TRANSCRIPT: TRANSCRIPT OF JOINT DOORSTOP AVALON
TRANSCRIPTION: PROOF COPY E & OE
DATE: 26 FEBRUARY 2013
TOPICS: Avalon Airshow and Geelong; Air Force Capability; Vigilare; Joint Strike Fighter; KC-30; Newspoll
STEPHEN SMITH: Ok, well thanks very much for turning up. I’m very pleased to be here at Avalon again with the Chief of Air Force, Geoff Brown and also with Richard Marles, our Parliamentary Secretary for Foreign Affairs, but most importantly in Avalon’s context the Member for Corio and the local Member for Avalon. Avalon is a great event for Geelong, a great event for Melbourne and a great event for Australia. And it’s a terrific opportunity for Geoff as Chief of the Air Force to invite guests from overseas and to engage in discussions and collaboration with his overseas counterparts. And we welcome our overseas guests. It’s also the opportunity to reflect upon projects for the future and also enhancements in capability that we’ve seen.
And of course in my opening remarks I drew attention to the significant enhancements that we’ve seen in our airlift, whether it’s our heavy airlift, our C-17s are now a fleet of six, our C-130 fleet now moving completely to a fleet of C-130s, or our tactical military air lift, our C-27s which we expect to get in the next couple of years. I also indicated that Geoff has given initial operating capability to our KC-30s, our multi-role transport tankers, our refuellers.
This gives us a significant enhancement that effectively will enable us when final operating capability is given to see our C-130s for example, operate around the world. And the KC-30s have their own air lift capability which is under-appreciated, some nearly 300 passengers and some 25 to 26 air containers. Geoff and I are also announcing today, and I’ll ask Geoff to make some remarks in a moment, the final operating capability for Vigilare, our command and control air system. But before I throw to Geoff, I might just ask Richard as the local Member to make some remarks about the importance of Avalon to Geelong and the local economy. And then I’ll ask Geoff to make some remarks about the KC-30s and Vigilare, and then we’re happy to respond to your questions.
RICHARD MARLES: Thank you Stephen, and can I say what a pleasure it is to be here as - in this capacity - the local Member - welcoming, not only you but in fact people from all round the world to Avalon. This is no small event in terms of Australia's global standing. This is one of the great air shows of the world today. And happening every two years, it's really the biggest single event which happens in the Geelong region with that regularity. It's expected that 200,000 people will attend this event over the course of the week, which is fantastic. That's fantastic as a public event, but when look at the amount of trade that will be undertaken during the course of the few days leading up to the weekend, this is a huge commercial event as well. And I think about Chemring, which is a company just across the Melbourne road which provides the flares that you sometimes see on the introduction to Lateline, coming out the back of a Hercules, I think. Those are manufactured here locally - a defence industry which is contributing significantly to Australia's defence capability but doing a wonderful thing for the Geelong economy. So, welcome everyone to this event. It is a great national event, but it is a wonderful local event, and it's a fantastic event for Geelong.
GEOFF BROWN: As you heard, the Minister announced the initial operational capability of the KC-30. For Air Force this is an incredibly important event because it now starts to give our Air Force some global reach across the world. The aircraft recently took a detachment of F-18s up to Guam to participate in an exercise called Cope North, which was with the US Air Force and the Japanese Self-Defense Force. It successfully took the detachment up there. It refuelled aircraft while it was on that detachment and brought the aeroplane back. It's got an amazing capability not only from air-to-air refuelling but also from its cargo carrying capacity as well. This year and this Avalon, in lots of ways, we celebrate a fairly large recapitalisation of a lot of Air Force assets. The Minister mentioned Vigilare capability, which is incredibly important to our overall defence force. It takes about 245 inputs from 45 different systems and integrates it into one air pictures that takes us across the whole of north of Australia. I think if you have a look at what we've achieved in Air Force over the last couple of years, it’s really quite significant. We announced the IOC for Wedgetail late last year, the final operational capabilities of the Super Hornet. So, I think everybody can be quite proud of the Air Force and its contribution to the ADF.
