TRANSCRIPT: INTERVIEW WITH DAVID SPEERS, LUNCHTIME AGENDA
TRANSCRIPTION: PROOF COPY E & OE
DATE: 3 May 2013
TOPICS: 2013 Defence White Paper.
DAVID SPEERS: Minister, thanks for your time.
STEPHEN SMITH: Pleasure.
DAVID SPEERS: This is a less ambitious document than the 2009 White Paper. Is that because the threat facing Australia has somehow reduced or that we can simply not afford as much?
STEPHEN SMITH: I wouldn't describe it as less ambitious in the sense that I think it is a strategic document which will address current circumstances but also stand the test of time. So far as capability and budget, we're obviously going through a very tough time financially. That's been the case in the aftermath of the global financial crisis.
So, in that respect, in my view, it's a sensible, sustainable document so far as capability is concerned. But-
DAVID SPEERS: It is more modest, though. That last White Paper had a $200 billion wish list of acquisitions.
STEPHEN SMITH: The last White Paper essentially set out a dedicated Defence Budget or spend or expenditure from 2009 through to 2029-30. So, it sought to set up a defined Defence Budget over a very long period of time. And it became pretty quickly apparent in the aftermath of the global financial crisis that the deleterious financial circumstances and fiscal circumstances wouldn't allow and didn't allow that to occur.
So, I've set up and we've set up a model-
DAVID SPEERS: So, this is less ambitious?
STEPHEN SMITH: Well, you can use that word if you want to. We've set up a model which is more sensible, which doesn't pretend that in very difficult financial circumstances you can ignore economic financial or fiscal circumstances, whether they're domestic or international.
So, the model we've set up is a four-year Defence Budget based on the forward estimates and then the following six years will have a Defence guide so that we can do the necessary planning. But the notion that we could be the only country in the world in the face of the global financial crisis to have a dedicated Defence Budget for 20 to 30 years is just out the door, as it should be because it's not sensible planning.
DAVID SPEERS: You made a big point today of saying there's now a bipartisan approach to Defence spending. Both you and the Coalition share this goal of getting back to two per cent of our GDP being spent on Defence and essentially there will be no more Defence spending cuts.
Isn't the reality here though that it's this Labor Government that has cut deeply into Defence, including just last year $5.5 billion?
STEPHEN SMITH: We've had to respond to difficult fiscal circumstances. And I don't walk away from that. But the first time I used that expression, an outbreak of bipartisanship on Defence spending, was in January or February of this year after Mr Abbott went to the Press Club - and you might recall he went to the Press Club, his first formal speech, and he said that the Coalition's commitment on Defence spending was no further cuts to Defence spending, but no commitment or promise to reinstate any cuts in the past and an aspiration for two per cent of GDP.
And I said that that perfectly mirrored what the Government had done. That they had adopted our forward estimates. And I've made that same point today.
But let me make a point about two per cent of GDP. The Government would like to spend two per cent of GDP, but we recognise - on Defence - but we recognise the financial constraints. The Opposition says it has the same aspiration. Australia has not spent since 1999, so from 2000 on, we have not spent two per cent of our GDP on Defence. So, this has been an aspiration, effectively, under two Governments for 13 odd years. But GDP is not the only measure.
Despite all of our difficulties, which the former US Secretary of State for Defense describes as the new fiscal reality for defences around the world, we'll still be in the top 15 of Defence spenders and we will still be able to make the Australian Defence Force an effective and capable organisation which can protect our national security interests.
DAVID SPEERS: Okay. The main criticism from the Opposition to this White Paper today, Minister, has been that it lacks detail on the dollars. How much some of your plans are going to cost and where the money's going to come from?
STEPHEN SMITH: There's pretty much the same detail so far as finance and budget is concerned in the 2013 White Paper, as there was in the 2009 paper, as there was in the Coalition's last effort in 2000. Leaving a gap from 2000 to 2009 by the Coalition was not a helpful contribution, but there's enough information there to enable people to make the following judgements; that the acquisitions that we've announced, in particular the acquisition of Growler, will be done in the four year forward estimates period. We will purchase the Growlers in the financial years 14-15 and 15-16, and we'll have, on the advice of the Chief of Air Force, initial operating capability by 2018.
