TRANSCRIPT: INTERVIEW WITH DAVID LIPSON, LUNCHTIME AGENDA
TRANSCRIPTION: PROOF COPY E & OE
DATE: 10 MAY 2012
TOPICS: Craig Thomson; Defence Budget; C-27s.
DAVID LIPSON: Stephen Smith, thanks for your time. What was your role in the happenings on the floor of parliament yesterday relating to Craig Thomson?
STEPHEN SMITH: Well, I'm the Deputy Leader of the House, and the Leader of the House, Mr Albanese, was on his feet. So I had a conversation with some of the Independent Members of the Parliament. Mr Thomson had made it clear that he wanted to let the House know that he would make a statement. The Independents were in favour of that so we had to find the mechanism, and the mechanism was Mr Albanese made it clear to the parliament that that was Mr Thomson's intention.
Mr Thomson then sought indulgence to make that statement. Now-
DAVID LIPSON: Did you have to convince the Independents to not vote with the Coalition's motion?
STEPHEN SMITH: No, the Independents were keen to make sure that Mr Thomson was able to make clear to the House that he wanted to make a statement, and that's I think appropriate.
There's been an 1100 page report from Fair Work Australia. Mr Thomson told the House yesterday that he hadn't had any advance notice of it so it's a big document that he wants to go through, presumably also with his legal advisers. But it is appropriate that he make a response to those findings which are obviously serious and concerning, and he's made it clear that he'll do that when the House comes back the week after next.
And my own judgement is the House should give him that opportunity to do it for as long as it takes.
DAVID LIPSON: Rob Oakeshott said today, bugger the numbers, we've got to sort this out. That's pretty strong language. Is there any concern that support may drift to the Opposition over this?
STEPHEN SMITH: Well, I haven't seen Mr Oakeshott's remarks but I think that comment simply makes the same point that I've just made to you in different language, which is essentially it was appropriate for Mr Thomson to make a response to the House. He certainly should be afforded that opportunity but I also share the view that there is an obligation upon him to give the House a response to the serious findings in the Fair Work Australia report.
DAVID LIPSON: Wayne Swan has armour-plated the surplus. He said that he will make further savings for the cuts if necessary, if revenue continues to dwindle. Can you guarantee that there won't be further cuts to Defence?
STEPHEN SMITH: Well, what I can guarantee is that what we've done in this Budget, which is across the forward estimates years, $5.4 billion worth of savings. That's made a contribution to the surplus, as every department and agency has. That's difficult for Defence but it's manageable.
We have ring-fenced a whole range of important areas not adversely impacting on overseas operations, no impact on military numbers, no impacts on kit for people on the frontline, and protecting our core capability reflected by the announcement I have made today of 10 new tactical airlift aircraft at a cost of $1.4 billion.
DAVID LIPSON: We will get to those but you can't guarantee that there won't be further cuts to Defence?
STEPHEN SMITH: Well, we're dealing with this Budget. That's the first point and we will bring '12-'13 to surplus. Defence has made a substantial contribution. There are a range of operating areas - not operations but operating areas, the normal everyday operating of Defence, whether it's the civilian side or the military side where we need to get savings particularly in the first year. But I'm proceeding on the basis that Defence, having made a substantial contribution, we can make that contribution and continue to discharge our obligations to our national security priorities.
DAVID LIPSON: Okay. So you've announced $1.4 billion for these aircraft to replace the Caribou fleet. Are we getting new builds or are these second-
STEPHEN SMITH: No, no, they're new builds. It's an Italian aircraft. These will be put together on a production line in the United States. We're buying it under our United States Foreign Military Sales. But the long-term maintenance will be done by a contract with Alenia, the Italian company.
And it fills a gap. We've got a fleet of six C-17s, the big heavy airlift, two of which we've purchased - since I became Minister. We've got a fleet of C-130s. But the advantage of the C-27s, the tactical air-lifters, they can get into smaller, more remote airfields. So, for example, in the Pacific there are about 200 more airfields that a C-27 can get into that a C-130 can't. And so that obviously helps on not just security, for example if you're in East Timor or the Solomons, but also on humanitarian assistance. And there are, I think, some 600 airfields in Australia where a C-27 can get into that a C-130 can't.
DAVID LIPSON: And just very briefly, is there an issue of interoperability here considering that the US is cutting these aircraft from its program?
STEPHEN SMITH: Well, no because we will have a long-term commercial arrangement with Alenia, the producer of the plane, for long-term maintenance. We're buying them through our US Foreign Military Sales because the US continues to have a production line. Yes, they have, as part of their cuts, stopped their use of the C-27 fleet for national guard purposes, but their production line continues to operate for our purposes which is essentially getting the Italian body frame and then completing it. So we'll use that production line for Foreign Military Sales but the long-term maintenance will be done directly with the Italian company.
And it makes a very good point. The US and the UK, for example, have been under a lot of budget pressure, as we are. They've addressed that in some cases by chopping things out or just simply eliminating things. We've addressed our problems by trying to not chop things out or cut things off but to reduce in some cases the funds that flow to them so that when the fiscal environment returns we can move those to a better position into the future.
DAVID LIPSON: Stephen Smith, thank you very much.
STEPHEN SMITH: Thanks. Thanks very much.