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Transcript of press conference: Mrs Macquarie's Chair, Sydney: 27 August 2013: discusses Future Navy Taskforce; Defence funding; Syria; Compensation to victims of terror; Campaign

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E & O E - PROOF ONLY _____________________________________________________________

Subjects: Future Navy Taskforce; Defence funding; Syria; Compensation to victims of terror; Campaign. _____________________________________________________________

PM: It is good to be here with Industry Minister Kim Carr, on an important day for the future of Australia's defence industries, defence infrastructure, our national security and the priorities for Australia's long-term future.

You heard me say many times before, I am about building Australia's future - that means building the industries of the future; building the jobs of the future; building the schools and hospitals of the future; building a clean energy future for all Australians, and to ensure also on top of that, that we are getting our key infrastructure decisions right as well - whether it is a National Broadband Network or whether it is high speed rail planning for future or the planning of our future needs for our defence infrastructure across Australia.

This is a good day in terms of making the big calls on the future of our defence infrastructure bases. You can either sit back and simply allow events to overtake you or you can plan ahead. What I have said quite plainly today is that we're a Government which believes in planning ahead. Planning ahead to make sure that we have the bases ready, the naval equipment ready, the defence assets ready, to deal with the contingencies of the future.

You see, in Australia, the vast majority of our operations for our naval assets and our military assets lie to our north-east, to our north and to our north-west into the Indian Ocean and that’s why, and the pattern of Australian defence planning, going back to the last 20 or 30 years, we have seen step by step, brick by brick the movement of our defence assets, our defence infrastructure, north.

That has been important, to be as close as possible to fields of operation and to be close as possible to fields of embarkation for Australia's military forces, as well - our land forces based at Enoggera; our land forces based at Lavarack in Townsville, and our land forces also based at Robertson in Darwin. Putting these assets together over time is where all sensible long-term government planning goes.

That is why, when the Government deliberated on the Defence Force Posture Review, we are very mindful of its recommendations and the recommendations on these questions are very important. The Defence Force Posture recommendations - recommendation 14 was that Defence should commence planning now on long-term options for establishing a supplementary East Coast fleet base in Brisbane for the future submarine and the large amphibious ships. This work will complement the development of options for embarking forces on amphibious ships in Brisbane in the shorter term, and there are other recommendations which are relevant within the Defence Force Posture Review and these all go to the future location of Fleet Base East.

When the Government deliberated upon these, we believe that the right thing to do was to make sure that the right planning processes were in place, so that when we look out to 15 to 20 years’ time, we're not simply operating from behind the curve - we are ahead of curve - and that is what good long-term planning is about.

That’s why the decision today to establish this Naval Taskforce to plan the implementation of the long-term relocation of part, or all the naval assets from Fleet Base East to Brisbane, Townsville, Cairns, Darwin, Broome or 'HMAS Stirling' off Perth is the right planning approach - step by step, methodical and involving our Defence hierarchy, as well.

That is what we're about to do, within 24 months the Defence hierarchy will report through the committee established under the taskforce for the Navy. This will provide us with recommendations on the operationalisation of this plan as well as its timetable, as well as the costings associated with each step in the process.

We're not talking about a landing point here short of 2030 - 15 to 20 years’ time. If you look at the depth of investments necessary long-term to have our defence infrastructure in the right places across Australia, to serve our future defence needs, we’ve got to make sure that that is done thoroughly, properly and in a considered manner.

In our long considerations of this matter, as Cabinet Ministers in recent weeks and in recent months on this subject, it has been the clear resolution on the part of our colleagues and myself, that this planning process needs to be operationalized through the Naval Taskforce, which I have identified.

Furthermore, when you look at the economic and defence industry opportunities, they are great.

For here, at Garden Island behind me, it may well be that our Naval Taskforce recommends the continuation of certain naval assets and operations here. It may well be that they recommend what naval assets are then located in Brisbane, Townsville, Cairns and the rest. Also, further opportunities for jobs and economic development here in Sydney at Garden Island lie with a range of possibilities including the cruise ship industry.

I have noticed some criticism this morning from Premier O'Farrell on this subject. I gotta say that Mr O'Farrell seems to have a very short-term memory. He was saying not long ago, in fact only last year, that the New South - that the cruise ship industry

here in Garden Island needed more and more access to these facilities here. More and more access. More and more berths. There were cruise ships tied up here in fact just the other day. Well, there is a basic mathematical problem here. We’ve got more naval ships being developed that need to be berthed here; more and more cruise ships who Mr O'Farrell says have to be berthed here. Well there is a limit to the real estate available here, that is why you need to plan this ahead.

