TRANSCRIPT: INTERVIEW WITH KARINA CARVALHO & PAUL KENNEDY, ABC NEWS BREAKFAST
TRANSCRIPTION: PROOF COPY E & OE
DATE: 4 MAY 2012
TOPICS: Defence Budget; White Paper; Chicago Summit; Peter Slipper.
KARINA CARVALHO: Now, the Defence Minister Stephen Smith joins us in the studio. Good morning-
STEPHEN SMITH: Good morning.
KARINA CARVALHO: -thank you for being here.
STEPHEN SMITH: Pleasure.
KARINA CARVALHO: Now, how much of these cuts are genuine cuts and how much are delays?
STEPHEN SMITH: Well, first point I think is I agree with Mr Jennings from the Australian Strategic Institute that these cuts will be difficult for us. We've worked our way through them very carefully, but our view is they will be manageable.
Any time you look at a Defence Budget there are two aspects to it; there is the Defence capability plan; that moves around all the time, so there will be projects in that which are delayed through the normal course of events, technical difficulties and the like. But there will also be projects which will be delayed as a result of our fiscal difficulty.
There'll also be cuts in other areas, or savings in other areas, and I'll leave that till Budget night.
KARINA CARVALHO: Well, $2 billion was announced yesterday; how much more is likely to be cut? We're hearing anything from another $2 billion to another $4 billion from Defence.
STEPHEN SMITH: Well, people can speculate. I made it clear yesterday to the Prime Minister that there'll be more savings in the Budget, but Defence, like every other department and agency, will make a contribution to bringing the Budget back to a surplus, so there will be more savings.
But what we've tried to do and to pick up again from Mr Jennings' analysis - how we've tried to make it manageable is by ring-fencing some key areas; no adverse impact on our overseas operations - whether it's Afghanistan or East Timor or the Solomons - no adverse impact on our military numbers; no adverse impact on the kit and the resources delivered to our people about to deploy or on deployment. And as a general proposition, other than matters which might be going through the so-called Strategic Reform Program, there's no attack on the conditions and entitlements of our service personnel and there's no adverse impact on the things that we do with the United States as a result of the Global Force Posture Review
PAUL KENNEDY: Now, not notwithstanding all of the different things that have happened in the last couple of years, do you now concede that the 2009 White Paper was unrealistic?
STEPHEN SMITH: Well, I've seen a commentary today saying that the capability side of the White Paper, you know, and various adjectives have been used - is under pressure, you know, is not to be relied upon. I don't share that assessment about the capability side of the White Paper.
We have committed ourselves to continuing the core capability aspect of the White Paper - so, Joint Strike Fighters, submarines, Air Warfare Destroyers, Landing Helicopter Docks, Navy helicopters, replacement to Caribou - so that continues.
It's also the case that the White Paper had underneath it about 180 capability projects; about 10 of those have been cancelled, largely because they've been overtaken by other capability matters. We've spent over $13 billion on approved projects since the White Paper, so I don't accept the notion that as a capability document it's no longer relevant. It'll remain relevant until the next White Paper in 2013.
Where we are clearly under pressure, both in the short term and in the longer term, is under pressure in terms of the financial underpinning of the 2009 White Paper; and that's all about the global financial crisis, the adverse consequences.
Whilst the White Paper 2009 set out a financial framework, it also made the point that the global financial crisis was unfolding. And it's unfolded in a way in which we've seen, essentially, global financial crisis mark II, and also very deep Defence cuts from the United States and the United Kingdom; so we're grappling with that ourselves in our own way.
PAUL KENNEDY: It also has a lot to do with following through on a promise to return the Budget to surplus, doesn't it? Is it really worth it?
STEPHEN SMITH: No, absolutely. A strong economy, making sure there's growth in the economy is important to Australians; it's also important to Defence.
There are two things that can help Defence spending; one is a strong economy, and the second is a major conflict.
