Aust Defence Minister Press Conference

TRANSCRIPT: PRESS CONFERENCE, PERTH
TRANSCRIPTION: PROOF COPY E & OE
DATE: 17 DECEMBER 2010

STEPHEN SMITH: Thanks very much for turning up. I'm sorry I'm a bit late this morning. I've got a number of matters to go through, some materials are being distributed for you and then I'm happy to respond to your questions.

Can I firstly deal with the United States review on Afghanistan and Pakistan announced by President Obama overnight on 16th December. Firstly, I welcome very much the review. Secondly, the analysis in the review about the progress of the military and political strategy so far as Afghanistan and Pakistan is concerned accords with Australia's own assessment in Uruzgan Province, that we are making progress but we do need to consolidate and make sure that the gains are not reversed.

The Review underlines the fact and confirms that the political military strategy now in place is the correct strategy for the future and one which is sufficiently resourced. I made the point, as did the Prime Minister in the course of the recent Parliamentary debate, that one of our difficulties in Afghanistan is it has taken the international community a long time to set upon the correct military and political strategy.

It's our very strong view that we now have that strategy in place as a result of the previous Riedel Review, the Obama Review and now underlined by this analysis.

It also accords very much with the sentiment and the conclusions drawn from the recent NATO Lisbon Summit that we are making progress towards the transition. Our objective here, Australia's objective and the international community's objective, is to transition to Afghan led responsibility for security matters, and that is progressing in Uruzgan Province as it is in Afghanistan generally.

Of course it is an Afghanistan-Pakistan review and it does underline the fact that the Afghanistan-Pakistan border area is very important to making progress in Afghanistan. And Australia and the international community in the last couple of years have considerably enhanced its engagement and relationship with Pakistan. In Australia's case we are now the second largest trainer of Pakistan military officers in the counter terrorism area, and that's a good thing.

So the review underlines the ongoing importance of working closely with Pakistan so far as the very difficult issue of international terrorism and extremism in the Afghan-Pakistan border area is concerned.

So I welcome that analysis. It underlines that the political military strategy is correct and it reinforces the analysis that international communities saw in Lisbon recently.

Today, separately, I'm releasing the most recent update to Defence's public Defence Capability Plan. This is released on a regular basis, and today I've authorised the release of an update to be placed online for the benefit of Defence industry, for the benefit of the Parliament and for the benefit of the general public.

Now the purpose of the Defence Capability Plan is to give an indication for the future as to Defence's intention so far as capability is concerned. It is very much an indicative plan, but it is there in a transparent way to provide as much assistance to Defence industry as possible as to Defence's future intentions so far as capability requirements are concerned.

The updated Defence Capability Plan includes 140 capability projects or phases of projects to a value of over $150 billion. It is a update which is over a 10 year period which is a return to the previous Defence Capability Plan update arrangements. The previous update was a four year timetable and we've responded to suggestions from industry generally that a 10 year timetable's more appropriate. And I think that's right, so it's over a 10 year period.

It's also the case that since the previous update in February of this year, we've seen in the order of $2 billion worth of projects approved so far as Defence capability is concerned. So a substantial amount of work for Australian defence industry and defence industry generally.

So that is released today and included in the papers that you've been provided with is not just my media statement in that respect but also the foreword to the capability plan.

I'm also announcing today, and it's detailed in the papers with you, Government approval of three significant capability projects. Firstly in respect of deployable air traffic management control systems, secondly, maritime communications modernisation, and thirdly, the consolidation of the Hornet structural refurbishment.

Those projects involve in the order of $650 million to $950 million by the time that they are completed. There are two new projects there that have been subject to first pass approval, and the consolidation of the Hornet structural program is an update or an upgrade of a previous program in place, which is more effective and more efficient. So those details are there for you.

Can I just, in addition to those announcements, make some remarks on a number of other matters. Firstly so far as Christmas Island is concerned, this is the first opportunity I've had to make some public remarks, so firstly, I express my sympathy to the family and friends of those who are deceased. This has been a terrible tragedy and events continue to unfold.

