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Transcript of joint press conference: 27 June 2002: Australia to join joint strike fighter program: Australia's future air combat capability.

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Media Release

27 Jun 2002 MIN27062002/02


Transcript of Australia to Join Joint Strike Fighter Program

Event: PRESS CONFERENCE Date: 27/06/2002 Slip ID: C00007406740 Time: 11:45 AM



SENATOR ROBERT HILL: Thanks for coming along. This is an occasion that only happens I guess once every few decades when governments announce a new project towards the acquisition of new aircraft for the ADF.

What we're announcing today is that we've decided, as a government, to participate in the system development and demonstration phase of the Lockheed Martin Joint Strike Fighter. Being S35. We've decided to do that on the basis of advice from the Air Force that they believe it will meet the capability requirements that we are seeking through their 6,000 project. That is as a replacement for the FA-18 and the F1-11.

This is an investment, in the first instance, of some 300 million Australian dollars over a ten year period. Which enables us to become part of the project and, in fact, to be located within the project and to give our industry the opportunity to invest in the design and development phase.

It gives us significant benefits, presuming that we move to acquisition of the aircraft. Whilst that's obviously our intention, a decision to acquire probably won't be made until about 2006. So by which stage we'll be well into this development phase with the possibility of an aircraft, if a decision is to acquire this aircraft, which we expect probably from about 2012 onwards.

This is a very different way of acquiring an aircraft. What we're doing here is investing in the development of this project. It's more, I guess, akin to us becoming a partner in the development of what is going to be clearly the global stealth fighter of the future.

We have taken this decision at this time because some might see it as, in effect, leaping a generation of aircraft. We have made that decision purposefully because we believe to acquire any of the other alternatives at the moment would put us in a position where ultimately we'd be likely to acquire this aircraft in any event.

So, rather than investing in an aircraft that may well be out of date within the next 10 or 15 years, what we're doing is leaping a generation which gives us much greater confidence that we'll be investing in the technology and capability of the future.

In terms of the alternatives that'll be around in the post 2012 era, we don't believe that there's any other alternative that would meet our capability requirements within the costings that we put into the White Paper.

The White Paper, of course, talks about the purchase of up to 100 aircraft. That will be a decision for the future because whilst certainly what we're looking for is a capability equivalent of 100 aircraft, by the time we get to the acquisition decision it might be decided that less aircraft can achieve that capability and they may be phased in over a longer period as well.

This is designed as an open-architecture aircraft. It'll be continually developed and we will need to decide which block we'll start purchasing in and we may purchase, unlike we've done in the past, we may purchase smaller numbers and do it on an on-going basis as the technology continues to evolve.

It is large money, and ultimately this will be the largest procurement, largest military procurement in Australia's history. But we do have a commitment to obviously defend this country. We wish to do it to provide our Defence Force with the most capable equipment within our capacity to pay for it, and we believe that this aircraft is the one that can enable us to

do that.

What I was going to do is to invite Ian to talk a bit about the industry opportunities for Australia in this project. Give the Air Marshal the opportunity to say a bit about the technical capabilities of the aircraft and why the RAAF have guided the government in this direction. Advised the government in this direction. And then the three of us are open for questions.

IAN MACFARLANE: Thanks very much, Robert. And from an industry perspective, this decision by the government to invest some $300 million, to be part of the development of the Joint Strike Fighter, obviously offers great opportunities to Australian industries to participate in the development of the fighter. Rather than in the past, as we've seen, only participate in perhaps some production componentry of the finalised aircraft.

The aerospace industry in Australia already has about a 1% share of the global market, and were they able to even achieve that conservative participation in this project that is just 1% of this global $400 billion project. They're A dollars I should add. But if they were able to achieve just 1% of that, then that would be worth to Australia $4 billion. And I think it's significant that Australian industry is in a position to take advantage of the development phase, but it's also very significant that, of course, that gets us in on the ground floor in terms of Australian industry participating in the actual construction of the Joint Strike Fighter.

This is, as I say, a great opportunity for industry. But it also shows the confidence of the government in the aerospace industry in Australia. And Australia's aerospace industry to actually punch above its weight and achieve in a global environment for what will be a truly global Joint Strike Fighter.

