Joint doorstop with Minister for Defence Stephen Smith – Darwin

TOPICS: Bushmaster; Defence Capability plan; Australian Foreign Military Sales Office; C-130H gifting to Indonesia; SBY visit; Annual Defence Ministers’ dialogue; Border Protection; Patrol Boat availability

STEPHEN SMITH: Well, thanks very much for turning up. I’m very pleased to be here together with Jason Clare, the Minister for Defence Materiel. We’ve got some Defence capability announcements to make. I’ll make some remarks, throw to Jason, and then before we answer your questions, I’ll make some remarks about President Yudhoyono’s visit and a Defence announcement related to that.

Firstly today, Jason and I are announcing that the Government has decided to approve the purchase of 214 additional Bushmasters. This will see Army’s Bushmaster fleet grow to around 1000. You might recall that some time ago the Government approved the purchase of an additional 108 Bushmasters. When those – 101, sorry – when those 101 are constructed, the fleet will be in the order of 800. So the additional 214 sees our Bushmaster fleet grow to in the order of 1000.

So that’s a very good thing because the Bushmaster has been a most effective piece of equipment and it’s saved lives in Afghanistan. So it’s been a most successful piece of kit designed and built in Australia in Bendigo. The 214 that we are purchasing are also linked to Thales’ Bendigo development of the protected vehicle, the light protected vehicle, Hawkei. You might recall that in December of last year, Jason and I announced that the Government was doing further work together with Defence and the Defence Materiel Organisation on the development of some 1300 protected and unprotected light vehicles.

There were two prospects at that stage – the development of Hawkei and also the Joint Light Tactical Vehicle, a project in the United States. And today we’re announcing that we are proposing to make sure that the production line remains open in Bendigo and the necessary skills are there to see the development of Hawkei, with the purchase of these additional 214 Bushmasters.

As well, we’re announcing today that in the future, the Defence Capability Plan will now be configured on a four-year plus six-year basis – a Defence Capability Plan of four years which matches the four-year forward estimate period, and then a defence capability guide over the following six-year period. This is as a result of discussions that Jason and I have had with industry, with defence industry over the last few months. We think this will give industry a much better guide as to Government intentions, linking the Defence Capability Plan directly to the four-year Budget forward estimates period, gives much more certainty to industry while at the same time a six-year Defence capability guide will give industry some indication as to what might be included in the Defence Capability Plan in following years.

We’re also announcing today the establishment of an Australian Defence Foreign Military Sales Office, essentially based on the United States foreign military sales arrangements. We see this as giving defence industry a one-stop shop to assist with export potential, and the Bushmaster is a classic illustration of that, as is the work we’re doing on our Anzac class so far as enhanced radar is concerned.

And finally today, we’re also announcing that we’ve received into service two Chinooks, two D Class Chinooks, which we have picked up from the United States, and these will add to our fleet of Chinooks which we currently have in operation in Afghanistan. So, some major capability announcements there. I’ll throw to Jason to make some remarks, then I’ll make some remarks about the Indonesian President’s visit, and then we’ll happily respond to your questions. Jason.

JASON CLARE: Thanks Stephen. These are three major announcements for the Australian defence industry. Stephen mentioned a couple of months ago, in February we sat down with the Australian defence industry and one of the things they suggested to us was a Defence Capability Plan that aligned with the Budget and the forward estimates and a longer-term plan that set out the plan from five years, or four years into the end of the decade. So we’ve developed that based on the discussions we’ve had with Australian industry.

The decision to establish an Australian Military Sales Office is also a decision we’ve made based on discussions with Australian industry. Australian defence industry does some amazing work. A good example of that is the new phased array radar which we’re putting on our ANZAC frigates. By setting up an Australian Military Sales Office, similar to what the United States has with their Foreign Military Sales Office, and Canada and Sweden and other countries, it’ll provide the opportunity for Australian companies that are developing military technology here in Australia to export that overseas.

Some of the recent things that Australia’s purchased, the C-17s, the Super Hornets, have been purchased through the United States military sales system, and this is a similar system we want to establish to support the work of Australian industry. Good examples of that are the phased array radar, but others might include the Bushmaster or potentially the next generation armoured vehicle, the Hawkei.

On that point, as Stephen made mention, we’ve made the decision today to purchase an additional 214 Bushmaster vehicles. That means we’ll have over 1000 Bushmasters. These are life-savers. These are the vehicles that have saved dozens of Australian lives in Afghanistan and they’ll be built to a higher protection level, STANAG four, a higher protection level than the original Bushmasters were made now about a decade ago.