So, in terms of the economic opportunities for the people of Sydney, and the other opportunities for the people Sydney and those working at Garden Island now - number one, our Naval Taskforce will make appropriate recommendations on which assets remain here, both in terms of industry and in terms of naval units such as those behind me.

Number two - which should head north and which should head west.

And number three - we will then look at what other uses aspects of this freed-up site can be put to - open green spaces, like the ones we are currently enjoying here near Lady Macquarie's chair, but also on top of that the appropriate preservation of heritage buildings here as well, not to mention the massive economic potential represented by the cruise ship industry in the future.

I am told that the cruise ship industry at present contributes something like half a billion dollars to the Sydney economy. Well, there is a constraint at the moment - and that is every cruise ship being built in the world at the moment can't get under the Harbour Bridge, they are that big, and most can't be berthed over there at the terminal Circular Quay because they're too long. Therefore, where do they go? If they’re not coming here, they will go elsewhere in Australia or elsewhere in the world.

So we gotta work closely with all the industry participants, defence industry participants, to make sure that all these jobs are properly supported into the future, including any support and transition of jobs to other locations north; that the infrastructure work is undertaken with appropriate industry buy-in from Australian industry and those jobs are actually provided here in Australia; other industries which make possible future use of the site, including the cruise ship industry, which is a massive revenue earner for this city and I note again, the massive contradiction between what Mr O’Farrell said this morning on the one hand and on the other hand what he said just 12 months ago, which is he wants more Garden Island real estate for cruise ships.

Our job as the National Government is to make the big calls for the future and the big calls here lie in making sure that we’ve made proper planning provision for where we need to be with our Defence Force and our Royal Australian Navy by the year 2030.

We have supported the acquisition of major capital ships for the navy - the LHDs as well as air warfare destroyers and other units. The Navy belongs to a proud tradition in Australia. It is a great Navy. We have got to make sure that it is properly positioned and forward based in future.

So, before I ask the Industry Minister to supplement my remarks and take you questions, let me conclude with this observation. The priority the Government has is

to make the big calls on the future of our economy; the future of our defence industry and infrastructure, and the future of our jobs, whereas Mr Abbott's priority continues to be cutting jobs, cutting health, cutting hospitals, cutting schools, all to pay for his number one priority - his unaffordable and unfair Paid Parental Leave scheme.

Minister, I will ask you to make comments and we will take questions.

CARR: Thank you, Prime Minister. This is a Government that is committed to ensuring that we are able to secure jobs in existing industries, but more importantly secure jobs for the future. Secure jobs to make sure we have the engineering skills that this country desperately needs. Secure jobs that we have in service industries we so desperately need, and to ensure that we plan for the future, and that’s what this taskforce is about - it’s about securing jobs for Australia into the future, as much as it is about securing the strategic needs of Australia, and that’s why I think this is such a long-term vision that ensures that we are able to protect the skills that this country desperately needs.

PM: Just as I conclude and take your questions, there is inevitably going to be folk out there who will criticise aspects of this decision, in terms of its short-term inconvenience. Our job is to make the big calls for the long-term and I am prepared to shoulder any such criticism as we make those calls for the national interest for the long term. That is what they expect of us on the economy, that’s what the people expect of us on our infrastructure, that is what they expect of us on our defence assets as well.


JOURNALIST: Only a few months ago the Government ruled out the Brisbane option. Why have you changed your mind? And also, the Defence White Paper set a $6 billion price tag on that, is that still your estimate and are you prepared to pay that much?

PM: The guiding principle here is the Defence Force Posture Review. The Defence White Paper decided to not implement its recommendations at this time. We have reviewed that decision and we believe that the right thing to do is to establish this Naval Taskforce to give us detailed advice on operationalising the plan. That is the change here. We think it is the right change.

On the price tag associated with the future deployment of the LHDs and the air warfare destroyers, that is outlined of course, in the Defence White Paper. The reason we have asked the Naval Taskforce to look at this carefully and in detail is because we need to have a whole of Navy approach to this in terms of which assets are retained here, which assets sent north, where they are sent, and what additions need to be made to Defence infrastructure there. Already, there will be a berthing problem here. That is just the truth. We are not seeking to solve a problem which doesn't exist. There is a lack of real estate here in terms of your ability to berth every ship that needs to be berthed here, from the Navy as well as the competing commercial uses as well. So, the Naval Taskforce will provide us with detailed recommendations on timetabling, operationalisation and the cost, stage by stage, and that falls outside of course the forward estimates period, but once we have that

report in within 24 months, we will provide a detailed response and a detailed plan both how to operationise and to fund this for the future.