The rescue is, of course, under the authority of the Australian Maritime Safety Authority, the line agency. So far as Government is concerned, it is Border Protection Command, but there is of course a Defence or a Navy presence through the presence of HMAS Pirie.

I have, in the last two days, of course, spoken about this matter with the Acting Chief of the Defence Force, also to the Chief of Navy, and both yesterday and this morning had a conversation with my colleague, the Minister for Justice and Customs Brendan O'Connor, who, of course, remains on Christmas Island. I've also spoken to Chris Bowen, the Immigration Minister.

So this is a terrible tragedy and can I firstly compliment the men and women on HMAS Pirie for the fine work that they have done. I'm not proposing, I believe appropriately, to be drawn on any of the detail of this matter because this will be the subject of a coronial inquiry, it will be the subject of a AFP investigation and preparation by the AFP of a report to the WA Coroner. The Defence Force and Navy will of course, as they always do, cooperate fully both with the WA Coroner and with the AFP.

But let me make some general remarks. Can I compliment the men and women of HMAS Pirie for the fine work that they have done in very, very difficult circumstances. It's quite clear that the work that they did in the face of terrible weather and a terrible tragedy saved lives. And I'm confident that when the exhaustive analysis and assessment and investigations and inquiries are done that we will again see acts of heroism and bravery from Navy personnel.

I, on the basis of the information that I have seen, am confident that as soon as HMAS Pirie was alerted to the difficulty, that everything that could be done was done to assist in the rescue. But as I say, these matters will be the subject of exhaustive and proper assessment.

But this has been a terrible time for the individuals concerned, a very difficult time for the men and women on HMAS Pirie and also a very difficult time for the local inhabitants of Christmas Island. So our hearts go out to all of those.

Two final things. Firstly, you may recall that in the context of WikiLeaks cable leaks, there were earlier two sets of leaks in respect of Iraq and Afghanistan. A Defence Taskforce was established to consider the leaks so far as Iraq and Afghanistan were concerned from the point of view of operational and national security interests. I previously made the point that the Taskforce came to the conclusion in the case of Afghanistan that there was no prejudice done to our operational security. That was also the preliminary advice I had in respect of Iraq. Of course, our operational activity in Iraq has long concluded and I'm in a position today, as I indicated a couple of days ago in Canberra at a press conference, I can indicate today that the conclusion of the Defence Taskforce so far as the WikiLeaks in respect of Iraq is concerned, that no damage has been done to our operational security and no damage done to our national security interests. And that's a good thing.

But generally I make the point, as I have made in the past, that the unauthorised release of such materials does run the very grave risk of putting operational security or national security interests at risk.

Finally can I just indicate that this morning I've had a conversation with the Acting Chief of the Defence Force. You may have seen some publicity overnight in respect of the availability of beer for Australian Defence Force personnel in Afghanistan. The starting point, of course, in Afghanistan is that it is an alcohol-free zone so far as Australian Defence Force personnel are concerned. But local commanders do have the capacity on special occasions, and Christmas Day is one of those occasions, on special occasions to authorise distribution of limited quantities of alcohol for those Defence personnel who wish to partake in alcohol for a special occasion, and the limit is two cans of beer.

As a result of a discussion with the Acting Chief of the Defence Force this morning, I'm able to announce that on the basis of the current arrangements, given that this year has been a particularly difficult year in Afghanistan, a very, very difficult year for our personnel in Afghanistan - we know tragically that we've seen 21 fatalities so far as Afghanistan is concerned, and we've had half of those in the course of this year - so because it's been a particularly difficult year and the special circumstances of that, I can announce that if local commanders in Afghanistan determine that they will make alcohol available to Defence Force personnel, that will be made available by Defence from within Defence's current resources and it will be at no charge to the Defence personnel concerned.

Whether alcohol is made available is, as I say, importantly very much at the discretion of the local commander, and that will be done on a case by case basis. It’s entirely a matter for the local commander to make a decision about. But if a local commander makes such a decision then the beer will be available at Defence's expense, not at Defence personnel expense. And for those Defence personnel who don't drink alcohol, a similar quantity of soft drink will be made available if required.

