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Transcript of interview: ABC radio Riverina : 11 February 2013: Defence funding, bases, Reserves, military superannuation

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Transcript - ABC radio Riverina February 11, 2013

RE: Defence funding, bases, Reserves, military superannuation

DELANEY: We’re going to be talking Defence this morning. We know that it’s something that is really important for

our region, a lot of interest in the wider community and also lots of Defence employees in our region as well. Now

you’ve got to remember just a couple of weeks ago there was a leaked draft of the Government’s 2013 Defence

White Paper and this was looking at the priorities for the next decade, spending, I think the phrase ‘reforming and

rationalising’ was also part of that report, with me this morning to talk about some of the Defence issues that are

going to be on the agenda this year, particularly up to September 14th for our Federal election, Senator David

Johnston who is the Shadow Minister for Defence, Senator thank you very much for taking some time for me this


JOHNSTON:: Good morning Anne I’m delighted to be with you in the Riverina.

DELANEY: Now that phrase - ‘reforming and rationalising’ this was a phrase that popped up in the leaked draft of the

White Paper, what does reforming and rationalising mean in your reading?

JOHNSTON: Well whatever it means, given what the Government have done to the Defence budget I’m pretty

frightened about any vague terms like that. One of things we’ve come to understand is that it’s really important that

people have regional training bases to be able to carry out the vital work that is really war fighting and you can’t do

that in urban areas around Sydney and Melbourne, so when Mr Pappas did a review for Defence he produced a

document that set out the rationalisation of bases, this was three or four years ago, but the Government redacted the

whole thing and transparency has been completely missing with everything this Government have done with Defence

and I’m really upset that people in your region have had the extra stress of wondering whether or not these bases are

going to continue given that they are probably one of the most consistent economic drivers. So I am empathetic and

sympathetic to having some certainty. We have no plans to cut any of these regional training bases, we think they are

really important.

DELANEY: When you say no plans to cut them, obviously that means no plans to close them, but does that mean

any plans to reduce the funding to these bases?

JOHNSTON: Funding is a huge issue. This Government has taken $25 billion out of the Defence budget in the last

four years, they’ve taken us back as a share of GDP to 1937 levels - funding is real problem for us. Obviously they

have cast around looking for money to try and get this mythical surplus that they’ve now abandoned, and the one that

they’ve come to, stopped at and treated like an ATM is Defence. Well we’re going to stop that. Tony Abbott has said

there will be no more cuts to the Defence Budget. And then we have to put a handle on the state of the economy -

debt and deficit is our enemy - and so to rebuild the economy we want to focus on Defence as soon as we possibly

can, we are not going to make outrageous promises, we want to go back to the 2009 policy of three per cent growth.

But having said all of that, these bases are really important because regional economic drivers are fundamental to the

health and wealth of the regions. But also to the training capacity of our people, it’s really important, Bandiana,

Kapooka, these places are important.

DELANEY: Certainly when people think of Defence bases they think of the big ones but we also have in our region a

sprinkling of Reserve depots. I know talking to people I know in Defence who are Reservists if we see more depots

closing people are not prepared to drive an hour and a half, two hours to their nearest Defence Reserve depots. Are

we likely to see an impact on Reservists if we start to see fewer and fewer depots?

JOHNSTON: I come from Western Australia and when you talk about the distance people have to travel to go to a

Reserve depot I can relate absolutely to what you are saying. Reserve days have been slashed by this Government

and I am really upset about that because these good people who we have trained up, often in the regular Army for

many years, then they continue to give good service as a reservist, we’ve got around 21,000 reservists in Australia

and they need to be managed properly. I am very sympathetic to that and I think it’s important that people don’t have

to travel, often at their own expense, all of those extra miles, particularly in regional areas to get to a Reserve depot

to do some training and to participate as they do. So I understand that fully and I am very keen that we keep those

depots going.

DELANEY: For the wider community and especially those not closely involved with the Defence Force sometimes it is

hard for them to understand why so much money goes into Defence, especially as we hear more and more

technology, more and more efficiencies, we have a lot more of a modern Defence force, there is the argument for

maintaining spending where it is now, if not increasing it, rather than cutting it and seeking efficiency drives, relying

on technology what is the argument for putting the ‘more bang in your buck’ in Defence?

