Minister for Defence – Address to the Air Power Conference – Canberra

Address by Stephen Smith MP

to the

Air Power Conference

National Convention Centre



Our host, Chief of Air Force, Air Marshal Geoff Brown, Vice Chief of Defence Force Air Marshal Mark Binskin, visiting Chiefs of Air Forces, overseas and distinguished guests, ladies and gentlemen.

I am pleased to see representatives of all three services and the Defence organisation generally.

The aim of the Air Power Conference is to encourage strategic thinking and informed debate about the role of air power and modern air forces.

Such Conferences play an important role in examining the contribution of Defence and the military in modern society.

Your Conference theme “Air Power and Coercive Diplomacy” includes an examination of the use of Air Power during operations in Libya in 2011.

Libya is an example of the air power capability and preparedness challenge that face nations across the globe today.

This is a timely examination of these events.

Modern Air Force

The Royal Australian Air Force is one of the most capable, responsive and flexible in our region, if not the world.

It is undergoing a period of significant transition, with the Government committed to continuing to build its capability.

This commitment endures in the context of what is a difficult but nevertheless manageable fiscal environment for Defence and Air Force.

The 2012-13 Defence Budget

The Government’s priority was to return the Budget to surplus in 2012-13, which has been achieved.

This is part of a strategy to ensure the strength of our economy, a strategy which is essential for the future economic security of Australians.

A strong economy is good for all Australians and it’s good for Defence.

All Departments and Agencies were called upon to contribute to the all important objective of a surplus.

The Defence Budget released on Tuesday was developed following a comprehensive review of the Department’s budget to identify contributions Defence could make across the Forward Estimates to support the Government’s broader fiscal strategy.

This review has resulted in a Defence contribution to the Government’s fiscal strategy of $5.4 billion across the Forward Estimates and will see Defence contribute $971 million in 2012-13.

Importantly, we have ring-fenced key priorities from these savings:

  • There will be no adverse impact on operations in Afghanistan, East Timor or the Solomon Islands.
  • There will be no reduction of the number of military personnel in the Army, Navy and Airforce.
  • There will be no adverse implications for equipment for forces about to be deployed or on deployment.
  • There will be no reductions in conditions or entitlements for service personnel, other than those already being considered as part of the Strategic Reform Program.
  • There will be minimum impact on the delivery of core Defence capabilities.

And there is no fundamental change to our Defence Budget from a strategic perspective:

  • In the 2009-10 Budget, the Government, for the first time, budgeted over $100 billion for Defence across the Forward Estimates.
  • Last year in the 2011-12 Portfolio Additional Estimates Statements, Defence’s Budget across the then four years Forward Estimates period was $103.4 billion.
  • In this budget, the Government has budgeted $103.3 billion for Defence across the Forward Estimates period.
  • This level of funding will maintain Australia’s status in the top 15 nations in terms of world Defence expenditure, along with Canada either 13th or 14th in that list.
  • Australia continues to be 2nd on the list of military expenditure per capita basis, with only the United States spending more per capita.
  • In real dollar terms, we spend far greater than any of our regional neighbours.

The Government remains committed to the core capabilities outlined in the 2009 Defence White Paper, including:

  • the Joint Strike Fighter;
  • the replacement for the Caribou aircraft;
  • upgrades to Orion maritime patrol aircraftl; and
  • upgrades to C-130J aircraft;
  • the consideration of the Growler Airborne Electronic Attack capability.

Of the 180 DCP projects underpinning the 2009 White Paper, 170 remain, with only 10 removed, and those being overtaken by related projects or replaced by newer technologies.

A range of lower-priority capability projects will be deferred.

Other major and minor capability and facility programs will be subject to re-scoping.

Defence Operations will continue to be fully supported, with the Budget providing an additional $1.4 billion in 2012-13 and across the Forward Estimates.