It's something that I've obviously been keen to see happen, and I think it opens up great opportunities for us to continue to expand on our already highly innovative and technologically leading aerospace industry.

So I certainly support Robert fully in his comments, and I might pass over to the Air Marshal. Thank you.

AIR MARSHAL HOUSTON: This is a bold decision by the government. A decision that will carry the Royal Australian Air Force into the future.

The Joint Strike Fighter is a fifth generation aircraft. And really, when you have a look at all the capabilities that are available, it is the capability of the future. And we need to focus on the future and the future combat environment that we're likely to face.

This aircraft is a stealth aircraft, but it's also an affordable aircraft. It will affordable because already there are 3,000 aircraft on the order books, and there's likely to be many many more. So the very expensive development costs, research costs, are going to be spread over a large number of platforms, thus making this aircraft relatively affordable compared to others.

I mentioned the stealthy characteristics. What the Joint Strike Fighter will bring to the table is a capability that will fit beautifully into the structure we're developing in the Australian Defence Force. A structure of network enabled warfare where we'll have highly sophisticated command and control, surveillance reconnaissance and electronic warfare capabilities. And this aircraft will be able to connect very effectively into that environment.

It will be very very capable in the air control role, which as you will all recall was one of the most important aspects of the government's White Paper. But it will also be flexible enough to go out there and conduct strike operations. And I think that all in all it's a great day for the Royal Australian Air Force and I think a very enlightened decision that ensures that we will be able to control the air approaches above our northern land areas and also our maritime approaches.

So I think rather than continue to talk about the technical aspects, it's probably best picked up with a few questions. Thank you very much.

QUESTION: Minister, what guarantees can you give taxpayers that the Department of Defence will not botch this massive contract as it has done in so many? And what guarantees can you give them that the American military industrial complex won't screw Australian taxpayers again?

ROBERT HILL: This, I think in part because of so much being invested at the front end of this project and that we're joining in its development on a partnership basis rather than simply buying off the shelf, already in the development phase Britain, as you know, has committed as a Tier 1 partner. The Netherlands have committed. Italy has just committed. Denmark, Canada, so there are a significant number of global partners already as part of the deal and all of us will be working jointly with the United States in the development of the aircraft over the next 10 years. So I think that that is a start.

Secondly, the way that it's been structured gives Australia the opportunity to opt out at many different points, if it so wished. Now, I wouldn't emphasise that, because we don't think that that will be the case. What we start with today is a process to negotiate a Memorandum of Understanding with the United States, and that will cover our initial industry investment in the development phase. It'll cover issues of technology transfer that have been so important to us. And, in

some instances, we've missed out in the future.

And later this year we expect to be able to execute that Memorandum of Understanding. We then go into our investment over a period of 10 years - 300 million over a period of 10 years - with a number of exit points in that.

And, as I said, by the time we get to 2000 - around 2006, when we make acquisition decisions, we will have a very firm understanding of the costs involved in the acquisition and the design parameters of the aircraft. So in our view the risk is very much reduced from any other alternative method of acquisition.

And then, as the Air Marshal said, this project itself has been costed in a different way to previous military aircraft development so that it is affordable. And whilst I'm not the one to ask the technical aspects in terms of the data and data management and control and all of these things that have led those responsible for the project to be so confident that the costs can be contained, that certainly is the view of all of the countries that have entered the project.

QUESTION: What are those costs?


QUESTION: What are the costs? What costs are...

ROBERT HILL: Well, the development phase is a 20 billion US phase, of which we are contributing roughly 150 million of 20 billion. So we're getting a huge - a huge benefit in that for the investment that we are making. That will logically follows.

QUESTION: What are these things going to cost taxpayers? The Australian taxpayer is going to pay how much for these things?

ROBERT HILL: Per aircraft?


ROBERT HILL: Well, that's not known at the moment, but it is believed to be in the vicinity of about 40 million US per aircraft. And any other aircraft that's around, as you would know, is considerably more than that. You're looking at double that price.

