Prime Minister and Minister for Defence – Transcript – Joint Press Conference

PRIME MINISTER:

Well look it’s good to be here at Royal Australian Air Force Base Fairbairn with the Minister David Johnston, with the Chief of the Air Force, with representatives of the manufacturer of the F-35 Joint Strike Fighter which will be in operation with the Royal Australian Air Force by 2020.

I’m very pleased to say that the Government has decided to acquire an additional 58 of these state-of-the-art aircraft. This is the fulfilment of an important election commitment. This brings into substantial service an aircraft which the Howard Government first committed to back in 2002 and to its credit the former government ordered the first 14 of these back in 2009.

This is one of the largest defence purchases that Australia has ever made. It will ensure our edge as a regional power. It will also – as well as maintaining the effectiveness of our Air Force – it will also be a very substantial boost to jobs and technology here in Australia. Australian business has already won some $1.5 billion worth of work associated with this aircraft. The tail fins for some 700 of these aircraft will be produced in a factory in Victoria and my understanding is that up to $7.5 billion worth of additional work is there potentially to be won by Australian companies.

In addition to the extra work for Australian manufacturing industry, there’ll be some $1.6 billion worth of construction associated with the $12 billion purchase of these aircraft. So this is a good day for our armed forces, it’s a good day for the Air Force and it’s a good day for Australian industry and I now invite the Minister to support these remarks.

DEFENCE MINISTER:

Thank you, Prime Minister, and thank you for your support in allowing us to bring this project to this point and to bring it forward. I want to say that we’ve had a hard-working team in the United States for many, many years now bringing this project forward and I want to thank them particularly for all of their good work.

Air combat capability is the cornerstone of our national security and the cornerstone of our air defence capability. This aircraft is peerless; it has no identifiable rival in the air at the moment. We see it dominating the skies for the next at least 10-15 years; we will have this aircraft out to 2050. But may I say it’s not just about the aircraft. Today we have Squadron Leader Andrew Jackson, Squadron Leader David Bell with us – our first two JSF pilots. This is about them as much as about the aircraft. We are giving them the best possible chance of survival and victory.

It’s expensive; it’s highly technical, with 19 million lines of code in each aircraft.  But this is a commitment that the world needs to see.  This is the message we are sending: we are committed to the defence of Australia; we’re putting our best people forward.

I want to thank you all for the way that you’ve reported this story. It’s a very, very positive story with more than $300 million worth of contracts currently undertaken, a potential $1.5 billion of contracts out of $7.5 billion on offer. We are very, very pleased. The tailplane, the optics, Quickstep doing the low-observable technology on the aircraft; these are high-tech Australian industries that are getting a slice of the most complex, technically difficult areas of work in aerospace.

Lastly, can I say thank you to Lockheed Martin for keeping me and the Opposition, as we once were prior to September, fully informed on the progress of this programme. It made it so much easier for to us bring forward the project.

Thank you.

PRIME MINISTER:

Chief.

AIR MARSHAL GEOFF BROWN:

Well first of all I’d like to take the opportunity to thank the Prime Minister, Minister for Defence and the Government for the commitment to the F-35. It is in my view very much about building a stronger Australian Defence Force. Air superiority is a fundamental pillar of air power, but more so it is an essential prerequisite for the Australian way of modern joint warfare. Without it, our nation’s ground and naval forces would be required to fight in very radically different ways. But gaining and maintaining air superiority is not easy. It requires trained very proficient and ready air crew. It also requires large numbers of very capable and technically superior aircraft.

With today’s commitment, the Air Force can confidently introduce three operational squadrons of F-35s and a training squadron to replace the F-18. We will introduce the first squadron, which will be Number 3 Squadron, it will be fully operational in 2020.  The F-18s will be withdrawn over the period 2021 to 2022 and we’ll have the full F-35 capability in 2023.

For a country as large as Australia, an advanced Air Force I think is a critical element of national power. And the F-35 has long been the centre piece of Australian defence planning and it will provide Australia with a technical edge so that we can ensure we can deter aggression and provide government with credible military options well into the future.

The fifth generation F-35 actually embodies the crown jewels of American, or US, military technology. It is truly a game changer; it is an extremely hard aircraft to detect and track, whether it’s with radar, infra-red or EW. I’ve actually been on the receiving end of this game changing technology at an exercise called Red Flag. It wasn’t a particularly pleasant experience. We basically were never in the fight. That’s the competitive edge that the ADF needs and it’s the competitive edge that we will have with the F-35 in any future conflict.

