TRANSCRIPT: INTERVIEW WITH PETER VAN ONSELEN, AUSTRALIAN AGENDA
TRANSCRIPTION: PROOF COPY E & OE
DATE: 5 May 2013
TOPICS: 2013 Defence White Paper; Federal Elections.
PETER VAN ONSELEN: And as mentioned off the top we are joined now by the Defence Minister who has just released the Defence White Paper to end the week.
Stephen Smith, thanks for your company.
DENNIS SHANAHAN: Pleasure Peter.
PETER VAN ONSELEN: Can I just ask you about the Defence White Paper and I guess defence issues more broadly. We've had the Prime Minister's diplomatic trip to China. We've obviously got an ongoing defence relationship, as well as diplomatic one, with the US. It looks like our relationship with China is growing diplomatically.
Are there any concerns here that we should have from a Defence perspective about there being a blurring of the lines between this emerging diplomatic relationship with China versus the realities of Australia's sense of its defence policy for the defence of the nation?
STEPHEN SMITH: No I don't believe so. We have more than a diplomatic relationship with the United States; we have a military alliance with the United States. That's served us and our region very well for over 60 years, and our military Alliance with the United States continues to be the bedrock of our defence security arrangements.
At the same time we have a growing relationship with China, from our early recognition of China back in the 70s by the Whitlam Government and the one China policy. But more recently we've seen our Defence engagement with China grow. For the last 15 years we've had a high level dialogue with them with the Secretary of our departments and the Chief of our Defence Force with their equivalents, and that will continue. And the Prime Minister's most recent successful visit saw high level dialogues planned on an annual basis between the leadership and between the Treasury Secretaries and the like.
So, it's not a zero sum game. It's a win-win. And the point of the White Paper, and the point I've been making generally and the Government's been making generally is that we can have an ongoing relationship, military alliance included with the United States, a growing relationship with China. The key to ongoing stability and peace and security and prosperity in our part of the world and the world generally is a positive and constructive relationship between China and the United States. And that's the key.
PETER VAN ONSELEN: If we've got such good relations with both the US and China, diplomatically as well as militarily, what are we spending all this money on? What's the Defence risk that requires us to have such a large spend on Defence?
STEPHEN SMITH: In the White Paper I outlined the four priorities of the Australian Defence Force. We have to have a capable Australian Defence Force to protect our national security interests, but there are four levels.
Firstly there is the Defence of Australia as the first priority. Now there is no immediate of foreseeable threat upon Australia itself, but we need to prepare for that - manage that risk. And that's why you see more work being done on what we call our northern and western approaches.
Secondly there's the area of our region where the world sees us as having primary or lead responsibility. The South Pacific and Timor-Leste, we need to be able to operate there whether it's stabilisation, as we've seen historically in the Solomon Islands or East Timor, or humanitarian assistance and disaster relief. And this week we held for the first time the first meeting of South Pacific Defence Ministers, which reflects that priority.
Thirdly we've got the Indo-Pacific region generally. In particular, from our perspective, being able to operate with our partners, including the United States, in Southeast Asia.
And finally we have the capacity to join into a global operation, and Afghanistan is the clear and best current example of that. And the White Paper, and our work in defence and national security continues to allow us to have an ADF which can do all of those things and do it effectively and efficiently.
DENNIS SHANAHAN: Minister you make the point that there is no direct threat to Australia, no immediate threat - we no longer see Indonesia as a threat to the north. But there is obviously, and the paper makes this point clear, a more fraught tension within the area, within the region. A greater chance of some regional conflict drawing us in or making us have some sort of decision as far as China or the US is concerned.
But, if the area is more fraught, and if all of the other nations are spending more money on defence, why is there a more benign outlook for Australia? Is that to justify the fact that we are not increasing our spending, as are our regional allies?
STEPHEN SMITH: Well a range of issues there.