This includes:

  • an additional $1.3 billion for Operations in Afghanistan and the Middle East;
  • an additional $77 million for the ADF’s contribution to maintenance of peace and stability in East Timor as part of Operation Astute; and
  • an additional $44 million for Defence’s role in Operation Anode, the Australian-led Regional Assistance Mission to Solomon Islands (RAMSI).

The key measures include:

  • a two year delay to the acquisition of 12 Joint Strike Fighters following delays to the project in the United States, saving $900 million and deferring later stages of the Joint Strike Fighter project for a total saving of $1.6 billion;
  • savings of $250 million from the early retirement of the C-130H aircraft;


The Government has also prioritised maintenance and sustainment activities, almost all of which is conducted in Australia.

In 2012-13, the Budget for sustainment is $4.6 billion per annum. This will grow to $4.8 billion per annum by 2015-16.

This includes prioritisation of an additional $700 million for Collins Class sustainment, noting the long standing challenges this fleet has faced, a further $270 million for Navy fleet sustainment and a total of $6.1 billion for Air Force sustainment across the Forward Estimates.

2013 Defence White Paper

The Prime Minister and I last week announced the commissioning of a new Defence White Paper to be delivered in the first half of 2013 that will consider the implications of Australia’s changing strategic and fiscal environment.

These changes include:

  • The Australian Defence Force’s post-operational challenges, including transition in Afghanistan and draw down in East Timor and Solomon Islands.
  • The Australian Defence Force Posture Review which addressed a range of national security factors.
  • The ongoing effects of the Global Financial Crisis, which since the 2009 Defence White Paper has continued to unfold with unexpected severity and duration.


Defence Capability

The 2012-13 Budget contains over $3.4 billion in investment in Defence capabilities in 2012-13, and over $17.5 billion over the Forward Estimates.

The focus of this Budget’s capability activities will be on improving airlift, land mobility, submarines, afloat support, communications, interoperability, and electronic and cyber warfare.

The total value of projects planned to be considered by Government for approval in the 2012-13 amounts to approximately $9 billion.

This is on top of the $6 billion in projects approved in 2011.

Combined, the Government has approved over $13.4 billion for key capability projects since the 2009 White Paper, including:

  • the first 14 Joint Strike Fighters;
  • 24 new naval combat helicopters;
  • seven new CH-47F Chinook helicopters; and
  • two more D model Chinooks.

We have also allocated funding for essential new capabilities not envisaged in the 2009 Defence White Paper, including two additional C-17 heavy lift aircraft.

These new capabilities will complement an already capable Air Force that includes 24 F-18 Super Hornets and 71 Classic Hornets, 12 C-130 J model Hercules and 19 P3 Orion maritime patrol aircraft.

Air Lift

Air lift is a critical element of the Australian Defence Force’s capability to deploy, whether it is to Afghanistan or in support of humanitarian and disaster relief operations closer to home.

In Afghanistan, C-17 and C-130J aircraft provide the transport backbone for the Australian Defence Force’s operations.

Three C-130J aircraft, based in the United Arab Emirates, provide in-theatre air movement for Australian and International Security Assistance Force forces throughout the MEAO, including Afghanistan.

C-17 aircraft from the RAAF’s Amberley based 36 Squadron provide routine strategic lift support to Australian forces in the MEAO, including Afghanistan.

In 2011, the Australian Defence Force’s air lift capability also effectively responded to a range of natural disasters in Australia, including floods in Queensland and Victoria.

Air Force C-17s also supported relief efforts in New Zealand following the February earthquake in Christchurch and in Japan following the March 2011 earthquake and Tsunami disaster.

The C-17s are particularly suited to heavy lift operations such as this.

The C‑17 can lift very large and heavy cargoes over long distances providing a significant contribution to Australia’s ability to reach and respond to events.

One C‑17A can carry up to four C-130 Hercules loads in a single lift and cover twice the distance in three-quarters of the time of a C‑130.

The effectiveness of the C-17 on these operations underpins the Government’s decision to acquire an additional two aircraft for a total fleet of six.

The acquisition of the fifth C-17A was announced by the Government in March 2011 at a cost of around $260 million.

