BRENDAN NELSON: Late in 1994 the Keating Government developed a program for a helicopter which would be able to operate from our Anzac Class Frigates. The tenders were let in 1995 and the contracts finally signed by the Howard Government in 1997.

The Super Seasprite Program is budgeted all up for around $1 billion. It is intended to deliver penguin missile technology from the Super Seasprite helicopter to support anti-ship warfare from our Anzac frigates and in doing so complement the harpoon missile system in both the FFG and the Anzac frigates.

The concern that I have is that the project, due largely to problems with the prime contractor, Carmen, and some other technical difficulties, this project is now five years behind. The Director of Naval Aviation has had no choice but to ground the helicopters until recent further software problems have been resolved.

Late in March I specifically asked the Chief of Navy and the Chief of Defence to develop and provide me with all of the options that the government might consider: what is the way ahead; how can these problems be fixed; how certain can we be about making sure that the Super Seasprite is able to deliver what was promised by our contractors. Alternatively what modifications could we make to the program and at what cost, and what sort of capability might we get.

And thirdly I have also asked them to provide me with the option in terms - and thirdly I have asked the Department of Defence to provide me with the option of the government considering removing itself completely from the Super Seasprite Program.

At the moment the government has made no decision at all. I have simply asked defence to provide me with the three major options that we could consider: that is continuing with the program and at what cost, and when would we get the capability; secondly what modifications could be made to the program and at what cost, and what would we get; and thirdly what would be involved were the government to decide to get out of Super Seasprite altogether, how would the capability be delivered and at what cost.

The fundamental problem here is that throughout the nineties this project was entered into - and it would never be entered into today. In plain language what we are endeavouring to do with this overly ambitious program is to fit the equivalent of 2006 Holden electronic technology into an EH.

The Super Seasprite is a very good air frame, however it is one that has aged and we are trying to fit state-of-the-art technology into it. The navy has worked tirelessly - and under no circumstances should anyone be critical of the navy itself for the problems that we have. Australia and the Australian Defence Force has been let down by the software; in some cases by the contractors that have been involved; and it also should be emphasised that this is a fixed price contract and the contractors are required to deliver on the capability.

So in other words the price is not increasing, the contractors went into a fixed price arrangement, and I'm determined on behalf of the Australian taxpayer to get to the bottom of this. We need to work out can we deliver it; if so at what cost; when are we going to get the Super Seasprite fully operational; and if we can't what other choices have we got.

QUESTION: Given the project is five years behind schedule why has it taken so long for someone in government to act?

BRENDAN NELSON: Well obviously the government has been keeping an eagle eye on this project for some time. We know that we want to have a capability off our Anzac frigates to conduct anti-ship warfare around archipelagos and islands. We have been constantly reassured by contractors and others that the software problems can be resolved, and it's quite possible that they can be.

But from my point of view I'm determined to make sure we get to the bottom of it; I want to make sure that we bring certainty to our naval aviators; I want to make sure that the taxpayer gets good value for money; and in that sense it's important that as the Defence Minister I present to the cabinet the full range of options that are before us.

QUESTION: Would the government consider legal action against the contractors if the contract can't be fulfilled in full?

BRENDAN NELSON: Certainly I have asked the Department of Defence to consider all of our options including, if it is appropriate, legal action against contractors who have not fulfilled their obligations to Australia and the Australian taxpayer.

QUESTION: Have you been given the run-around by these contractors?

BRENDAN NELSON: Well, look, I have had the privilege only for three and a half months to be the Defence Minister, as far as I can see the navy has worked day and night, it has worked tirelessly and professionally to get this project on track. However it seems that for almost a decade we have had a succession of letdowns by contractors, we've had technological failure, and the plain reality is that this is a project we would never go into in 2006. We have seriously changed the reform program, we have seriously changed the way in which we buy major defence equipment, and this is what's called a legacy project.

The fundamental problem here is that in the early and the mid-nineties the ambition was to basically put state-of-the-art technology into an EH Holden. And as solid as the basic Seasprite air frame is we have an overly ambitious program. I intend to get to the bottom of it and to make sure that the investment that's made is the way ahead, whether that's continuing with Seasprite, looking for something else or modifying the program, that we make good rational decisions on behalf of the Australian taxpayer.

