STEPHEN SMITH: Thanks very much for turning up. I just wanted to make some remarks about AUSMIN. Firstly, as the local Federal Member for Perth and Defence Minister from Western Australia, I'm very pleased to be able to welcome not just my colleague, Foreign Minister Bob Carr and the Prime Minister, but also Secretary of State Hillary Clinton and Secretary for Defense Panetta to Perth.
I was very pleased when my three Ministerial colleagues, Secretary Clinton, Secretary Panetta and Foreign Minister Carr agreed to my suggestion that we conduct AUSMIN in Perth.
I think there are two very good reasons why AUSMIN should be conducted in Perth. Firstly, Perth, of course, is our Indian Ocean capital and the Indian Ocean itself, India and the Indian Ocean Rim continue to rise in importance, and that will take on greater strategic importance in future years and decades and the rise of India continues, in my view, to be under-appreciated.
Secondly, of course, it means our interstate and overseas guests get the chance to see the modern Perth and the modern Western Australia. It gives very good exposure to Perth as a capital city and to Western Australia as a state.
And whilst we will be talking tomorrow about defence and security matters, I will also make the point that in Western Australia and in Australia, you have very substantial United States economic investment.
That particularly applies in Western Australia where you see substantial United States investment in the petroleum resources industry and the Gorgon Project, a project of over $40 billion, is but one example. So there are very significant economic reasons as well as very significant strategic and security reasons why AUSMIN should be held in Perth.
As you'd know, this morning, Minister Carr and I welcomed Secretary Clinton's arrival. Later this afternoon, I will welcome Secretary of Defense Panetta and our formal proceedings will begin later in the day with a bilateral meeting between the Prime Minister and the two Secretaries of State. And that will take place later in the day.
In terms of topics, as you know, we hold AUSMIN every year. Last AUSMIN in Australia was in Melbourne in 2010 and last year's AUSMIN was in San Francisco to mark the 60th Anniversary of our alliance relationship with the United States.
We'll do a stocktake on the rotation of Marines in Darwin, we'll start a discussion on enhanced aviation or aerial access by the United States to our Northern Territory airfields and, because we are in Perth on the Indian Ocean, we will also start a conversation about, down the track, potential for enhanced United States naval access to HMAS Stirling, our Indian Ocean port.
But we will also traverse, as we always do at AUSMIN meetings, the strategic and regional issues of concern and interest to us, including the substantially enhanced regional architecture which is relevant to all of us, the expanded East Asia Summit to which Secretary Clinton will travel, as will the Prime Minister, and the expanded East Asia Summit also has a Defence Ministers format, the ASEAN Defence Ministers-Plus meeting which Minister Panetta - Secretary of State for Defense Panetta and I are scheduled to attend next year.
So we're very pleased to welcome our overseas guests. It will be a good thing for Australia/US relations, but a very good thing to expose the modern Perth and the modern Western Australia to that international audience.
I'm happy to respond to your questions.
JOURNALIST: Why doesn't the Government just give the Americans a base here and be done with it?
STEPHEN SMITH: Well because we don't have United States bases in Australia. We have joint facilities and that's been the case since the 1980s and that was effected when Kim Beazley was Minister for Defence.
But United States Defense Force personnel, whether they're Army, whether they're Navy or whether they're Air Force, have had access to Australian facilities since the course of and subsequent to World War II. We continue to be of the view that our alliance between the United States and the United States presence in Australia is a force for stability and security and investment and prosperity in our region.
United States force personnel who come to Australia, whether they're Marines going to Darwin or Air Force personnel going to Northern Territory air fields or Naval visits to HMAS Stirling, and all of these things occur already, are doing so under a status of forces agreement which has been in existence since 1963.
JOURNALIST: Have they ever raised with you the prospect of a base here?
STEPHEN SMITH: No.
JOURNALIST: Mr Smith, you said you're going to formally start talks about greater use of HMAS Stirling. The Americans already have - they come and go here pretty frequently. How do you see this issue being different? How often do you see American ships coming here? When do you think that this will actually begin?
STEPHEN SMITH: You're quite right, you've made the point as I've made in the past that over the years we've seen plenty of United States Navy visits to Australia, whether that's Western Australia or the eastern seaboard, and we've seen plenty of aerial access by the United States to our Air Force bases and facilities.
What we have been working on, and we started this work as early as 2010, our AUSMIN meeting in Melbourne, has been enhanced practical cooperation.
The United States has made it clear that not only does it want to continue its presence in the Asia Pacific, or the Indo-Pacific as we now these days see the Indian Ocean Rim and the Pacific referred to, not only does it want to maintain its presence, it wants to enhance it, its so-called rebalancing. So our enhanced practical cooperation is precisely that.
Now we've always made it clear, as the President and the Prime Minister did when the announcement about the Marines taskforce was made at about this time last year, that the second issue we would deal with would be enhanced aerial or aviation access and, down the track, greater naval access to HMAS Stirling.