JOHNSTON: Well that’s a very good question Anne. The point is that the modern fighter these days is somewhere

between a physical training expert and a scientist. He’s got technology and he manages an enormous amount of

bandwidth (inaudible) these things are so crucial for us having the cutting edge not just in our region but when we

fight with our allies. The typical nature upon which we go forward to do the business of defending Australia and

(inaudible) is a very technical thing. Now we train these people up at great expense, often there’s millions of dollars

invested in just one person, to operate a fire control radar, flying an aircraft, being able to repair a radar, stuff like that

is really very expensive.

Now we’ve got 59,000 full time uniforms, that we’d like to think we pay them something that retains them in service to

Australia, we’ve got around 23,000 public servants in the Defence Department, I don’t think that’s terribly sustainable,

but they’re highly trained people, and then we’ve got 21,000 reservists. So we’ve got about 100,000 people to provide

career opportunities to and its very expensive business. And it’s all about in this modern age, cyber space, satellites,

radio communications, naval ships, tanks, planes, you name it, and they all have to be trained, many of them science

degrees, physics degrees, the capacity to think properly, is something we train them up. Now in all that, those bases

that I mentioned, particularly in the Riverina and the southern parts of NSW are really crucial to us in making sure that

when we certify people to be able to defend Australia, in a technical sense, we can actually put them in the field and

see what they can do, and those bases are really crucial to that.

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have the best trained people in the world, but some of the complaint coming from our people is that we have the best

armed service men and women in the world but gee we’ve got some substandard gear we have to work with. We’ve

got either dodgy equipment, we’ve got not necessarily the best technology, we’re phasing out certain large scale

items for instance aircraft, bringing in aircraft, the gear side of things is a bit of mess. What would you do to fix it?

JOHNSTON: Well I don’t think it is a bit of a mess - there are some pockets of things. We’ve have body armour in

Afghanistan that we’ve had a bit of an issue with, but remember the technology is moving very quickly and we chase


To try and get on the cutting edge of technology is a very difficult proposition for our 23 million people to fund.

Remember we’ve got one of the largest maritime frontiers, one of the largest land masses in the world with one of the

smallest populations. So the taxpayer has to be given some consideration in this. We can’t be America, we can’t be

the United Kingdom but we can be smart and we can focus on the areas that we do well in.

Our submariners are world class, our fighter pilots are world class, our SAS and Special Forces are absolutely

outstanding. So there’s an element of being able to do things at a niche level really well, so world class performances

in some of those areas I’ve just mentioned.

There is always going to be a problem given the length and breadth of Defence and its capabilities, some

redundancy, some staleness about what we’re going. That battle rages and goes on all the time, and we always

aspire to win the battle but sometimes we’re going to fall a bit behind and that to some extent is inevitable.

DELANEY: Can we improve the way that we do our processes and contracting, because the wider community

watches some of these very big defence contracts, come and go, some fall off some get cut half way through, there’s

not a lot of confidence in the way that process happens.

JOHNSTON: Well Anne you are playing my song when you say that because in the ten years I have been involved in

Defence in the Senate and we have Senate Estimates coming up this Wednesday, contracting and the management

and administration of capability acquisition is a really crucial thing that we need to get right. Now I don’t think we do a

bad job, about 90 per cent of projects run beautifully, but some of the big ones run into trouble and they are the front

page headlines we are all familiar with.

So our task is to try and fix that, it’s not easy when some of these contracts are extremely technical, some

developmental projects are very difficult, but overall we don’t do to badly. However, the image that I think is portrayed

out there is that we get a lot of these wrong, and some of the things we do get wrong and we can always do better,

we’ve got to strive to do better, but it’s not as bad as some of the headlines would suggest.

DELANEY : I’m talking to the Shadow Minister for Defence, Senator David Johnston. Senator you mentioned just how

many people are in our defence force, not just the uniforms, but the thousands and thousands of civilians, we have

seen a trend of an increased civilianisation of our Defence force if that phrase makes sense for you, is that something

a Coalition Government would continue?

JOHNSTON: Well I just think it’s unsustainable. In South Korea they’ve got 3,000 public servants running 600,000

soldiers. Now we’ve got 23,000 public servants running 59,000 ADF personnel, Army, Navy and Air Force, the

comparison is really quite stark. So I think there is room for improvement there and I think the tooth to tail ratio can be

made much better. So whilst I’m not focussing and saying there’ll be massive cuts, Joe Hockey has said that there

will be natural attrition cuts to the number of personnel, what I am really driven to do is to try and keep those savings

inside Defence, that’s my real task. To capture the savings we can make.

DELANEY: So just to clarify that, any savings from this kind of move would not then be regarded as money back into

the Federal wider kitty, the consolidated revenue, this would be Defence savings that would be used then

redistributed within Defence?

