TRANSCRIPT: INTERVIEW WITH LYNDAL CURTIS, ABC24
TRANSCRIPTION: PROOF COPY E & OE
DATE: 3 May 2013
TOPICS: 2013 Defence White Paper.
LYNDAL CURTIS: Stephen Smith, welcome to ABC News 24.
STEPHEN SMITH: Pleasure.
LYNDAL CURTIS: Your White Paper contains a commitment to return the Defence budget to two per cent of GDP, it's an aspiration. Have you now also formally abandoned the promise in 2007 to real growth in Defence spending at a minimum of three per cent?
STEPHEN SMITH: Yes, I made it clear at the press conference today that that had fallen foul of the global financial crisis and the difficult financial position that we find ourselves in. What we've-
LYNDAL CURTIS: So does that mean it will take longer to get to two per cent of GDP?
STEPHEN SMITH: We're not putting a timetable on it. We want to be spending closer to two per cent than 1.5 or 1.6. I've been making that clear for more than 12 months. But the reality is that Australia has not spent two per cent of its GDP on Defence since 1999. So since 2000 until now, we have not met two per cent. It's an aspiration for us, it's an aspiration for the Coalition. But the fiscal circumstances in which we find ourselves mean that you've got to put forward a sensible, sustainable model.
We've put forward a model of the four year forward estimates period plus six years' worth of planning.
LYNDAL CURTIS: Over that 10 years, can you see a Government getting back to two per cent?
STEPHEN SMITH: Well time will tell. If you're having the conversation in 2009 about adverse implications of the global financial crisis, no one would have predicted what we've seen, the depth, the longevity.
LYNDAL CURTIS: But you also - in the 2009 paper it said that the Government - it demonstrated the premium the Government puts on Australia's national security by not allowing the impact of the global financial crisis on its budget to affect its commitment to Defence needs.
STEPHEN SMITH: No one then - including the Government - foresaw the depth, the extent, the longevity, and the way in which it would impact adversely [indistinct]. Not just on Australia and its overall fiscal position including Defence, but on other comparable countries, none the least the United States or the United Kingdom or Canada or New Zealand.
LYNDAL CURTIS: Do you believe that two per cent is necessary to fund Australia's national security obligations to ourselves and in the region, and if you don't get there for a while, is the intervening period essentially underfunded?
STEPHEN SMITH: Well, a percentage of GDP is a measure. It's not the only measure.
LYNDAL CURTIS: But that does allow you the capability to meet-
STEPHEN SMITH: No, what it does-
LYNDAL CURTIS: The security-
STEPHEN SMITH: What it does is it enables you to have a consistent, domestic benchmark, but also a capacity to make sensible, objective, international comparisons. It's not the only measure. Despite our difficult financial circumstances, we were the first Government - in 2009 - to bring Defence spending to over $100 billion over the forward estimate period. This year's budget will see that continue. We'll have a modest increase on the four year forward estimate position from last year, where - in raw terms - it was 103, 104 billion.
And to use the expression used by the Chief of the Defence Force, given the difficult circumstances that we face it's a good outcome. Now the hallmark is are we doing, through the White Paper, the things needed to protect and defend our national security interests? Strategically, yes we are.
LYNDAL CURTIS: At a time when others in the region are also growing their budgets and increasing their capability.
STEPHEN SMITH: Well some are and some aren't. As we see economies grow, China, India, Indonesia, you'll also see their military capability and modernisation capability grow - modernisation occur. But GDP is not the only measure. As I say, Australia hasn't seen two per cent of GDP since 1999. And I don't think, in the year 2000 - or through the years until 2006-07, Mr Johnston was out there saying that Defence and the ADF is in crisis because we weren't getting to two per cent of GDP.
We remain in the top 15 defence spenders. We remain, in our immediate part of the world, the most effective and capable defence force. And the White Paper and our budget decisions to be seen in the Budget in a week or so will continue to make sure the Australian Defence Force is an effective and capable military force in our part of the world.
LYNDAL CURTIS: You said given the commitment that this Budget won't see cuts to Defence spending, it will see a small increase, can you explain what the reasons were for the cuts to Defence in recent years? Was it driven by national security considerations or simply the search for a surplus?
STEPHEN SMITH: Well Defence had to make a contribution to the Government's overall fiscal position, as other agencies did. All other agencies did. And what we did was make sure, particularly in last year's Budget, that we didn't have an adverse impact on our core priorities or capabilities. So the main capability continued as you see it continue today. Whether it's C-17s, Super Hornets, submarines, Bushmasters and the like.
So the main capability from the 2009 White Paper continues, plus we ring-fenced capability to Afghanistan, ring-fenced those people about to deploy or on deployment, made sure that we could discharge the new enhanced practical operation with the United States under our Alliance. So we did it in a priority way. And that's what you have to do. And that's why, despite all the nonsense from the Opposition about a crisis and the worst day since Saigon, the Defence Force is ongoing in its capacity to engage and do the priority tasks that the Government and the nation requires of it.