JOURNALIST: Have you consulted with Defence on this policy shift and if so what have they told you?

PM: We have been in deep consultations through the Defence Minister. We have been in deep consultations with all relevant Ministers within the Government and we believe this is the right call.

Remember, the Defence Force Posture Review comes from the Defence establishment. It is the one that recommended this course of action in the first place and we believe therefore, that representing the considered wisdom of its deliberations, we should not brush those to one side. We should act upon them and take them into the future. As I said, there will be folks around the place who may prefer the Navy in all of its elements to remain here at Garden Island. We have got to look to the long term, and the long term has been outlined in multiple Defence documents over a long period of time about our focus for strategic operations in north-eastern, northern and north-western Australia and the waters beyond.

JOURNALIST: The White Paper was only in May, are there any other aspects of that under review. On the cost - I know you said there’ll be a 24 month report and so on but Defence is most concerned about the cost coming out of their existing Budget. Are you able to confirm whether that will or otherwise?

PM: We will not be drawing within Defence’s existing budget for the future operationalisation of this plan because Defence has core priorities it must attend to in the near term. They have their priorities right now legitimately focused on the acquisition of these new assets. Some of you were with me, I think, the other day in Melbourne when I went to Williamstown to look at one of the LHDs which is about to come into service into the Royal Australian Navy. So, they have their priorities. They should be attended to now. It would be irresponsible however, as Prime Minister of the country not to embrace a long-term plan to deal with where we must anchor and home port these major new naval assets in the future, particularly given the competing demands here in Sydney.

JOURNALIST: On the White Paper, any other aspects of that also under review?

PM: Not that I am aware of. I think there is a broad continuity across white papers about the strategic logic of our Defence assets being in north-eastern, northern and north-western Australia and Western Australia. Why? It is the most proximate to our theatres of operations. Let me give you one example. The steaming time from, say Brisbane, out to some of the Pacific Islands contrasted to here, let alone from Townsville or Cairns, in the event of a massive natural disaster which takes out an entire island and a massive slice of the population - there is a big difference. When you’re talking about saving lives, saving one or two, two or three days steaming time out of here as opposed to closer to an area of intense cyclonic activity and natural disaster activity, is an important consideration. One of the missions of the LHDs, which some of you may have seen, is to be able to effectively deploy a massive field hospital to cope with a civilian population in distress, to provide a power generation unit for the equivalent of a small town so that you can deal with those sorts of

disasters. Time is of the essence when you're dealing with natural disasters. I remember full well when the tsunami hit Indonesia and when we had massive constraints in many countries, including our own, in getting the kit and the equipment to the place needed as rapidly as possible.

JOURNALIST: On overall Defence funding - ultimately this will prove to be a costly decision. In 2007 you promised to maintain Defence funding at 2 per cent of GDP. It has dropped well below that level, to the lowest level in 30 years. Why has that dropped off so markedly?

PM: Well what we are seeking to do is to maintain this discipline over time. Governments will constantly work within the forward estimates, four year period, in terms of what projects will be brought forward and those which will be delayed slightly. And often they are based on, frankly, detailed recommendations concerning the particular pieces of equipment - some may be able to be deployed early, some later. This is a rolling assessment.

But our long-term funding support for the Australian Defence Force is strong. I am very proud of our men and women in uniform. They do a first-class job and if I look at the kit and equipment which our troops have in Afghanistan, I constantly ask the question of the Chief of the Defence Force, are there things which our Defence Force need in the field which they currently don't have? That is an important question to ask, and I am constantly assured they have that which is necessary. I constantly ask the question of the other service chiefs, the same question. This is a commitment for the long-term, and can I just say, the massive new naval assets which are coming on stream are a reflection of our investments already.

JOURNALIST: Prime Minister, you said that you have been in deep consultation about this plan. Have you actually personally spoken to Defence top brass about this plan?

PM: Defence top brass were deeply engaged in the Defence Force Posture Review - it’s only a document 12 months ago - hang on, hang on, let me answer this - and the normal processes are that the Defence Minister will deal with his own bureaucracy. These matters were considered by Ministers well before us entering into the caretaker period with appropriate consultations all round.

JOURNALIST: Can I ask you about your phone call with President Obama? Can you tell us a bit more about that - who called who, and did you have a staffer taking your Instagram photo while you were actually on the phone to him?

PM: I was focusing on the telephone call, I assume so. If I was wearing a Broncos top, I probably was at that time.

