TRANSCRIPT: INTERVIEW WITH ASHLEIGH GILLON, SKY NEWS
TRANSCRIPTION: PROOF COPY E & OE
DATE: 27 JULY 2012
TOPICS: RIMPAC; Defence Budget; South China Sea; Leadership; WA State Elections.
ASHLEIGH GILLON: Stephen Smith, thank you for your time.
STEPHEN SMITH: Pleasure.
ASHLEIGH GILLON: Tell us about the Rim of the Pacific exercise. How much did it cost to undertake and what's the point?
STEPHEN SMITH: Well it's a very big exercise; we do it every two years. This one's the largest - over 20 nations, including for the first time Russia. So we've got about 1100 personnel there from Army, Navy and Air Force.
Its focus is really a maritime and an aerial exercise, but it enhances interoperability between us and a range of other countries. We've got significant assets there; Farncomb - one of our Submarines, two Frigates, Darwin and Perth. And it's a very good exercise; it's been going very well. But I can't give you the cost of the exercise at the moment; that'll be accounted for in the usual way, but it's certainly value for money and value for effort and it has been, and continues to be very successful.
ASHLEIGH GILLON: While you were there, you held talks with the Commander of the US Pacific Fleet. Did he raise any concerns with you about Australia's decision to cut the Defence budget?
STEPHEN SMITH: No he did not. We spent literally a whole day in discussions with him, with Admiral Locklear who's the Commander of Pacific Command. That's the United States military command which has responsibility for all of the Asia-Pacific and the Indian Ocean. So it's a very large area of responsibility and all of those areas of strategic interest to Australia.
I spent a day in discussions with him and his colleagues. We spoke about budget matters for about two minutes where we both made the point that a number of countries: Australia, United States and the United Kingdom are all under fiscal pressure.
Indeed my reference point in these matters is the Secretary for Defence, Leon Panetta at Shangri-La Dialogue a couple of months ago where he said we all have to understand that we face a new fiscal reality.
United States is taking out nearly $500 billion over the next decade - half a trillion. And if the can't get support of Congress there'll be more than that. So we all face these constraints. It's a matter of how you deal with that and cope with that.
My conversations with Leon Panetta both before the budget and after the budget, including when I was in Hawaii by telephone is that he is absolutely confident that Australia continues to make its contribution to the alliance and its contribution to peace and security in the Asia-Pacific.
ASHLEIGH GILLON: So why do you think those concerns aren't being expressed to you? Because we have heard from the Commander, criticism that the budget has fallen below the expected levels of America's European allies-
STEPHEN SMITH: That's not a correct categorisation of what Admiral Locklear said when he was here. He was asked by journalists about Defence spending. And he said that he had just come from responsibility in NATO where the rule of the bus two to two-and-a-half per cent of GDP. He acknowledged that not every NATO country meets that commitment and that we're all going through a difficult fiscal time. And he made that point to me when I was there.
But if you look at people who've been making comments about Defence spending some of them assert, and it's been asserted by the Liberal Party that former officials making comments, journalists and commentators making comments that this somehow is a criticism by the US administration of Australia. There's only one person whose comments are relevant in this context, and that's the Secretary for Defense.
I made sure that I spoke to him before our budget, and I've spoken to him twice after our budget as late as Monday of this week, and he says to me, Minister, you're no orphan, we're all going through these difficulties. And he's absolutely persuaded and convinced that we continue to make a contribution by protecting our overseas operations, protecting the work we do with the United States, and also protecting our core capability for the future.
ASHLEIGH GILLON: So are you disregarding the comments from people like Richard Armitage suggesting that Australia shouldn't expect to take a free ride on the US?
STEPHEN SMITH: Well Australia is not taking a free ride. Australia-
ASHLEIGH GILLON: So those comments aren't significant or concerning to you at all?
STEPHEN SMITH: Well I know Richard Armitage. He is a former Assistant Secretary for Defense. He's served-
ASHLEIGH GILLON: So his comments carry some weight.