As part of an F-35 multinational partnership, led by the US, we will be introducing aircraft that is highly interoperable with our allies and will be continually upgraded to maintain that technological edge. The decision itself has been a long time in the making, but I think it’s now clear that the JSF will be a success and will surpass the capability of any other jet fighter that’s currently in production.

As Chief of Air Force I’d like to assure everyone that the Government’s commitment to the F-35 will ensure that the Royal Australian Air Force is flying the world’s best multi-role fighter. I’m very confident the F-35 is the right aircraft for Australia and the right aircraft for the Royal Australian Air Force well into the future.

Thank you.

PATRICK DEWAR:

Prime Minister Abbott, Minister of Defence Johnston, Air Marshal Brown, Ambassador Berry. Good afternoon. Let me say how delighted I am that I could be here today. On behalf of the 115,000 men and women of Lockheed Martin I would like to say how immensely proud we are that the Australian Government has chosen the F-35 Lighting II to be the cornerstone of the Royal Australian Air Force’s air combat capability for the next 30 to 40 years.

We consider it a great honour and privilege to partner with you as the world’s most advanced fifth generation fighter, the F-35 will provide transformational capability to the Royal Australian Air Force, enduring their capability and their abilities to maintain technologically-leading advantage to the region and for decades to come. Last month the Australian Defence Forces celebrated its centenary of military aviation and Lockheed Martin supported without hesitation those celebrations in recognition of our long lasting commitment and support for Australia dating back to the 1940s for aviation.

I see today’s announcement as the start of the next 100 years of Lockheed Martin’s dedication and service to Australia, and we now look forward to enhancing our partnership with the Royal Australian Air Force ensuring that F-35’s transformational capabilities place Australia and Australian industry at the leading edge of military aviation technology well into the future. This is also an exciting day for Lockheed Martin Australia – I’m Chairman of Lockheed Martin Australia and so it was a pleasure to be able to be here. Our 750 Australian employees who live and work from Queensland to Western Australia, it marks another major milestone in our strategy for long-term growth and investment here in Australia with your local industry.

Our growing partnership begins a new commitment to affirm that local industry partnerships and to create the technological advantage that again that we’ve spoken about for the F-35. The number of Australian companies that have now won significant contracts is growing, the programme is not simply building upon the next generation of aircraft, but it’s also building the next generation of opportunities; opportunities for companies, for hard working men and women to succeed and to grow their advanced manufacturing capabilities and their technological potential.

We’re building opportunities for Australian businesses in the face of unprecedented global financial pressures to grow and expand and invest and position themselves for future commercial success. And together we are creating opportunities to enhance long established partnerships while forging new ones. So the men and women of Lockheed Martin recognise the trust and faith that you’ve placed in us and to provide this critical element to Australia’s national security. We are committed to this partnership and appreciate the confidence the Australian Government has demonstrated by selecting the F-35 in this decision today.

Thank you very much, Sir.

PRIME MINISTER:

Thank you so much.

Well do we have any questions? I’ll take questions, the Minister and if necessary the Chief and I will take questions on the F-35 Joint Strike Fighter and defence issues and then if there are any other issues.

QUESTION:

Prime Minister, when will this appear – the 58 – when will they appear as a line item in a Budget?

PRIME MINISTER:

Well I’ll get the Minister to further elaborate, but this purchase which is $12 billion for the aircraft and equipment associated with the aircraft and a further $12 billion to keep them operational until 2024, this is in the Defence Capability Plan which is provided for in the Budget. So, this is not new money, it’s money which successive governments have carefully put aside to ensure that our nation’s defences are strong.

DEFENCE MINISTER:

I think you’ve answered it Prime Minister. We have been putting the money away, a line item called ‘air combat capability’ and it’s been there, it’s been building up and it’s in the Budget.

QUESTION:

Are you worried Prime Minister that given you’re telling people they have to prepare for a tough Budget and to make sacrifices themselves that they may see this announcement and say why are you spending all this money on planes?

PRIME MINISTER:

Except I want to stress that this is money that has been put aside by government over the past decade or so to ensure that this purchase can responsibly be made. The way we try to run government and the way successive governments to their credit have tried to do these things is – you know that at some point in the future you’re going to need new ship, new planes, new armoured vehicles etcetera, so you start putting the money aside now for the major purchases that you need in the future to keep your Defence Forces effective and operational. So, this is not new spending today, in the context of a tough Budget, this is spending money that we need to spend that has been sensibly put aside in the past to ensure that our nation’s defences remain strong.

