Thanks very much to Kokoda for the invitation. US Ambassador John Berry, lovely to see you as always; Japanese Ambassador Akimoto San; Commander of the US Pacific Fleet Admiral Harry Harris; delighted to meet you tonight and see you here in Canberra; David Irvine, the Director General of ASIO; VCDF Air Marshall Mark Binskin; Chief of Air Force Air Marshall Geoff Brown; distinguished and honoured guests all.
We are observing a substantially changing Asia-Pacific region.
By 2050, half of the world’s top 20 economies will be in the Asia-Pacific region.
By 2050 China’s economy will be five times larger than in 2011 – India’s economy will be eight times larger.
The economic pendulum is shifting in an eastward direction with the growth of the Asian economies, not just China and India but Japan. Japan and South Korea, Vietnam, Thailand, Singapore but very significantly for Australia, our near neighbour, Indonesia with its population of 270 million.
With economic weight brings the capacity to develop greater strategic weight.
Since 2002, China has increased military spending by 170 per cent, India by 66 per cent and Indonesia by 82 per cent.
United States and Japanese economic and strategic weight will and must remain critical to the region, especially for Australia.
The region has experienced significant economic prosperity over recent years but the potential remains for miscalculation and conflict as we have seen in the South China Sea and especially with North Korea.
I want to pause to welcome our Japanese guests, particularly Ambassador Akimoto.
So if I can say to all of our Japanese guests;
Konban wa shinshi shukujo.
Konya wa kitekurete arigato gozaimasu.
Watashi wa Nihongo hanasemasen
Sumimasen sukoshi dake
Nihongo ga, heta no yoko-zuki desu
I am not going to tell you what I said!
Japan is Australia’s best friend in Asia. We have many good friends in Asia however in terms of the development of our economy during the past 60 years Japan’s contribution has been outstanding. I acknowledge the ongoing contribution of Toyota. Coming from the mining industry in Western Australia I know it never would have developed without the Land Cruiser.
Fujitsu, Mitsubishi, Inpex, Sumitomo, Yokogawa, NEC, Marubeni and Mitsui to mention just a few. As a Western Australian I would be remiss in not mentioning the contribution of Mitsui in firstly participating in the development of my State’s iron ore mines in the 60’s and 70’s and then in the LNG industry in WA in the 70’s and 80’s.
The then Premier of WA Sir Charles Court formed on of the most successful trading relationships with Mitsui Corporation – a relationship which continues to drive my State’s economy and indeed the Australian economy.
We must never forget old and reliable friends.
So turning to what is our most important strategic alliance and again I welcome John Berry as our new Ambassador for the United States. John as you will all come to know has a great sense of humour. John - this is hard currency in Australia.
Australia has no greater ally than the United States. We share values and very many aspirations in public and the international policy arena.
Our alliance, under the auspices of the ANZUS Treaty, was ratified in 1951. The Alliance is enduring and is constructed upon a mutual understanding and trust between partners, and remains the cornerstone of our Defence policy. I have just come home from a NATO Defence Minister’s meeting in Brussels. Among the highlights of this trip was spending time with each of Secretary Hagel, ISAF Commander General Jo Dunford and Supreme Allied Commander General Philip Breedlove.
Each of these highly skilled leaders imparted to me a great sense of confidence as to the calibre and wisdom of leadership in these extremely important spheres. I could not have been more impressed with the capacity of these three very outstanding men.
Australia welcomes the US’ renewed commitment to the Asia-Pacific region.
Australia’s alliance with the US remains the cornerstone of our defence policy and I have said that twice because it really is a very important statement for us.
Australia-US force posture initiatives that are evolving in Darwin, give strength to our existing, and long-standing bilateral relationship.
This Government is committed to implementing US force posture initiatives in northern Australia, including annual rotational deployments of US Marines – potentially up to 2,500 personnel.
There is opportunity to do more substantial training in Australia that is mutually beneficial to Australian Defence Force and US Marine Corps.
As many of you know we have two 28,000 tonne Landing Helicopter Dock ships coming onto our scene and these will be of a significant strategic nature in the way in which we do our business in this region into the future.