STEPHEN SMITH: Well he's a former Assistant Secretary for Defense. He served the previous Bush administration. He's not a current member of this administration. He is effectively a commentator. I don't agree with his comments. I have respect for him; I don't agree with his comments. And the comments to me of the United States Secretary for Defense comprehensively overwhelm those comments.
Yes, I would like as Defence Minister for our expenditure in Defence to be closer to two per cent of GDP than 1.5 which is where the budget sees it. But that's not the only measure. In 2009 for the first time we spent $100 million over the forward estimate years; we're still doing that.
We continue to be the 13th, 14th or 15th largest spender in Defence terms. We continue to be the second-highest per capita spender when you look at the large countries including China. But most importantly, we have ring-fenced our financial difficulties from our overseas operations. We have ring-fenced our financial difficulties from our core capability, and we have ring-fenced our financial difficulties from those things which we do with the United States, in particular, the enhanced practical co-operation that we agreed with President Obama, and announced by the Prime Minister and him in November last year.
ASHLEIGH GILLON: Still though, as you've pointed out, the Opposition has really slammed these cuts. I'll quote David Johnston. He says they're unacceptable, naïve, high-risk, dangerous, crazy and foolish.
If the Budget does continue to be tightened as planned, does it mean that you're effectively planning for a smaller Australian Defence Force - is that the path we're heading on?
STEPHEN SMITH: Well two things, firstly - if it was all of those things, all of those pejorative adjectives which the Shadow Minister has put out there, then presumably he - the Shadow Treasurer, Mr Hockey; and the Leader of the Opposition, Mr Abbott - would have committed themselves to reverse these cuts, and reinstate [indistinct].
ASHLEIGH GILLON: They argue they don't know what the state budget will be in even when they [indistinct].
STEPHEN SMITH: Well no what they do is they refused to commit themselves to reinstating those expenditures because they know they also will have - if they come to office - they will also have the financial constraints.
So they are prepared to try and score political points, use pejorative language. But they will not commit themselves to a reinstatement of these expenditures. And that is for the obvious reason that in the current constraints, post global financial crisis, post European difficulties, returning the budget to surplus - the only responsible course is to make sure that we return to a budget surplus, and every government department and agency has had to make a contribution.
ASHLEIGH GILLON: So again, are you planning a small Australian Defence Force, is that the path we might be going down?
STEPHEN SMITH: No it's not, no, one of the things that I have made sure did not occur is that we have not cut into military or service personnel numbers. That was a mistake that the Liberal Party made in the aftermath of Vietnam. And we're not proposing to make that same mistake.
So we are protecting the number of military personnel - we are protecting our core capability - and we are protecting the work that we do in the Asia-Pacific in particular with our alliance partner the United States.
ASHLEIGH GILLON: The Opposition Leader was in China earlier this week. He said that Australia will do what it can to ensure that territorial disputes in the South China Sea are [indistinct] peacefully in accordance with international law.
That's consistent with your policy isn't it?
STEPHEN SMITH: Well he said-
ASHLEIGH GILLON: -and if it is, why has the Government been out attacking Tony Abbott over those comments.
STEPHEN SMITH: Well he said a bit more than that when he was in China, both on the South China Sea, territorial and maritime disputes, and also on foreign investments. And both of those pieces of commentary caused me and others in the Government to just ask the question whether-
ASHLEIGH GILLON: What specifically about the South China Sea did Mr Abbott say that you're concerned about?
STEPHEN SMITH: Well he made comments which have been widely interpreted - not just by members of the Government, including the Foreign Minister, but by a range of Australian commentators and journalists that he was essentially saying that Australia would come to the aid - or to the rescue of a particular party involved in a territorial or maritime dispute with China.
ASHLEIGH GILLON: But Mr Abbott didn't say that.
STEPHEN SMITH: Well when you're holding yourself out as being Prime Minister of a country - and you make comments about foreign policy and you make comments about national security in another country - you have to be very careful.
His words on both fronts I've referred to were inelegant. And as a consequence of those inelegancies, they've been widely interpreted in the manner in which I have outlined.
