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Transcript of interview with Geoff Hutchinson: ABC720: 14 November 2012: AUSMIN; Defence Budget; General John Allen

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Minister for Defence - Interview with Geoff Hutchison, ABC720

14 November 2012




TOPICS: AUSMIN; Defence Budget; General John Allen.

GEOFF HUTCHISON: The Defence Minister, Stephen Smith, came in to the studio to explain

what that future might look like. Stephen Smith, welcome to the program.

STEPHEN SMITH: A pleasure.

GEOFF HUTCHISON: It has been hinted at, in fact, you have said the enhanced importance of

Stirling is, to me, something that will occur as sure as night follows day. Will you tell us what

role you see Stirling playing.

STEPHEN SMITH: Well, Stirling, of course, is our Indian Ocean port, and Perth is our Indian

Ocean capital. That is one of the reasons why Secretary Clinton and Defense Secretary

Panetta are here as strategic and economic weight move to our part of the world, it is not

just the rise of China or the rise of the ASEAN economies. It is also the rise of India. That is

on a slower trajectory than China, but as India grows and rises, the importance of the Indian

Ocean will grow, the importance of the Indian Ocean rim will grow, so Stirling will grow in


It is not going to happen tomorrow, but it will happen over the course of the next few years

and decades.

GEOFF HUTCHISON: Let us try and get past some semantics here. Will it play host or be

home to American forces?

STEPHEN SMITH: No. We do not have US bases here. We have joint facilities, and Pine Gap is

the classic illustration of that. And we also have access to our facilities by US Defense Force


Now, that has been occurring since, during and after World War II.


STEPHEN SMITH: And the basis on which US personnel or equipment come to Australia is

under a Status of Forces Agreement signed between Australia and the United States in 1963.

So what we are doing is just enhancing those arrangements - Marine rotation through

Darwin, the prospect of enhanced aviation or aerial access in the Northern Territory and,

third cab off the rank, the prospect of greater naval access to HMAS Stirling.

But we do not have bases. There is no proposal for a US Navy base in Stirling. We saw that

suggestion from a US think tank some time ago. And even the think tank put it up as an

option and then rejected it.

GEOFF HUTCHISON: A joint facility. I guess our audience wants to know whether-

STEPHEN SMITH: No, no, no [indistinct]-

GEOFF HUTCHISON: -whether an Aircraft Carrier comes in to Stirling, x number of times a

year or spends time at Stirling.

STEPHEN SMITH: No, no, it’s about a greater number of visits and greater access. But when I

talk about a joint facility, before the 1980s, Pine Gap was a US facility. Kim Beazley and the

Hawke Government changed that, so that Pine Gap is now a joint US/Australian facility. What

occurs there occurs with what we call full knowledge and concurrence.

So that is effectively the best example of a joint facility. There have been other

communications joint facilities in the past, which no longer operate. But when it comes to

either access to Stirling or to Freo or to Sydney Harbour, it is done under that Status of

Forces Agreement and is essentially a ship visit.

Now, we have had naval visits to Freo or Stirling throughout the years. What this will see, in

due course, is greater regularity of that.

But we haven’t even started the conversation. We will start the conversation today when we

meet formally under our AUSMIN umbrella with Secretary Clinton and Defense Secretary


GEOFF HUTCHISON: So no more than more visits, greater occurrence?

STEPHEN SMITH: More visits, greater access, greater occurrence. There is no change of

status in any way whatsoever. And the reason there will be more visits is because as the

Indian Ocean grows in importance, there will be more activity, and that will come from India,

it will come from Indonesia, it will come from Australia.

And when I was last in India, I agreed with their Defence Minister - Minister Antony - that we

would start to enhance what we do with the Indian Navy, particularly with exercises.

And you may have seen-

GEOFF HUTCHISON: That was a point that Hillary Clinton raised last night, too.

STEPHEN SMITH: Yes, exactly. And you have seen reference to that. And that is a good thing.