The command control structures, the loading of those vessels, the fighting of those ships, the ability to conduct combat activities 100 km from the command control structure on board the ship is something we have not done, and yet it is bread and butter for the US Marine Corp.
We will learn a lot from having the Marines in Darwin.
We need to increase broad area maritime surveillance in the vast open waters adjacent to our mainland coastline. We have made an election commitment to bring this to fruition as part of our responsibility to know what is occurring in our immediate region, particularly in the maritime.
Now I was in Afghanistan on Tuesday and it was re-assuring to know that our commanders and troops on the ground were unanimous in praising the efforts and assistance of the United States and their forces in supporting our efforts in Uruzugan. With their helicopters, their enablers, their air support as so on.
The relationship is a seamless one and a very, very successful one.
Having said all of that it is also important that I turn to our Defence relationship with Japan.
This Government is very comfortable with growing defence and security co-operation that we are currently experiencing with Japan.
Japan is our second largest export market and as I have acknowledged, has been a major reason in the economic growth of our nation.
Our defence forces have worked closely together in Iraq, and I remember visiting Camp Smitty overlooking the Japanese base just down the road; East Timor; Pakistan; Cambodia; South Sudan – and also in Japan in the wake of the great east Japan earthquake and tsunami.
Australia was the only country other than the United States to provide strategic airlift capability to the Self-Defence Force in Japan during that crisis.
Australia looks forward to Japan making a greater contribution to security in our region and beyond – including through our respective alliances and friendship with the United States.
We seek to support Japan’s plan to work towards a more normal defence posture to help it play that greater role.
We will continue to look for opportunities for us to enhance our practical cooperation with Japan, including with respect to Defence Science and Technology.
Now I had a very successful and pleasant phone call with Japan’s Defence Minister Onodera, about three weeks ago. It was a very cordial discussion – he and I both share a love of the snow and he and I are meeting in Niseko early in the New Year.
So let’s come back to the crux of what the talk of Japan is really all about. Australia, the United States and Japan have the capacity to create a very significant and successful trilateral defence cooperation.
We recognise how much we share values and strategic interests. We recognise that our defence capabilities are complimentary.
Australia and Japan, as allies of the United States, have mutually supportive roles to play in the security of the region.
Australia seeks to further strengthen trilateral cooperation, including through robust and frank dialogue on defence and security issues; conducting more advanced trilateral exercises with a focus on improving each country’s ability to enhance security through air, land and maritime cooperation, and conducting observer exchanges to respective exercises.
So working together more broadly in the region we will build a community of interest, in the region that promotes peaceful resolution of disputes in accordance with international law and that establishes defence cooperation as a regional normal.
We seek to strengthen our capacity to respond to regional challenges, including regional disasters, and provide humanitarian assistance and disaster relief, through increased practical cooperation.
We also strive to promote freedom of navigation and maritime security in the region’s sea lanes. As a stabilising regional presence we think that the trilateral relationship can build confidence and encourage transparency within the region.
In closing may I say that as a maritime nation Australia seeks to be a reliable supplier of agricultural products, minerals and energy into Asia.
Our energy developments are very much founded upon US investment – Chevron, Exon and Shell.
Japan is a great trading nation and customer.
We each have significant skin in the economic game of a growing Asia.
It is nothing more than a natural logical progression that we would increasingly work together to underpin the stability and prosperity which has served our region so well over the past seven decades.
Thank you very much.
This might be an easy question, but you’ve been taking the briefs from the Department and you had a great understanding before you took on this role, but what do you see now as your greatest challenge?
I should start off by telling you I have heard so many secret things in the last month that I can’t remember any of it.
Look, the first thing I am confronted with is that in terms of the capital account, it is unique inside the executive government. That is, that we are running projects over 10, 15, 20 years of government. The accountings calls by which we account for the budget to those matters are completely inappropriate for running those kinds of projects.
When you take out $30 billion over about 4 years from the Defence Capability plan that is out to about 2030. We’ve got about a 100 projects that have been moved substantially to the right. In short, it is a mess.
My task is to firstly gather up, what we’ve got, put it together and then see to prioritise which will do in about a quarter of next year. I describe all of this as steadying the ship. You simply can’t muck around with this. The cash flow and the foundation stone of this portfolio are not [inaudible]