QUESTION: Minister, a question for you, Minister, and a question for Air Marshal Houston. Are you this morning telling all other competitors, 'Don't bother any more. We're committed to the Joint Strike Fighter sight unseen at $40 million a copy.' ? And, Air Marshal Houston, how can you be confident that this aircraft, sight unseen, will have the range and the endurance and the payload to effectively replace the F111, for example?

ROBERT HILL: Well, if I just start by saying of course this aircraft has already won competition in the United States against Boeing. Two examples of the aircraft are flying and there's been an enormous investment and work done to get to this stage for it to win that competition.

So whilst the capability will continue to be developed over the course of the next 10 years, and as I said in fact it's going to be, with its open architecture, probably over the next 30 years it'll continue to be expanded as well.

We already know a great deal - and the partners know a great deal about the aircraft. The Air Force has made a number of visits to Lockheed Martin and been briefed at a confidential level on the capabilities as are known at the moment and as they are expected to develop.

In relation to other manufacturers who would have liked to sell to us as part of the Air 6000, to be fair to them I think we've got to say what I've already said and that is that we are going into this project expecting it to be successful. We're going into the Memorandum negotiation expecting the Memorandum to be signed.

We're going into the development phase expecting it to lead to acquisition of aircraft. But the acquisition decision, as I said, we don't expect to be finally made to around about the 2006 period.

AIR MARSHAL HOUSTON: In terms of the question about the F1-11, the F1-11 has a range approaching 1,000 nautical miles. This aircraft won't have quite the range of an F1-11 with internal fuel tanks. But with external tanks and air-to-air refuelling, it will have the capability to do what the F1-11 does. So I am very confident that it'll be able to do that.

QUESTION: Pay loading?

AIR MARSHAL HOUSTON: Pay load? It will be able to carry a reasonable pay load. Bear in mind we're very much focused on the future. One of the associated technologies that's coming along with this is small diameter munitions. And

this aircraft will be capable of carrying the high-technology weapons of the future, be they small diameter munitions or a variety of missiles which will give the aircraft a stand-off capability.

Like the F1-11, it does have an internal bomb bay, so that means that unlike just about all the other contenders for Air 6000, the weapons can be carried internally. Which means you maintain your stealth, your low observable configuration. And that means that you're going to be very hard to detect and that is going to enhance both your tactical advantage and also the survivability of the platform.

If you have a look at the F1-11 right now, it has a huge radar cross-section and can be seen very easily by the sorts of radars that are currently being deployed. This aircraft will be very very hard to pick up.

And, of course, that's going to be an advantage also in the air-to-air role where it's all about being able to see the adversary before he sees you. If you've got stealth on your side, you've got a huge advantage. And of course the aircraft also has a number of sensors integrated into it that will enhance the situation awareness of the pilot and with the weapons that are going to be carried, I'm confident our pilots will have the right equipment for the future.

Bear in mind that the future air combat environment is likely to be one where it is fought beyond visual range. So this stealth capability is absolutely crucial to the future - future effectiveness in that environment.

QUESTION: The stealth capability, Air Marshal, if you have to carry external tanks won't this sacrifice some stealth?

AIR MARSHAL HOUSTON: Absolutely. Absolutely. I mean we're getting into a lot of, you know, 'what ifs' here. But the White Paper has a number of wide body tankers. It will give us a very good air-to-air refuelling tankers. Those air-to-air refuelling tankers are a great enabler for this capability. And, indeed, any air combat or strike capability. So I would hope that we wouldn't have to use those tanks. But, if needs be, like the F1-11 the F1-11 carries things externally, it has a very large radar cross-section. And we would be able to get in there and do the work if there's a need to do so.

QUESTION: Air Marshal, how much is the future going to lie more and more on unmanned aircraft? At the moment they're used for all sorts of purposes including surveillance and signals interception and intelligence and so on. But in the future, isn't there going to be unmanned aircraft which are going to be used increasingly in the strike role as well?

AIR MARSHAL HOUSTON: That is correct. That's something that we are keeping abreast of. And that's part of the Air 6000 study to have a look at the sort of possibilities that are available with uninhabited combat air vehicles.

If you have a look right now, though, those capabilities are quite under-developed. And it's Boeing - the Boeing aircraft company that is actually leading the way on that with its X45 development.