I have been working very hard to try and grow our relationship with India generally, both as

Foreign Minister and now as Defence Minister, because that is economically and strategically

very important to us.

GEOFF HUTCHISON: So we will see joint Australian Indian Naval exercises?

STEPHEN SMITH: Yes, in due course, we will. We have already done what are called - what

the naval buffs call - or boffins call PASSEX, which is as you essentially pass each other on

the sea line of communication, you do signals and you exchange communications and the

like. But we are now looking to, with Indian agreement, to formal naval exercises, and that’s

a good thing, just as we do naval exercises with the US and as we have done naval exercises

with China. A couple of years ago, we did our first live firing exercise with China.

GEOFF HUTCHISON: Now, Stirling has been spoken of for many years. Can I give you some

multiple choice options? Two, five or ten?

STEPHEN SMITH: I think, realistically, five to ten. I said yesterday, in my view, it will occur

as sure as night follows day, but it is not going to occur in weeks and months. It is going to

occur in years or decades.

And I think, I have been arguing that the rise of India continues to be under-appreciated and

so, as that grows in appreciation, as India itself takes on the mantle of a rising super power,

which is where it will end up, together with the United States and China, the activity and the

appreciation will grow.

So I think in five to ten years, we’ll start to see that activity.

GEOFF HUTCHISON: Will India be our great friend and China our great trading partner?

STEPHEN SMITH: We want them both to be great trading partners and great friends. We

continue to be confident that China will emerge as - to use the jargon, as a responsible


We want to grow our relationship with China. We’ve got a very strong economic relationship

with them. That started with our early recognition 40 years ago, but we want to grow our

defence-to-defence, and political, and military-to-military relationship with them to a better


We’ve got a good military-to-military and defence-to-defence relationship with them.

With India, we share a lot of things in common with India and we’re working hard to grow

that relationship as well.

India has been our fastest-growing trade market over the last half dozen years. But we want

China and India to be positive, and constructive and active members in our region and global

players, and that is what we say - in terms of our relationship with China - we’ve got a

positive relationship with China and we want China to emerge in a positive and constructive

way and we’re confident that they will.

GEOFF HUTCHISON: My guest this morning is Defence Minister, Stephen Smith, ahead of

talks with Secretary of State Clinton and Secretary of Defense Panetta this morning.

I understand today that they will also be looking at increasing US access to airfields in our

north. Are we talking Northern Territory north or are we talking the possibility of Curtin?

STEPHEN SMITH: We’re talking Northern Territory, we’re essentially talking RAAF Tindal and,

to a lesser extent, RAAF Darwin.

And again, when we announced these three initiatives when President Obama was here about

a year ago, we said that our first priority was the Marine rotation. We saw 250 marines

rotating this year, that’ll occur again next year.

Our second cab off the rank was enhanced aerial or aviation activity. And again, we’ll

effectively start that conversation today. There’s been some preliminary talks but we’ll start

that conversation at Ministerial level today.

GEOFF HUTCHISON: Is that a conversation about size and scope?

STEPHEN SMITH: Again, it’s about regularity - more regular visits. We, of course, have US

aircraft that have access to our facilities and that’s been going for a long period of time.

So again, it’ll be more regular access and that’s because, you know, as the world moves in

our direction, the United States have made it clear they want to do what they call is a so-called rebalance, to rebalance their military and defence assets from fifty-fifty to NATO and

Europe and the Northern Hemisphere, and the Middle East, effectively to 40/60 to the Asia-Pacific, or as people, including me, now describe it, the Indo-Pacific, when you add India,

together with the Asia-Pacific. Or as I’ve heard people say, which is a pretty good way of

crystallising it, from Hollywood to Bollywood.