LYNDAL CURTIS: You've announced the purchase of 12 new Growler-enabled Super Hornets. Is that a big hedge against the Joint Strike Fighter not being delivered on time, or not being delivered at all?
STEPHEN SMITH: I've made it clear pretty much from day one since I became Defence Minister that I would not allow a gap to appear in our air combat capability. And that risk of a gap has occurred because of the delays in the Joint Strike Fighter project. The Opposition says that's down to us, well actually it's a program in which we are an international partner. But a project in which we have no control over the outcomes. And in last year's Budget, we put back the purchase of the Joint Strike Fighters onto the same timetable as the United States when the United States, in the run up to our Budget, pushed 170-odd planes to the right.
In other words, it recognised that there were delays. So we need to make sure that a combination of our classic Hornets, which will see the end of their capability in 2022, a combination of our classic Hornets, our 24 Super Hornets, and now our 12 Growlers give us an ongoing capability edge in our part of the world - in our immediate region - until the Joint Strike Fighters arrive.
And we're currently planning - continuing to plan as we have since the last Budget on the first of three squadrons arriving commencing 2020.
LYNDAL CURTIS: You've also effectively extended the life of the Collins Class submarines by another seven years, that will mean effectively towards the end of their life there'll be submarines around 35 years old in the water.
STEPHEN SMITH: We have done a couple of things. The Collins Class submarine is a good submarine when it's in the water, despite everything that the Shadow Defence Minister says in contradiction of his leader, Mr Abbott, who takes the same view that I do that the operation of the Collins Class is the challenge we have to meet.
The Opposition would also have you believe that the operational difficulties of the Collins commenced in December 2007. They've been there from day one. And one of the real lessons of the Collins, which we're incorporating in the Future Submarine program, is you've got to work out your maintenance and sustainment from day one. So we've done more over the past couple of years to get the Collins back into a sensible maintenance, sustainment and operation regime than was done in the decades before.
Now so far as the Collins Class is concerned, the Collins fleet went into the water between 1996 and 2003. They had on paper a 28 year life of type. As part of the work we've been doing - we've done a life expectancy study of the Collins, an objective assessment as to how long they can go, and the analysis of that is - which I announced late last year - is there's no reason why they couldn't go seven more years, one more cycle, seven years not counting deep maintenance. So that puts the Collins into 2031 to 2038 in terms of their end of life of type. Which gives us more than enough time for the careful planning we need to do to build the replacement submarine program.
LYNDAL CURTIS: On the strategic outlook, the language in this White Paper seems more diplomatic about China than the last White Paper. Has anything underneath changed? Is China being more open or is it the need to couch it in, perhaps, softer language than was used last time?
STEPHEN SMITH: I might be in a minority of one so far as the commentators are concerned, but I've always had the view that the Government's articulation of China and the rise of China has been consistent from day one, but I can see that's not the view of the commentators.
But I think the strategic analysis of this White Paper will stand the test of time. It makes the point that the single most important emerging factor in ongoing peace, stability, and prosperity in our part of the world is the relationship between the United States and China.
We welcome the fact that that's becoming a developing positive story so far as strategic, political, military, and defence engagement is concerned. But all we ask of China is we want China to emerge as a responsible stakeholder.
We welcome its rise. We welcome its development. We think it'll be a positive and constructive force. When it comes to military modernisation to simply be transparent about its strategic intentions.
LYNDAL CURTIS: The White Paper - and just finally - talks about the situation in the, what you've described as the Indo-Pacific arc, be more complex and competitive. Is the strategic outlook more fraught than it was in 2009?
STEPHEN SMITH: There's clearly been a consolidation of the economic, strategic, political, and military influence in our part of the world, but that has now spread from the Asia Pacific to the Indian Ocean Rim. We now call it the Indo-Pacific.
The rise of China continues to be under appreciated, but in the decades ahead, we'll have effectively three super powers; the United States, China, and India. And just as China and the United States and the regional international community deal with those shifting strategic sands of China's rise, then we'll also have to deal with the shifting strategic sands of India's rise.
But we can manage that if we are sensible, if we rely upon the regional architecture, both in the Asia Pacific, the ASEAN related forums, and in the Indian Ocean. And we're confident about that but the world has always had to deal with these changing strategic shifts.
But the very clear message in our part of the world is that the relationship - the ongoing presence of the United States is crucial and we welcome that - the relationship with China will be crucial. We see that developing in a positive way. And then we'll all have to deal with the emergence of India, which will see three powers, potentially of equal weight, in the second half of this century.
So, the international community has to manage these shifting sands. The White Paper recommends that, but also sets out a sensible way for Australia - both the way forward in terms of finances and capability, but also in terms of our engagement in our part of the world, the South Pacific, but also South East Asia and the Indo-Pacific generally.
LYNDAL CURTIS: Stephen Smith, thank you very much for your time.
STEPHEN SMITH: Thank you. Thanks very much.