I wouldn't use the word fraught. Certainly as you see a new power rise, in this case China, the other global powers, in this case the United States, have to adjust to that, as our region does, as the globe does. And so you've got the rise of China; the international community has to manage that, and that's part of our strong view that the China-United States relationship is pivotal to that. Not just an economic relationship, which they now have at a very very high level, but growing their political, strategic, military and defence relationship. And we welcome the development of that.
At the same time we rely upon our regional architecture, whether it's the ASEAN related forums, or the Indian Ocean related forums. To have a regional architecture which does its best to reduce miscalculation, misjudgement and the like. And so that's why we strongly argue that the maritime or territorial disputes which don't involve the United States or Australia but involved China, Japan, the Philippines, Vietnam and others, are managed peacefully and in accordance with international law.
Now, it's not the case that everyone else in our region is increasing their defence spending. The classic example is the United States; going through the process of reducing billions of dollars out of their defence arrangements.
PETER VAN ONSELEN: But they're cutting money out of defence at the same time as putting more focus on our region, nonetheless.
STEPHEN SMITH: Which is precisely what we're doing. We had a tough fiscal time in the last budget, we reduced expenditure but we protected our priorities. No reduction in our overseas arrangements, particularly Afghanistan, no reduction in the money going to our growing practical cooperation with the United States.
And in this White Paper, and in this Budget you'll see a modest increase in our budget arrangements. But this White Paper, and I've seen it described by some commentators, does show, if you like, a re-balance to Australia and our region as we draw down, in particular from Afghanistan.
The United States is going through a tough fiscal time, reducing expenditure in defence, as is the United Kingdom. So we have to manage that, and we're managing that by protected our priorities which we did in the last budget, and which the white paper continues to do. Whether it's core capability, whether it's our practical cooperation with the United States, or whether it's our intense engagement in our key areas of responsibility and interest; the South Pacific or South East Asia.
SIMON BENSON: You'll probably repeat a bit of what you've just, but I wanted you to be specific, if you could. You mentioned one of the reasons being your fiscal realignment, one of the other reasons that has been quoted in the report as further reason to why it's being brought forward was a change in the strategic landscape.
Could you be specific about what has changed in the strategic landscape, not only more recently to bring the paper forward, but since 2009, since we had the last White Paper?
STEPHEN SMITH: In 2009 we said that we would have White Papers at least once every five years, we essentially set up a five year timetable. That was because the previous White Paper was 2009, and so the Coalition Government under John Howard did a White Paper in 2000, and then with the change of Government at the end of 2007 we had White Paper nearly two years later, 2009.
That was too long a gap. And because it was too long a gap we said you've got to have it every five years. About a year ago, almost to the day, the Prime Minister and I said there are a range of reasons why we should bring forward the current White Paper from what would have been April of next year, 2014, to April, May or June of this year, we said the second half of this year.
And that was for a range of reasons. It was clear that the transitional draw-down from Afghanistan was occurring, and so for the first time in a decade we would have the opportunity to see what the implications were in the absence of a very high tempo 1,550 commitment to Afghanistan. We didn't want to make the same mistake that we made after Vietnam which was a draw-down from Indo-China which, just by way of digression, was much less elegant than the draw-down we're seeing now, the so-called embassy roof withdrawal.
We didn't want to make the same mistake which was to not say well what do we do now, what's our strategic focus for the future. And we also didn't want to reduce military numbers.
At the same time you had the rebalance of the United States, including our enhanced practical cooperation in the Northern Territory, whether it's Marines, or aerial access, and in the future Naval operations out of HMAS Stirling. We had the ongoing deleterious and adverse implications of the global financial crisis, which had impacted severely on our Budget arrangements.
And you also had, for the first time in a quarter of a century, I affected what's called a Force Posture Review. Which is, how do we position our own Defence Force in Australia. That was the first time we'd done that since the mid 1980s.