The company that makes the Bushmaster has also been down selected to build the next generation of armoured vehicle, the Hawkei. This is more of an armoured jeep than an armoured truck, and production of Bushmaster is currently scheduled to end towards the end of this year or early 2013, and production of the Hawkei is scheduled to begin not until about 2016. So the decision we’ve made today makes sure that we’ll be able to maintain the expertise and the skills needed to build armoured vehicles in Australia between the current end of Bushmaster production and the beginning of production of the Hawkei.

It’s also good news for Australian industry. It’s not just one company that makes the Bushmaster; it’s hundreds. There’s over 100 companies across Australia that produce parts of the Bushmaster, so it’s also a very good announcement for Australian manufacturing today.

STEPHEN SMITH: Thanks very much, Jason. Just some remarks on President Yudhoyono’s visit to Australia. Obviously we’re very pleased that the Indonesian President is visiting Darwin and visiting Australia. This is the first of the agreed annual leaders’ summits between the Indonesian President and the Australian Prime Minister.

In addition to other ministers, the President will be accompanied by my counterpart, Indonesian Minister for National Defence, Minister Purnomo. And one of the things that we’ll be doing in the course of the President’s time here today and tomorrow will be signing up a memorandum of understanding for the gifting of four C -130 H class heavy lift planes, being gifted from Australia to Indonesia.

This is a project that we’ve been working on for a couple of years now – Australia, the United States and Indonesia. We of course received the C -130s from the United States, and United States approval is required for on-gifting. But as we’ve now acquired two additional C-17s for a C-17 fleet of six, we’re now moving to the more modern C -130 J class. We’re in a position to decommission some of our C- 130 H’s, and as part of that process, we are gifting four to Indonesia.

This is very important. You might recall, for example, 2009, the Padang earthquake where Australia invested a lot of effort so far as humanitarian assistance and disaster relief was concerned, not just with heavy amphibious lift ships but also helicopters and the like. And so enhancing Indonesia’s heavy air lift capability for humanitarian assistance and disaster relief is a very good thing for Australia to engage in. And when Jason and I leave here we’ll be going to the airport to join with the Prime Minister to greet the President, and at the airport the memorandum of understand will be entered into and signed. So that’s a very good development.

I’ll also this afternoon, together with Jason, be having a formal bilateral meeting with Minister Purnomo. The last time we met was at the Shangri-La dialogue in Singapore last month, and you might recall in March of this year we had our first so-called two-plus-two meeting with Foreign Minister Natalegawa and Defence Minister Purnomo. The two-plus-two is the meeting of Defence and Foreign Affairs ministers. We do this with a very small number of countries: United States, United Kingdom, Japan and now Indonesia. And Minister Purnomo and I agreed in the margins of the two-plus-two that we would meet formally on an annual basis.

We’re not starting with this meeting in Darwin; I’ll be travelling to Indonesia in the second half of this year – later this year to conduct the first of our formal Defence Minister’s dialogues. But the C-130 gifting is a very important gesture so far as the strength of Australian and Indonesian bilateral relationships are concerned in general, but also reflective of growing strength of the defence to defence and military to military relationship between Australia and Indonesia, one of our key partners in South East Asia.

We’re happy to respond to your questions.

JOURNALIST: Those C-130s that Australia’s gifting, as you said, older models, what nick are they – what sort of nick are they in [inaudible]?

STEPHEN SMITH: Well, we’re – we will hand the four over in ready-to-fly condition. The maintenance for our C-130s takes place at Richmond Airbase – RAAF Richmond in New South Wales. So they’ll be handed over in a fit condition to fly. But under the Memorandum of Understanding, the responsibility for ongoing maintenance and sustainment falls upon Indonesia.

We of course are prepared to give them whatever technical or other assistance is required. We’ll hand them over in a fit-to-fly condition and thereafter, maintenance responsibility is a matter for Indonesia. And that’ll also be a good thing because it’ll help them grow that capability into the future.

JOURNALIST: Minister, people smuggling obviously is a big issue for Australia and Indonesia. What discussions are you going to have with your counterpart on how to combat that issue, and you know, how can we improve or increase defence capability to improve the situation?

STEPHEN SMITH: Well, with Defence Minister Purnomo, we of course have a navy to navy interest, so we’ll no doubt mention that in passing. I’ll also let Jason add to my remarks in his capacity as Minister for Home Affairs. But clearly that general issue, given its importance will be the subject of conversation between the Prime Minister and the President in the course of their meetings over the next day.

