TRANSCRIPT: INTERVIEW WITH FRAN KELLY, RADIO NATIONAL
TRANSCRIPTION: PROOF COPY E & OE
DATE: 26 JULY 2012
TOPICS: Defence Budget; South China Sea.
FRAN KELLY: Defence Minister Stephen Smith joins us from Honolulu.
Minister, welcome to Breakfast.
STEPHEN SMITH: Good morning Fran.
FRAN KELLY: Minister, two weeks ago Admiral Locklear was here publicly voicing his concerns about our Defence budget. Did you have words with him about this?
STEPHEN SMITH: Firstly, I don't think that's the correct categorisation of what Admiral Locklear said when he was in Australia. He was asked by journalists about Defence expenditure. He made the point that he had recently come from a NATO area of responsibility where the ambition in NATO is two to two and half per cent of a country's GDP. He made the point that a range of countries, all countries including the United States and Australia are going through a period of fiscal difficulty.
What Leon Panetta, US Secretary of State for Defense, describe as the new fiscal reality. It's not just Australia, it's the US, United Kingdom, Canada, New Zealand and the like.
I spent two days of discussions with Admiral Locklear and his Commanders - Army, Marines, Air Force and Navy - and we spent about two minutes talking about budgets and the fiscal reality which confronts us.
FRAN KELLY: Just to be clear, the comments Admiral Locklear made when he was here, as you say, he told reporters that Australia's spending had fallen below the level the US expected of its European allies and the standard Washington expected of its NATO allies was two and a half per cent of GDP. He also made the point - I mentioned in the lead - which is:
Defence is not something you can turn on and off with a switch from year to year, based on how bad the economies are, so from a Pacific Commander's point of view I would hope that as the Australians work through that they recognise and contemplate this.
That sounds like a criticism of our level of defence spending.
STEPHEN SMITH: It was a reference he made, not just about Australia, about the United States and every other military.
Let me just be absolutely clear on matters of Defence expenditure and the constraints that are upon us.
I've seen references from the Liberal Party, I've seen references from reporters about a view which the United States may take of this. There's only one view that is important so far as the United States' view of how Australia is going so far as our Defence commitment and arrangements are concerned and that's the view of the Secretary for Defense, Leon Panetta.
When I arrived in Hawaii on Monday morning, one of the first things I did was to take a call from Leon Panetta, which we do reasonably regularly and we spoke about AUSMIN, we spoke about Force Posture Review developments in Darwin but we also spoke about Australia's commitment to Defence, Australia's commitment to the Asia Pacific and the Indian Ocean region and Australia's commitment to working very closely with the United States.
I have had three conversations with Leon Panetta about the difficulties that we face in the Budget. His response to me has been twofold on every occasion. I spoke to him before the Australian Budget was delivered in May, I spoke to him after and I spoke to him this week, and the points he's made to me is that the United States and Australia, other countries, are facing what he describes as a fiscal reality, we're all under pressure but, secondly, he said to me that he is absolutely convinced and persuaded that the way in which we are approaching our difficulty will not in any way diminish the commitment that we're making to the Asia Pacific nor to the alliance and, indeed, I've made it clear that we're not engaging in any Defence expenditure restraint which would have an adverse impact on our contribution in Afghanistan nor an adverse impact on what we're doing in the Asia Pacific, our overseas operations in the Solomon's and East Timor nor in any way get in the way of our ongoing enhanced practical cooperation with the US which is currently exemplified by the contribution of Marines rotating through Darwin.
And he said to me that no country makes a greater contribution to its work with the United States than Australia and I accept that at face value from the person who is running their show.
FRAN KELLY: I accept of course that that's what the Defense Secretary said to you when you met him face to face but there do seem to be these other messages coming in from other channels and, to quote from Richard Armitage who was the Deputy Secretary of State in the Bush administration, he said last week Australia's Defence Budget is inadequate. He accused Australia of trying to seek a free ride through our alliance with the US. You're saying that you have not noted any unhappiness, disquiet or resentment towards Australia cutting our Defence spending to the lowest level since the Second World War.
STEPHEN SMITH: Richard Armitage is a former Assistant Secretary of State for Defense. He is well regarded and well respected.
FRAN KELLY: That's the point, really. He is well regarded in Washington, isn't he?
STEPHEN SMITH: He's well regarded and well respected but he's not currently in office. He's not a member of this administration. He's a previous member of the Bush administration. He has a view. The Secretary of State for Defense Leon Panetta does not share his view. I do not share his view.
I reject absolutely any suggestion that a country like Australia, which is making the 10th largest contribution to Afghanistan, the largest non-NATO contribution to Afghanistan, the third largest Special Forces contribution in Afghanistan and which is working with the United States to enhance the United States' engagement and presence in the United States with Marine rotations out of Darwin, the prospect of enhanced aviation or aerial asset access through our northern airfields and down the track proposals under consideration, down the track, for greater Naval access to our Indian Ocean port in HMAS Stirling in my home state of Western Australia, that that is not a country taking a free ride.
That is a country which says the world is moving to the Asia Pacific, to our part of the world, and we've got an obligation and a responsibility to make our contribution to stability, peace and security so that prosperity can be enhanced in our part of the world.
FRAN KELLY: Minister, sorry to interrupt but we're almost out of time. Just can I get a quick response to you from the comments made by Tony Abbott in China in a speech yesterday where two days ago - he said no big country - he's talking about intervention in the South China Sea and he said no big country's entitled to get its way with smaller countries just because it can. Under a Coalition Government Australia will do what it can to make sure the territorial disputes in the South China Sea are managed peacefully in accordance with international law.
Do you have a response to those comments?
STEPHEN SMITH: I think he said a bit more than that and the bit more that he said was somewhat inelegant. He's made a number of inelegant contributions about China in recent days which have put a question mark over his judgment but so far as the South China Sea and territorial and maritime disputes are concerned, the Australian Government's position is quite clear.
We want those maritime and territorial disputes to be settled amicably amongst the parties concerned. Australia does not take sides in the resolution of those things. We simply want those disputes to be resolved in accordance with international law, in accordance with the law of the sea and we don't want those disputes to be a cause for concern or instability or a potential for miscalculation or misjudgment in our part of the world.
And if that risk does arise then Australia believes that through regional arrangements and institutions like the ASEAN Defence Ministers Plus, other countries are entitled to express a view about the need for these matters to be resolved peacefully, amicably and in accordance with international law.
FRAN KELLY: Minister, thank you very much for joining us on Breakfast.
STEPHEN SMITH: Thanks, Fran. Thanks very much.