So the capability issues that we've addressed today, whether it's submarines or the Growler variant of the Super Hornet, are within the forward estimate expenditure realms or guide, which the Budget will show in a week or so time.
DAVID SPEERS: What about the submarines though? What about the submarine, what are they going to cost?
STEPHEN SMITH: Submarines are an enormous project. You're talking, you know, in the billions. But it's also a project which we're in the planning stages of now, and will last through to the 2030s. So successive governments and successive budgets and successive defence capability plans will make the adjustments and the priority for that as we go.
But we've made some significant decisions on the submarine program today. Narrowing to an evolved Collins design or a wholly new design and, indicating we're proposing to use or adopt for the submarine the US, or a US combat weapons and communication system-
DAVID SPEERS: And is this a political decision to protect those jobs in Australia?
STEPHEN SMITH: Absolutely not. We approached this as we do on every other capability issue, which is we have to make a judgement from our national security perspective. We looked at four options including off-the-shelf and modified off-the-shelf, and the two I've referred too. And we came to the conclusion, working through with the Chief of Navy, the Chief of the Defence Force, and Defence generally, that the off-the-shelf variants, generally European, do not give us either the operational or the strategic capability that we need as a great maritime country and continent.
DAVID SPEERS: Okay. But on the cost here, you're saying it's too early to put down any figure at all, about what these submarines might cost.
STEPHEN SMITH: The forward estimates provision contain more than sufficient resources for us to do the planning that we have referred to and for us to do the remediation on the Collins Class submarines that we've also referred too. So that's in the forward estimates, but we're at the planning stages of Defence's and the Commonwealth's largest capital works program ever. The Collins Class will last us anywhere to 2031 to 2038. So we're talking over the next 10, 20, 30 years, a rolling program of planning and a rolling program of production.
So it's billions of dollars, and that's why we have been so careful, so meticulous, and so assiduous about our early planning, because mistakes made now will be massively magnified into the future.
DAVID SPEERS: Just finally, Minister, there was a different tone in this White Paper than the previous one, in relation to China. Did the 2009 White Paper get it wrong, or go too far?
STEPHEN SMITH: As I have said previously, I think that the Government has adopted a policy position so far as China is concerned which has been consistent from day one. Namely, we know China is on the rise. China is going to become a significant power, the equal of the United States. It's growing its economy. It will grow its military. We want China to emerge in a positive and constructive way. We want the relationship between China and the US to be positive and constructive. And we accept that China will modernise its military. We simply ask for transparency.
Now, I know a different interpretation was taken by the commentators and all concerned in the 2009 White Paper-
DAVID SPEERS: Not just the commentators, though, Minister. By China too, from all reports.
STEPHEN SMITH: Well, people interpreted the 2009 White Paper in their own way, just as people will no doubt interpret this one in their own ways. I'm sure there'll be a-
DAVID SPEERS: But do you stand by the language in it, in relation to China?
STEPHEN SMITH: I stand by the fact that in my view, our policy approach to China has been consistent from day one. We welcome China's rise. We have a positive and constructive relationship with China. We want China to be a responsible stakeholder. We accept that in the short-term we'll have two super powers, United States and China.
The key starting point is the positive relationship that they have, not just on the economic front, but on the strategic, defence, military and political front. And in the not too distant future, in the sweep of history, India will also be of the same prominence. And the international community, and India, the United States, and China will all have to adjust to that as well. In the first instance, the bilateral relationship between China and the US is absolutely essential to our ongoing prosperity, and our ongoing peace and stability in our region, and we welcome the efforts that both of them are making in that respect.
DAVID SPEERS: Defence Minister Stephen Smith, we'll have to leave it there. Thank you for joining us.
STEPHEN SMITH: Thanks, David. Thanks very much.