The fifth C-17 arrived in Australia in September 2011.

In March 2012 the Government announced that Australia would purchase a sixth C-17A.

The aircraft has been purchased through the United States Foreign Military Sales program, at a total acquisition cost of around $280 million.

Initial Foreign Military Sales payments have been made, and the C-17 is on schedule to be delivered to Defence in the United States in October this year. It will arrive in Australia before the end of the year.

The purchase of the sixth C-17A will double the number of C-17A aircraft available for operations at any one time from two to four.

A sixth C-17 will give the Government increased options to support a wider range of contingencies that might require heavy-lift aircraft and will extend the life of the C-17 fleet by reducing the use of each aircraft.

C-130H retirement

I am aware of suggestions that jobs will by lost in Richmond in the coming weeks because Defence is retiring its C-130H fleet.

This is not the case.

Defence currently has 12 C-130H aircraft, introduced in 1978, which are based at RAAF Base Richmond, near Sydney.

As part of the Defence contribution to the Government’s return to surplus in 2012-13, the C130H will be retired early in order to minimise costs associated with maintaining and operating the ageing fleet.

Current activities undertaken by the C130H aircraft fleet will be redistributed across the remaining Air Force air mobility fleet, including C-130J aircraft and C-17 aircraft.

The aircraft are maintained by Qantas Defence Services.

Defence has a contract with Qantas to maintain the C-130H fleet until 30 June 2013.

The Chief of Air Force advises these need to continue flying C-130H aircraft until at least the end of 2012.

The process of retiring the fleet will take some time.

This includes developing a disposal plan and a plan to redistribute the C-130H fleet’s tasks.

The disposal process will require additional maintenance activities.

Defence is in discussions with Qantas about these matter.

Air Combat Capability

Joint Strike Fighter

The Defence White Paper 2009 outlined the Government’s commitment to acquire Joint Strike Fighters.

In 2009, the Government announced approval for the purchase of the first 14 Joint Strike Fighters at a cost of around $3.2 billion.

Of these, we are contractually committed to two, which will be delivered in the course of 2014 to 2015 in the United States for testing and training purposes.

In February, President Barack Obama sent to Congress a proposed Defense budget for the US fiscal year 2013.

The President’s budget includes a restructuring of the Joint Strike Fighter program, involving the deferral of the acquisition of 179 aircraft and US$15 billion less in funding over the next five years.

While the US remains committed to the Joint Strike Fighter program, procurement has been slowed to complete more testing and make developmental changes before the purchase of aircraft in significant quantities.

As United States Secretary of Defense Panetta has stated: ‘We want to make sure before we go into production that we are ready’.

US Deputy Secretary of Defence, Ash Carter, has stated that the US will increase ‘to full rate production as and when it is economically and managerially prudent to do so.’

I share that view.

In the 2012-13 Budget, the Australian Government has deferred by two years any further purchase of the Joint Strike Fighters beyond the two already contractually committed to.

That effectively mirrors the decision which Secretary of Defence Panetta has taken.

The Budget effect of that is that it takes out of the forward estimates for this year’s budget about $1.6 billion, a significant contribution to the Government’s priority of returning the Government to surplus.

It is a reflection on the reality of delays in the Joint Strike Fighter program.

In the meantime, I will not allow, and the Government will not allow, a gap in our air combat capability.

Australia’s air combat capability is a vital part of our national security framework.

An assessment of Joint Strike Fighter progress and any potential capability gaps will be presented to Government in 2012, will inform further decisions on the project later in 2012.

Government will also consider whether any alternative options need to be implemented to supplement and ensure our air combat capability in the light of Joint Strike Fighter delays.

An obvious option is the Super Hornet.

However, other alternatives will be examined before any decision is taken. This includes considering the life of our existing 71 ‘classic’ F/A-18 Hornets.

This would be similar to announcements by the US Air Force Chief of Staff General Norton Schwartz that the US will be extending the life of about 350 F-16 fighters.

Super Hornets

In October last year, the final four Super Hornets arrived at RAAF Base Amberley to bring the total to 24 aircraft.