SIMON BENSON: But when you talk about a change in-
STEPHEN SMITH: You bring all of those elements together, plus - if you like the starting point of your question - plus, the ongoing consolidation of strategic weight, economic weight, political weight and military weight in our part of the world. Not just the rise of China, but also the rise of India, which is why I've been describing the arc now of our interest as the Indo-Pacific, or, as I've seen it described, from Hollywood to Bollywood.
So it was that consolidation which caused us to say it makes sense for us to do it now. There was no further bring-forward of it. I always had in mind that we'd publish the White Paper some time in the run-up to, or in, or shortly after, the Budget.
So whilst we were saying June, my view was always May.
SID MAHER: Minister that brings me to a question on the timing of the White Paper. Why release the White Paper two weeks before the Budget, why not release the White Paper after the Budget when it can have some numbers in it? And, you know, one of the big criticisms of this White Paper has been the fact that it doesn't have any numbers in it and it's leading people to question whether you can pay for what you're saying you're going to do.
STEPHEN SMITH: Well let me give you, if you like, a snapshot of history. The 2000 White Paper published by the Coalition had about four or five pages on budget and finance, it's not a budget document it's a White Paper, and said that its ambition, its pledge, was 1.9 per cent of GDP spending over the 2000s.
The 2009 White Paper, our White Paper, had about two or three pages on budget and finance, it's not a budget document. But set out what I describe as the budget rules, or the budget approach to defence; a guaranteed share of Defence spending into the future and ambition for two per cent. And that wasn't met because of the global financial crisis.
PETER VAN ONSELEN: But multiple wrongs don't make a right on this, and fiscal prudence is a huge issue at the moment.
STEPHEN SMITH: Fine, that's fine. But I've seen people say that because we haven't met two per cent of GDP it's the worst day for Australian Defence since the fall of Saigon.
The 2000 White Paper by the Coalition Government said 1.9 per cent of GDP. We didn't see 1.9 per cent of GDP from all of the year 2000 until now, that's the first point
We haven't had-
PETER VAN ONSELEN: But I think the difference is people would have looked at that in the context of their budgets and said the funding's definitely coming. Whereas people look at this in the context of an eroding Budget, and wonder whether or not the two per cent's going to get hit.
STEPHEN SMITH: Firstly, both political parties now say - the Government and the Coalition say that they have an aspiration for two per cent of GDP. That's not the only measure, but just to ensure and placate you that Defence funding is not in crisis, the 2000 White Paper by the Liberal Government said we'll have 1.9 per cent of GDP; that wasn't met.
The 2000 White Paper from us said two per cent of GDP, that wasn't met. We haven't seen two per cent of GDP since 1999, right? And there's not been a crisis in defence spending.
Currently, if you look at the budgets and if you open up the Budget papers in a week or so time, you'll see defence spending in the order of between 1.55 and 1.6.
Now, I'd prefer it was higher, but we're still able to do the things that we need to do to keep the ADF capable, efficient and effective, and to do the objectives that - those four objectives I outlined earlier, that Government needs and wants it to do.
DENNIS SHANAHAN: Minister accepting your point that it's a White Paper and not a budget paper. Still, it remains that your Secretary of Defence, while Secretary of Foreign Affairs, made the point that Australia could not sustain a strategic outlook on Defence while its budget was less than two per cent.
Now, that was his position going into it, the Coalition has indicated it wants to aspire to two per cent, the White Paper contains an aspiration to two per cent. So clearly this Budget issue of two per cent for defence funding is a legitimate strategic issue as well as a Budget issue, and when can we expect to see some return to that level of strategic spending?
STEPHEN SMITH: Well, I think you've over-egged Dennis Richardson's speech quite frankly-
DENNIS SHANAHAN: I- Well-
STEPHEN SMITH: No, I think you've over-egged his speech. I've read that speech, he committed himself to giving that speech when he was Secretary for Foreign Affairs-
DENNIS SHANAHAN: I made that point-
STEPHEN SMITH: -and he announced it when he'd been announced as Secretary of Defence.