Let me go to the conversation itself - in terms of the call, the President is consulting with all allies and partners and we had a good conversation this morning about the situation in Syria. The situation in Syria is a grave one and the President is consulting allies about two things. Where the evidence points in terms of who is responsible for what is now patently clear to have been a chemical weapons attack and, secondly, what now must be done across the international community. We had a detailed conversation about those two points.

We also had a detailed conversation about the future of Syria and where it goes to from here given the enormously complex politics on the ground. President Obama and I, as you would expect, had a full and detailed conversation about these questions. Our diplomats are in close contact with each other and our militarily liaison officers are in close contact with each other. This is an important question, not just for immediate events in Syria itself but the broader international principle of any regime anywhere in the world believing it can murder people with chemical weapons and get away with it without any response.

These are the deep questions which have been the subject of our conversation this morning I would emphasise, also he would be in conversation with other allies around the world as well.

JOURNALIST: Can I get your take on Tony Abbott's announcements today on unemployment and on terror compensation backdated. Would you support that and also are the reports accurate that the Labor Party has given up on winning and is now just sand bagging seats?

PM: On that latter report, I think that was in the Oz this morning? For those interested in that report, I draw your attention to Media Watch last night. You should all have a look at that. Just have a look at Media Watch and form your own conclusions about the fairness of reporting. In fact what I would say here to all working for those sorts of outlets is have a long close look at Media Watch last night and you, as professionals, form your own conclusions about fairness of coverage.

Now, on the other points you raise concerning the compensation to victims of terrorism - as you know, our regime applies under the relevant provisions of the Social Security Act. We believe that’s the right response for the future but we will continue in discussions with victims' organisations. We believe that these $75,000 payments for the future is about getting the balance right, but we will continue to work with the victims associations. You had one other point too I think?

JOURNALIST: (inaudible)

PM: Well, I’m not across the detail of that but can I just make one core point.

The Government has as its core priority building industries and protecting jobs.

Mr Abbott, by $70 billion of cuts, is cutting jobs. You cut jobs by cutting into hospitals and cutting into schools and cutting into infrastructure and cutting into a whole bunch of things where people rely on Government to provide support.

So I find it amazing that here we are, a Government which has helped create one million jobs with over the last five or six years with its priorities being jobs, jobs and jobs and Mr Abbott now talking about support for the unemployed when in fact he is about to contribute to large-scale unemployment in this country by cutting jobs across the economy. These $70 billion worth of cuts is not a small figure. It is four to five per cent of GDP. It’s a massive figure. If you do that and all I say is take a deep breath and watch where those jobs would go from right across the country. Therefore, the contrast again is clear. We are about building jobs and supporting people into new jobs. What I see from Mr Abbott's priority is his priority still is cut,

cut, cut; cuts to jobs; cuts hospitals; cuts to schools; cuts to the National Broadband Network and cuts all designed to pay for this unaffordable paid parental leave scheme.

I can't believe it that this guy could bring in a paid parental leave scheme which is going to whack a million plus part pensioners. I can't believe it that he is going to bring in a paid parental leave scheme that’s going to whack $1.7 billion out of the pockets of self-funded retirees. I can't believe it that he thinks it is fair to do that and still provide $75,000 payments for a billionaire to have a baby. If that is Mr Abbott's set of priorities, I don't share them.

JOURNALIST: (inaudible) do you concede this could hurt the NSW economy in terms of jobs and economic (inaudible).

PM: Mr O'Farrell here in New South Wales needs to be consistent with what he said in the past. He wants access to cruise ships. He has said so on the record. He has sided in earlier statements I’ve seen, with greater use of Garden Island by the cruise ship industry and says that in fact is his priority. He sided with tourism and cruising industries in saying that the current offer by the Federal Government to allow limited access here is inadequate and will have to be expanded in the future. So all I am saying is be consistent Barry. If you're arguing for this, something has to give. You can't walk two sides of the street on this. Either you want the cruise ship industry to bring more and more tourism dollars to Sydney and we have to make room for it, or you retain this facility for exclusive naval use in the future given we have got new large units of the Royal Australian Navy that are coming here. I just say to Barry O'Farrell be consistent and therefore for the economic benefits to Sydney and NSW through a rapid expansion of the cruise ship industry, depending on the Naval Taskforce Review and its recommendations, this will generate massive new opportunities and not just in the tourism industry but in the maintenance of ships as well and that is important.

JOURNALIST: Will you commit to blocking the sale of GrainCorp?

PM: On the details of that I think I will turn to our Agriculture Minister Joel Fitzgibbon and I’ll have him comment on that.

