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Transcript of interview with David Speers: Sky PM Agenda: 23 January 2013: National Security Strategy; Defence Budget; Defence White Paper; Nova Peris

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Minister for Defence - Interview with David Speers, PM Agenda

23 January 2013




TOPICS: National Security Strategy; Defence Budget; Defence White Paper; Nova Peris.

DAVID SPEERS: Stephen Smith, thank you for your time. Can I start by asking-

what does this National Security Strategy tell us that we didn’t already know?

STEPHEN SMITH: It puts our national security risks and national security challenges

and opportunities into a framework. There’s a seamless body of work here. Firstly, the

Asian Century White Paper, which puts Australia generally into the Asia Century, all of the

movement of economic growth to our part of the world. The National Security Strategy

puts out in strategic terms a framework which says here are our national security

challenges. They’re much wider than the traditional, conventional nation-state to nation-state conflict challenges. They traverse non-state actors, such as international terrorism

and also new and emerging issues, in particular cyber security. And so it puts those into

a framework and later in the first half of this year, those bodies of work will culminate

with the Defence White Paper which will deal with those same strategic issues but also

deal in depth with defence and capability issues.

DAVID SPEERS: Well I want to ask you a bit about that because there have been a

number of leaks on that. But firstly just on today’s strategy, let’s look at the top three

key national security risks. They’re called; the first one espionage and foreign

interference. Where is the threat of espionage and foreign interference coming from?

STEPHEN SMITH: Well, we never identify individual or particular nation-states, but

under that umbrella, of course, you also have international terrorism, which continues as

a risk and that will continue, I think, almost in perpetuity. But Australia’s national

security information is always potentially the subject of attack by other nation-states and

also non-state actors. That also incorporates cyber security.

DAVID SPEERS: Well indeed, the other key national security risks identified are

instability in developing in fragile states and then the third, malicious cyber activity. The

governments of the United States, Canada, and India have all accused China of being the

one that’s behind a lot of this online espionage, online activity, targeting their

government and defence computer systems. Does Australia believe that China is involved

in cyber espionage?

STEPHEN SMITH: Well again, our policy is not to identify a nation or individual

nations. What we do know-

DAVID SPEERS: Is that just publicly? I mean, privately, surely you must-

STEPHEN SMITH: Well publicly we don’t identify individual nations or nation-states.

What we do make clear is that whether it’s national security information, whether it’s

government information, whether it’s individual personal information, or importantly

intellectual property or industry sensitive information, all of that is at risk and it’s at risk

not just from nation-states in the traditional sense, it’s at risk from criminal hackers,

from individuals, from individual organisations or non-state actors. And one of the

purposes and points of the National Security Strategy has been to bring all of our efforts

in this area essentially into one umbrella. And tomorrow the Prime Minister will make

further announcements, which will essentially show a one-stop shop for industry but also

again make the point this is not just a risk for governments or Defence, it’s a risk for

everyone, including and in particular business, and we all need to take the necessary


DAVID SPEERS: Okay, you’re clearly reluctant to pin any of this on China but the

document released today does name other states for other issues, Iran and North Korea,

when it comes to weapons of mass destruction. Other countries have referred to China

and its involvement in cyber attacks. The US Officer of National Counter-Intelligence in

particular said that Chinese entities are the world’s most active and persistent

perpetrators of economic espionage.

Why won’t you say that China is behind this?

STEPHEN SMITH: Other countries have their foreign and international relations policy

and approach and we have our.

DAVID SPEERS: Is it because there is a concern about upsetting an important

trading partner?

STEPHEN SMITH: It’s because we have our policy and other nation-states have theirs.

Iran and North Korea are obviously mentioned and named because they are both

international proliferation- nuclear proliferation risks. They’ve both been the subject of

intense international community pressure seeking to have both of them stop and desist

from their nuclear programs.

DAVID SPEERS: Isn’t China a security risk when it comes to cyber attacks?

STEPHEN SMITH: Well as I say, we don’t identify in the modern world any individual

nation or nation-states and one of the reasons we don’t do that is because we keep

making the point this is not just a traditional nation-state to nation-state issue. There are

individuals out there who are a risk to people’s internet or online information, whether

that’s an officer in Defence, whether it’s a Member of Parliament, or whether it’s an

individual at home or a company officer trying to make commercial decisions on behalf of

his or her company.

DAVID SPEERS: The paper today says - the strategy announced today says China’s

military growth is a natural, legitimate outcome of its growing economy and broadening

interests. Are you completely comfortable that the Chinese’ rapid military expansion is

natural and legitimate?

STEPHEN SMITH: Well, I’ve made the point for as long as I’ve been a Minister, some

five years, as has the government, that it’s entirely open to a country which- whichever

that country is as its economy grows, as its economy expands, entirely open to that

country to modernise it’s military capability and China is not unique in this respect. All we

say to China is that we want China to be transparent about its strategic intentions, to be

open about its strategic intentions.

