Joint Press Conference with Minister for Defence Stephen Smith



DATE: 16 JUNE 2011

TOPICS: Capability projects; Civilian access to military facilities.

STEPHEN SMITH: Well, thanks very much for turning up. I’m here with Jason Clare, the Minister for Defence Materiel. We have a number of announcements. I’ll go through those briefly and then let Jason make some remarks.

Firstly today, Jason Clare, the Minister for Defence Materiel and I are announcing that the Government is proposing to purchase 24 Seahawk Romeo naval helicopters at a cost of just over $3 billion. This new fleet of navy combat helicopters will replace the existing Seahawk fleet. We expect that to occur over the period 2014 to 2020.

We’ve chosen the Lockheed Martin Sikorsky helicopter for a number of reasons. Firstly, it’s a proven capability. It’s currently used by the US Navy. Secondly, it is the updated or modern version of the Seahawk, which we currently use, which it is replacing. Thirdly, because it is a Sikorsky Lockheed Martin capability, of course, it is interoperable with our alliance partner, the United States and because of its proven capability, it’s low risk and, also, we very strongly believe it’s value for money.

This has been through a competitive process. The competitor was, of course, Australian Aerospace, with the NATO frigate helicopter and we’ve decided to choose the 24 Romeo Seahawks for the reasons that I have outlined, and Jason will add to that shortly.

Secondly, I’m making some announcements today on greater civilian use of military facilities.

Firstly, and most importantly, I’m announcing today that I’ve asked Allan Hawke, Mr Allan Hawke, the former Secretary of the Department of Defence to conduct an independent review of potential greater access by large cruise ships to Garden Island or Fleet Base East.

This has previously been the subject of a report by a New South Wales committee and in the last few years we’ve seen increased arrivals in Sydney of these larger cruise or tourism vessels.

The Minister assisting the Minister for Tourism, Senator Sherry, the Minister for Transport, Mr Albanese, the industry itself and the New South Wales Government have raised this issue with me and my office and with Defence and Navy.

I indicated when I spoke to Premier O’Farrell earlier this morning that it would be open to the New South Wales Government to put whatever representations they might want to Mr Hawke. Premier O’Farrell indicated the fact that he welcomed the independent review that I had established and that Mr Hawke would have the complete cooperation of New South Wales and its agencies. So, I’ve asked Mr Hawke to commence in the next few weeks, with an expectation that he delivers his report towards the end of this year.

I do make this point though that Fleet Base East or Garden Island is, of course, one of the Navy’s two premier naval institutions. Our ongoing primary obligation and capacity has to, of course, be for Navy and military arrangements; In addition to the current naval vessels at dock will go through Garden Island or Fleet Base East, we will, of course, over the next half dozen years see the arrival of the Largs Bay, the large amphibious vessel from the United Kingdom, two Landing Helicopter Docks, very large ships, larger than our previous largest aircraft carrier, and three Air Warfare Destroyers.

So there are considerable constraints on Garden Island, but I want that independent review to be effected.

I’ve also released today the Air Force review on civilian access or civilian use of Air Force airfields, and I’ve asked the aviation industry, the civil aviation industry, to comment on that report, that review, and to do that by 31 October.

We, of course, have increasing civil and general aviation use throughout Australia and we want to see whether it’s possible to provide greater access to a dozen or so of our Air Force airfields, and those details are being supplied to you. The starting point has to be that our Air Force airfields are, of course, for Air Force and Defence purposes, but we’re willing to see whether greater sensible civilian access is appropriate.

Jason Clare and I are today giving an update on a range of our capability measures and acquisitions. Jason will go into more detail. But we have signed up for the purchase of the Largs Bay and paid the last instalment of the $100 million, and that’s on track to arrive by the end of the year.

We’ve signed a contract with Thales in Bendigo for 101 Bushmasters at the cost $133 million.

I’ve indicated that Tobruk, which is currently in dry dock undergoing maintenance, will require further maintenance and not be available until the end of August and we’ve made arrangements to extend the cover of the Aurora Australis to ensure that we’ve got a heavy amphibious lift cover over that period.

And we’ve previously announced the utilisation of the C-RAM in Tarin Kot. That has been extended to a range of our forward operating bases. Not proposing, for the obvious reasons, to go into which forward operating bases, but that force protection measure has now been extended to some of our force operating bases in Uruzgan Province, and it’ll be further extended in the course of the year.

I’ll hand over to Jason and then we are happy to take your questions.

JASON CLARE: Well, thank you, Stephen.

This is a big and important decision. It’s worth more than $3 billion, and worth even more than that to Australia’s national security.

These helicopters will replace our existing Seahawk helicopters and they’ll be based at HMAS Albatross in Nowra.