But Dennis is-
DENNIS SHANAHAN: No there was a previous speech Minister where he gave that while he was still the Secretary of Foreign Affairs, and he made the point it was not sustainable in the long term for Australia to have less than two per cent.
STEPHEN SMITH: You've over-egged his speech firstly. Secondly, everyone is out there saying we'd prefer to be spending closer to two per cent of GDP than 1.5 or 1.6. Australia, under two successive Governments, the Howard Government from 2000 to December 2007, and the current Government from December 2007 until now, we have not seen two per cent of GDP spent on defence by either of those two Governments.
That's called an outbreak of bi-partisanship in defence spending. It's 50 per cent of time each. They've out there with an aspiration which can't be met in the short-term, and so are we.
In the meantime, when you are under financial pressure you have to make sure that the things you can spend on are your priority areas. Since 2009 we've been spending over $100 billion over the four year forward estimate period in defence.
Irrespective of our difficulty in terms of short or medium or long-term fiscal difficulties, we are still in the top 15 defence spenders in the world. We are still regarded as one of the most capable and effective defence forces.
And so when you're under pressure you've got to pick your priorities, and we pick our priorities. Our core capability will continue; whether it's electronic warfare capability Growler, whether it's the Joint Strike Fighters down the track, whether it's Super-Hornets, whether it's continuing with our submarine program, whether it's replenishing Army with a new fleet of nearly 3,000 trucks, whether it's making sure that our air combat capability continues to be superior in our immediate region, whether it's the transformation of our Navy with Landing Helicopter Docks, Air Warfare Destroyers and a new submarine fleet in the decades ahead-
PETER VAN ONSELEN: Well can I ask you about that submarine fleet-
STEPHEN SMITH: Our core capability continues to be developed, and our capability and capacity continues to be efficient, effective, and more than enough to give us the ongoing superiority in our immediate region that we've always wanted to have.
PETER VAN ONSELEN: Minister can I ask you about the submarines? Now it strikes me that this is more - as I understand it both sides are supportive of this, but why build-
STEPHEN SMITH: I'm not sure about that-
PETER VAN ONSELEN: Okay, well let me ask this question; why build submarines in South Australia for defence reasons only. We know that the Collins-class submarines, to put it lightly, have had their problems. We've now got a situation where we're going to rely on them until their 50 year used by date, or at least from when they were first produced, and we're building them in South Australia which strikes me as a sock to the manufacturing industry in a state that's struggling rather than best decision making around best submarine warfare practice.
STEPHEN SMITH: Well let's go right back to basics. You either say that it's important strategically for Australia to have a fleet of submarines or you say we don't need them. We're a maritime country, we're a maritime continent, and our sea lines of communication - our northern and western approaches, the Indonesian archipelago, the Indian Ocean which will grow in importance, these are all absolutely essential strategic sea lines of communication.
PETER VAN ONSELEN: But I'm not questioning having subs, I'm questioning having subs that work.
STEPHEN SMITH: Well that's good, I'm glad you're not because some people are.
SID MAHER: Minister-
STEPHEN SMITH: Well I've been asked a question, let's give us a go.
Some people, including the Shadow Minister for Defence, are out there saying he wouldn't touch the Collins-class with a barge poll. So does that mean if he became the Minister the Collins-class would shut down, we wouldn't continue to do the work that we've been doing over the last two years to get them back into the water?
I've been out there saying when you get the Collins-class in the water it's a very effective capability and will continue to be a very effective capability. Tony Abbott said that the other day as well, but his Shadow Defence Minister is out there saying he won't touch them with a barge poll.
Adelaide happens to be our submarine building, designing and maintaining centre, with some work done in Western Australia where the subs themselves are based.
PETER VAN ONSELEN: But why not just buy proven submarines from our allies like the United States?
STEPHEN SMITH: Well because the United States runs a nuclear submarine fleet and if we were to buy nuclear submarine fleets that would essentially mean outsourcing the entire submarine fleet to a different nation, irrespective of whether it was our military ally.