We're keeping abreast of that, but I can't see that being fielded operationally, that sort of capability being fielded operationally for quite a few years yet.

QUESTION: Air Marshal, given the cost and maintenance issues surrounding the F1-11, how soon would you like to start replacing that fleet with these fighters?

AIR MARSHAL HOUSTON: Well, the JSF, if you have a look at the fact sheet we've given you, the US Air Force will be introducing its first aircraft in about 2011. And it will reach its initial operational capability by about 2012. I think that we want to get in at a reasonably early stage. But, as you would be aware, most programs, aircraft programs, take a while to bed down. So I'd prefer to be going a little bit later on. And we have to have a look at all of that, but the intention always was to replace the FA-18 in the 2012, 2015 timeframe. And the F1-11 in the 2015, 2020 timeframe.

QUESTION: Might you move that forward now, though?

AIR MARSHAL HOUSTON: Well, we have to have a close look at that. One of the things that we've got to work through now is, given this decision, there are a number of things that we've got to analyse and a lot of detail. And one of the things I want to look very closely at is how we manage the fleet that we've got at the moment to fit in with the prospect of introducing the Joint Strike Fighter after about 2012.

QUESTION: Air Marshal, were there any conditions connected to this agreement with the United States? For instance, if the United States went into some sort of combat, would we have to automatically go in as well?

AIR MARSHAL HOUSTON: No, no, there's no obligation that we have to go into something that they're going into. Any situation that arises, and that is a matter for the Australian Government as is the case now and as will be the case for years to come.

What it does do, though, because we're getting into this, we're in a much better position to negotiate the release of the top line software that we require to make the aircraft highly capable.

QUESTION: Does that mean that you will gain full access to all technology, all source codes, all the technical


AIR MARSHAL HOUSTON: All of that has to be negotiated, but clearly if you're in the program you've got more prospect of getting good access to the technology that's available. I think that we'll get much better access through being part of the program than we would if we were to, say, go and buy the foreign military sales version of the aircraft off the shelf in 10 years time.

QUESTION: Minister, can you, with this decision now, you're in fact ruling out any open competition in 2006 for a replacement fighter? Is that what you're effectively saying?

ROBERT HILL: Well, a sort of definite answer on that is a few years down the track. But, as I said, I think it would be unfair to competitors to hold out a carrot that I don't think is really there. Our starting point in this project, this investment in the design and development phase, is our belief on the basis of information that's currently available to us and the advice of the Air Force, that this is the aircraft for us in the future.

But the advantage - an advantage in the way we're doing it, as I've said, is that it is a step by step approach and the acquisition decision won't be made until about 2006.

QUESTION: Senator Hill, could that change if Labor wins the next election? Or is there a certain bipartisanship in relationship to this?

ROBERT HILL: Well, governments can make whatever decisions they like. If you're talking about an election in two and a half years time, we would have made a contractual commitment to 300 million Australian dollars in the design development phase of this aircraft. We wouldn't have made a contractual commitment beyond that.

QUESTION: But Labor could reverse this?

ROBERT HILL: Well, Labor could - if Labor was in - if the acquisition decision is made in 2006, will be made by whoever is in government in 2006. We believe that whether it's us or someone else on the basis of the information that's currently available to us, that they are more than likely to acquire this particular aircraft.

QUESTION: Did John Howard discuss these matters when he was in Washington recently? And was there any political leverage involved, given the closeness of the bilateral relationship?

ROBERT HILL: He had a briefing on the state of the project when he was in the United States. There's been no political pressure. This is very much a decision made by the Cabinet in what we believe to be Australia's best interests.

But the issue of interoperability with the United States is certainly one factor that is in our mind in making this decision.

QUESTION: Minister, can you explain how the value for money assessment on this decision was carried out?

ROBERT HILL: This is a decision to invest in the design and development phase of this aircraft at a cost of about $300 million. As we've set out in the papers, if we decide to purchase the aircraft in the end, and if we think the numbers, as anticipated at the moment, it'll actually save us about $600 million off our ultimate purchase.

In addition, for our $300 million, it gives us the opportunity for Australian industry to get in in this phase as well, and therefore they have the opportunity for very significant economic returns.