So, sorry that's been a bit of a lengthy introduction covering a range of topics, and I'm happy to respond to your questions on those or other matters.

QUESTION: Do you think it is an unreasonable ask?

STEPHEN SMITH: Well, it's not a question of my view about reasonableness or otherwise. I had a conversation with the Acting Chief of the Defence Force, the Vice-Chief Hurley who is acting, the Secretary of the Defence Department and the Chief of the Defence Force Angus Houston are currently in China on Australia-China Defence officials talks. And as a result of the conversation I had with the Acting Chief of the Defence Force, the conclusion has been made that in the special circumstances of this year, because of the terrible circumstances that our personnel have found themselves in, that it's appropriate on this one-off occasion for Defence to make the payments for the alcohol rather than the personnel concerned.

QUESTION: In the Defence Capability Plan, is it true that JASSM [indistinct] has been dropped from that?

STEPHEN SMITH: So far as JASSM is concerned, the project has not been dropped, but as I announced recently at the Defence leadership group meeting in Canberra, I have listed, together with the Minister for Defence Materiel Jason Clare, we have listed JASSM as a Project of Concern. We've listed that as a Project of Concern because of the failure of Defence to fully inform Government of the challenges of that project and to fully inform Government of the ongoing technical risks associated with that project.

But the project continues. There was recently, in the United States, a test firing of the missile and I've made it clear previously and I again do today that we will give exhaustive consideration to the analysis of that test firing and proceed accordingly. But that is now a Project of Concern, and it's a project of concern because of our failure, Defence's failure, to keep the Government of the day fully informed over a period of time about how that project was developing. But it continues to be an ongoing project and continues to be an important part of our capability examination.

QUESTION: Does it outline how the Government intends to pay [indistinct]?

STEPHEN SMITH: I think one needs to understand what is in the Capability Plan. The Capability Plan has been in existence since about 2001, so for a decade. When we came to office we made a range of changes to the information provided by the Plan and we've tried to put in as much information as we can. And that information has been enhanced in the materials that will go on the website today.

But what the Plan contains is effectively projects which are not yet approved by the Government. They are projects which have not been formally approved, and in the materials that I've released for you you'll see that a number of projects have come out of the Capability Plan because they've been formally approved by the Government.

So, for example, the two projects that I've announced today in respect of Navy communications and air traffic management, they have come out of the plan because they have been formally approved and are now being progressed as a capability project on the part of the Government.

What the plan does is it tries to give industry an indication about what Defence has in mind to enable the Defence industry in Australia and overseas to make their own judgements about a company's investment plan and its skills and training plans. But it is very much, and I've always been at pains to underline this, it is very much an indication, it is not an approved list, and it also contains what is described by those experts in this area, it also contains over programming. In other words, Defence and Defence industry understands that there is more in the indicative plan than will proceed at any given time.

So it's an indication, and as a consequence of that, projects will come in and come out, phases of projects will change and indicative timetables and indicative cost will also change.

QUESTION: Have you been able to make some savings with this…

STEPHEN SMITH: Sorry, let me address a separate point. I've also made it clear that in the past there has not been sufficient rigour associated with planning and financing of Defence capability projects, and we have seen some terrible examples in the past including, for example, the Sea Sprite helicopter. What my predecessor Joel Fitzgibbon established and what my immediate predecessor John Faulkner consolidated was putting Defence capability into a much more rigorous environment.

So, the White Paper, the Force 2030 program, the budget rules, and the fact that Defence's budget is now cost-capped, and you'd see in the announcement I've made today, the two projects that we've authorised for going forward are also capped. There is now much more rigour associated with procurement problems. But again, the point I made to the Defence leadership group recently, we have to get better and we have to do more and we have to be more rigorous.
And Minister Clare and I will be making some announcements about that area in the course of next year. We also have the Strategic Reform Program which, over the period of the White Paper, is to find $20 billion worth of efficiencies and to invest that into the capability projects. And so those budget parameters and external financing parameters remain true.

You have to distinguish between those and approved projects. And the indications that you find in the Capability Plan seeks to give industry as much information as possible to enable industry to do its own forward planning.

