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Question & Answer session: ADM 2004: National Convention Centre, Canberra\n9:50 am, Tuesday, 24 February 2004: ship building industry, joint facility at Alice Springs.

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ADM 2004

National Convention Centre, Canberra

9:50am, Tuesday, 24 February 2004

E&oe__________________________________________________________ship building

industry, joint facility at Alice Springs.


Tim Longley, Commonwealth Bank, (inaudible) regarding public/private partnerships. I’d be interested in your views there.

Senator Robert Hill:

I’m quite surprised to get that question from you. As you know the Government is committed to best value for money and that includes in the provision of finance. I think if we can do it in a way that enables such an objective to be achieved we will. It hasn’t - our record to date hasn’t been as successful as we what would like largely because accounting issues with the way in which we are obliged to account which has meant that some projects that we are interested in sharing on that basis we are unable to do so. However, our commitment is evident by the efforts that we’re making in that regard with the upgrade of the explosives factory at Mulwala and also what I hope will be using that methodology to fund the new headquarters out at Bungendore. Again when we are able to we will.


I was just wondering what the Government’s current position is on rationalisation of the ship building industry (inaudible)?

Senator Hill:

There was more work in the DCP than was envisaged at the start of preparation of the sector plan. But nevertheless my view is that there will still be some rationalisation and that there is a benefit if that can occur in a sensible way that has least consequence upon employment of individuals and it ensures that we end up with a capability that will provide us with a long term ability to sustain and upgrade platforms. We believe that competition is a legitimate tool in the process of rationalisation. In relation to the major contracts that we’ve got coming up that will therefore play a part in that rationalisation. How many primes result from the process I don’t know. The sector plan said that it believed that it’s probably Australia only sustain one major, one prime or possibly two. If I was given a preference between both of those options I would prefer two because I would always like to see some competition between primes as well as competition at lower levels in the supply chain. But it’s not our way

to put all these pieces on the chess board and to dictate the winner. We believe that the process of healthy competition will help to achieve that outcome. But we certainly don’t want an outcome that is just determined on price. We want one that will give us, as I said, the confidence that we can sustain and support our fleet over the long term.


(Inaudible) from Tenix, Minister. The press has made quite a little bit of fuss about the Opposition leader’s visit to the joint facility at Alice Springs. His support seems to indicate some leaning towards perhaps or bipartisan approach on the part of the Labor Party? Do you see any prospect of more bipartisan focus to the more critical Defence projects as they appear in the DCP?

Senator Hill:

Well that’s inviting me to be a touch political which I’m not sure is what Greg was wanting. So I’ll just be objective and say it struck me as a bet each way really to be frank. He went to Pine Gap and said he supported Pine Gap but at the same time he said he’s opposed to missile defence. Joint intelligence facilities have helped us as one of the coalition of the West to gauge early missile launches and therefore to provide a protection. The old paradigm of course in the Cold War days was the protection was in the form of mutually assured destruction. Our new paradigm is that you can provide that protection through missile defence. You can actually defeat the missile before it reaches its target. So why would you say you support joint facilities that provide sensors for a form of protection that was necessary in the Cold War days but not a form the protection which most people would say is necessary for the future? I don’t understand unless it is a bet each way. One for the left and one for the right. That’s objective.


(Inaudible) … South Australian Government Minister. There’s been a force disposition review underway for some time. Do you have any comment on when that disposition might be released?

Senator Hill:

We have more bases than we can afford. It costs a lot of money to sustain and there needs to be rationalisation. We have been for some time disposing of properties that are not necessary. You can make a case for all the existing operational bases but if you can’t afford them all at the level that you want them to be maintained then you’ve got to make some further decisions and we’re at that point at the moment. There is advice before me that I and my colleagues are considering and when we make a decision we will announce it. It’s not easy because as I said the military can always make a case for their particular base and not just on historical, for historical reasons although the culture and the history is an important part of any military organisation. But also there are issues of industry issues, employment issues. A lot of the bases are in regional areas and we’re particularly conscious of our responsibility to support regions of Australia and so they’re quite difficult issues that have to be

made but they will nevertheless be made. None for Ric? He’s getting an easy day.


Just coming out from left field, we were talking about left and right. Secretary of the Department, how do you rate relations with Indonesia these days now you’re out of the hot seat? Is it getting better - or even another hot seat - is it getting better or is deteriorating?

Ric Smith, Secretary of the Department of Defence:

Thanks. Well I mean I’m about 15 months out of date with actually knowing the pulse of that relationship but it seems to me that it’s in pretty good shape. I think we’ve done some really very constructive things over the last year and a half. The joint approach to people smuggling issues taken through the Bali conference. The approach we took with them through the police in pursuing the post-Bali bombing issues and the regional conference on terrorism that the Indonesians sponsored with us again in Bali last month. All of these seems to be very positive indicators of our ability to work together with Indonesia. Of course Indonesia’s going through a lot of transition, a lot of change. They’ve got elections this year. I think they’re going to be very much preoccupied with those internal affairs. But I think we understand and respect very clearly the importance of each other.


(Inaudible) to the Secretary if I may. Given the tendency for (inaudible) support contracts and a number of them, there is some concern amongst SME’s that they’ll be locked out of work for Defence. Two part question. Is that a concern and if so how will it be addressed?

Mr Smith:

SME’s of course was not a part of what the Kinnaird team addressed but they did I know talk to some of the SME’s and that was good. I think that the best I can say Phil is that we hear you’re concerns and I know that Mr Brough in particular has been talking to a number of companies about that and I think it’s prominent in what he’ll be talking to (inaudible) about from tomorrow. I don’t want to pre-empt where they’ll take that but we hear the concerns you have.