But Australia works very closely with Indonesia to prevent people smuggling operations. I think it’s under-appreciated, the number of successful disruption events that occur through close co-operation between the relevant authorities in Australia and Indonesia working closely together. But we’ve made it clear as a Government that we see the way to break the people smugglers’ model is to effect offshore processing.

We made it clear we think that the Malaysian option is the one which is best able to effect this. We’ve been unable to get that in the first instance through the High Court and secondly through the Parliament. In our endeavours to get it through the Parliament, we’ve made it clear that whilst we don’t believe that Nauru these days is a viable option or solution, we’re prepared to put that into effect as part of our efforts to get offshore processing through Malaysia going. But these matter will no doubt be the subject of conversation over the next day or two.

JOURNALIST: Are you going to talk about new strategies?

STEPHEN SMITH: Just hang on, I’ll just – I’ll throw to Jason to let him make some remarks as well.

JASON CLARE: Sure.

JOURNALIST: I mean, we’ve had a couple more boats. Are you going to talk about new strategies? We know that there’s already existing plans in place with Indonesia, but what new are you going to talk about this time?

JASON CLARE: Let me expand on what Stephen said. There’s a strong relationship between the Australian and Indonesian authorities. The search and rescue authorities work closely together. The border protection authorities work closely together. The law enforcement authorities on the ground in Indonesia work closely together as well. That’s meant that we’ve invested something like about $40 million to support Indonesian law enforcement efforts over the course of the last few years [inaudible] includes the purchase of three vessels for Indonesia.

It also involves the construction of about 12 police stations along the Indonesian archipelago, working to support the Indonesian Satgas team that – the police that have helped disrupt about 300 ventures over the course of the last three years. This will be part of the discussions that we’ll have with the Defence Minister when we have discussions later today. It’ll also be part of the discussions that the Prime Minister has with the President of Indonesia tomorrow to talk about how we can work even more closely together.

But let’s be frank about this; the work that our law enforcement authorities do – Australian and Indonesian – is a bit like putting your thumb on the end of a hose. If you want to stop people from transiting through Asia – through Indonesia to try and get to Australia, you’ve got to turn the tap off. To turn the tap off, you’ve got to remove the incentive for people to want to transit through Indonesia to get to Australia in the first place to risk their life on a boat. And the way to do that is offshore processing.

The Labor Party believes that Malaysia is the way to do that. The Liberal Party believes that Nauru is the way to do that. Our compromise proposal is let’s do both. But we strongly believe that the Malaysian plan is the better plan because why would you transit through Indonesia, pay someone $10,000 in Java to get on a boat if you were going to go back to Malaysia. The limitations with an offshore processing facility in Nauru are that we know that 90 per cent of the people who are found to be refugees at Nauru ended up coming to Australia or New Zealand. So the disincentive to give someone $10,000 isn’t as strong with that offshore processing arrangement as it is for Malaysia.

So, we strongly believe that we need to work closely together – and we do – but we take – need to take the next step of implementing offshore processing if we’re going to stop a repeat of the deaths that we’ve seen over the last few weeks.

JOURNALIST: [Inaudible] more money on the table in this area for Indonesia – more funds, more aid, I suppose to help them?

STEPHEN SMITH: Well, as Jason has said- and as I said earlier- we work very closely with all of the relevant Indonesian authorities. If in the course of the next 24 hours we come to the conclusion there’s even more we can do, obviously we will take that up. But Indonesia has been very effective on this front, and they’ve also been very effective in counter-terrorism operations where we worked very closely with them as well.

But I just reinforce the point that Jason made which is we can expend all of our efforts and energy treating the symptom- we’ve got to get to the cause. And to get to the cause you’ve got to break the people smugglers’ business model, and our very strong view on that front is you’ve got to have offshore processing. And we think that that can be done effectively through Malaysia, and would have the effect of that model removing the incentive for people to engage in the risky journey on boats coming to Christmas Island or mainland Australia.

JOURNALIST: [Inaudible] Home Affairs Minister, the Greens have suggested in recent days that customs has a different rescue standard for asylum vessels than they would for round-the-world yachtsmen or container ships that might get into trouble. And they’re saying that we should go all the way up to Indonesia when a vessel first calls in a – an asylum vessel first calls in a distress signal. What’s your response to that? Is there a different standard – rescue standard for asylum vessels than there is for other vessels?

JASON CLARE: Absolutely not, Nick. It’s wrong. And anybody that’s been a mariner knows that there is one rule that applies- when the call comes for assistance, you go to provide assistance to save lives at sea. That’s why we saw those merchant vessels arrive on the scene last week and the week before. The work that those merchant vessels did by getting on the scene so quickly two weeks ago and again last week saved lives – saved people’s lives. And the short and simple answer to this is to suggest that there are different rules for different people lost at sea is just plain wrong.

