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Transcript of interview with Michael Rowland: ABC News Breakfast: ALP; Defence budget; White Paper; Defence capability.

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Minister for Defence - Interview with Michael Rowland, ABC News Breakfast

26 September 2012




TOPICS: ALP; Defence Budget; White Paper; Defence Capability.

MICHAEL ROWLAND: Stephen Smith joins us from Tokyo now. Minister good morning to you.

Tony Abbott in making the speech to the RSL national congress yesterday said he wanted -

your budget cuts were effectively taking Australia from a middle country to a small country and

he wants to boost Australia’s Defence capability. What’s wrong with an aspiration like that?

STEPHEN SMITH: Well there’s nothing in it. It’s more than not being an aspiration, it’s all magic

pudding. We’re dealing with serious national security issues here. We’ve got a White Paper

coming up in the first half of next year; we’re dealing with what US Secretary for Defence Leon

Panetta says the new fiscal reality. Australiais not the only country who is dealing with difficult

financial circumstances. The US is taking half a trillion dollars out of its Defence budget over

the next 10 years.

We remain in the top 13 or 14 Defence spenders. Our Defence budget over the four-year

forward estimate period for the first time in 2009 got to $100 billion. We’re still spending over

$100 billion in the current budget forward estimate years. We’re protecting our core capability,

we’re protecting our military numbers and we’re protecting our overseas operation.

So there was nothing in Tony Abbott’s speech yesterday other than saying if he comes to office

in 12 months time, 18 months down the track he might make a few decisions. That was

essentially it.

MICHAEL ROWLAND: He’s also suggesting there is more fat to cut in the Defence bureaucracy.

He was suggesting in that speech there were still far too many chiefs versus Indians. Do you

believe there is more scope to get any further Defence savings from the Defence bureaucracy

instead of from the front line?

STEPHEN SMITH: Well, we have as I’ve said, protected military numbers and we’ve protected

our overseas operations, whether that’s Afghanistan, East Timor or the Solomon Islands. Over

the last two budgets we have taken out 2000 civilian numbers.

What Mr Abbott on the one hand is doing is criticising us for Defence cuts but at the same time

saying that there’s more that can be found. It simply doesn’t add up. And that is on top of the

$70 billion worth of cuts they’ve got to find to services to make their books meet before they

start in the Defence area. So I described it yesterday as not an aspiration but magic pudding

and that’s precisely what it is.

On submarines he says in two and a half years time they will make something of a decision but

he won’t give any commitment or guarantee to 12 subs, or for those submarines being

assembled in Adelaide which is our commitment.

On Joint Strike Fighters he says in two and a half years time he will make a decision. Well

we’ve made a decision on Joint Strike Fighter in the most recent budget to align our purchasing

program with the United States purchasing program, but to also make the point that in the

course of this financial year we will be making judgements to ensure we don’t have a gap in

capability and that may mean the purchasing of potentially additional Super Hornets but we will

make that judgment in a careful way.

In so far as his assertions that the system is somehow grinding or creaking to a halt, since the

budget I’ve announced the purchase of 200 more Bushmasters which has been very successful

for us in Afghanistan, a fleet of military tactical airlifts, C-27s and the Growler electronic

warfare capability which is the most significant capability we’ve picked up in terms of air

combat capability since the F-111.

MICHAEL ROWLAND: You suggested there that you may look at purchasing Super Hornets

while that Joint Strike Fighter rollout continues. Of course as most of our viewers would well

know that program has been horrendously over budget for many years now. Do you regret

Australia ever signing up to this Joint Strike Fighter project in the first place?

STEPHEN SMITH: No I don’t because what we have done is we have committed ourselves to

the project but we’ve been very careful, particularly since this government came to office, very

careful about the number of orders that we place.

We have contractually committed ourselves to purchase two and they’ll be delivered to us in

2014-15 in the United States for training purposes and we’ve indicated publicly we’ll pick up

another fleet of 12. So we’ve committed ourselves to 14. Any future decision we will make as

the program goes.

And the reason that I have been so assiduous about this is we don’t want to end up having any

risk of a gap in capability and that’s why for more than 12 months now I’ve been talking about

the need to ensure that if there are to be further delays in the Joint Strike Fighter program we

can’t afford to allow a gap in capability.

On the other hand you’ve got Mr Abbott out there saying in two and a half years time he might

get around to making a decision about our air combat capability.

MICHAEL ROWLAND : Now let’s get back to the Defence bureaucracy. You mentioned those

2000 positions you are taking from the Defence bureaucracy, so that’s it, are you confident

there’s no more fat to trim from the bureaucracy?

STEPHEN SMITH: We want to make sure that going through a tight fiscal period that Defence

makes a contribution to efficiency. That it also makes a contribution to the Government’s

budget bottom line. It’s very important that we make a surplus for general economic reasons.

And we’ve made a substantial contribution to that in the last budget.

The Finance Minister and the Treasurer announced in the last 24 hours some further measures

in terms of efficiency dividend. Those don’t apply to Defence because Defence made its

contribution in the most recent budget.

So anything down the track we will deal with and consider in the usual way in the formal

budget process. So I’m not proposing as I haven’t in the past - not proposing to get into a

rule-in rule-out circumstance.

We have taken 2000 civilians out of the Defence organisation over the last two budgets. That’s

been done by process of natural attrition and non-replacement. That’s a substantial

contribution and part of the rationale for that was not to impact adversely on our military

numbers or our military contribution.

MICHAEL ROWLAND: Lindsay Tanner a colleague that you worked closely with in the Rudd

Government, the Former Finance Minister has written that book where he criticises Labor, he

accuses Labor of being an electoral machine largely devoid of purpose and he says it was a big

mistake to dump Kevin Rudd in twenty one. What are your thoughts on that?

STEPHEN SMITH: Well I haven’t seen Lindsay’s book, he is a good colleague and I’ll give it a

read but let me just make a couple of general points. We made a decision about leadership

some time ago and we were successful in forming a government after the 2010 election and as

the recent polls have shown our view is at the next election that will be a competition and I

think people are now starting to draw comparisons and contrasts not just to view the

government in isolation.

I’ve always seen in the past people be, are critical in the midst of it, of the true labor

credentials of the Whitlam Government and the Hawke and Keating Governments and when

the dust settles people look back and say that was a government that made substantial

mainstream labor reform and however long this government lasts whether it is a six year term

or a nine year term or longer. My very strong view is that when people look back at the very

strong contribution the government has made it’ll be a mainstream traditional labor.

Protection of jobs when the global financial crisis was at its height and then doing everything it

can for low income people, historic record increases in pensions, parental paid leave, disability

and mental health reform, aged care reform and the like and in my area in the national

security area a significant contribution in to getting Australia into the G20 and getting the East

Asia Summit expanded. These are all landmark traditional labor reforms that will stand the test

of time.

MICHAEL ROWLAND: Minister, thank you very much.