GEOFF HUTCHISON: Now, Mr Smith, you’ve rejected any notion that the US is concerned that

cuts to Australia’s defence spending is a big issue. Kurt Campbell has, we’re told, been quick

to say that he wasn’t troubled by those cuts. But are the Americans expecting you, or us, to

really bring something to the table here in return for the perceived security benefits that

might accompany their growing interest and presence in our part of Asia.

STEPHEN SMITH: We bring a lot to the table, and Secretary Clinton and Secretary Panetta

make that point clear privately and publicly.

Yesterday, when the Prime Minister and Bob Carr and I met with them, again, they made that


Afghanistan, for example, we’re the tenth largest contributor in Afghanistan, we’re the largest

non-NATO, we’re the third largest Special Forces contributor. And whatever financial pressure

we’re under in terms of defence budget, we’ve made sure that we ring-fence our overseas

operations so we don’t have adverse implications for that: Afghanistan, East Timor, Solomons

- Afghanistan obviously the most important.

We also made sure that we ring-fence the activity that we do with the United States, so that

we don’t have an adverse impact on the things that we’ve just been talking about.

Now, Secretary Panetta himself made the point - we went to Swanbourne yesterday, and we

both made the point that it’s not just Australia, it’s the US, it’s the UK, Canada, New Zealand,

comparable countries all under financial pressure when it comes to defence budgets.

Secretary Panetta’s taking out as we speak half a trillion dollars out of the US budget over

the next 10 years. And if the United States don’t solve what they call the fiscal cliff crisis,

then he’s at risk of having to take out 1.2 trillion.

GEOFF HUTCHISON: That will still represent, what, 4 per cent of their economy. What are we

looking at? One and a half per cent, maybe two at best.

STEPHEN SMITH: I would obviously prefer to be closer to 2 per cent of GDP than the 1.6 that

we’re at now. But I’ve often made the point - I’ll make it again - percentage or proportion of

GDP is not the only measure of defence spending.

We’ve ring-fenced those areas I’ve spoken about, plus we’ve ring-fenced some important

capability areas. Since the budget, we’ve announced the acquisition of Growler, which will be

the most effective air-combat capability we’ve picked up since the F-111. But we continue to

be, by far and away, the largest spender in our immediate part of the world, the South Pacific

and South-East Asia. We’re still in the top 15 defence spenders per se.

Secretary Panetta describes this as the new fiscal reality where everyone’s under pressure

and we have to learn how to be smarter, work better together and, also, get the priorities


And so, when Secretary Panetta, for example, talks about not cuts across the board, but

getting your priorities right, that’s what we’ve done in the sense of protecting those areas

that are very important to us.

GEOFF HUTCHISON: Stephen Smith is my guest. 1300 222 720 if you’d like to make

comment this morning, if you’d like to send a text: 0437 922 720.

Finally Minister, as important as these talks are, have you seen any indication of a distraction

from the Secretary of State and Defense, they must be enormously concerned at the crisis

that appears to be enveloping the military and security circles in the United States in the last

few days.

STEPHEN SMITH: We haven’t had an exhaustive or extensive conversation, but, obviously,

you lose a director of the CIA, that’s a cause of concern for you.

We know the deputy director well, so in that sense there’ll be continuity. But-

GEOFF HUTCHISON: Now an investigation into the US Commander in Afghanistan, John Allen.

STEPHEN SMITH: Which obviously, from Secretary Panetta’s point of view is something that

he will be, you know, following very closely. He’s put that out to formal investigation by his


General Allen has been recommended for effective promotion from Commander ISAF to

Supreme Allied Commander Europe and that confirmation or nomination process is now on

hold while he’s subject to an investigation.

There is, of course, continuity. One of the good things about President Obama being re-elected is we may well, I expect, see some continuity with Secretary Panetta himself who has

the advantage of being a former CIA director, so he has that experience as well.

GEOFF HUTCHISON: Hope they enjoy afternoon tea at Cottesloe. Thanks for your time.

STEPHEN SMITH: I’m sure they will. I’m sure they’ll enjoy the delights of Cottesloe.