These 24 aircraft have been progressively delivered since the first tranche of Super Hornets arrived in March 2010.

The purchase of the Super Hornets will ensure Australia’s regional air combat capability until the arrival of the Joint Strike Fighter.

The Super Hornet gives the Royal Australian Air Force the capability to conduct air-to-air combat, strike targets on land and at sea, suppress enemy air defences and conduct reconnaissance.

It is an operationally proven aircraft having been flown by the United States Navy since 2001.

The United States Navy have operated Super Hornets in Afghanistan, Iraq and Libya.

Australia is the first country outside the United States to fly the Super Hornet.

The Super Hornet is what the White Paper 2009 referred to as a ‘bridging’ air combat capability until the arrival of the Joint Strike Fighter.


Another vital air power capability being progressed is Growler.

A key outcome from operations in Libya in 2011 was the effectiveness of the Growler Electronic Warfare Aircraft.

Growler is an electronic warfare enhancement system that gives the Super Hornet the ability to jam the electronics systems of aircraft and land-based radars and communications systems.

The Growler electronic warfare aircraft was used very effectively by the United States Navy during air operations in Libya last year.

The 2009 Defence White Paper outlined the Government’s decision to wire 12 of our Super Hornets to enable them to be equipped at a later stage with the full Growler capability.

In March, the Minister for Defence Materiel Jason Clare and I announced that the Government had approved more than $19 million for the purchase of long lead item electronic equipment for the potential conversion of twelve of Australia’s F-18 Super Hornet’s to the EA-18G Growler variant.

This purchase ensures Australia will continue to have access to specific technologies needed to make any such conversion.

A final decision on whether Australia converts some of its Super Hornets to Growler configuration will be made after exhaustive assessment by the Government this year.

If Australia converts some of its Super Hornets to Growler configuration it will be the only country in the world, other than the United States, operating such aircraft.

This decision was made in part because of the important lessons learnt during air operations in Libya last year.

Maritime Patrol

Another important element of Australia’s air power is maritime patrol.

Australia has over 36,000 kilometres of coastline and an offshore maritime area of 15 million square kilometres.

An effective maritime surveillance capability is an essential element of Australia’s ability to manage our maritime approaches.

The Royal Australian Air Force AP-3C Orion fleet aircraft currently undertake surveillance, reconnaissance and response roles, strengthening Australia’s border protection operations against people smuggling, illegal fishing and piracy.

We must also be able to provide intelligence, surveillance and reconnaissance support to operations further afield.

Two AP-3C Orion surveillance aircraft currently provide maritime surveillance in support of international counter piracy, counter terrorism and maritime security operations in the Gulf of Aden, Arabian Sea and Indian Ocean and overland surveillance in support of operations in Afghanistan.

However, the fleet is expected to reach its planned withdrawal date around the end of the decade.

In December, the Government provided intermediate pass approval for Phase 2B of the Maritime Patrol Aircraft Replacement Project.

This project will acquire a military-off-the-shelf maritime patrol aircraft to replace the current AP-3C Orion fleet, most likely the P-8 Poseidon aircraft, a developmental program.

The Government has approved additional funding of almost $100 million for activities that will be conducted up to second pass.

The Government is also planning to acquire a long range unmanned maritime surveillance aircraft to enter service after they are fully developed.

We are closely monitoring the US program to develop a specialised unmanned maritime surveillance aircraft (the Broad Area Maritime Surveillance project), which is also developmental and not expected to be fully operational until 2019.

Navy and Army air power

Air Power is not just about having a sophisticated, capable and flexible Air Force – it requires a joint effort.

The Government is enhancing the capabilities of the Royal Australian Navy and the Australian Army.


In June 2011, the Government announced that it had approved the acquisition of 24 MH‑60R Seahawk ‘Romeo’ naval combat helicopters at a cost of over $3 billion.

The acquisition of 24 ‘Romeos’ means that Navy will be able to provide at least eight helicopters embarked at any one time in our Anzac class frigates and the new Hobart class air warfare destroyers.