JOURNALIST: Can I just bring you back to defence spending. You gave the commitment before, taking questions at the Lowy Institute, that your objective was to sustain it at two per cent of GDP. That is a substantive commitment. Can I just ask what your timeline is there, are going to match the 10-year period that Tony Abbott set out? Can you do that, do you have a timeline by which can achieve that goal?

PM: Our position on this is well established. I have said it before and other ministers have said it before. What I find remarkable in this election campaign is our position is well-known, well documented, clear out there. Mr Abbott picks one out of space here, plucks another one out of that tree over there and talks about something he might do in the by and by. It is a bit like that comparative table, I understand, of spending commitments through a certain newspaper outlet’s spin-dometer today, which is tucked away in a column somewhere someone told me on page four, I can't remember what paper it was.

JOURNALIST: Perceived Murdoch bias aside, can you tell us, have you changed your strategy? Are you looking at saving old seats rather than getting new ones?

PM: I am here fighting for values I believe in and for people I believe in and jobs which are important to working Australians across this country.

JOURNALIST: (inaudible)

PM: I am saying that my job - let me just take you back to the question of policy.

I know it is interesting and easy to become focused on campaign dynamics but national elections are a serious matter and they are a serious matter about choices - choices about whether you are going to build or cut jobs.

I have explained to you every day of this campaign so far and I will continue this week and next week as well, as to how we will build the new jobs and industries of the future. You know why? Everyone who watches your program or reads your reports, they have a job and they are worried about it. They are worried about whether they are going to keep it; they are worried about whether they will have protections for their penalty rates and overtime; they are also worried about whether there will be a slash to their local school or their local hospital; they are worried about whether they are going to have access to broadband so the kids can do their homework properly online. That is what I am worried about to. I’m worried about them and in terms of the judgements the Australian people make, that is a matter for them. That is a democracy. I think in the context of an election campaign it is it is very important our ladies and gentlemen of the press to work through these policy alternatives. You may love or hate what we have to offer but ultimately it is a set of choices for people.

I have great confidence that the Australian people will reach their own good common sense conclusions at the end of the day.

But I do recommend, I do recommend - did you watch Media Watch last night, did you enjoy it?

JOURNALIST: I always enjoy Media Watch.

PM: Well that’s good. I think it should be mandatory viewing across the country. I think we might twitter that out and make sure everyone has a look at Media Watch last night because you know what is at stake there? It’s the life blood of a democracy. It is about a fair contest of ideas. It’s about a fair go for everybody. It is about how in fact you have a proper animated political debate about our plans for jobs, schools, hospitals, infrastructure and Mr Abbott's plans to cut each of the above. That’s what it is about. You guys can conclude on campaign dynamics to the extent that you want.

JOURNALIST: The issue of compensation for victims of terrorism. Can I take it from your comments that you don't support retrospective - going back to 2001 and compensating those affected by 9/11?

PM: I support the amendments to the Social Security Act, Supporting Australian Victims of Terrorism Overseas Act 2012, which provides for financial assistance up

to $75,000 to Australians who are harmed in an overseas terrorist act and to Australians whose close family members have died in an overseas terrorist incident. That’s Government's policy and we stand by it and one more question and then we’ve got to zip.

JOURNALIST: (inaudible) organisation and the article itself, the child care visit yesterday, do you think in hindsight it would have been better to talk to parents at that actual child care centre for the appearance of the campaign?

PM: You know something, when you're invited by an early childhood centre to meet with whoever is there, it is usually a voyage of discovery for me as to who I then meet. That is a matter for them. I will happily meet and greet anybody and talk to anybody, as those of you who have been following me around in this campaign in non-orchestrated events, with folk who can just roll up and say anything, positive or negative. I have been out and about doing that from day one. I think what I would say to you and the basis of your question is, I question whether that is actually part of what the Leader of the Opposition is doing.

Mr Abbott is doing two or three basic things and you know it.

Number one - not putting out his costings and limited scrutiny of that fact. Why does he not put them out? Because he doesn't want any scrutiny, because he is frightened they would cause people not to vote for him. That’s what’s happening. You know that, you know that Joe as well. Everyone around here knows that. That’s just a fact.

Number two, in terms of scrutiny, Mr Abbott is not out there wandering around talking to any person who comes - I do - and sometimes they’ll say nice things and sometimes they won't. That is what you should be doing if you put yourself up for elected office.

So you know something? I am pretty confident in my engagement with folks in and around the place and for anyone who is worried about what is on the front page of particular newspapers today, I just commend them again to have a long, long watch of Media Watch and put it on their long term view. I think it would be entertaining for the country at large.

Thanks folks we’ve got to zip.