TRANSCRIPT: INTERVIEW WITH JON FAINE, ABC 774
TRANSCRIPTION: PROOF COPY E & OE
DATE: 4 MAY 2012
TOPICS: Defence Budget; White Paper; Leadership.
JON FAINE: Minister, good morning to you?
STEPHEN SMITH: Good morning, Jon.
JON FAINE: Is it 1.5, is it 4, is it 5, how many billions of dollars worth is cut from the Defence budget?
STEPHEN SMITH: Well, what I indicated yesterday were two substantial procurement or capability projects, a deferral of the purchase of our initial 12 Joint Strike Fighters. That will be deferred to-
JON FAINE: Which don't exist and don't fly but-
STEPHEN SMITH: The project in the end will be successful. We've put ourselves on the same purchasing timetable as the United States. That has the effect of moving $1.6 billion to the right, to use the jargon.
And, I also announced that we wouldn't be proceeding with a piece of self-propelled artillery. That saves us effectively about $2 billion.
I made it clear yesterday that there would be more cuts in the Budget but I'm not proposing to be drawn on the detail or the amounts of those other-
JON FAINE: Well, speculation is $4 or $5 billion dollars worth and the analysts are divided over whether this, in some way, reduces our capacity to defend ourselves or if there's still plenty more that could be cut.
Which do you think?
STEPHEN SMITH: Well, I won't be drawn on particular numbers. People can speculate all they like between now and when the Treasurer introduces the Budget.
I agree with the ASPI analysis, with that institute's analysis, which is these savings will be difficult but they will be manageable.
We've tried to ring-fence a range of areas and we will effectively do that. No adverse consequences for our overseas operations, whether it's Afghanistan, East Timor or the Solomon Islands.
JON FAINE: But everything affects everything else. Why another White Paper? You've taken little notice of the last one, why another one?
STEPHEN SMITH: Well it's not true we've taken little notice of the last White Paper. The capability basis of the 2009 White Paper continues through the system. There's about 180 projects, the vast bulk of those are continuing and the headline capability items, whether it's submarines, whether it's Joint Strike Fighters, Air Warfare Destroyers, Naval helicopters, that all continues.
What we are doing with the bring forward of the next White Paper is responding to the strategic imperatives, the continuing consolidation of weight in our area, the Force Posture Review which shows we need to get back to focusing on our northern and western approaches.
JON FAINE: Or the-
STEPHEN SMITH: -the drawdown from Afghanistan…
JON FAINE: -or is it time buying, Yes, Minister's type exercise? When you don't know what else to do you went out and sought a White Paper?
STEPHEN SMITH: Well if that was all it was then people wouldn't be making important references to the 2009 White Paper which has been the strategic basis for our operations to date and will continue until it's replaced by the 2013 White Paper.
It's important to make sure that we continue to not just have a sensible strategic assessment. Where the White Paper 2009 is obviously under pressure is in the financial aspects of it and that will also no doubt fall for consideration but we're not the only country in the world which, post-global financial crisis, has had to front up to difficulties in defence expenditure.
We've seen deep cuts in the United States, deep cuts in the UK. What we're trying to do-
JON FAINE: Yeah, but not in China.
STEPHEN SMITH: -what we're trying to do - well, China's economy is growing and they are modernising their military-
JON FAINE: But that's regarded as the most likely threat?
STEPHEN SMITH: We don't regard Chinaas a threat. We regard China's emergence as a great power in the course of this century in the same manner that we regard India's rise as a great power in the course of this century, moving the strategic and the political and the economic weight to our part of the world which is again-
JON FAINE: But the point is, Minister, everyone else is cutting back except China which is growing. Shouldn't we also be trying to keep pace with China's growth just in case?
STEPHEN SMITH: Well, there are two things which have traditionally in the Australian context seen an improvement in defence spending. One has been a strong economy and the second has been a conflict, and whilst I'm Defence Minister I don't want to see us relying upon a conflict for greater defence spending.
So returning the Budget to surplus is important for defence, just as it is to Australia and to Australians. But in terms of what we're doing through this budget, we're ring-fencing important areas so that we can continue our operations.
We're continuing with the core capability of the White Paper 2009. We're fronting up to strategic changes by bringing forward the 2013 White Paper but we're also being realistic about the financial pressures that are on us, just as they've been on the United States, the United Kingdom and Europe.
JON FAINE: Stephen Smith, would you be prepared to lead the Labor Party to the next Federal Election if Julia Gillard didn't?
STEPHEN SMITH: Well we've dealt with leadership. I had some-
JON FAINE: Well, I haven't with anybody this morning, I'm asking you.
STEPHEN SMITH: Well, we've dealt with leadership comprehensively and conclusively a couple of-
JON FAINE: What's the answer?
STEPHEN SMITH: Well, the answer is that Julia Gillard will lead the Labor Party to the next election.
JON FAINE: And if she doesn't, would you?
STEPHEN SMITH: Well, I think she will so there won't be a vacancy [indistinct]-
JON FAINE: The mere fact I'm asking this question and so is everybody else, whether it's on the front page of the nation's newspapers or whether it's in commentary on radio and television, shows you how deep the crisis is within your party?
STEPHEN SMITH: Well there's no doubt that we're going through a tough political time but there's also no doubt that we've dealt comprehensively and conclusively with this issue a couple of months ago.
My own judgment is that Julia Gillard will lead Labor to the next election. My own judgment is also that Tony Abbott will lead the Liberal Party to the next election and we'll have a contest in September, October, November of 2013.
JON FAINE: Good luck and may your-
STEPHEN SMITH: Luck and votes is generally all you need in an election, Jon.
JON FAINE: Well, there is a bit of each. Stephen Smith, the Minister for Defence in the Gillard Government in Melbourne this morning. Thank you for your time.
STEPHEN SMITH: Thanks, Jon. Thanks very much.