But we have, in this White Paper, narrowed the options from four, which we had out there previously, and off the shelf submarine, a modified off the shelf submarine, and evolution of the Collins submarine, or a brand new design.
We've done an exhaustive assessment of off the shelf, and the problem we have is this. You can't find an off the shelf submarine which gives you the reach and the operational and strategic distance to meet our strategic requirements. It's all well and good to have a European submarine which traverses the Baltic Sea or the North Atlantic; we have to have a submarine which traverses our northern and western approaches, particularly as the Indian Ocean grows in importance, has the capability of dealing with the strategic maritime demands of an island continent, not a small country in Europe.
That's why we've had to say we either evolve the Collins-class submarine or we have a brand new design. Or you accept, you either don't have submarines, which may or may not be the Shadow Minister for Defence's position, or you have a submarine which is inadequate for the strategic purposes that we need.
SID MAHER: Minister-
STEPHEN SMITH: Sorry Sid.
SID MAHER: No. The problem with the Collins-class though is there was significant problems in building and operating the Collins-class. What is to say that going down this path again won't produce the same problems?
STEPHEN SMITH: When I came to office as Defence Minister, a number of people said to me Minister you must go right now to National Security Committee and Cabinet and start the future submarines project. To which I said no; we've got six submarines, at this stage my advice is that at any given day we either have zero or one or on a good day two able to go into the water. The first thing we're going to do is to get the Collins-class submarine fleet back into a reasonable shape.
So I got UK experts to go through it with a fine tooth comb. The problem with the Collins-class submarine was from the first moment there was never a proper maintenance and sustainment program.
Now, despite the fact that the Liberal Party would have you believe that the Collins-class submarine problems only started in 2007, the first Collins-class submarine went into the water in 1996. The last one, the sixth, went into the water in 2003. And we've had difficulties with them from that moment, including 11 years of the Howard Government.
The truth is we've done more over the last two years to get the Collins-class maintenance sustainment back under control and in a better shape than has been the case for a long time. Currently we've got three available for operations and one actually on operations. That's a good thing, and so that - getting the subs in the water is improving.
Meanwhile, there are very significant lessons that we learnt from that which we can put into the planning of the Future Submarine program, and that's what we're doing.
SID MAHER: And what about manning the submarines? Because for a long time we've only been able to get a couple of submarines into the water because of manpower shortages.
STEPHEN SMITH: Well it's a very good point, and the Chief of Navy has been doing a very good job of building and growing the crewing availability for the Collins-class submarine. We know that as we move from the Collins-class submarine to the Future Submarine program, and we're not talking months or years here, we're talking decades, the Collins-class submarine when it went into the water has an on-paper life of 28 years.
As part of work we've done on the Collins-class submarine we've done a life evaluation program which says there's no reason why we can't get seven more years out of the Collins. That takes you to an on-paper span of 2031 to 2038. And as we go with the future submarine program, it won't be for some period of time before welders start to hit sheets of metal and the like, but there is a long period of time to do the planning, the development, and make sure that as the new submarines go into the water there's no gap in capability with the Collins.
We have learnt a considerable number of valuable lessons with our difficulties with the Collins, and they're feeding into the Future Submarine program. And the reason I have been so meticulous, so careful, so making sure that we get the Future Submarine program right in its planning stage is that all of the experience of difficult defence projects is the mistakes you make early in the piece magnify exponentially when you go down the track.
So that's why - yes we want to have a submarine fleet which matches our strategic requirements and matches the operational requirements of an island continent. And you can't do that if you simply buy off the shelf from a European model.
SIMON BENSON: Minister can I just take you back to the broader questions of the paper; why has the language about China, in this White Paper, been toned down significantly compared to the 2009 White Paper? Is that a recognition that that was unnecessarily provocative?
STEPHEN SMITH: Well I conceded when I sort of spoke after the launch of the White Paper - I'm probably in a minority of one here, I accept that. But I've always been of the view that the Government's articulation of our relationship with China, China's emergence as a super power, has been the same from day one.