QUESTION:

How will the acquisition s be made over time? Will we get eight aircraft per year starting in 2018?

PRIME MINISTER:

We’ve got the 14 aircraft that were purchased by the former Government. They’re arriving, as I understand it, in 2018. Then every year we’ll be putting in an order for more aircraft. I think we’re going to put an order in almost immediately for a further eight and then we order more aircraft year by year and as the Chief has just pointed out, we will have 72 operational Joint Strike Fighters, F-35s by 2023.

QUESTION: 

One issue for people who follow this project, it was first announced by the Howard Government, in those days there was talk of 100 aircraft for around $16 billion. Since then there’s been lot of talk about cost blow-outs and whatever, one of the hard things to nail down has always been the cost of the aircraft – price per aircraft. That’s been complicated by the fact that some prices have been pushed out there for an aircraft that doesn’t have an engine for instance [inaudible]. Do we have now, has the cost blown out or has it been wound back in over the last three years and do we know what it costs per aircraft?

 PRIME MINISTER:

 I’ll do my best and then I’ll ask the Minister to elaborate where necessary.

We are expecting to pay about $90 million per aircraft. We think that as time goes on, the cost per aircraft will actually reduce – we’re confident that as time goes on the cost per aircraft will actually reduce. With the decision that we have just made to acquire an additional 58 Joint Strike Fighters, that will take the fleet that we are committed to – to 72 Joint Strike Fighters and as the Chief has just told us we would expect all 72 to be fully operational by 2023.

We are certainly retaining the option to purchase an additional squadron –  a further 18 Joint Strike Fighters and we haven’t decided precisely what type it might be – that will be something that will be looked at in the context of the coming Defence white paper. If you actually look at this programme and you compare it with the way complex long-term defence programmes typically work out, yes there has been some escalation in costs, but nothing like as dramatic as we sometimes see. We are confident that all of the logistical issues are well on the way to being ironed out. We’re certainly confident that all of the operations that will affect the operational deployment of the aircraft will be sorted by 2018 and as I understand it there are already close to one hundred of the land-based versions of the Joint Strike Fighter flying in the United States and I think there’s something like 14 of the Marine based versions flying in the United States. They’re not yet operationally deployed but they are close to that and they certainly expect-  as I understand it – in America to have them operationally deployed by 2016 which is well before we are expecting to need ours to go into operational deployment.

Do you want to add to anything?

DEFENCE MINISTER:

All I want to say Brendan is that the curve on costs is headed in the right direction. We are purchasing each year. There is flexibility in that purchase regime for us to defer, for to us be unhappy as a customer, we’ve built that flexibility in. One of the principal considerations for the purchase of this aircraft was cost, so long as that curve heads down from six to seven there was a 4 per cent cost reduction. It must continue.

QUESTION:

Minister, does it mean anything for the future submarine project, is there in any way an effect that the money being spent on this project could now mean that there’s no way we’ll pay for 12 new subs?

DEFENCE MINISTER:

I’m not going to talk about submarines today when I’m talking about air combat capability.

PRIME MINISTER:

The fact is sensible governments for many years have been putting aside money for major procurements because we are not going to sacrifice the defence of our nation. In the end, Government has no higher priority than the defence of the nation and an effective Defence Force for a country such as Australia requires modern and capable joint strike aircraft such as these. It requires a small but powerful and flexible army and it also requires a strong and effective navy including a substantial submarine force.

QUESTION:

You aren’t saying to the Australian public ‘sorry it is actually going to cost more than $12 or $16 billion’ and what makes you is so sure given a colleague of yours Dennis Jensen as recently as last month was still putting big questions over this project saying it wasn’t fit for purpose and you’re still describing it as a [inaudible]?

PRIME MINISTER:

Both sides of politics have got the odd outlier when it comes to defence purchases. There was a Labor Senator in Western Australia who was unhappy with her own party’s support for this purchase. So, we all have observations from the sidelines so to speak but it is very important that Australia maintain leading-edge joint strike capability in the air and this is exactly what this F-35 gives us. The fact that 11 other countries are purchasing Joint Strike Fighters, the United Kingdom, Japan, South Korea, Israel, amongst others, gives us great confidence that we are making absolutely the right decision.

QUESTION:

How much of the $12.4 billion has been put aside already and how much will need to be found in future budgets?