QUESTION: With the analysis that you did of opportunities for Australia on JSF, did you do a fair and equal comparison with opportunities on Eurofighter? Did you do an equal comparison with opportunities on the DASO aircraft?

ROBERT HILL: Our decision was primarily driven by the capability of the aircraft. The first issue that Cabinet looked, what was really the driving influence for Cabinet, was our belief, on advice, that this would be the aircraft that we need to meet our capability requirements. And then we looked to the best opportunity for Australian investment.

So it hasn't been driven by an Australian industry choice. We actually think that there'll be very good opportunities for Australian business in this project. But the project decision, to the extent that it's been made now, has been primarily driven by our capability requirements.

QUESTION: How did you compare the technical aspects then? How did you decide on JSF ahead of Eurofighter or ahead of Rafael if you do no technical evaluation?

ROBERT HILL: Because on the basis of the information provided to the aircraft, they see this aircraft as at least a generation ahead of the others that you've mentioned. So the issue is whether you invest for the short term or you invest for the longer term. And, in terms of capability, the advice of the Air Force to us is that there's really no choice.

QUESTION: Okay, well how did Air Force, though, do the comparison? And what opportunity was given to the two

European offers to actually go through? Because you said, 'Repeat delegations to the United States. You were given multiple offers by Rafael and by Eurofighter and an offer to yourself on 7th...

ROBERT HILL: We know the aircraft. Rafael's operating off a French aircraft carrier. Good information on the British, or the European alternative being pressed by the British. And we know significant amount about the capability of this aircraft. And on the basis of that information, the Air Force gave us advice that there really wasn't, in terms of capability, any competition. This aircraft is at least a generation ahead of the other alternatives.

Now, if you want specifics on that, then that's a technical issue you should ask the Air Force.

QUESTION: Minister, how do you tell the Air Force that they were going to get an off-the-shelf, if you like, version of this aircraft and not an Australian gold-plated version? In other words, can taxpayers be assured that they're not going to be slugged for some extra stuff that Australia was?

ROBERT HILL: Well, part of our comfort in the decision that's been made is the fact that so many of these aircraft are to be purchased by the United States Air Force. So we lock into the technical advantages of that bulk buy. We also lock in, through investing so early in the design and development phase for having a much better understanding of the aircraft. We have, as has been said, the opportunity to get a much better transfer of technology, the codes and so forth, which has been a real problem for us in the past.

We do have our own - we'll have our own AWAC's in the air. We will be obviously critically important that the software is effectively linked into those aircraft, so we will have aspects, I suspect - I think the Air Marshal should really ask it - we'll have aspects that particularly relate to our needs. But we are not going to use that terrible expression, purchase another orphan aircraft. We're very much seeing this as part of the global Joint Strike Fighter project.

QUESTION: Is this a decision that Sir Humphrey would describe as a 'courageous minister', given that we're committing $300 million now and effectively committing ourselves to upwards of $10 billion down the track on an aircraft that's still effectively remains a paper aeroplane.

ROBERT HILL: Well, you could equally say to the Americans are they courageous in investing hundreds of billions of dollars into this particular aircraft? Have the Brits been courageous in putting two billion dollars into the development stage of this particular aircraft? Really what I guess each of us have come - have decided on advice is that this is the sound investment for the future. It just - to be quite frank, I don't think when Cabinet was convinced on the capability issue Cabinet didn't need a lot of convincing that on that basis we ought to be in it at the start rather than some way down the track.

The advantages of being in it as a partner from the beginning were overwhelming. So I would, rather than talk about it as courageous, I would have talked about it as sound and perhaps enlightened.

QUESTION: Minister, can you just tell me, just to follow Craig's question, did President Bush ask the Prime Minister in Washington recently would he meet that 15 July deadline? Would Australia meet the 15 July deadline? And can I just ask Air Marshal Houston, what's left for Air 6000 to do now with this decision made?

ROBERT HILL: Well, I don't know what, if anything, President Bush said to the Prime Minister. I've only seen the results of the briefing from the Lockheed Martin and so forth to the Prime Minister. I don't know whether the President even mentioned it to the Prime Minister.