QUESTION: Can you answer the question, you haven’t actually addressed it - that's $20 billion of savings, fantastic; what about the other $130 billion? How, when are going to find out [indistinct] budget, how are we going to pay for this?

STEPHEN SMITH: Well the White Paper which we announced in 2009…

QUESTION: Yes. You didn't actually outline how [indistinct]…

STEPHEN SMITH: Well, that's not true. The White Paper indicated what Force 2030 projects would be, what we believed in 2009 dollars that cost would be and how we were proposing to meet that. That's the first point.

Secondly, the budget which followed immediately upon the publication of the White Paper contained, as it should, the forward estimate calculations for Defence's budget. And that will occur in every budget that follows through the White Paper process.

I've made the point, this is a big challenge for Defence. It's a big challenge to meet the Strategic Reform Program, it's a big challenge to meet our capability program, it's a big challenge to meet the Force 2030 elements of the White Paper, but we believe that we are on track to effect that.

For example, in the last financial year under the Strategic Reform Program, we found effectively $797 million or $800 million worth of efficiencies to invest back into capability projects.

So this will be an ongoing challenge, but it's a challenge which we believe we can and will meet.

QUESTION: You said that in regards to WikiLeaks and Iraq and Afghanistan, you said that you found that there'd been no threat to operational security.

Does that mean, would you be recommending to the AFP that they stop looking at options to, whether or not this bloke Assange, whether or not he actually committed any crime?

STEPHEN SMITH: Well a couple of things there. Firstly the most recent set of leaks that we've seen are essentially diplomatic cables, so they cover a much wider range than purely Defence interests. The first two sets of leaks that we saw which had an impact on Australia were with respect to Afghanistan and Iraq, very much squarely in Defence's patch. We established a Defence Taskforce to deal with, in the first instance, the Afghanistan leaks and the assessment of the Defence Taskforce, which I announced some time ago, was that no damage was done to our operational interests, no damage was done to our national security interests.

That was followed by the Iraq leaks. And the same Taskforce did the same assessment. As you would expect, there was always much less of a risk that operational security would be adversely impacted, given the time which has elapsed since we left Iraq. And I indicated last week that the preliminary assessment was that no damage was done, and I've been able to confirm that today.

With the current set of leaks, they cover a much wider area. Questions of appropriateness, questions of unlawfulness, question of illegality have been raised. This is not said in any critical way, because the Attorney-General has just announced that the AFP had indicated and advised him and the Minister for Justice and Customs that on AFP's look at the matter, no illegal act had occurred in Australia.

That, of course, doesn't answer the question as to the illegality if any of the acts in the United States. We're dealing here primarily, if not exclusively, with the United States diplomatic cables.

That issue, of course, will be a question for United States authorities. But the Attorney-General, as he said publicly on a number of occasions, believed it was appropriate to get some assessment as to the state here, and he's been advised today and he's announced today, the AFP have come to the conclusion that there was no, on the basis of what the AFP has seen, no illegal conduct so far as Australia, activity in Australia is concerned.

QUESTION: In regards to the Afghanistan-Pakistan review, President Obama said overnight the review shows that it is time to start responsible reduction of troops next year. What are the implications for Australian troops in that in regards to this review?

STEPHEN SMITH: We've always made it clear that we are committed to our approach in Afghanistan, which in Uruzgan Province is to train the Afghan National Army and the Afghan National Police and put them in a position of being able to cater for security and have responsibility for and lead for security in Uruzgan Province.

Our advice continues to be that we believe we can make that change over the next two to four years, which is squarely on the timetable spoken about by the international community at Lisbon, the timetable that President Karzai has set himself.

So we believe we're on track for that transition, firstly. Secondly, I've never seen, and I've made this point before, I've never seen any inconsistency with a strategy to transition by the end of 2014 with a drawdown of troops as the transition is effected.

And President Obama has made it clear overnight, as a result of his review, that he sees no reason why a drawdown can't occur on the timetable that he previously spoke about, which is July of next year.

He's also, as have his officials, made it very clear that in the first instance that would be small, rather than large, and niche rather than general.