STEPHEN SMITH: Okay, we're happy to respond to your questions.
JOURNALIST: Minister do you have [indistinct] confidence in the Joint Strike Fighter after the last [indistinct]?
STEPHEN SMITH: As I've said on a number of occasions, I've always been confident that in the end the Joint Strike Fighter Project would get up - that it would be successful, and that's because the entire weight of the United States system is behind it. But I've also made this point crystal clear that yes, there have been difficulties and delays in the project and one thing I won't allow to occur is any gap in our air combat capability.
And that same approach and attitude saw the arrival of 24 Super Hornets, which were given, Geoff indicated, final operating capability status towards the end of last year. The decision to purchase the 24 Super Hornets was, to his great credit, made by Brendan Nelson. That was reaffirmed by Joel Fitzgibbon when he effected a review of air combat capability in 2008, when we came to office in late 2007. So I've made it clear that I won't allow a gap in our capability to occur, and the gap in capability potential, of course, is there because of the ageing nature of our Classic Hornet fleet. We've got 71 Classic Hornets, and the delays that we've seen in the Joint Strike Fighter Project. We are contractually obligated to take two Joint Strike Fighters, which we will take in the United States for training purposes in 2014 and 2015. We've indicated publicly that we will then purchase another 12 to effectively give us our first squadron. We've made no decision about the timing of that, we'll make that decision in due course as we take this step-by-step.
In the meantime, last year, I asked Defence to do a comprehensive assessment of all of the options and all of the risks. That came to me at the end of last year and at the end of last year I announced publicly that we would make a decision in the course of this year, I expect the middle of this year, about whether we need to make further decisions to avoid any gap in capability. As part of that process we issued, under our foreign military sales arrangements with the United States, a request for information for up to 24 additional Super Hornets.
No decisions have been made, no judgements have been made, we'll make that decision in the course of this year, I expect in the middle of this year. But one thing I won't allow to occur will be a gap in our air combat capability. With 71 Classics, and 24 Super Hornets, we clearly have an air combat capability and superiority in our immediate region. And the other very significant acquisition that we have made, in addition to the 24 Super Hornets, is to make sure that 12 of those Super Hornets can be wired for the electronic warfare capability Growler, and last year I announced that the Government had decided to purchase 12 Growler. That gives us a deeply significant capability. I've also made the point that just as the United States Navy is now effectively operating on a mixed fleet to 2030 or 2035, a mixed fleet of Super Hornets, Growlers and Joint Strike Fighters- that potential is there for Australia as well.
Sorry, one here.
GEOFF BROWN: At the moment we've still got one aircraft in Spain, and it's testing at the moment. I'm hopeful by the end of the year that we will have sorted the issues with the boom and we'll start using the boom from early next year. So, once the boom is capable, we start using it, we'll go very close to FAC early next year.
JOURNALIST: Will you be using it primarily as a tanker, or a passenger transporter? You talked about the number of seats it has, and it's supposed to be a tanker?
GEOFF BROWN: Well the great thing about is if you look at taking fighters overseas or anything like that, again you've got ground crew, the ability to take the ground crew, you can take a lot of the cargo underneath. I see it as a flexible use asset, we'll use it for both air lift and air to air refuelling.
JOURNALIST: Would you be happy with a price tag of [indistinct]-
STEPHEN SMITH: Well look, I have seen, in recent times, various representatives who are associated with the Joint Strike Fighter Project, putting out a particular figure. I think in terms of schedule and in terms of cost, it's in Australia's national interest to take this step by step. So I'm not relying upon any speculation, any assertions, any predictions, we'll deal with the reality as and when it comes.
JOURNALIST: Well if we've got 48 Super Hornets, we won't need as many [indistinct]-
STEPHEN SMITH: Currently we have 24 Super Hornets, and I've asked and I've authorised the issuing of a Letter of Request to get information about the purchase of up to potentially another 24 Super Hornets. No decision has been made, I originally said in the course of 2011, and last year, that I thought we'd need to make a decision about any potential gap in our combat capability by the end of last year. In the event, we didn't need to do that, we do need, I think, to make a decision by the middle of this year about any risk for gap in capability, and we'll do that in a methodical, exhaustive, due diligent way.