The ‘Romeos’ are equipped with a highly sophisticated avionics suite designed to employ Hellfire air-to-surface missile and the Mark 54 anti-submarine torpedo.

Australia’s first two ‘Romeos’ will be accepted in mid-2014 for training and transition with operations at sea expected to commence by mid-2015. The final aircraft will be delivered in 2018.


In March of this year, I announced that a second Shadow 200 Tactical Unmanned Aerial System was delivered for use by Australian troops preparing to deploy to Afghanistan, almost one year ahead of schedule.

The Shadow 200 system captures full motion video during both day and night operations which can be sent back to a ground control station up to 125 kilometres away. It can recognise targets on the ground while operating at an altitude of up to 8000 feet.

The US Army and Marines first used the system in Iraq and have been using it operationally in Afghanistan.

The Shadow 200 system was recently certified as fully operational. It has already completed more than 220 hours of successful testing and training.

We are also acquiring new D and F model Chinook helicopters, Armed Reconnaissance Helicopters and MRH-90 helicopters.

C-27J Acquisition

Since the retirement of the Caribou fleet in 2009, after a career spanning more than four decades, Australia has had a military capability gap for tactical fixed wing airlift.

This capability gap is being partially filled by C‑130 Hercules aircraft and helicopters.

Today I am pleased to announce that the Government has agreed to further strengthen Australia Defence Force’s air lift capability with the purchase of 10 C-27J Spartan Battlefield Airlift aircraft at a cost of approximately $1.4 billion

The C-27J complements the capabilities of the C-130 and C-17 aircraft and uses common infrastructure and aircraft systems such as engines, avionics and the cargo handling systems.

The acquisition of the C-27J will significantly improve the ADF’s ability to move troops, equipment and supplies.

The C-27J has the capacity to carry significant load and still access small, soft, narrow runways that are too short for the C-130J or runways which are unable to sustain repeated use of larger aircraft.

In Australia, the C-27J can access over 1900 airfields compared to around 500 for the C-130 Hercules aircraft.

In our region, the C-27J will be able to access over 400 airfields compared to around 200 for the C‑130 Hercules aircraft.

These aircraft will provide battlefield airlift but are also capable of conducting airlift in our region.

They will be able to operate from rudimentary airstrips in Australia and overseas and will be able to support humanitarian missions in remote locations.

The flexibility of the C-27J allows it to undertake a wide range of missions from delivering ammunition to front line troops to undertaking aero-medical evacuation of causalities.

A Battlefield Airlifter needs to be able to operate in a high threat environment.

The C-27J with its missile warning systems, electronic self protection, secure communications and battlefield armour provides protection from threats ranging from small arms to highly lethal man portable air defence systems (MANPADS).

The C-27J was assessed by Defence as the aircraft which best met all the essential capability requirements and provides the best value for money.

It was assessed as being able to fly further, faster, higher while carrying more cargo and requiring a smaller runway than the other aircraft under consideration, the Airbus Military C-295.

The acquisition of the 10 C-27J aircraft with associated support equipment will be conducted through a Foreign Military Sales (FMS) arrangement with the United States (US) at a cost of around $1.4 billion.

The first aircraft are expected to be delivered in 2015 with the Initial Operating Capability scheduled for the end of 2016.

Initial logistic support, including training for aircrew and maintenance personnel will be provided through the FMS program, utilising the system that has been established in the US.

Defence will seek a separate agreement with the C-27J manufacturer, Alenia, in order to ensure that RAAF can operate, maintain and modify the aircraft throughout its planned life.

The 10 C-27J will be based in Richmond.

Closing remarks

Air power is fundamental to Australia’s defence strategy and to the principle task of the Australian Defence Force, to deter and defeat armed attacks on Australia.

The purchase of the C-27J demonstrates the Governments commitment to providing Australia’s air power needs, a critical element of our national security capability, even in times of fiscal difficulty.

I wish you a productive Conference.

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