But our approach to territorial and maritime disputes is straightforward - safe, and use of sea lines of communication, consistent with international law, are absolutely essential to Australia as a maritime nation as they are to other countries.
So where there are territorial or maritime disputes, it's absolutely essential that they're settled in accordance with international law. We don't take sides.
We're not a party to any of these disputes, so we don't take sides. We simply say to the parties concerned, the countries concerned and it can be more than two countries over a particular area that these need to be settled peacefully in accordance with international law, in accordance with the law of the sea, and we can't allow them to become causes for conflict or for misjudgement or miscalculation.
And that's why we say international or regional institutions like the East Asia Summit and the ASEAN Defence Ministers' Meetings are entitled to take a view about these matters.
ASHLEIGH GILLON: Mr Smith, the leadership rumblings are continuing. I have to say that your name doesn’t seem to be thrown up as often as a leadership contender. It seems to be the focus clearly being on Kevin Rudd is the other option for the Labor leadership.
Is that your reading of the situation?
STEPHEN SMITH: Well you won't find my name there, because I'm a strong supporter of the Prime Minister. And I've made that clear from the moment she became Prime Minister including in the challenge against a few months ago-
ASHLEIGH GILLON: Would you serve on the front bench if Kevin Rudd was reinstalled as leader?
STEPHEN SMITH: Well I'm serving the Prime Minister of the day. She will be Prime Minister in my view from now until the next election. I regard all of those matters as purely speculation. The Labor Party at the parliamentary level dealt with these matters comprehensively some time ago. I have a very clear memory of Mr Rudd saying that he would not challenge the Prime Minister again. And indeed, he would be a human shield if anyone else tried to.
I take him at his word and I'm proceeding very much on the base that the Prime Minister will continue to deal with the difficult policy and political challenges that we face. And she'll do that until the next election in September/October/November of 2013.
ASHLEIGH GILLON: But you haven't decided if you would serve on a front bench if Kevin Rudd was [indistinct].
STEPHEN SMITH: Well there are a lot of hypothetical things that I don't put my mind to, and I don't put my mind to things which won't occur.
ASHLEIGH GILLON: The WA state election is due early next year before the federal poll. The Opposition Leader here in WA, Mark McGowan has effectively said Julia Gillard isn't welcome here to campaign with him in the lead up to the state election.
Do you agree she'd be better off staying away?
STEPHEN SMITH: Well firstly I haven't seen Mr McGowan say that, and I'd be, you know, and I would be surprised if any journalist was able to show me that quotation, that's the first point.
ASHLEIGH GILLON: Well I've got a quote here. I think it's a contest between State Labor. I wouldn't think there would be any federal involvement needed.
STEPHEN SMITH: Well he's making the very simple point which I have made over a long period of time - as a state government, Western Australian State Government staffer, as a state party official here, and as a Federal Member of Parliament, that the Australian community - whether they are West Australians or people from other states - are smart enough to work out the difference between state issues and federal issues.
So the Western Australian election here, next year, will be fought on state issues. And Mark McGowan is doing a very good job of putting Colin Barnett under pressure. And it'll be an interesting run up to the state election. And it'll be I think a very competitive election - Mark McGowan is and will continue to do in my view very well.
ASHLEIGH GILLON: We keep hearing that here in WA, Labor MPs at a state level would prefer a federal election sooner rather than later, they think that that would boost their own chances in a state election if Labor was cancelled out on a federal level. Is that-
STEPHEN SMITH: Well we have an election cycle. And the current election cycle sees a federal election in September/October/November of next year, and a fixed state election in March of next year. We deal with-
ASHLEIGH GILLON: So they should give up on that hope.
STEPHEN SMITH: Well, we deal with the cards as they're played. The state Parliament determined that there would be a fixed four year term, and the start of that fixed four year process would be a state election in March of next year. And I think WA Labor and Mark McGowan will be very competitive in that respect.
ASHLEIGH GILLON: Stephen Smith; thanks for your time.
STEPHEN SMITH: Thank you, thanks very much.