You had one for Geoff and then we'll come over here.
GEOFF BROWN: You can keep an aeroplane for as long as you want. The problem is aircraft age is you lose availability and reliability of the aircraft. So the important thing from my point of view as Chief of Air Force is the Government realises the importance of the air combat capability, and they're looking at all the options as to how we maintain a robust air combat capability. Because, from my point of view as Air Force, you know, we do four main things for the joint force [indistinct] Government, we do our air lift capability, our ISR capability, strike and control of the air. But that control of the air is probably the most important thing that we give to the rest of the joint force.
JOURNALIST: Minister, can you confirm whether the Defence Force is planning to buy seven surveillance drones, costing about $3 billion?
STEPHEN SMITH: Well no decision has been made in that respect, just to outline the history, we currently have, in terms of unmanned aerial vehicles, we have Shadow and Heron which operates in theatre in Afghanistan, and that works very well for us.
In terms of Australia as an island country, an island continent, and a maritime power, we want to have, and we want to make sure, that we've got a capability to patrol and surveil our maritime space. Currently we do that through manned aircraft, we do that through our Orions and we have a fleet of about 18 Orions. And at this stage the judgement is that towards the end of this decade, there will be a need to take the Orions out of service. So for some time, Defence has been planning for the replacement of the Orions, both by manned aircraft and by unmanned aircraft. And very serious study and consideration is being given to the potential for - on the manned side of that replacement, before the Poseidon, the P-8 Poseidon to do that job.
And so far as unmanned surveillance is concerned, we need to have a capability in the unmanned surveillance area which will deal with maritime surveillance. No decisions have been made on that front, we are examining a range of options and in due course will make announcements about those. For the present time, the unmanned aerial capacity that we have works for us very in theatre in Afghanistan, but we need to have into the future, when the Orions come out of service, an unmanned maritime capability, and that's what we're working on, but no decisions have been made.
JOURNALIST: Minister what's one of your highlights for the air show this year? Can you give us an overview of where you think the highlights have been?
STEPHEN SMITH: Well, if we were on an Air Force day rather than a Navy day, and it wasn't wet, we'd be doing this in front of a KC-30. And Geoff's been asked about the KC-30 going to be used as a tanker to refuel, or as lift? And Geoff is quite right, it's going to be used as both. And when you add the KC-30, its refuelling capability and its lift capability, and when you add that to all of the other pieces of lift capability that we've acquired, and air combat capability that we've acquired, you see a deeply significant air force capability, both for humanitarian assistance and disaster relief purposes, both onshore and offshore, but also for combat and military purposes. So we've got, now, six C-17s, last time we were here we had four. Our C-130 fleet, the Js have entirely replaced the Hs. We've got a dozen C-130Js. And we will have, over the next couple of years a replacement for our military tactical air lift, the C-27s. When you add the KC-30s to that, and the capacity when the KC-30s go to final operating capability, they'll be able to refuel C-17s, Super Hornets and, in due course, when they arrive, Joint Strike Fighters.
In terms of lift, that gives you the capacity for a C-17 to effectively go around the world. For the Super Hornets, it means you can refuel the Super Hornets, so it gives you both a power projection, but also a heavy lift projection. And that sets Air Force up for a very bright future. So, on the Air Force side of the show, I'm very pleased with the capability and the acquisition that we have picked up over the last couple of years.
And I mentioned Growler, in addition to the 24 Super Hornets, in addition to Joint Strike Fighter's down the track, Geoff has said, in his view, that the acquisition of the Growler air warfare capability - electronic air warfare capability, is the most significant acquisition that we've seen for some considerable time. I think Geoff has said since the F-111, I agree with that. That is a deeply significant acquisition, and that will work well, both obviously with the Super Hornets, but also in due course with Joint Strike Fighters.