PRIME MINISTER:

It’s all part of the defence capability plan. It’s not new money. It is not new money. The money that we need to acquire and to sustain this capability up until 2024 is all there. As time goes by, every year, more money will be set aside to ensure that future capability and the maintenance of existing capability is provided for. But the money is there in the Budget to make this purchase.

QUESTION:

Prime Minister, can you outline any important real world scenarios that you have foreseen that these Joint Strike Fighters will be used?

PRIME MINISTER:

Well, you just don’t know when you might need a powerful defence capability. I don’t imagine that too many Australians thought in 1990 that we might have to send a substantial military force to East Timor in 1999. I don’t imagine that in 1999 too many Australians would have thought that we have would have had to make a significant contribution to the invasion of Iraq. I don’t imagine in 1999 we would have contemplated for a second a decade-long military commitment in Afghanistan. You just don’t know what is around the corner. You do know that the world remains a difficult and often a dangerous place and sensible countries have to have military forces capable of dealing with foreseeable contingencies. We just don’t know what is around the corner. We do know that a substantial and serious country like Australia has got to have an effective Air Force and that means an effective joint strike capability.

QUESTION:

Minister Johnston, when in Opposition you were always saying that the Labor Government could never say where the money was going to come from for these big acquisitions. Now you’re in Government you are saying that the money is already there because it’s been saved by sensible governments in the past. Can you explain that?

DEFENCE MINISTER:

Sure. Specifically with respect to submarines – that is the problem. But with respect to this particular programme, the Joint Strike Fighter, thankfully, there has been bipartisanship and the money has consistently been put aside in the Defence Capability Plan so that we can make this announcement today as not a new policy proposal. This is money that has been set aside.

QUESTION:

So what is the dollar figure on how much has already been put aside and what is the dollar figure of how much will need to appear in the forward estimates?

DEFENCE MINISTER:

The proposal we took to Cabinet had provision for no new money so $12.4 billion is the figure.

QUESTION:

Sorry, just to follow up on that. So, $12.4 billion has already been put aside in the Budget? That money is already there?

DEFENCE MINISTER:

That’s correct.

QUESTION:

Prime Minister, you’ve got a couple of experts here, but one thing that’s come up today again that’s been brought up, including by Dennis Jensen in your Party, is the concern or a claim that the Russians or the Chinese are building a fifth generation Fighter which will be much better than the Joint Strike Fighter. Now, is there someone who can explain technically why this is or isn’t true? Do you know anything about the Russian and Chinese Fighters that would lead someone to reach a conclusion?

PRIME MINISTER:

Well, I don’t imagine that those particular Fighters might be available for Australian purchase. Our job is to ensure that we have the most effective aircraft that is available to us and this is what we believe we have achieved with this purchase. Now, I think we can also be confident that countries like the United States and the United Kingdom are not in the business of being beaten and this aircraft is, in the judgment of the United States and the other principal Western powers, a very, very effective aircraft; an aircraft which is more than capable of giving them a combat edge for the decades ahead and I think we’re very lucky to have it.

QUESTION:

Minister, could I ask you outline what expansion will be needed to Tindal?

DEFENCE MINISTER:

We’ve got to build some sheds, some servicing and maintenance facilities, similarly at Amberley and similarly at Williamtown. So there’s about I think $1.6 billion contained in the 12 for support services for these aircraft in their deployment.

QUESTION:

Does that stretch past sheds? Obviously there’s some quite technical equipment needed.

DEFENCE MINISTER:

There is. It’s quite technical equipment.

QUESTION:

Can you go into detail about what $1.6 billion will buy?

DEFENCE MINISTER:

Well, not really. There’s obviously software maintenance, engine handling facilities and a whole host of low observable technical management facilities that are quite technical and, may I say, quite classified.

QUESTION:

Prime Minister just on the jobs question, to what extent is the timing of today’s announcement being driven by the need to send a signal to Washington – to Lockheed Martin – that  yes, we are serious about this project and the work should continue to flow to local manufacturers?

PRIME MINISTER:

This is a Government which makes defence announcements on the basis of defence priorities, not on the basis of other priorities. This is a decision which has been a long time in the pipeline. I’m not being critical of the former government because, as we know, the former government put in the initial order back in 2009, but nevertheless, it has been a long time in the pipeline. It is 12 years since the Howard government first made a commitment to join the Joint Strike Fighter project. So, this is more than the appropriate time to get cracking – more than the appropriate time to get cracking – and that’s why we’ve made the announcement.

QUESTION:

I have a question on another issue. Prime Minister, are you at all likely in this Budget to announce that you’ll be deregulating university fees?

