TOPICS: Carbon price; ADFA and ADF investigations; Air Warfare Destroyers and Submarines; Senate Estimates – flying troops to Middle East.
KIERAN GILBERT: Minister, thanks very much for your time.
STEPHEN SMITH: Pleasure.
KIERAN GILBERT: Before we get onto a number of issues in your portfolio specifically, I want to get your reaction to the latest in the carbon tax debate. Cate Blanchett appeared in this advertisement again last night, this open letter signed today by a number of Australians, a number of actors, Rebecca Gibney among them. What do you make of the criticism against Cate Blanchett that she is wealthy and famous and not necessarily going to understand the challenge - cost of living challenges that face many ordinary Australians, particularly in the face of what's going to be an impost through the carbon tax?
STEPHEN SMITH: Well a few points. Firstly, the Government is very strongly of the view that we have to reduce the amount of carbon in our economy and in our atmosphere to make a contribution to minimising and reducing dangerous climate change so it's squarely in that context.
Secondly, when individual Australians or individual Australian groups make a public policy point, that's a good thing and that means they're committed to a particular view but it also means they are very conscious of drawing to attention a significant challenge facing Australia and that's the case in this respect.
We understand that very many Australians are conscious of the threat or the possibility of additional impost in the economy as a result of an emissions trading or a carbon tax proposal. And that's why we've made it very clear that the arrangement we want to put in place is a tax on big polluters and that adverse consequences so far as industry and households are concerned will be the subject of compensation. So, it's a good thing that people are out there drawing attention to a very considerable and significant economic and environmental challenge that we face.
On the other hand our political opponents are essentially deniers of the fact that there's too much carbon in the atmosphere, too much carbon in our economy and if they're elected to office effectively would do nothing.
KIERAN GILBERT: What does it say about the Government's ability to sell this though if you're relying on movie stars to do it for you?
STEPHEN SMITH: Well we're not so much relying upon movie stars, as I say it's entirely a matter for individuals concerned and groups concerned to put these points of view. We put our point of view very strongly. Our point of view stands in stark contrast to the Liberal and National parties. We believe there is too much carbon in our economy and too much carbon in the atmosphere. We need to reduce that.
The effective way of doing that is the way in which we are proceeding, that will see a tax on big polluters and a program whereby households or industry will be sensibly compensated for a change in our economy and as a result a reduction of carbon in the atmosphere.
KIERAN GILBERT: Okay lots - lots to talk about in Defence specifically. The Skype sex scandal, allegations that teenage cadets have been deprived of sleep and detained for I think it was 17 hours as part of the investigation here and also allegations that an ADF Lieutenant was manhandled during this probe by ADFA and this was in front of some top Defence brass. Now tell me what do you know of these allegations? Is there any truth to any of this?
STEPHEN SMITH: Well firstly so far as the allegations of sleep deprivation are concerned. They're very serious allegations, very concerning of course and that is now the subject of a Defence enquiry. The Defence Force Investigative Service is now investigating that.
When these allegations were drawn to the attention of Defence, Defence enquired of Mr Kirkham QC as to whether it would appropriate for him to consider them as part of the enquiry into the so-called Skype affair. His advice that it would not be, as a consequence ADFIS, the Investigative Service is currently looking at these issues.
So as far as the suggestion of an assault is concerned, that is also the subject of investigation. The advice I have is that the two officers, the two senior officers of whom it is asserted witnessed this allegation, they both say that no such thing occurred in their presence. But there are a range of serious issues that we see drawn to public attention this morning. They are two of them. There is also a suggestion that young cadets were refused or advised not to see legal advice. That's also the subject of an enquiry. We need to take these matters seriously which we are and they are being investigated as we speak.
KIERAN GILBERT: How concerned are you by that? First of all there was the incident itself, the alleged incident and then it seems in every step of the way there has been a problem or a bungling by Defence?
STEPHEN SMITH: Well I wouldn't use that phrase. I mean we do need to progress these matters methodically. The Skype issue itself was a highly controversial issue. We put in place not just Mr Kirkham's enquiry but a range of other more generally - more general broad based enquiries to address it.
Just on Mr Kirkham's enquiry I think it's important to make this point; as a result of the various enquiries that he - various interviews that he has conducted, Mr Kirkham came to the view that he should speak to the Vice Chief of the Defence Force, in other words interview the Vice Chief of the Defence Force.
The Vice Chief of the Defence Force of course was the initiating officer, so as a consequence of the need to avoid any perception of a conflict of interest, the Vice Chief of the Defence Force will essentially stand aside as the initiating office of the enquiry and that role will now be taken by the Chief of the Air Force and he is currently the Chief of Air Force in discussions with Mr Kirkham as to the technical way of effecting that.
But Mr Kirkham's effecting a full and complete enquiry, that's a good thing but these other matters will also be the subject of a serious separate investigation.