QUESTION: Have there been a series of letdowns also by your predecessors? Surely someone in the last five years that this project's overrun should have by now stepped in and taken the action you've now taken?

BRENDAN NELSON: Well, look, I think hindsight is a wonderful thing. Unfortunately at every stage over the last decade the Department of Defence and the government have made what it considered to be the right decisions. At the moment I am taking steps which I think are the right ones. We need to get all of the information ahead of us; we need to know what are the technological challenges ahead; what's the cost involved; and let's make some rational decisions.

I think it's important that we focus on the future, that we don't focus on the past, and most importantly that our frigates can have and do have access to the right missile technology and the right helicopter program to run it.

One of the things that I am also determined to deliver is to rationalise our helicopter fleet. At the moment we've got ten different types of helicopters across the Australian Defence Force. There may, in the review of this project, be a further opportunity to bring some rationalisation of our helicopters and the kind of technology that's required to support them.

The helicopter itself is an outstanding helicopter. Unfortunately it's an aged helicopter and we're trying to put cutting edge modern technology into what I would describe as an EH air frame.

QUESTION: How can you be so supportive of defence when they have sat by and let deadline after deadline slip away over five years?

BRENDAN NELSON: Well, look, you've got to understand that there have been many, many very good men and women in the Australian Navy and Naval Aviation who have worked very hard to deliver this technology and this capability. We have been let down seriously by a number of contractors, we've had delays, and essentially, as far as I'm concerned as a relatively new minister, the software failures that we faced in late March in my view have become the straw that has broken the camel's back.

I want to make damn sure that we have a good hard look at this: can we deliver what Australia needs and wants; can we make changes to the program; or indeed is a decision to basically get out of Super Seasprite altogether a reasonable one; and I want to make sure that all of our choices are on the table.

I should also emphasise to Australians that what we are endeavouring to achieve in this particular program would put Australia at the front of the rest of the world., it is not a question of us not having the capability that we're otherwise seeking.

And the other thing that's very important is that the armed reconnaissance helicopter, the Tiger Eurocopter - which is a completely different helicopter program - has absolutely no connection whatsoever to the Super Seasprite.

QUESTION: Does that leave the [indistinct] force exposed in any way?

BRENDAN NELSON: Well ob - no, it doesn't leave our defence force exposed at all because clearly we haven't got the capability at the moment. It is currently five years behind where it ought to be; given the recent problems we've had with the avionic system there would be further delays. So the choices that lie before us are: do we continue with the program; do we further ratchet up the heat on the contractors; do we further invest increased resources into it to see we ultimately get the capability; do we change the program so that we basically deliver most but perhaps not all of it; or alternatively is this a program with which we should continue; and should we be looking at other things.

QUESTION: What's the reaction to speculation that John Howard might step down end of December?

BRENDAN NELSON: Well, look, it's entirely a matter for the Prime Minister himself. I strongly support both the Prime Minister and the Treasurer in their current roles, personally I'd like to see them continue in those roles for some time yet but that's entirely a matter for the Prime Minister. And my parliamentary colleagues will make decisions that are put to them should the Prime Minister ultimately decide to resign.

QUESTION: Would you like to run for deputy if Mr Costello took over?

BRENDAN NELSON: Oh, I won't comment on that.

QUESTION: Would you like to see the Prime Minister go into the next election?

BRENDAN NELSON: Well like most of my colleagues I would be - and most Australians - I would be delighted if the Prime Minister chose to contest the next election, but that's entirely a matter for him and a decision that would be supported then by the parliamentary party.

QUESTION: When do you expect the Kovco Inquiry to be handed in?

BRENDAN NELSON: Well, as I have said previously, it will take up to six months to complete the full enquiry - the coronial and board of enquiry - into the tragic death of Private Jake Kovco. The important thing is that the enquiry can be conducted fully and completely. It's not - I don't think anybody should be putting undue pressure for haste, it's more important we get it right, that we get to the truth, and then provide that information of course to the Kovco family and then to the broader community.

But my reasonable expectation is it will take up to around six months.

QUESTION: It's a pretty long time, though, why so long?

BRENDAN NELSON: Well firstly my experience in the short time I've been the minister is we had extensions to the Board of Inquiry into Sea King; we had extensions into the Board of Inquiry for David Nary; and I think it's reasonable, whilst a board of enquiry would normally take around four months, I think it's reasonable to say to Australians, look, it could take up to six months. If it is completed sooner than that then I think we'll all be very happy.