PRIME MINISTER:

I’m not going to offer a running commentary on what may or may not be in the Budget, except to say this: it will be a Budget of long-term structural reform, but it will be a Budget that keeps our commitments. We will make a range of decisions which are important for Australia’s long-term economic strength, because the most fundamental commitment that we gave at the election was to build a strong and prosperous economy for a safe and secure Australia.

You’ve got to fix the Budget, if you are going to fix the economy and doesn’t the Budget need fixing? Because – thanks to the inheritance that we had of $123 billion of prospective deficits over the four year period, $667 billion of projected gross debt, debt and deficit stretching out as far as the eye can see – there is a big repair job ahead of us. There’s also the fact that for six years basically there was a reform holiday in this country and it is important to ensure that we make the changes necessary, consistent with our pre-election commitments, that will give us the strong and dynamic and flexible economy that will produce the prosperity that every Australian wants.

QUESTION:

So that means all of your election promises, none of them will be broken in this Budget – Medicare Locals, the pension won’t be touched?

PRIME MINISTER:

We are going to keep our commitments.  Now, I’m not going to say, well you know there was 27 and a half commitments and you know 26 and three-quarters are going to be kept. We will keep our commitments. Now, I’m sure lots of people will argue and say, “Well what about this and what about that?” We will keep our commitments, because the point I keep making, if there is one thing that we learnt from the fate of the former government, you cannot say one thing before an election and do the opposite immediately afterwards.

QUESTION:

Prime Minister, can you shed any light on reports that flight MH370 may have landed and not crashed?

PRIME MINISTER:

Well, I have no advice whatsoever to suggest that there is any truth at all in that. Our expert advice is that the aircraft went down somewhere in the Indian Ocean. We have identified a probable impact zone which is about 700 kilometres long, about 80 kilometres wide and based on the detections from what we still believe was the black box recorder, we are

under-sea searching at the moment a circle with a radius of about 12 kilometres – that’s just under a 400 square kilometre area that we’re searching at this time. We haven’t finished the search. We haven’t found anything yet in the area that we’re searching, but the point I make is that Australia will not rest until we have done everything we humanly can to get to the bottom of this mystery.

QUESTION:

Prime Minister, have you had any contact from the Australian Ambassador in Croatia or the Croatian Ambassador here about comments reportedly made on your behalf to the Croatian Government last week about MP Craig Kelly?

PRIME MINISTER:

No, I haven’t.

QUESTION:

You don’t know about the Australian Ambassador being recalled in Croatia, or summonsed sorry, in Croatia?

PRIME MINISTER:

I have no knowledge of the matter you ask me about.

Lane?

QUESTION:

Can I ask you one point, Prime Minister, when that search just has to be called off? How close are we?

PRIME MINISTER:

Well, we are not going to abandon the families of the six Australian citizens who were on that plane. We are not going to let down the families of the 239 people who were on that plane by lightly surrendering while there is reasonable hope of finding something. Now, as I said, at the moment we are conducting an underwater search with the best equipment that we have currently available of an area of just under 400 square kilometres. If at the end of that period we find nothing, we are not going to abandon the search. We may well re-think the search, but we will not rest until we have done everything we can to solve this mystery. We owe it to the families of the 239 people on board; we owe it to the hundreds of millions, indeed billions of people who travel by air, to try to get to the bottom of this. Now, the only way we can get to the bottom of this is to keep searching the probable impact zone until we find something or until we have searched it as thoroughly as human ingenuity allows at this time.

QUESTION:

Prime Minister, are you willing to negotiate with Clive Palmer over reinstating payments for the children of war veterans?

PRIME MINISTER:

We will talk respectfully and sensibly to all Members of the Parliament, including crossbench Members of the Parliament, because every Member of Parliament deserves a fair hearing. Anyone who represents an electorate or a state in the Senate deserves a respectful hearing from the Prime Minister of the day. But, in the end we expect every Member of Parliament to respect the mandate of the Government and obviously we have an absolutely crystal clear mandate to repeal the carbon tax and to repeal the mining tax – no ifs, no buts – to repeal the carbon tax and to repeal the mining tax and we were very clear before the last election that the low income bonus was going, because it was funded by the mining tax which at that stage was raising no revenue.

So, happy to talk, but we expect in the end all Members of Parliament to respect the mandate of the Government because I want to be a Prime Minister who says what he means and does what he says. We said we were going to do certain important things before the election and that is precisely what we will do now that we’re in Government.

Thank you.


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