STEPHEN SMITH: Can I just add to that? It’s an appropriate time to make this point, we should never forget the efforts made by Navy personnel, both men and women. Firstly in the December 2010 disaster off Christmas Island where those men and women on board HMAS Pirie did heroic and tremendous work. And in the last fortnight we’ve seen work done by the men and women and Larrakia which again underlines and reinforces the point that Jason has made, it doesn’t matter what type of vessel you’re on; it doesn’t matter who you are rescuing, there’s one rule that applies at sea, and that is if anyone is in distress, then it’s all hands on deck to try and effect a rescue.

And whether it’s been merchant ships or whether it’s been Australian Navy vessels, we have from time to time effected rescues in the Indonesian search and rescue area because we have been the ones most available and ready and able to do that at the time.

JOURNALIST: Do you think Indonesia is doing enough to stop the vessels leaving form their end? Or are you going to be pressing your counterpart and should the Prime Minister be pressing the President to be doing more from their end?

STEPHEN SMITH: Well, as Jason and I have both said, we work very closely with all of the Indonesian relevant authorities. We’ve been very successful with Indonesia in disrupting a whole range of people-smuggling operations. But if you want to stop it at source, you’ve got to effect offshore processing, and that’s what our recent parliamentary efforts were about. But we publicly and privately commend the Indonesian authorities for the work that they do, and we’ll obviously do that over the next 24 hours. But if there is more that we can do between our various agencies, then we won’t hesitate to do it.

JOURNALIST: What do you hope to achieve then? From these meetings, what do you hope to achieve to improve the capability to tackle people smugglers in Indonesia?

STEPHEN SMITH: I think it’s at two levels. Firstly, the fact that the Indonesian President is coming to Australia to have for the first occasion, on an annual basis, leader to leaders meeting underlines the depth and the strength of the relationship between Australia and Indonesia.

STEPHEN SMITH: In any bilateral relationship, from time to time there are potentially always issues, but I don’t believe there’s been a point in time where the relationship between Australia and Indonesia has been stronger. And that’s reflected by the work that we do in the area that we’re speaking about now, whether it’s seeking to disrupt people smuggling operations, but also in the year in which we see the tenth anniversary of the Bali bombing in our counter-terrorism word, Indonesia has been the most successful country in terms of bringing to justice terrorists who are seeking to do damage to their nation, and their people, and also to the citizens of other countries, including Australia.

So we work very closely with Indonesia. If there’s anything that we can do to enhance that engagement at the agency level of course we’ll do it. But in terms of people smuggling we’ve got to get to the cause and not just deal with the symptom. And the cause in our view can only be dealt with by breaking the people smugglers’ business model by having offshore processing, and if we weren’t disturbed by the High Court we would have had a Malaysian offshore processing system in place by now.

Now the only option is for the Parliament to pass that, and we have gone a very long way in encouraging the Liberal Party and the National Party, the Coalition to accept the view that if they say that Nauru is the offshore processing solution, we say Malaysia is the offshore processing solution, then let’s have legislation which effects both. That’s a sensible way forward.

And in the meantime, because we weren’t able to get that view to prevail in the Senate last week, the Prime Minister has established the high level advisory group headed by the former CDF, Angus Houston, and assisted by Paris Aristotle, very well regarded so far as refugee and asylum seeker matters are concerned, he’s advised governments of both persuasions – and also Michael L’Estrange, the former Secretary of the Department of Foreign Affairs and Trade. And any suggestion which they bring forward we will of course also look very closely at adopting.

JOURNALIST: Minister Smith, seven of the 14 Armidale Class patrol boats situated here in Darwin are at any time receiving maintenance and not operational. In 2012, it’s been reported that only 80 per cent of the required patrol days have they been out looking after the borders. The Shadow Minister for Defence, David Johnston, says that the boats are wearing out at a rapid rate, and they’re working far beyond anything they’re expected to. What do you say to that?

STEPHEN SMITH: Well a number of things. Firstly, I think that the efforts of the patrol boats and their crews in the last two weeks, where they’ve been engaged in very difficult work, shows you just how effective they continue to be. That’s the first point. Secondly, the Chief of Navy continues to tell me and also tell Jason that Navy is in a position through its patrol boats to discharge the requirements that the Government asks of it in terms of border protection and control. Thirdly, there is no doubt that there is a high operational tempo, there’s no doubt that these boats and their crews are doing a lot of hard work. And we are monitoring that very carefully. We’ve made some changes through the Chief of Navy recently to the maintenance arrangements.