JOURNALIST: Minister, how significant is this event on an international level?
STEPHEN SMITH: Well, as Richard has said it's a great event for Geelong, a great event for Melbourne, but it's also a great event for Australia. It brings to Australia a large number of overseas and international guests, Geoff's counterparts, but also significant players and figures in the defence industry and the aviation industry. And it's a very good opportunity for Geoff, for the Defence Materiel Organisation, for Australia's defence industry to collaborate and work closely with those overseas guests. Our Air Force capability, our defence capability generally, is a mix of domestic production and overseas buy, so it's a very good opportunity for Australian industry, and Australian Air Force to collaborate with their counterparts from overseas.
JOURNALIST: Just on a different note, just if I could get your reaction to the latest Newspoll please?
STEPHEN SMITH: I've been saying for some time that when we get to the election, which is some six or seven months away, that it will be a competition, it'll be close, and I said recently, when the Australian public get to see the whites of Tony Abbott's eyes, they will start to worry about the risk he poses as Prime Minister. I don't think he has the demeanour or the judgement to make the national security decisions or the national economic interest decisions. There's been a series of polls, there's no point saying they haven't been tough polls for Labor, but the election will be in September, and I've always been of the view that when the election comes, it'll be a tough, tight, close election.
JOURNALIST: The Australian people [indistinct] in the latest polls, that Tony Abbott's a better person to run the country-
STEPHEN SMITH: Well we've seen over the recent period the Prime Minister having a better preferred Prime Minister status and we now see the results today. In the end, the community will make their judgement, their decision, in the middle of September. And I remain of the view that I've expressed for all of this Parliament, that I thought this Parliament would go full term, that's proven to be correct, and I think in the end it'll be a tough, tight, close election.
JOURNALIST: What about the unmanned combat [indistinct] - are you confident Australia is playing a part in that, and that we've got a future in that, and do you see a future where we won't have pilots in fighters?
GEOFF BROWN: I think you've got to look at what the advantages are of unmanned aircraft, and the real advantage is that they can sustain, over the battlefield for long periods of time. When we look at surveillance, surveillance is a real task for us, given not only Northern Australia, but down towards the Antarctic, so a long-range UAV really suits in those sort of circumstances. I think some people, when you have a look at the Afghanistan [inaudible]
STEPHEN SMITH: Currently, as Geoff and I previously indicated, we've got some tactical unmanned aerial vehicles in Afghanistan, they're not armed. I am not against Australia giving serious consideration down the track, in the future, to not just unmanned aerial vehicles that give us a greater capacity for intelligence and surveillance in our maritime space.
I am not opposed to the notion of giving consideration down the track to armed, unmanned, aerial vehicles. And, as Geoff- as the Chief of Air Force has said, this is not something that will completely dominate the future, but it is an option, it is currently utilised by a small number of countries, I am not averse to it, we are not rushing to judgement. This is one of the things which we are giving consideration to in the overall context of the replacement of our manned surveillance aircraft with a mix of manned surveillance aircraft, and unmanned.
So, as a philosophical point of view, I'm not opposed to the notion of unmanned aerial vehicles carrying weapons, we don't have them at the moment, there are no proposals at the moment, but this is a conversation which in due course, both defence and Australia needs to have.
Now- so there is one here and then we're coming back here.
JOURNALIST: Are you concerned the Australian defence industry [indistinct]?