They will operate off the back of our Anzac frigates, as well as our new Air Warfare Destroyers, and their job is to hunt and kill submarines. They also will play an important role in attacking small and fast-moving watercraft. Like the Seahawk helicopters that operate off our frigates now in the Middle East and off the coast of Africa, they’ll play a very important role when it comes to anti-piracy and counter-terrorist activities.

As the Minister said, they’re a proven piece of military equipment.

The US Navy already has about 100 of these helicopters. They’ve flown already more than 90,000 miles – 90,000 hours worth of flying time, I’m sorry – and they’ve operated in the Middle East. So they’re a military off-the-shelf piece of equipment.

We’re making a number of other announcements today about pieces of defence materiel, signing the agreement to purchase 101 extra Bushmasters. This is another piece of proven military equipment. The Bushmasters have been very effective in Afghanistan. It’s a matter of record that they’ve saved dozens of Australian lives in Afghanistan. The purchase of an extra 101 Bushmasters is very important to deal with the attrition of Bushmasters that have been attacked and, in some cases, blown up in theatre.

Largs Bay is another piece of proven military equipment, effectively an off-the-shelf piece of military equipment – five years old. It’s performed a very important role in those five years for the British Navy, including in the operation assisting the people of Haiti after the earthquake there. And the expansion of C-RAM is another piece of proven or off-the-shelf military equipment. It’s been in operation now at Tarin Kot since the beginning of the year. We’ve rolled it out now to a number of other forward-operating bases and we’ll roll it out to more forward-operating bases through the course of the year.

One of the big challenges that Defence faces is delay. If you’re purchasing equipment that needs modification or customisation, on average, it’s about 23 per cent late. If you’re buying something that’s first of type or is developmental, then, on average, it’s about 66 per cent late. But if you buy off the shelf, on average, it comes in on schedule.

Now, across all of the major projects that Defence has, the average behind schedule time is 20 per cent. Now, that’s better than the United States, it’s better than the United Kingdom, but I don’t think it is good enough. There’s more that we can do to reduce schedule and reduce schedule delays.

That’s why the first stage of reforms to Defence procurement that the Minister and I announced last month dealt directly with this: how do we reduce delays?

Now one of the things we’re doing is the introduction of an early warning system to alert Government and senior officials in Defence, where it looks like there’s schedule slippage; but another part of that is saying to Defence very clearly that if you’re going to make a recommendation to Government to buy something that is not off-the-shelf, then you have to present a business case – a cost benefit analysis about why we should do that.

It’s not always the case that you should buy military off-the-shelf equipment, but if you’re not going to do it, you need to present a very clear, a very cogent, and a very strong case for why you shouldn’t do it.

In this case, the Romeo helicopter, the Bushmasters, Largs Bay and C-RAM are all military off-the-shelf, proven equipment that provides good value for the taxpayer and reduces the risk of scheduled slippage.

STEPHEN SMITH: Alright, well because it’s brisk, but also because Jason and I have got leave for one division, but not two, so we’ll take a few questions, but I may not be able to do the usual half-hour effort.

JOURNALIST: [Indistinct]

STEPHEN SMITH: Well, there are two reasons, firstly the size of the cruise ships these days means that they can’t get beyond the Harbour Bridge and so there is an issue there, that’s the first point.

Secondly, this has been examined by Navy and Defence in the past, and also examined by New South Wales, in part because of the success that Allan Hawke had in coming to a very successful conclusion over extended use of Woomera, I thought he was the ideal person in place to see whether there was some potential for greater access that we could do.

The cruise ships arrive infrequently and they are also on a long term schedule, and so for example, a cruise ship can say we’re going to be in Sydney in 18 months time, can we berth or dock? So there is potentially a long lead time, which does enable planning and cooperation.

But I again make the point, we are already constrained at Garden Island, we’ll be further constrained when the LHDs and the Air Warfare Destroyers and the Largs Bay arrive, so I’m not necessarily indicating that there will be any greater or further improvements in the status quo, but I’ve got to-

JOURNALIST: But presumably they will pay money, the cruise ships will pay to go in dock?

STEPHEN SMITH: It is not going to be a gift of the Commonwealth.

JOURNALIST: [Indistinct] when the renewal [indistinct] and what would potentially be the earliest date that we could see cruise ships on Garden Island?

STEPHEN SMITH: Well, Dr Hawke has got a couple of other jobs to do, I expect he’ll be able to start up some time in July, he and I have spoken about a reporting date end of October/November, so with a bit of luck I’ll get a report from him before the end of the year, with a view to making a decision or a judgement by the end of this year, or early next year.

