think we will also make the point that already we have seen interest from our

ASEAN (Association of South East Asian Nations) colleagues and our East Asian Summit

colleagues wanting to do exercises that are of benefit to the region in terms of stability

and peace and security, using the presence of those Marines. So we’ve already agreed

with Indonesia that we’ll have a regional exercise with Indonesia, Australia, United

States and Indonesia in the course of next year.

And wearing my ASEAN Defence Minister’s Plus cap, the East Asia Summit format of

defence ministers, when we go to Brunei next year for our meeting, there will be a

military medicine and humanitarian assistance exercise involving all of the 18 East Asian

Summit countries.

So there are positive regional implications for what we’ve been doing so far as the

presence in Darwin is concerned.

BARRIE CASSIDY: So the numbers will go up to 2,500, there will be more, no doubt

more US planes over time, there’ll be more access to HMAS Stirling. Are you sure that

you’re carrying the country with you on this issue?

STEPHEN SMITH: Absolutely. The United States alliance continues to be the bedrock of

our strategic security and defence arrangements. But we’re taking it step by step. The

original decision envisaged that we would, as a Government and as a US administration,

make an decisive decision every time we move to step up to an increased number of

Marines.

So far as enhanced aerial access is concerned, we haven’t yet delved into the detail of

that, we’ll start a conversation at our AUSMIN meeting, but we’re a fair way away from

making a decision. And enhanced Naval access to HMAS Stirling I think is our third cab

off the rank, but that is a number of years off and that will come into play as the

importance of India and the Indian Ocean rim rises.

I continue to make the point that everyone sees the rise of China, but the rise of India

and the importance of the Indian Ocean rim and the Indian Ocean strategically continues

to be underappreciated. And HMAS Stirling, as our Indian Ocean port will continue to

grow in significance over time.

BARRIE CASSIDY: And you mentioned China and the new leadership, it has been

overlooked by some because of what’s been going on in the United States. But what will

you be looking for to get a sense of where the new leadership is headed? Are there any

obvious signals or markers that you’ll be looking for over the coming months?

STEPHEN SMITH: I think that the signals that have been given are ones of consolidation

and an orderly transition. At the end of this week we will see Vice-President Xi Jinping

become the President. We still don’t know the composition of the Politburo Standing

Committee, but that’ll unfold in due course.

We know the next President well. He has been to Australia. He prides himself on having

visited every State and Territory except Tasmania. So once he becomes the president

our Tasmanian colleagues will be keen to get him down there I’m sure. But that’s the

party position.

The formal government transition doesn’t take place until March next year and there’s an

expectation that Hu Jintao will remain for a period of time as chairman of the Military

Commission.

So all of the signals are orderly transition. And so far as economic change is concern,

whether there’s further economic reform, whether there’s a greater focus on domestic

consumption or export orientation, Australia will still do very well out of its economic

relationship with China.

So to me, the signals are orderly transition and stability, and so I am not expecting to

see any flourishes of new activity in the short-term.

BARRIE CASSIDY: Minister, thanks for your time this morning, appreciate it.

STEPHEN SMITH: Thanks Barrie, thanks very much