TRANSCRIPT: INTERVIEW WITH JIM MIDDLETON, NEWSLINE
TRANSCRIPTION: PROOF COPY AND E & OE
DATE: 30 JANUARY 2013
TOPICS: Defence Budget; Mali.
JIM MIDDLETON: Australia's Defence budget has already been hit with significant cuts as the Gillard Government battled to keep its budget it the black. Stephen Smith is Australia's Defence Minister.
Minister, welcome to the program.
STEPHEN SMITH: Pleasure Jim.
JIM MIDDLETON: Apart from fixing the date of the next election well ahead of what's been traditional, I might say, the Prime Minister also said in her speech to the Press Club that there would have to be structural cuts in the budget to pay for her priorities, notably for education.
Does that mean that your portfolio is in line for further cuts? Or has Defence made sufficient sacrifices already as far as its funding is concerned?
STEPHEN SMITH: Well we're about to start our formal budget process and to any of these questions they always say you should turn up on budget night. But Defence made a substantial contribution to the Government's fiscal aspirations last year, and it wasn't alone, every department and agency did.
I think the real point that the Prime Minister has made today is that we have used our fiscal approach as a very important lever for economic growth. We spent in the aftermath of the global financial crisis to ensure we didn't go into recession, but other than that we have been very restrained and tight on our fiscal arrangement.
And so we've affected savings over the last two to three budgets and we need to do so again to be fiscally responsible. We won't do anything in Defence which cuts away at our core or key capabilities or capacities, and we ring fenced key areas, in particular operations overseas and military numbers - when we had to exercise fiscal restraint in defence last year.
JIM MIDDLETON: Those operations are starting to drawdown, the expenditures are being removed, not just in Afghanistan but also in East Timor, for example. Defence does have a very big budget, some of the things the Prime Minister is talking about in education and also a national disability insurance scheme doesn't come cheap, $15 billion perhaps, over the forward estimates. That's got to make Defence an attractive target for people seeking to find the kinds of money that it needed to pay for those initiatives?
STEPHEN SMITH: Well again, Defence has not been the only department or agency that's made a substantial contribution, and there's no single focus on a particular department. And just as it is important for the Government to discharge its economic responsibilities, so it's important to discharge our national securities responsibilities. And despite the restraint we remain in the top 15 defence spenders, our annual defence budget remains in the order of $100 billion over the four estimate years.
And we're not the only country going through a period of fiscal restraint in the defence area, whether it's the United States, the United Kingdom, New Zealand and the like. The key thing is to make sure you do things in an efficient and smart way, and you get your priorities right. And so we're now moving through a period where there's a managed drawdown in Afghanistan in accordance with our international obligations, a drawdown from East Timor and the Solomon Islands.
But at the same time we're looking at our force posture in Australia and Northern and Western approaches, looking at enhancing our engagement and responsibilities in the South Pacific and Southeast Asia. So the responsibilities, the priorities always change. It's ensuring that our fiscal restraint is matched by a sensible order of priority, and that's what we did in the last budget.
And whatever the outcome in terms of defence and other budgets, that's what we'll do in the forthcoming budget, and as well we'll do that in our 2013 White Paper which we will publish in the first half of this year, but more likely than not April, May, June.
JIM MIDDLETON: Talking about the region, China for example is doubling its spending on defence every five years or so. India's boosting its defence spending by something like 20 per cent this year. Southeast Asia overall increased defence spending by 13 per cent last year.
Is it the right time for a nation of Australia's size bidding for influence in the region to be the going the other way, that is, reducing its defence spending as a proportion of GDP, when all these other countries are on the up and up?
STEPHEN SMITH: Well in a sense we're not doing it voluntarily. It's what Leon Panetta describes as the new fiscal reality. The United States to meet its fiscal obligations is taking out nearly half a trillion dollars over 10 years. The United Kingdom-
JIM MIDDLETON: But is there a danger that in following these budget imperatives as the Government sees them, that this means a reduction in influence at the very time that there are some very serious potential conflicts within the region?
STEPHEN SMITH: No well I don't believe so, because it is not just the military arm which you use to influence international events. It's also your diplomatic arms and your other strategic points of influence. But as I say, we're not the only country facing these constraints.
So far as China and India are concerned, as a country's economy grows - and both India and China are on the rise economically, politically, strategically - they're perfectly entitled to grow their military capability to match that. We simply say that as countries develop their military capability they should be transparent about their intentions.
We continue to be far and away in our own immediate region the most capable and the largest defence spender. And a number of the parts of our region that you've referred to, yes they're increasing their military expenditure, but they're coming off a low base.
JIM MIDDLETON: A few days ago, the Prime Minister outlined an update of the Government's strategic outlook. She suggested that the 9/11 decade, the national security decade was over. Does that mean though, for example, that Australia does not regard what's happening in Mali at the moment as part of this tendency towards Islamist terrorism another cell of that tendency developing there? That it's something else?
STEPHEN SMITH: The Prime Minister wasn't saying - and nor does the national security strategy document say - that the threat or the risk of international terrorism is over. We will continue to need to be ever vigilant, and our mission in Afghanistan continues to be to make sure that it doesn't become a breeding ground again for international terrorism. But it's not the only place in the world where there is a threat, whether it's in Indonesia or in Africa.
And so far as Mali is concerned, yes there's a threat there, we welcome very much the fact that the French have intervened, we strongly support the United Nations Security Council resolutions which support the intervention of an African Union-led intervention. The Foreign Minister and I overnight announced a $10 million contribution, $5 million of that, half of that, to the United Nations Trust Fund to sustain and support that military intervention.
It's not for us to make our own military contribution. There are countries that are closer on the ground, they have more historic connections with Mali and its region. And as France itself has said, in the end the primary responsibility is an African one, and effectively an African Union one. But we show our support of the French intervention and support for the African Union's intervention by making that contribution which is a proportionate one, and an appropriate one.
JIM MIDDLETON: I'd better leave it there, Minister. Thanks very much for your time.
STEPHEN SMITH: Thanks Jim. Thanks very much.