Obviously, my starting point would be when he reports to me, I’d make that available to Premier O’Farrell and to the industry, but I’d prefer to get it done sooner rather than later, so that there’s a resolution to that issue so that we can get on to the planning for the Air Warfare Destroyers, and the Landing Helicopter Docks.

JOURNALIST: Do you have any security concerns about access to-

STEPHEN SMITH: Well, there are always security concerns and issues and procedures and they currently apply at Garden Island, so in the small number of instances, from memory four since 2006, when a large cruise vessel has been given access to Garden Island there have been procedures in place, in terms of people arriving or leaving the cruise ships, so they are in place already.

But there is difficulty with these large cruise ships docking in Sydney generally and my attitude, Navy’s attitude and Defence’s attitude is that we are prepared to see what more, if anything, we can do. We think the vehicle that I have announced today, which is supported by my two relevant ministerial colleagues, and welcomed by Premier O’Farrell, is worth a go.

JOURNALIST: -Sea Hawk helicopters [indistinct] put into Sea Sprites. Can you tell us exactly where those Sea Sprites are now? Have they been on-sold to another country? Have they been [indistinct] or-

STEPHEN SMITH: I’ll answer the general question. The Romeos that we have announced today give us the Navy helicopter combat or attack capability that was originally envisaged by the failed Sea Sprite program, and Jason will be able to tell you about disposal of those.

JASON CLARE: Yes, they haven’t been on-sold as yet, but I can get you some more details about location, the timeframe, and the plan, in terms of the on-selling of those helicopters.

JOURNALIST: Sea Hawks are obviously off-the-shelf as opposed to the Sea Sprite [indistinct]. This purchase of the Sea Hawk obviously resulted in the [indistinct] of the Sea Sprite.

STEPHEN SMITH: Well I think Jason eloquently made the point, the general point about the risk equation when you purchase off-the-shelf and I outlined our rationale for choosing this, rather than the NATO frigate helicopter, proven capability, used already by the US Navy, it’s the modern day successor of the current Seahawk that we have, so we have continuity, because it’s off-the-shelf, because it’s a proven capability, because it’s currently operational, the risk is lower, and the delivery schedule is on all of the track records, attractive.

JOURNALIST: I have a question for Minister Smith. There’s a woman whose partner is currently serving in Afghanistan and she’s asked [indistinct] for a funeral, because they were close friends. [Indistinct] Do you know why that was?

STEPHEN SMITH: I’m not aware of that, but obviously given his funeral is in the next few days, I’ll go back and make some inquiries and see what more, if anything, can be done.

JOURNALIST: Has any decision been made to retire Kanimbla as Largs Bay is going to be here by end of year?

STEPHEN SMITH: Well, as Jason and I have indicated in the past, we decommissioned the Manoora, which occurred some time ago, we put the Tobruk in for maintenance and as a result of the work in the dry-dock, as the material that was released today made clear, further work is required, which will take that up to the end of August.

We currently have the Kanimbla essentially being maintained, once we finish our maintenance of the Tobruk, we will then make a judgement about whether it represents value for money and value for effort, to continue maintaining the Kanimbla, or whether we should decommission the Kanimbla.

That decision we won’t make in the short term, that’ll be made later this year, or early next year, we’re on track for the arrival of the Largs Bay by the end of this year, but on the basis that we have the Largs Bay ready for the cyclone season early next year, on the basis that we have the Tobruk, we’ll then be in a position to make a judgement about whether it represents value for money to keep the Kanimbla going or not.

JOURNALIST: Mr Smith, would you like to see Kevin Rudd return as leader?

STEPHEN SMITH: Well, there’s no vacancy-

JOURNALIST: There are no rumblings within caucus for a change?

STEPHEN SMITH: Well I haven’t seen any, and I haven’t heard any, and we strongly support the Prime Minister, as you would expect.

I saw a speculative piece in a well known journal today, but I didn’t pay it any attention or heed, or give it any credence, the Prime Minister’s doing, in my view, a very good job, and whilst the Government has got a range of challenges, in the end the community get their chance to make a judgement about that, I reckon in the third quarter of 2013, so a lot of water can go under the bridge between now and then.

JOURNALIST: Minister, can you reassure the public that there are Collins class submarines available?

STEPHEN SMITH: Well, the advice I have as recently as the beginning of this week, and by that I mean Monday, not Tuesday, was that we have two Collins class submarines in deep maintenance in South Australia, we have two in regular maintenance, and two available for operational activity, and as you would expect, I never go into detail about operational activity.

JOURNALIST: Minister, can you give us an update on the hunt for the ANA soldier who shot one of our soldiers-

STEPHEN SMITH: No further progress on that front, I’m told there’s a division, so going, going, gone. Thanks very much, cheers.