DAVID SPEERS: Is it being open and transparent?

STEPHEN SMITH: Well, we’ve made the point that to certain extent, yes, because

China publishes what is effectively a Defence White Paper on an annual basis but I’ve

made the point myself that we would prefer that document to be more open and more

transparent. But the paper also makes the point which successive Ministers of the

government and both Prime Ministers of the government have made the point, the

important point, which is that we are optimistic and confident that China will emerge as a

responsible stakeholder, that China will emerge as a responsible and very important

member of the international community.

The paper also makes the point that the most important bilateral relationship in the

modern era is not the relationship between Australia and China, it’s the relationships

between China and the United States. And that’s the bilateral relationship that in very

many respects everything else hinges on. And again I’ve made this point; so far as

Australia is concerned, it’s not a zero sum game. We can continue to have our

longstanding relationship including our reliance with the United States and continue to

grow our economic and comprehensive relationship with China. It’s not a matter of

choosing one or the other, although I’ve seen some commentators say that that’s the

choice we should be making, we don’t need to make that choice.

DAVID SPEERS: Well, China is rapidly expanding its military. We know that Japan

just a couple of weeks ago has announced a- albeit fairly small- increase in their defence

spending, as well as a direct response to the tensions with China over those uninhabited

islands in the South China Sea. Australia meanwhile, and a number of other countries,

are cutting our defence spending in the last budget, cuts that have taken our defence

spending as a proportion of GDP down to the lowest level since 1938. Is now the right

time to be doing that given the increased spending we are seeing in the region?

STEPHEN SMITH: Well, it’s never in my view a good time to be cutting expenditure in

defence or the national security environment but you have to cut your cloth to suit the

fiscal reality. Japan and its Self-Defence force spends less than one per cent of its GDP on

defence and so they’ve made some modest announcements about increasing their

expenditure. But it won’t be either Japan or China’s military expenditure which will solve

tensions in the South or East China Sea. That’ll be done as a result of diplomatic

arrangements and all nations abiding by the rule of law and the law of international sea,

including the Convention on the Law of the Sea.

DAVID SPEERS: But the bottom line is their defence spending is going up, ours is

going down.

STEPHEN SMITH: And ours is going down in the same manner that the United States

is going down. The United States is taking nearly half a trillion dollars out of its defence

expenditure over the next decade. The United Kingdom is taking-

DAVID SPEERS: From a very, very high level, though. From a much higher level

than us.

STEPHEN SMITH: From a higher level, but-

DAVID SPEERS: As a proportion of GDP.

STEPHEN SMITH: From a higher level that’s right, but if you’re taking nearly half a

trillion dollars out of your defence expenditure, then you’ve got to make choices about

priorities, and you’ve got to get effective value for money. The United Kingdom are taking

nearly $80 billion out over the next ten years and overnight we see from the United

Kingdom announcements about very serious reductions in their military numbers.

Now, we’re going-

DAVID SPEERS: But they’re not getting below the two per cent of GDP that we’re at


STEPHEN SMITH: Well, I would love to be closer to two per cent than to one per cent,

but even the Opposition who are out there on a daily basis criticising the cuts won’t give

a commitment to reinstate because they know that that is the reality, and that’s before

you get to the fact they’ve already made more promises than they can afford to make.

But let me make this point. You make the point about the percentage of GDP. It’s not the

only measure. Both before the last budget and after the last budget we’re in the top 15

defence spenders. Together with the United States we’re the top two per capita defence

spenders and we have important-

DAVID SPEERS: We have a very small population though, to be fair, if you’re going

to use that measurement.

STEPHEN SMITH: Well then, rely upon the one I’ve just given you, which is we are in

the top 15 spenders, defence spenders, in the world, we remain in the top 15. We

compete for 13 and 14 with Canada. But most importantly we have ring-fenced those

things which are important to us and this is where you get down to value for money,

efficiency, and priority.

DAVID SPEERS: Well let’s talk about the Defence White Paper. As you say, that’s

coming out sometime before the middle of the year. There have been a series of leaks in

recent days about what this is going to involve, they haven’t revealed anything too

dramatic, I don’t think, but are you worried about the leaking itself?

STEPHEN SMITH: Well, there’s been one leak, and that occurred at the end of

December. And the newspapers are starting to recycle it, but let’s just clearly understand

what was leaked. There is currently no such as thing as the draft White Paper. What was

leaked was an early working document that never came to me. It was so immature in

consideration that it didn’t come to me. Literally on Christmas Eve I got from the

Secretary of the Department a rough draft. He said to me, this is the most recent

incarnation that we’re looking at. It’s probably worth you having a look at it. Have a look

over the break if you get the chance. The first thing he said to me when I came back in

the middle of January was, ignore that draft, we’ve already made so many changes,

there’s no point looking at it.