QUESTION: Minister, would these...

ROBERT HILL: Do you want the...

QUESTION: What's left for Air 6000 to do, Air Marshal?

AIR MARSHAL HOUSTON: I think what Air 6000 needs to do now is look at how we're going to fit the Joint Strike Fighter into the ADF Force structure of the future. I also think there is a need perhaps to have a look at the emerging technology of uninhabited combat air vehicles. But in terms of comparing specific aircraft types, the nine candidates, that's well and truly in the past.

And just to reinforce what we're getting into here, this is a development program that we're investing in and we've got a number of years before we make the big decision, the really big decision, to actually go out and buy the first batch of aircraft. Now, that decision will be made in 2006, 2007. That is four years downstream.

We're going to have access to all the technical information on the Joint Strike Fighter, and obviously if we were to find that there was some problem with it, we have the right to pull out. But our expectation is that because the US Government is investing in a high low mix of F22 on the one hand - and there's only 300 of those and they're three times more expensive on a platform by platform basis than the JSF - and the JSF.

They are buying 2,852 Joint Strike Fighters and three different types. That will be the core of the US Government's air

combat capability. They are putting, as the Minister said, $20 billion into the development of this program.

Now, when you look at the number of platforms that we're talking about here and the fact that it is the only fifth generation aircraft and it's got stealthy characteristics which none of the other aircraft have, other than the F22 which is too expensive, I've got to tell you it's a decision that wasn't that hard for the government to make, I don't believe.

And have a look at the other aircraft. We'll take those details - take all of you in and go right through the characteristics of all the candidates. We'll be delighted to do that. But just in one simple area, stealth technology. We're talking about the battlefield of the future. We're talking about the post-F18, F1-11 era. We've got to start thinking about what that environment's going to be like.

This is an aircraft that is being designed specifically for that environment. It's not being designed for today's conditions; it's being designed for the conditions that will pertain in the 2015 to 2040 timeframe.

QUESTION: Air Marshal, could you describe for us by way of example if you'd be good enough, what role this aircraft would play in the defence of Australia? And how that compares as a priority to interoperability?

AIR MARSHAL HOUSTON: Well, I think, in answer to your question, I think defence of Australia is obviously, as the White Paper says, our first priority. But as the White Paper also says, interoperability is very very important. And if you think of anything we might get involved beyond Australia, interoperability has to be a very very important factor for us to consider.

Indeed, defence of wider interests, a war on terrorism or whatever it is, interoperability with our good ally and friend the United States, is something we really need to keep a very close eye on and it's a very high priority.

But just to answer - finish the question. In terms of the defence of Australia, what we're developing is a system, a surveillance, reconnaissance system where we will know everything that's happening out there. We've got the JOHRS [phonetic], the Jindalee Over the Horizon Radar System, other sensors, the AEW&C [phonetic] that's coming into service, so we will have incredible situational awareness in our maritime approaches in terms of the defence of Australia.

This platform will give us the ability to dominate that battle space. And the sorts of things that we'll be able to do is we'll be able to datalink the picture from the AEW&C straight into this aircraft. It may not even need to utilise some of its sensors. But it's going to have a sensor sweep that will enable it to operate in that environment with great tactical advantage.

And importantly, when we are considering our young Australians, an environment where we'll be able to survive in a much better way than we will with the sort of technology that's deployed here and now today.

QUESTION: Air Marshal, given that the - how superior is the F22 to this aircraft? And what are the chances of someone else developing an aircraft that is significantly superior to this in the time between now and when we've got them operational?

AIR MARSHAL HOUSTON: Lockheed Martin make the F22, Lockheed Martin are making the Joint Strike Fighter, Lockheed Martin are only producing a small number of F22s because it is so expensive. As you're probably aware, the program leverages off the development of the F22. So a lot of the features of the F22, a lot of the experience from the F22 is going to be applied to this program. I mean that's why we have - that's why we have a lot of confidence in the Joint Strike Fighter.

Cast your mind back to the last time there was a big fighter program being developed around the late 70s early 80s, the American approach was the high end low end mix. They had the F15 at the top end and they had the F18/F16 as the multi-role fighter. We, at that time, didn't go for the F22 at the time because at that stage the F15 was too expensive. We went for the F18 which provided us with a multi-role capability. And, as you know, it served us very very well.