I'm Minister for Defence, but I don't want to see a major conflict. And so a strong economy helps Defence as it helps all Australians. And what we're seeking to do is for Defence to make a contribution like everyone else to the surplus, because that's good for the country, good for Australians. But at the same time to protect vital areas, to bring about savings in areas when the fiscal conditions change and return, we can move those areas to a more improved or a better financial state.
KARINA CARVALHO: Later this month you will go to Chicago for the NATO Summit; what did you make of President Barack Obama's speech in Afghanistan earlier this week and Australia's - it would seem, Australia's timetable and the United States' timetable announcing?
STEPHEN SMITH: Absolutely; I spoke to my counterpart, US Secretary for Defense Leon Panetta yesterday and we spoke about Afghanistan, we spoke about the run-up to Chicago, we spoke about transition and the President's visit; and I think absolutely Australia and the United States, together with our NATO and International Security Assistance Force colleagues, are all on the same page in terms of an orderly transition after 2014, making the transition to Afghan-led security responsibility.
I also just took the opportunity of indicating to Secretary Panetta what we'd be doing on the Joint Strike Fighters and the bringing forward of our White Paper. He's been going through his own budget pressures so he understands those difficulties.
But we believe that Chicago will be a very important event for the transition in Afghanistan. But yes, in that respect we're on the same page and that just underlines essentially where the international community has been for a couple of years now.
Bob Carr and I were in Brussels a few weeks ago, and again, everyone singing from the same song sheet. It's difficult; and it continues to be dangerous; we have to be careful; we can't assume anything, but we think we're on track for transition.
PAUL KENNEDY: And just a couple of questions away from Defence to wrap up; the parenting payment scheme; we've had some information that there might be $700 million saved there. What can you tell us about that?
STEPHEN SMITH: Well, just as I am constrained in my own area - the Prime Minister and I have made some remarks about my own area - I'm doubly constrained in anyone else's area; so we really have to wait for the Treasurer to make remarks, either in the run-up to the Budget or more reasonably and likely-
KARINA CARVALHO: I think we're hearing this morning that the Government's confirmed that there will be $700 million in changes to parenting payments.
STEPHEN SMITH: I'll leave that to Minister Macklin and or the Treasurer.
KARINA CARVALHO: Okay. Let's talk about the position of the Labor Party? Obviously, the focus that the party wants and the Government wants is on this Budget next Tuesday, but that's been overshadowed by recent events and - did the Prime Minister Julia Gillard - and this question will continue to keep coming up - did she act too late in her actions against Craig Thomson and Peter Slipper?
STEPHEN SMITH: I think the Prime Minister's conduct was absolutely appropriate. She came to the conclusion that the combined focus of those two events was bad for the Parliament and bad for the standing of parliamentarians, and took the steps that she did.
I don't think that it's actually possible for events like that to overshadow a Budget, so I'm very confident that when the Parliament returns on Tuesday, the focus will be on the Budget; and that's a sensible thing because when you deal with the Budget, you're either dealing - in my case - with our long-term national security interests, but more generally, with the long-term economic interests of Australians.
KARINA CARVALHO: In terms of her leadership, is it secure?
STEPHEN SMITH: Absolutely. We dealt with that a couple of months ago; we dealt with it conclusively and that's the end of the matter. I've said on a number of occasions, she will lead us to the next election, just as Tony Abbott will, in my view, lead the Liberals to the next election.
KARINA CARVALHO: But is it because there isn't an alternative to Julia Gillard, that Labor's not looking to replace her?
STEPHEN SMITH: Well, an alternative put himself forward a few months ago and we dealt with that conclusively and decisively; and that matter, in my view, is over. The contest at the next election will be Julia Gillard and Tony Abbott. And as we get close to the election, I'm confident that people will come to the conclusion that Tony Abbott doesn't have the judgement required to manage our national security interests or our economic interests.
KARINA CARVALHO: Stephen Smith, we thank you for your time this morning.
STEPHEN SMITH: Thank you. Thanks very much.