KIERAN GILBERT: But on another issue now, the $8 billion Air Warfare Destroyer project, reportedly paralysed at the moment because of in-fighting between the Submarine Corporation, the Defence Materiel Organisation and BAE, as well as reports today 2400 faults apparently in the data used to build the hulls of the destroyers.
This has got to be a massive concern to you and as I say it's not the first report. This is - there have been several reports in The Australian newspaper about systematic problems here and as I say the situation is - the project is paralysed.
STEPHEN SMITH: Well again, I don't use that description. It's a very big project. The project has seen some initial difficulties and the Minister for Defence Materiel Jason Clare and I have been working through with Defence, with the Defence Materiel Organisation and also with the industry players on these issues for a number of months and late last week I announced that as a consequence of all of the parties to the project agreeing, there would be a reallocation of the construction of a range of blocks.
The Air Warfare Destroyers are currently being constructed block by block in Newcastle, in Melbourne, and in Adelaide, ultimately to be assembled in Adelaide and as a result of the pressure which is on BAE in Melbourne because they're involved in two big projects; the Air Warfare Destroyer and also the Landing Helicopter Docks, it's been agreed that there will be a reallocation of the building of blocks to Newcastle and also to Adelaide and there will also be five blocks which will now be built in Spain.
KIERAN GILBERT: But more than 2000 faults in the data to build the hulls. Is this the sort of-
STEPHEN SMITH: Well we're very - we're very-
KIERAN GILBERT: -number you're talking about here?
STEPHEN SMITH: We need to very clearly understand this is a big and a complex project. The advice I have is that at any given time in the building of the blocks and the building of this project, there can be something in the order of 50,000 to 51,000 particular scheduled items. So these aren't described to me as errors or faults; they are queries which come in the very early stage of the building; technical queries, design queries and the like.
KIERAN GILBERT: So you've been reassured by the military that these things are on track; you still have confidence in the way this is unfolding?
STEPHEN SMITH: Well, the measures that I announced last week together with Jason Clare, in our view, will see what we were very fearful, a two-year delay in this project reduced to 12 months. BAE have been under considerable pressure because they've been dealing with two big projects; so the reallocation of blocks in our view will substantially assist in the progressing of this big project-
KIERAN GILBERT: So do you have confidence in the way this is being handled? Is - are you - still have confidence that the AWD, that this $8 billion project is still on track?
STEPHEN SMITH: Well, we have confidence that it is on track, but we also understand it's a considerable project and there have been difficulties.
I went, for example, in March of this year when I was in London, I went to BAE headquarters in the United Kingdom and very strongly made the point that we were worried about this project and we needed - not just the Government but also the industry players - we needed to work together to address the difficulties; And you've seen the announcement that I made last week with the reallocation of work to Newcastle and to Adelaide and also to Spain.
KIERAN GILBERT: Can I ask you two quick issues? I know you've got to go, but the submarine maintenance of the Collins class subs, the cost the - Opposition says it's going to blow out by 36 per cent over the next decade, and that you have not taken or advanced a maintenance - a suggested maintenance contract as suggested by the Auditor-General two years ago. You've done nothing with that.
STEPHEN SMITH: Well, three points. Firstly, the Collins class submarine program - its maintenance, its sustainment, is very challenging. I have said quite frankly and openly in the past that this will continue to be a very serious challenge, not just for the parties concerned, but also for Defence and also for the Government. So this is a very considerable challenge; that's the first point.
Secondly, the Audit Office report that's referred to, about 80 per cent of those recommendations have been implemented and we're currently working very closely, the Defence Materiel Organisation and the Australian Submarine Corporation on a new performance-based contract which we hope will lead to improvements. But no-one should be under any illusions that this is a very challenging project for us; and that will also come as no surprise to the Australian public who have seen successive Governments challenged by the submarine project that we have. And, of course, as well as that we are at the early stages of embarking upon a new project, a new program for 12 new submarines which was part of the White Paper 2009.
KIERAN GILBERT: And one last question; a senior officer apparently publicly identified and contacted a confidential witness in the Senate Inquiry into a contract to fly Australian troops into the Middle East. This witness was meant to be confidential, as I say. A senior officer not only contacted the person but publicly identified the individual concerned. What - you've got to be worried about that, don't you?
STEPHEN SMITH: Well, this was a most unfortunate incident and the Secretary of the Department of Defence, when it occurred, wrote to the Senate Committee, apologised for it. He also - the Secretary of the Department also alerted me. It was unfortunate. It created a very bad perception and I'm sure that given we've got Senate estimates today, the Secretary of the Department will be in a position to offer further advice to the Committee as to the steps he's taken to make sure that such bad perceptions don't occur again in the future.
KIERAN GILBERT: Defence Minister Stephen Smith, thanks for your time.
STEPHEN SMITH: Thank you.