So, what was leaked was not a draft White Paper, what was leaked was a document

which wasn’t even in an appropriate position or state to come to the Minister. Now, in the

near future, I’ll get a document, which I will consider, I will make changes to that

document as you would expect. And over the next weeks and months, we’ll see a

document which will emerge which will be subject to inter-agency consideration, the

consideration of other ministers on the National Security Committee. And some time

towards the end of the second quarter of this year, April, May, June, a White Paper will

be published. People should judge the Government on the quality of the white paper, just

as they can judge the Government on the quality of the national security strategy and the

Asia century white paper.

DAVID SPEERS: It many not be the most up to date draft but-

STEPHEN SMITH: Well no, it’s a draft that didn’t even come to the Minister because it

wasn’t regarded as being worthy enough.

DAVID SPEERS: Nonetheless, have you asked the Department boss to have a look

at where the leak’s coming from?

STEPHEN SMITH: Well, the Secretary came to me and said do you want me to have

an Australian Federal Police inquiry into this, and I said no, because generally Australian

Federal Police inquiries into leaks don’t go anywhere. And it’s not a document which came

to me. So, whilst I don’t like leaks, and whilst it is a bad thing that an officer in Defence

thought it was a good thing to hand over a document, and whilst the Defence

Department itself will be having a look at it, I don’t think there’s any point in chasing

those rabbits down their burrows.

DAVID SPEERS: Now, I’m glad you’ve admitted there’s no point in an AFP leak

investigations, because they don’t go anywhere do they?

STEPHEN SMITH: No. And, in the end, I’m not so much worried about the process as

the outcome.


STEPHEN SMITH: In the end, some day in April, May or June-

DAVID SPEERS: We’ll see the White Paper.

STEPHEN SMITH: -you and I will be having a discussion about the published White

Paper, that’s the only reference point you need.

DAVID SPEERS: I look forward to that. The final question, away from Defence and

national security. The Prime Minister’s move to bring Nova Peris into the Parliament and

push Trish Crossin out. Labor’s National Executive has today endorsed Nova Peris’

membership of the Labor Party, and also reopened the pre-selection, or the nominations

for the Senate position. They’ll close on Monday, but she may well be the only one

contesting it, given that the National Executive will decide who wins the spot. No one

seems to dispute that having Nova Peris in Parliament isn’t a good thing, but have you

ever seen a Prime Minister tell a sitting member of Parliament to go?

STEPHEN SMITH: Well, pre-selections in the Labor Party are tough, and I’ve got

nothing but-

DAVID SPEERS: This isn’t a pre-selection though.

STEPHEN SMITH: Well it is. You’ve just told me that the National Executive, which is

our key body, the National Executive has just determined that Nova Peris is entitled to


DAVID SPEERS: And not the branch members.

STEPHEN SMITH: -they’ve opened nominations and the nominations will be

determined by the National Executive.

DAVID SPEERS: Not the branch members?

STEPHEN SMITH: Well, I happen to be pre-selected for the seat of Perth for the 2013

election, and I was endorsed by the National Executive. Over my time I’ve been endorsed


DAVID SPEERS: But was a sitting MP pushed out of that seat to get you in?

STEPHEN SMITH: Well, in the Labor Party when-

DAVID SPEERS: They weren’t.

STEPHEN SMITH: In the Labor Party when there are pre-selections, it’s rarely the case

that someone is elected unopposed, there are invariably contests. And under our rules,

it’s perfectly appropriate for the National Executive to determine, in the party’s overall

general interest, that the National Executive should determine the pre-selection. Now for


DAVID SPEERS: Yeah sure, but has a sitting MP ever been told to go for no

apparent reason?

STEPHEN SMITH: Well, I know plenty of MPs, former, state and federal, who were

defeated in their pre-selections.

DAVID SPEERS: Yeah defeated in pre-selection, but told by the leader to go?

STEPHEN SMITH: Well I know a number of MPs who went to the leader, state or

federal, saying I want your support, and the leader said it’s a matter for the National


DAVID SPEERS: Yeah, and they stayed out of it. Did the leader ever go public and


STEPHEN SMITH: The leader, the leader - well, I know plenty of leaders who’ve come

out saying here is a good candidate, I’d like this candidate, he or she endorsed. It’s

entirely open to the leader to put a point of view, and the party can do one of two things

in those circumstances: it can say, actually the leader’s had a very good idea here. We’re

going to get into the Parliament, potentially, the first female indigenous candidate that

we’ve had. That’s a very good thing to do in the Northern Territory and generally, so the

party will do one of two things. It will either back the leader and support the leader, or

there’ll be a different outcome. Now, I’m not a member of the National Executive, I used

to be, but I’m reasonably confident that in the end the National Executive will think that

Nova Peris’ candidature is a very good idea.

DAVID SPEERS: I think that’s a pretty safe bet, with the Prime Minister’s support for

it. Stephen Smith, thank you very much for joining us.

STEPHEN SMITH: Thanks David, thanks very much, and happy New Year.

DAVID SPEERS: And to you.