But the most important thing is that it's done thoroughly, that it's done properly, the Kovco family have been consulted, they are comfortable with the terms of reference and the nature of the enquiry.

So the New South Wales coroner obviously performed the post mortem; the coronial enquiry is continuing; there has been a preliminary meeting of the members of the board of enquiry to do their work plan for the way ahead; and I would expect that the ultimate outcome we will find in about six months, and hopefully even less.

QUESTION: Minister, the warships on standby near East Timor, will they be used for evacuation only or are they carrying troops?

BRENDAN NELSON: Well it's important to appreciate that the situation in East Timor is currently stable, although it is relatively brittle. We don't expect on balance that we will receive a request, but if we do receive a request from East Timor either through the United Nations or supported by the United Nations, Australians want us to respond in a very efficient manner.

And if we weren't to preposition our ships and other assets it would take us a lot longer to respond than the East Timorese or indeed Australians might like.

The ships - it should also be made clear that the ships that are being repositioned are within Australian waters, they're not heading off anywhere toward East Timor unless we receive a specific request, and...

QUESTION: Are they carrying troops or [inaudible]?

BRENDAN NELSON: Well I don't want to comment specifically on that but obviously if we do receive a request from East Timor through the United Nations for assistance you would expect that these ships will be carrying troops. And if people are required to be evacuated they might be put to that purpose.

But these are hypotheticals. At the moment what we are sensibly doing is what Australians would expect us to do, and that is we keep a close eye on what happens in our region, including in East Timor. It is quite possible the East Timorese Government may ask for assistance, if they do they want to make sure that Australia provides it in a timely manner.

That's what we're doing and hopefully in the end we won't be required to provide assistance at all. And in that instance it will have been a useful training exercise.

QUESTION: How many ships are going, is it two, or three or four [indistinct]?

BRENDAN NELSON: Well at the moment it's obvious that we are prepositioning Manoora and Kanimbla. We also, if we do have to send troops to support a request from the East Timorese Government, we will also provide the Tobruk to carry our troops, and we have some other assets that we might also have involved that we're also preparing, but I'm not prepared to discuss that.

QUESTION: The investigation into the Kovco body mix-up has that yielded anything, have procedures been changed?

BRENDAN NELSON: Well the Chief of Defence will receive the report into the distressing incident of the inappropriate casket being dispatched to Australia. You would need to ask the Chief of Defence when he expects to receive that report.

But as in the board of enquiry into the tragic circumstances of Private Kovco's death, that needs to be thoroughly and properly investigated, and the report will go to the Chief of Defence.

QUESTION: I think you were hopeful on the day that it was [indistinct] of having the report finalised within two weeks which is obviously some distance down the track now?

BRENDAN NELSON: Well, again, the enquiry needs to be done thoroughly and we need to get to the bottom of why this appalling incident occurred. And the Chief of Defence advises me that he would expect to receive the report soon. When the report comes to the Chief of Defence he will consider it, he'll provide a copy of it to me and the first people that will be informed of its content will of course be the Kovco family.

QUESTION: [Inaudible] many trouble spots that's stretching our defence force to the limit?

BRENDAN NELSON: Well certainly our defence force is busy, we're able to do this because when the Howard Government came to office in 1996 we immediately set about strengthening Australia's defence force, we have increased record sums of money in defence expenditure. At the moment we are easily able to deal with the pressures that are being placed upon us and of course we are preparing, should we receive a request from East Timor.

Keep in mind that at the moment we've got just over 2000 of our defence force deployed across Australia. We've got a defence force of 51,000 so at the moment we've got about four percent of our defence force deployed.

We won't deploy any of our troops or our equipment unless we can sustain them and at the moment I'm very comfortable with what we're doing, and indeed what we might have to do in the future.

QUESTION: Just on the Seasprites, Minister, how long had they been flying before they were grounded?

BRENDAN NELSON: Well that's not something that I am able to confirm to you today. I can tell you that we have accepted nine of the 11 aircraft, they have at varying times been flying over the last couple of years but in terms of specific detail I'm not prepared to discuss that.

QUESTION: Are there certain conditions that the Seasprites can't fly in?

BRENDAN NELSON: Well, again, I'm not prepared to discuss that beyond what I've already said.

Okay, thanks very much.