STEPHEN SMITH: Well, as a general proposition, if you look at the mix of opportunities for Australian industry, there's always a mix of capability, which is purchased overseas off the shelf, and capability which is developed here. The historical average of that mix is about, I'm told, about 54-55 per cent. So historically, 54-55 per cent local. So, in other words, about 55 per cent of the defence budget is a local investment. This year, this financial year, the CEO of the DMO, so Warren King tells me that he's expecting this financial year, that'll be 59 per cent domestic investment. Both defence industry and the world's economy have gone through a tough time. We don't call it the global financial crisis for nothing. And you may have seen the organisers indicating that as a consequence of that we've seen a slight reduction in the attendance here. But, I've made this point before, I run a national security policy, so I need national security assets. I don't run a local industry policy, but there are sections of our industry which are important national security and national strategic assets. Ship building is one, aviation, and matters air are another. But it will always be a mix, and the current investment, domestically into defence industry is about $4.7 billion per annum. So it's somewhere between four and a half and five billion. This is a significant investment. But there's no doubt in some areas, people have had pressures and that is almost invariably a result of the global financial crisis, or the fiscal circumstances that US Secretary of Defense Panetta refers to, which I agree with, the new fiscal reality.
JOURNALIST: Along those lines-
STEPHEN SMITH: Go here first, he's been trying.
JOURNALIST: Do you consider the Classic Hornet, regardless of the structural integrities, will be a viable air combat fighter in the next decade? And if not, we were told Super Hornets will be enough?
STEPHEN SMITH: Look, at the moment again, we're going through this discussion. The Classic Hornet has gone through a Hornet upgrade program over the last ten years. Right at this point in time it is a very capable fighter. The judgements you need to make is, as you look into the future, is to what the region comes up with – with other aeroplanes, what sort of developments there are. But there is a finite life on the Classic Hornet. And again, it’s just not the structural integrity, it’s the systems and it’s the difficulty of operating old aeroplanes. And that’s the set of [indistinct] we’ve got before Government at the moment.
GEOFF BROWN: And I’ll just add to – just to remind people that the Australian National Audit Office did a study of the maintenance program into the Classic Hornets, we’ve had a substantial maintenance and sustenance program. That got a very significant tick from the National Audit Office. Currently of course the Classic itself gives us an air combat superiority in our immediate region, but in due course we need to upgrade, and that’s why I’ve made the point that the potential gap between the classics and the arrival of the Joint Strike Fighters is reason for us to do what we’re doing. Which is very serious deliberative consideration of making sure we don’t have a gap in that air combat capability.
STEPHEN SMITH: We’ll I’ll go first, and then Geoff can go second. All of those studies that you’ve been referring to, Australia has been doing since 2008. When we came to office in December 2007 one of the first things that my predecessor – or one of my predecessors, Joel Fitzgibbon, did, was to effect a review of our air combat capability. That came to the conclusion that we should persevere and continue with the purchase of the 24 Super Hornets that Brendan Nelson had ordered, and that we should continue with the Joint Strike Fighter project. We also made the decision at that time that of those 24 Super Hornets, 12 should be wired up for Growler. And when I became Minister I made sure that that potential remained in place. I also made sure last year that we actually decided to purchase 12 Growlers. I also last year – with the further delays in the Joint Strike Fighter project asked the Defence to effect another review because I wanted to ensure that there was no gap in capability. And what that review has thrown up is the classics are doing well, but there is a limit – as Geoff and I have both said, there is a limit both to keeping them in the air and their capability. The Super Hornets are a very effective air combat capability plane for us, and they carry with them Growler, which is deeply significant. So what other countries have been doing, we’ve been doing that effectively since 2008, and we’re not proposing to change course now. We are, as I’ve said, step-by-step, advisedly making decisions as we need to. I remain confident that the Joint Strike Fighter will get up. The risks to the Joint Strike Fighter continue to be schedule and cost.
GEOFF BROWN: It’s a good point you make, but I think you need to remember that our Classic Hornets were bought between 1985 and 1990. The majority of the US Navy fleet that was built around that time has already been retired. So the aircraft you’re referring to were probably built about ten years later as the ones that are actually looking at upgrading. Upgrading aircraft is a hugely complex task, and one of the issues with doing it is that you actually take some of the fleet out of service and they’re unavailable for your normal raise, train, sustain. So it’s a difficult thing to manage, and I don’t believe there’s any point in upgrading our classics anymore, because there just isn’t the return on investment.
STEPHEN SMITH: You’ve had a reasonable go, shall we call it a day? Thanks very much, enjoy the show. Cheers.