TRANSCRIPT: QUESTION AND ANSWER FOLLOWING SPEECH TO THE ADM CONGRESS
TRANSCRIPTION: PROOF COPY E & OE
DATE: 21 February 2012
TOPICS: Joint Strike Fighter.
JOURNALIST: You mentioned three issues of primary concern. Is the Joint Strike Fighter not up there amongst them?
STEPHEN SMITH: There are a range of issues that I haven’t drawn attention to which are either specific project challenges or indeed more general issues. For example the ongoing challenge with the Strategic Reform Program continues.
On the Joint Strike Fighter, I think I’ve made my view about that project pretty clear in recent months. I think the last occasion I spoke publicly about that was in response to a question in the House, the last week the House sat.
I think it’s probably true to say that there’s now in a sense an alignment between the Australian position and the United States’ position. I’ve been saying since as early as July of last year that the one thing that we would not allow is a gap in capability. What might cause a gap in capability is the ageing of our Classic Hornets fleet, some 71 strong, prior to the arrival of the Joint Strike Fighter.
We’ve now of course got and it’s referred to it in my paper, the 24 Super Hornets, 12 of which are wired up for Growler and without digressing, within the course of this year, we’ll make a decision about Growler.
The deep maintenance program for Classic Hornets has gone very well but the risk of gap in capability for us is the end of life of Classic Hornets and the arrival of Joint Strike Fighter. This has now been replicated by what we’ve seen more recently out of the United States, whether it’s from Secretary of State Panetta, whether it’s from Ash Carter his Deputy who was previously the Capability Under Secretary, whether it’s from Acting Under Secretary Capability Kendle or whether from Norton Schwartz the Chief of the US Air Force.
I think most significantly in the course of January of this year Norton Schwartz made the point that he was now looking very carefully at his maintenance and sustainment program of his F-16’s, because he didn’t want to end up with a capability gap.
What’s driven all of that, of course, has been the decision by the United States - formalised in the so called President’s Budget which contained the projected Defence Department 2013 Budget - of essentially shifting to the right of the purchase of some 179 Joint Strike Fighters by the United States during the period 2013-2017.
The rationale expressed by Panetta, by Carter, by Kendell, by Schwartz – and also by Admiral Venlett the project Director of the Joint Strike Fighter project in an interview he gave I think to America Online on 25/26 January – what they’ve all said and I think the harshest phrase used was by Kendell which was that it was a miscalculation to believe that you could do the ongoing trialling and development with production. In other words, concurrency has not been the success that was envisaged. So there’s been a push to the right.
What I’ve said about that is we have announced that we will get 14 Joint Strike Fighters. We’ve committed ourselves to 14 in the first instance. Two of those we are contractually obliged to take, so we’re signed up and contractually bound to two and they’ll be for testing and trialling purposes in the United States and we still expect to get those in 2014.
The second tranche of the 14, the remaining 12, the original timetable for those was 2015 to 2017. Just as Leon Panetta is now looking at the timing of 179 Joint Strike Fighters for a comparable period, so are we.
In the course of this year and I choose my words advisably and carefully and say not at the end of this year, but in the course of this year, we’ll make a range of judgements. We’ll make a range of judgements about whether there’s a risk of a capability gap and what steps we need to take in that respect.
We’ve made no conclusions or commitments in that respect, but additional Super Hornets is an obvious option. Secondly, we’ll make a judgement about the timing of the receipt or delivery of the second tranche of 12. It won’t be a priority in my view this year to make judgements about the receipt or the delivery or the arrival of future or additional Joint Strike Fighters.
I see the key decisions this year as making sure there’s no gap in capability and the timing of delivery of the first tranche of 12. Two we’ll get for testing and trialling purposes, we’re still on track for 2014 in that respect, the other 12 we’ll make a judgement about delivery.
My own judgement has been this: the United States has put so much strategic and tactical and industrial development and funds into this project that in the end the project will get up and in the end the project will be a success. The first risk from our perspective, in my view, has always been capability gap, that is scheduling and secondly there is a unit cost risk as well.
We have been sensible from the start by forming the view that we were only interested in the Conventional model. That remains a sensible starting point and I think that we’ve also been sensible that while we are supporters of the program and we want to get the fifth generation fighter, we have been sensible in not committing ourselves too far in advance to the actual delivery timetable. Those decisions will be made by Government in due course and done advisedly.