Now, so far as Marines are concerned, we saw a very successful rotation of 200 or 250 this year. That will occur again next year and we're now looking at enhancing that number to a greater amount for the following years. What we're looking at getting to 2500 over the next five to six year period.
STEPHEN SMITH: Hang on. So far as aviation access is concerned, we haven't commenced that discussion so we'll make that start in our formal meeting tomorrow.
So far as HMAS Stirling is concerned, the enhanced access, again we haven't started that conversation. It's very much third cab off the rank and so in both of these instances, particularly with HMAS Stirling, you're talking years rather than weeks or months.
It will depend upon the way in which people start to appreciate the greater significance of the Indian Ocean and the Indian Ocean Rim as India itself rises.
JOURNALIST: Minister, you did flag the idea of the increased aviation access, increased naval access, 12 months ago, 12 months later you're still talking a matter of years. Why is there a go slow on this [indistinct]-
STEPHEN SMITH: And made it very clear at the time that our first priority was always the rotation of Marines. We'd start with 250 and over a period of years, some five or six years, we would go in principle to 2500. We also made it clear that we would make those judgements as we went.
Now, the 250 rotation this year has been very successful, not just in terms of the United States conducting exercises bilaterally with us, but also encouraging our region to look at regional exercises. And we've already agreed with Indonesia to conduct, next year, a regional exercise involving Australia and the United States and Indonesia.
But we made clear at the time that the enhanced aerial access and the enhanced naval access were lesser priorities and they would be attended to down the track.
So what I'm saying now is precisely what I said 12 months ago.
JOURNALIST: Are you in any way concerned about the reaction of China if you sped up the process?
STEPHEN SMITH: Well none of this is aimed at any one country. It's not aimed at China or any other country. It is aimed at a sensible engagement with our alliance partner in the region. It is aimed at a sensible engagement with our ASEAN colleagues in the region.
What we've seen since the announcement of the 250 Marines in Darwin, as I have just indicated, has been a view in the region that this presents the opportunity for humanitarian assistance and disaster relief exercises.
In the margins of the ASEAN Defence Ministers-Plus meeting in Brunei next year, we'll see a military medicine exercise and a humanitarian assistance and disaster relief exercise engagement. We saw Australian army personnel engaged for the first time in a humanitarian assistance and disaster relief exercise with the PLA in Sichuan Province, and we'll see a return leg of that next year. So we are enhancing our engagement on these practical measures, not just with the United States but also with our ASEAN partners and also with China.
JOURNALIST: After the Marines announcement China expressed an initial concern about that. Have you made any sort of pre-emptive-
STEPHEN SMITH: Chinese commentators did.
JOURNALIST: Okay, have you made any pre-emptive assurances to China or do you expect to have to make any after tomorrow's meeting?
STEPHEN SMITH: No, this is very much a sort of a consolidation, business as usual AUSMIN meeting so far as these matters are concerned. There's nothing that will occur tomorrow on this front that will surprise anyone or indeed advance the argument any further than I've indicated over the last few days or weeks.
JOURNALIST: Have the AUSMIN talks become more significant as time has gone on? Are they more important now than perhaps they were a decade ago? Do the Americans take them more seriously?
STEPHEN SMITH: The fact that the United States take them seriously is reflected by the fact that we've had an annual AUSMIN meeting involving both principals, the Secretary of State and the Secretary of State for Defense. This is now with this Government into our fifth year, so since we came to office at the end of 2007 we've had five AUSMINs, one with the previous administration and four with the Obama administration.
Secretary Clinton has engaged in every AUSMIN since she became Secretary of State, and that underlines her attitude to the region. The first trip she made as Secretary of State was to Japan and China, and we've been very pleased and very welcoming of her commitment to the Asia Pacific.
We've been doing AUSMINs now for 22 or 23 years. Our ambition is to do them annually, and we've met that task over the last half dozen years. It is - it's the annual clearing house, if you like, of Ministerial discussions, and they serve the conversation between Australia and the United States very well. And the fact that we alternate countries is also a good thing.
I've done AUSMINs personally in Canberra, Washington, Melbourne, San Francisco and now Perth. So they are very effective formats and we value them very much.
JOURNALIST: Minister how close are we to a decision on missile defence considering the Secretary's going to Adelaide afterwards to look at warships?
STEPHEN SMITH: Missile defence, cooperation on cyber, cooperation on space, these are things which reflect part of the modern world, and as early as 2008, but certainly since 2010 in my experience, these things have regularly been on the AUSMIN agenda and formed part of the AUSMIN Communique, so tomorrow as part of our conversations we'll do a bit of an update on these modern security issues. So cyber, space and the like. We'll touch upon these in the course of tomorrow's meeting.
JOURNALIST: Could you tell us a bit about those, Minister, cyber security, space situational [indistinct]? What you hope to come out of tomorrow?