We’ve also these days adopting a different crewing arrangement. But we are very conscious of the maintenance demand, we’re very conscious of the wear and tear, but for the time being Navy, the patrol boats are able to discharge the obligations asked of them through border protection and Customs. I’ll ask Jason to add because Jason is having a meeting this afternoon with DMS, the provider of the bulk of the maintenance. I’ll ask Jason to add as well.

JASON CLARE: Yeah just briefly, Stephen’s right, the patrol boats have been worked very, very hard. We have adjusted the maintenance program based on the learnings from last year with Paul Rizzo’s report into maintenance for our amphibious fleet, where we’re rolling that out across the Navy, applying the same methodology to make sure that these vessels have the maintenance that they need for the extraordinarily difficult task that they’ve been asked to do, and you’ve seen evidence of that most visibly over the course of the last few weeks. DMO, Navy, and DMS are all working very closely together to ensure that we’ve got the capability that we need, that we continue to meet the requirements of Navy.

And as part of that while I’m here in Darwin today I’ll use the opportunity to meet with the leadership of DMS, and talk to them about the maintenance program to make sure that everything that needs to be done is done.

JOURNALIST: Do you know how many patrol boats can’t be deployed right now?

JASON CLARE: Well at the moment we’ve got sufficient capability to meet the requirements of Navy. We’ve got one vessel, Larrakia, which has returned from the extraordinary work it did two weeks ago. We’ve got Wollongong, which is up in Singapore at the moment as part of a logistics visit. It was involved in that search and rescue operation, as well, two weeks ago. I think Maitland is still out there at Christmas Island after doing that extraordinary search and rescue last week as well.

So we’ve got the capability that we need, but it’s put under pressure by the enormous amount of work that these vessels have been asked to do. And as Stephen has said just look at the work that they’ve done in the last two weeks, it’s evidence of the capability of these vessels.

JOURNALIST: Yeah, given the work, but do you know how many can’t be deployed? Can you give us numbers?

JASON CLARE: Well at the moment my understanding is that there are five of the Armidale patrol boats that are currently in operation. Others are in different states of training, or in the maintenance period.

JOURNALIST: In relation to people smugglers, are you talking about you know, there’s going to be talks, but what can be improved? I mean there’s always room for improvement. What can improve between your relationships with Indonesia and Australia to try and stop the issue?

STEPHEN SMITH: Well I’m not sure how much influence the President of Indonesia had on the Australian Parliament. The most effective thing that can be done, the most significant step forward is for the Parliament to authorise offshore processing. That’s what the Government asked the Parliament to do last week. We were successful in the House. We were unsuccessful in the Senate. That is fundamentally the most significant thing that can be done to improve the movement of people and the people smuggling issue and difficulty that we face.

So far as Indonesia is concerned, we are very pleased with the cooperative work that we do with Indonesia on this front and elsewhere. But to – and as Jason and I have both said, and very happy to repeat it – if in terms of relationship between agency to agency there is more that we can do, we can do that. But we’ve got to get to treating the cause, and the cause can only be addressed by offshore processing. Greater enhancement [inaudible]. Having said that both on the people smuggling front and on the counter-terrorism front we’ve worked very very closely with Indonesia and we’re very happy with their efforts.

JOURNALIST: Are the budget cuts – sorry, are the budget cuts to Defence, are they having any impact on the ability to maintain these patrol boats?

STEPHEN SMITH: No, as Jason said – and as I said earlier, the main issue so far as the boats are concerned is we’ve got a very high operational tempo, they’re asked to do a lot of work. My memory – I’m happy to stand corrected – my memory is that in 2011 in terms of operational days met it was, if it wasn’t 86 per cent of operational days, it was 89. This year, in the course of this year, we are still above 80. If it’s not 82 per cent it’s 84. So we continue, as the Chief of Navy tells me, as recently as Saturday, if we continue to be able to meet the demands of the operations based on it, and there can be no better evidence of that than what’s occurred in the last couple of weeks, in the course of this year’s budget, we’re actually spending more money on maintenance and sustainment than we have in the past.

And that is a direct result of the work that we’ve done with Paul Rizzo, with his report to us, and our implementation of that. And also as a general proposition so far as the budget was concerned we’ve ring fenced our operational requirements – Afghanistan, the Solomon Islands, East Timor. But in terms of the resources given or applied to maintenance or sustainment we have substantially increased those in the course of this year’s Budget. If it’s not, again, if it’s not $600 million increase, it’s $700 million.

We’ve got to get to the airport. Thanks very much, cheers, thank you.