JOHNSTON: Well that’s the objective, remember if you sell any land, that money goes into general revenue. So my

task is to argue with my colleagues is that all of the savings we can make, a very significant portion of it could go

back into Defence and that’s what we need to do given the ravages of what this Government has delivered in terms

of funding.

$25 billion out of any portfolio is just going to bring a portfolio to its knees and that is where I think Defence is at the

moment in terms of its future planning and its capital account

DELANEY: Can we talk about land for a moment because you did mention there about sell offs, what are your fears

about any potential land sales, because we know some Defence land I’ll tell you what it’s prime real estate with a big

price tag and it’s an attractive option if you are trying to find some money.

JOHNSTON: I think that there are opportunities for us in urban areas but the point is the Opposition is kept

completely in the dark, and there’s no transparency in that, so I am not going to speculate, but I think there are

opportunities. But what I want to do with any of those proceeds, I’m going to argue is that those proceeds come back

into the training bases, because that’s where we actually learn the art and the skills necessary to be a successful

Defence force. Land that’s subdivided, that’s very good land but has been overrun by urban sprawl, is not, I don’t

think is effective for Defence as it could be and I think the regional bases present a really huge opportunity for us.

DELANEY: One last topic for you this morning is Defence super, and I know that this has been a thorn in the side of

so many serving and former personnel, I know it’s been a bit of hot potato in politics over the last 15 years, what is

the Coalition planning, if you get Government in September, what can you do to fix this Defence super situation, and

you might just if you wouldn’t mind Senator give a quick recap for those people who don’t know what the situation is.

JOHNSTON: What happens in Defence for veterans is that they’re pensions are indexed by the CPI, now the CPI

index is a very variable index that doesn’t yield much growth for people. Pensioners, and other people, who are

completely dependent upon the pension, have Male Take Home Average Weekly Earnings (MTAWE) as their

indexed base. What former Defence personnel are complaining about is that they haven’t had a proper rise in 10 or

15 years. Now the previous Government was very reluctant to change the basis because in the way out years, in 20

years time, it’s quite an expensive proposition. In the four budget out years it’s only about $98 million to change from

CPI to MTAWE. Tony Abbott has said these people have served our country very well, we need to give them some

further security and we will change their indexation method to MTAWE and that gives them some growth They can

Page 2 of 3 Transcript - ABC radio Riverina > David Johnston, Liberal Senator for Western Austr...



DELANEY: Well the Mathew’s Report was infamous in saying that while we acknowledge that almost of all of the

submissions to the Mathews Report suggest changing the way things are done the Mathew’s Report said “Mmmmm,


JOHNSTON: That’s right, now look we didn’t promise them anything in the 2007 election, but the Labor Party did.

Now they broke that promise and did not give them MTAWE indexation, now Tony Abbott has said that’s not fair, we

will promise to change that, it’s an election commitment, it’s the only new money in our Defence policy, and I think all

of us on our side are very proud of the fact that we are committed to finding that money to change the index basis to

Male Take Home Average Weekly Earnings and I think that’s a positive step. Now it suggest that we did get it wrong

under Howard, I think there is an element of that but at least we didn’t lie to them, we didn’t mislead them, and

promise them the sun and the moon and then just turn our backs on them. We said we are going do it, we’ve costed

it, funded it, it’s in our plan and we will put it into action.

DELANEY: Now people are going to immediately be saying where are you going to get the money from?

JOHNSTON: Well $100 million in the scheme of the Defence budget which is about $50 billion is not a lot. Indeed

natural attrition will probably generate that if we’re careful with how many hirings and firings we do. Just

administrative consistency and expertise will generate that sort of money over the four out years so it’s not a difficult

proposition. We also look to the Future Fund way out to be successful and to fund that into the distant future, beyond

the Budget years so that’s our plan, I think it’s a good one, I think it’s robust, I don’t think it can be challenged.

DELANEY: And what will this do for the confidence of those people on other superannuation plans, because it’s not

all serving personnel, (inaudible) it’s specific.

JOHNSTON: Well it says to them that we’ve heard them, we realise that given the high cost of living out there we

understand that since 2007 circumstances have changed to a significant degree, and we are prepared to support

them by giving them the benefit of that index change. I don’t think initially it’s a lot of money, it’s something we should

do and I think it respects their service.

DELANEY: Senator it’s been really good to talk to you this morning thanks very much.

Page 3 of 3 Transcript - ABC radio Riverina > David Johnston, Liberal Senator for Western Austr...