And it's a similar circumstances that we've got at the moment. The F22, there's only 300 of those being produced. And frankly I can't see any more of them being produced. And to get into that sort of program would be prohibitively expensive and I don't think would serve Australia's needs as well as the JFS program where we've got the opportunity to buy a multi-role platform that will replace both the F18 and the F1-11.

QUESTION: Minister Macfarlane to talk about the industry benefits that might flow from this. The Executive Director of Australian Industry Group...

ROBERT HILL: Sorry, I don't think the second part of the question was answered. It was really is there a possibility of another aircraft being developed in this timeframe that would be competitive.

AIR MARSHAL HOUSTON: Sorry. No, in terms of - at this stage there is no - there are no indications along those lines. The only fifth generation aircraft that's being fielded is the Joint Strike Fighter. And beyond the Joint Strike Fighter we're

probably going to get into the uninhabited combat air vehicles that I think you mentioned earlier on.

QUESTION: Minister, you talked about the industry benefits that might flow from this to Australia. On the 3rd June the Executive Director of the Australian Industry Group's Defence Council, Lee Purnell, wrote to Under Secretary Roach, advising, 'That any decision to invest exclusively in one solution prior to a complete value for money assessment would be seen by Australian industry as the worst possible Air 6000 outcome.' Would you care to comment on that?

IAN MACFARLANE: I'm happy to do it. I don't think there's any doubt that this decision provides enormous opportunity for all the aerospace industry in Australia, including those who perhaps were backing rival bids. The earlier the final decision is made the better, in terms of those participants in rival bids being able to actually move across to this project.

And I know for one - I know of one company already who would be able to participate in this particular project in the Joint Strike Fighter project, were involved in the Eurofighter project.

In terms of the full assessment being done, in terms of the cost benefits, I have absolute faith that the Air Force have done that. And in terms of value for money, the submission that have been made to Cabinet indicated that this was not only the best fighter available in terms of what the government needed, but also in terms of its value for money. It was quite exemplary.

QUESTION: Mr Macfarlane, which are the Australian companies that are best placed to benefit from involvement in this project? You mentioned aerospace companies. There could, I suppose, be some other types of companies as well. Which are the companies we're talking about here who are best placed? What sort of number of jobs are we talking about?

IAN MACFARLANE: Well, in terms of that process, that is very much in its early days. But my department travelled to the United States, spoke to Lockheed Martin and as a result of that, Lockheed Martin visited Australia. And they identified a significant number. But in particular, said there were at least 10 companies that would be a real chance in terms of participating in both the development and potentially the construct of this aircraft.

And in particular, five that they would place at very short odds. Now, they didn't pass those names to me, but I'm confident that based on Australia's already significant capability in this area and the fact that one supplier who's name eludes me, is actually already involved that we will see significant involvement by Australian aerospace companies or Australian-based subsidiaries of aerospace companies in this project.

And as I said in my opening comments, if we get 1% of this project and it's worth four billion dollars, if we actually do what many expect and get up to 2% of this project because of the decision of the government to put in this $300 million and get involved in the development, it gives us a real opportunity not only to ensure that some of the requirements are suited to what we as a country require from this aeroplane in terms of the development phase and ensuring that the technology is what will work not only globally but here in Australia.

But the second big advantage is that we may be able to double our participation in this project to 2%, which is worth $8 billion.

UNIDENTIFIED: Ladies and gentlemen, thank you very much. No, ladies and gentlemen, the Ministers have got a busy schedule.

QUESTION: This is a multi-billion dollar acquisition. I think we're entitled to a few more questions, given that it's taxpayer's dollars.

UNIDENTIFIED: I'm sure there'll be opportunities at a later stage. The Ministers do have a busy schedule. We have got a short video of this aircraft, which we will play now. Thank you very much.

QUESTION: Just quickly, Senator Hill, though, you said this was ultimately the largest military procurement in Australia's history...

ROBERT HILL: If I answer this one then I'll have to go on. I really have to go back to the Senate. It's a difficult day in the Senate today.