STEPHEN SMITH: Well on cyber in Melbourne in 2010 we agreed with our United States colleagues that we had to enhance our bilateral work because cyber was an emerging issue. An emerging issue not just for national security but also for commerce and industry. So we now work very closely with the United States, both at Ministerial level but also at agency level on cyber and cyber prevention.
So far as space is concerned my memory is - happy to be corrected on the record - my memory is that in 2010 we signed up for an agreement to work in the space area, particularly when it comes to making sure that space is not bound up with too much debris. So we've been, particularly over the last couple of years, looking at issues of space debris and protection of satellites and the like. But we'll have an update on those areas tomorrow.
JOURNALIST: Will defence spending be on the agenda in any shape or form in terms of the global economy or anything else?
STEPHEN SMITH: Well, as I said, over the weekend the suggestion or the notion asserted by one newspaper that somehow Secretary Clinton and Secretary Panetta were coming to Australia to raise concerns about Australian defence spending is just a nonsense, it's just wrong.
Whatever conversation we have tomorrow will be entirely consistent with the conversations I've had with Secretary Panetta both before our budget and subsequent on a number of occasions, and it's quite straightforward. We're all under financial pressure when it comes to defence budgets. And Secretary Panetta at the Shangri-La dialogue in Singapore earlier this year referred to that as the new fiscal reality.
He's currently managing defence cuts out of the US Defence Budget of half a trillion dollars over the next 10 years, and if there's not a satisfactory resolution to the so-called fiscal cliff, then he's in danger of having to work out how he manages a $1.2 trillion reduction over that same period.
So we've had these conversations, I've made the point to Secretary Panetta and he has publicly and privately acknowledged this that what we are doing in terms of our fiscal restraint is doing things which make sure we don't have any adverse impact on our overseas operations, particularly Afghanistan.
Secretary Panetta has regularly praised us for the contribution that we make there. And not do anything which will have adverse implications for the work that we do with our alliance partner, including the global force posture matters that I've referred to. And I just noticed - I was on the tarmac this morning and Assistant Secretary Campbell got off the plane, Ambassador Beazley told me that the first thing that Assistant Secretary Campbell did was to tell Ambassador Beazley how aggrieved he was that he'd been grievously misrepresented in the papers over the weekend. So I think that puts it in this appropriate context.
JOURNALIST: But meanwhile China's defence spending increases at pace. Is that a matter of concern?
STEPHEN SMITH: China's economy continues to grow and we have always said that any country as its economy grows is entitled to modernise its military. The same will occur so far as other countries in our region and the same will occur, for example, with India.
But so far as Australia goes, we remain far and away the biggest spender, defence spender, in our immediate region, and we remain in the top 15 defence spenders generally.
JOURNALIST: Just on Stirling, as part of these talks do you think it's inevitable you'll have to build more infrastructure there, you'll have to do dredging [indistinct]?
STEPHEN SMITH: We haven't got down to that level of detail, as I say, almost certainly we'll start a conversation tomorrow but those issues are well down the track. Stirling is, as I've put it, the third cab off the rank. We will deal with the consolidation of the marine rotation in Darwin, then deal with the aerial or aviation access.
But I have, as you would expect, coming from Perth and waking up every day and looking at the Indian Ocean rather than the Pacific I've been an advocate and an arguer of the point of view that India is on the rise, the strategic importance of the Indian Ocean is on the rise, as is the Indian Ocean rim generally, I've made this point to India and to Indonesia, the three premier maritime countries in the Indian Ocean rim. We may well be looking years and decades rather than months and years but the enhanced importance of Stirling and its utility is, to me, something that will occur as sure as night follows day. But it'll take years rather than months and weeks.
JOURNALIST: And Minister, just on Afghanistan, given that we're handing over quite a lot of responsibilities to the ANSF in coming months in Uruzgan is there any scope in tomorrow's talks to discuss either changing the timetable of a drawdown or frontloading it in some way?
STEPHEN SMITH: No, no, the transition timetable is set. We've done that both at the Lisbon and the Chicago Summit which the Prime Minister and I both attended. I'm sure we'll have a conversation tomorrow about the post 2014 international community contribution or commitment to Afghanistan, that conversation is essentially not just between us and the United States, but also between our NATO and International Security Assistance Force colleagues, that's effectively just beginning.
Some of you might recall that when I was in Brussels in October for the NATO/ISAF Defence Ministers meeting that I made the point in my intervention that we had to start this detailed conversation.
So I think what will fall for consideration tomorrow will be a conversation about what the post 2014 environment might look like, we're a long way away from coming to detailed or final conclusions on that. Australia's made it clear that we're in the market for continuing to do some enhanced or high level training.
We've already agreed that we'll do some officer training together with our British and Canadian and New Zealand colleagues. And we've also made it clear that under an appropriate mandate, properly authorised, we'd also consider a special forces contribution, either for training or for counter-terrorism or for both.