QUESTION: Back to Christmas Island. Do you think that the Navy could have done more in terms of delay between the alert and rescue?

STEPHEN SMITH: Firstly I am not proposing to be drawn on any of that detail, that's the first point. I think that is appropriately dealt with by the exhaustive assessments that will follow. That's the first point.

Secondly, on everything that I have seen and on all of the advice that I have received, I am confident that as soon as HMAS Pirie was alerted to the difficulty, it did everything that it possibly could to assist both in terms of the speed of its response and what it did when it arrived at the scene.

Now that is appropriately one of the aspects which will be considered by the WA Coroner in the course of his formal coronial inquiry. It will also be the subject of AFP inquiry or investigation as the AFP does the job that it has to do, which is, at two levels - as I understand it - to investigate any people smuggling offences, but secondly to, together with the Western Australian Police, to prepare the evidence for presentation to the Coroner.

So it will clearly be the speed of the response by HMAS Pirie and also by the Australian Customs vessel Triton will fall for consideration. Everything that I have seen leads me to two conclusions - firstly that once HMAS Pirie was alerted, it did everything possible to assist, firstly. And secondly, but for the actions of the men and women on HMAS Pirie, more lives would have been lost. And thirdly, I'm sure we will see when all of the evidence comes out, acts of bravery and heroism in very difficult circumstances by men and women aboard that vessel.

QUESTION: No doubt, but once this - a little bit more detail on what you were just saying there. [Indistinct] or any other Australian authority indicated as to the whereabouts of the boat that smashed on Christmas Island at any stage between it leaving Indonesia and BPC being notified of the boat at 5.48 AM on Wednesday Christmas Island time?

STEPHEN SMITH: Well firstly, the Minister for Justice and Customs, Mr O'Connor, and the Minister for Immigration, Mr Bowen, have made it very clear, as I do, that this boat was not being tracked. That's the first point.

Secondly, it's also the case that in very difficult and dangerous weather conditions, often, radar is not effective against wooden boats. And thirdly, that matter will also no doubt be the subject of inquiry or consideration by the Coroner and others. And as a consequence of that, I'm not proposing to go into any further detail.

But I do very strongly make this point, on everything that I have seen, Navy, HMAS Pirie, and people on board HMAS Pirie did everything possible that they could to save lives in what were very difficult and dangerous circumstances.

QUESTION: Was any Government authority made aware at any point before 5.48 AM on Wednesday, Christmas Island time?

STEPHEN SMITH: I make the same point that the Prime Minister has made, that the Minister for Customs has made, that the Minister for Immigration has made, this boat was not being tracked.

QUESTION: So no?

STEPHEN SMITH: This boat was not being tracked.

QUESTION: So no?

STEPHEN SMITH: From the first moment that HMAS Pirie and Australian Customs vessel Triton were alerted, in my view, they did everything they possibly could to minimise the tragedy and to save lives.

QUESTION: The WikiLeak cable that Julia Gillard was looking to [indistinct] Kevin Rudd a year before it actually happened, how much of that did you know?

STEPHEN SMITH: I have made a consistent course of conduct that I'm not proposing to comment on any of the so-called WikiLeaks US cables, and generally I make a practice of not commenting upon newspaper speculation about what may or may not be in such cables.

I have generally made the point that diplomatic cables are often like newspapers. Sometimes you find serious analysis, and sometimes you find gossip, and people can make a judgment about whether there's serious analysis, or there's gossip. What you also find in diplomatic cables is that from time to time people actually get things wrong. From time to time, people - whether they're diplomats or other people - make misjudgements. So I haven't been drawn to date on these matters. I'm not proposing to start giving a running commentary now.

QUESTION: This is very Defence specific question, you did touch upon it before. What do you say to those people who believed that the [indistinct] should have picked up that boat?

STEPHEN SMITH: I say exactly what I said to you earlier, which is any radar system will often have significant difficulty in very bad weather conditions picking up small wooden boats. All right?

This may or may not be the last occasion that I appear before you this year, so have a Merry Christmas, and a safe and happy New Year, and if I don't see you again I'll see you sometime in 2011.

Thanks very much. See you. Cheers.

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