Australia — Statement on possible acquisition of a C‑17 aircraft; China

Tran­script: Min­is­ter for Defence, Joint Press Con­fer­ence with Min­is­ter for Defence Materiel, Aval­on

TOPICS: Aval­on Inter­na­tion­al Air Show; Pos­si­ble acqui­si­tion of a C‑17 air­craft; Chi­na; Car­bon price frame­work
STEPHEN SMITH: Well, thanks very much for turn­ing up. I’m very pleased to be here at the open­ing of the Aval­on Air Show, togeth­er with the Min­is­ter for Defence Materiel, Jason Clare, and also pleased to be joined by the Chief of Air Force, Mark Bin­skin.
First­ly, the Aval­on Air Show is a great thing for Aval­on. It’s a great thing for Gee­long, a great thing for Mel­bourne and Vic­to­ria, but it’s also a very impor­tant thing for Aus­tralia. The Aval­on Exhi­bi­tion and Air Show is now very much a must-do part of the avi­a­tion, aero­space, defence and Air Force cal­en­dar. So we’re very pleased to mark the begin­ning of anoth­er suc­cess­ful Aval­on week. It’s, of course, impor­tant this year because it marks also the nineti­eth anniver­sary of the cre­ation of the Roy­al Aus­tralian Air Force. And I was pleased last night to make some remarks at the Chief of Air Force Sym­po­sium.

Of course, in the course of its grand 90-year his­to­ry, we’ve seen the Defence Force take part in all com­bat activ­i­ty that Aus­tralia has been engaged in since World War II. But also, we’ve seen a sac­ri­fice of lives. So, in the earn­ing of that great rep­u­ta­tion, we’ve also seen some ter­ri­ble sor­row for Aus­tralian fam­i­lies and Aus­tralian com­mu­ni­ties.

But the Air Force has dis­charged the two great oblig­a­tions of Aus­tralian Defence Force per­son­nel. First­ly, com­bat and mil­i­tary oblig­a­tions; and sec­ond­ly, human­i­tar­i­an and dis­as­ter relief. And we’ve seen that, unfor­tu­nate­ly and regret­tably, very much in the course of the first part of this year. Whether it’s been floods in Bris­bane or Ipswich, whether it’s been floods in the Lock­y­er Val­ley, or whether it’s been cyclones in North Queens­land, or ter­ri­bly, most recent­ly, the trag­ic earth­quake in Christchurch, we’ve seen Air Force effec­tive­ly come to the res­cue with heavy air­lift capa­bil­i­ty — C‑130s and C‑17s doing great work remov­ing peo­ple, for exam­ple, from the Cairns hos­pi­tal and pri­vate hos­pi­tal, and also get­ting emer­gency search and res­cue work­ers to Christchurch in less than 24 hours. So, great work.

As a result of the work that we’ve been doing this year, it’s caused us to also have a look at the make-up of our heavy air­lift. We cur­rent­ly have, as you might know, 24 C‑130s, both the H and J vari­eties, and four C‑17s. I’ve announced overnight that we’ve approached the Unit­ed States under the Unit­ed States for­eign defence sales regime to pur­chase a fur­ther C‑17.

The C‑17s, of course, are very heavy car­go lift, can fly much longer dis­tances than the C‑130s. For exam­ple, the C‑17 you see behind us could effec­tive­ly take half a dozen Bush­mas­ters or a half a dozen ambu­lances.

So we’ve indi­cat­ed to the Unit­ed States, and I’ve spo­ken with the Deputy Under Sec­re­tary for Air Force, Hei­di Grant, who’s here in Aval­on, of our inten­tion, our enthu­si­asm to pick up anoth­er C‑17, which we think will get the cal­i­bra­tion of our heavy air­lift right.

Our cur­rent defence capa­bil­i­ty plan would see us con­tem­plate buy­ing two more C‑130s in the mid­dle of this decade. If we pick up the C‑17 in the way in which I’ve out­lined, then it’s almost cer­tain­ly the case that we would­n’t see the need for those C‑130s. So I’ve made that announce­ment overnight.

I’d like to ask Jason to make a few remarks and then we’re hap­py to respond to your ques­tions.

JASON CLARE: Thanks Stephen. It’s great to be here at the Aval­on Air Show, the biggest air show in Aus­tralia, and one of the most impor­tant air shows in the world.

Over the next six days, almost 200,000 peo­ple will vis­it the Air Show, and there’s more than 100 air­craft on dis­play, includ­ing the Aus­tralian Super Hor­net and the Amer­i­can F‑22 Rap­tor. It’s going to mean more than $120 mil­lion of invest­ment in the local econ­o­my. So it’s great news for Aval­on, great news for Gee­long, great news for Mel­bourne and great news for Vic­to­ria.

It’s also the per­fect place to announce our inten­tion to pur­chase a C‑17 air­craft. The C‑17s are one of the great work hors­es of the ADF, and as the Min­is­ter has men­tioned, we’ve seen them on active duty dur­ing the floods, dur­ing the recent cyclone and in Christchurch after the recent earth­quake.

It was the capa­bil­i­ty of the C‑17 that allowed us to evac­u­ate the entire Cairns hos­pi­tal in one night as that cyclone, Cyclone Yasi, was loom­ing on the peo­ple of Far North Queens­land.

The C‑17 also gives us glob­al reach. It gives us the capac­i­ty to deploy over­seas. So this is an impor­tant deci­sion, it gives us glob­al reach. It extends our glob­al reach and our capa­bil­i­ty to deploy over­seas, and extends our human­i­tar­i­an sup­port capa­bil­i­ty, both here in Aus­tralia and through­out the world.

STEPHEN SMITH: Thanks Jason.

QUESTION: Min­is­ter Smith, how much would this cost and when would it be avail­able?

STEPHEN SMITH: We’ve indi­cat­ed to the Unit­ed States under their for­eign mil­i­tary sales regime that we’re keen to pick it up as quick­ly as we can. Real­is­ti­cal­ly that will be in the course of this year.

We’re effec­tive­ly doing the due dili­gence on avail­abil­i­ty, price and the like, so I’m not propos­ing to be defin­i­tive about an actu­al cost or price. It’s on the pub­lic record that when we pur­chased our four cur­rent C‑17s they cost us in the order of $2 bil­lion, so you’re talk­ing hun­dreds of mil­lions of dol­lars. But we think it’s val­ue for effort, val­ue for mon­ey and it cal­i­brates bet­ter, we think, the mix of our air­lift and the capa­bil­i­ty, as Jason and I have both said, a capac­i­ty for much longer dis­tances than the C‑130s and capac­i­ty also to do large tasks very quick­ly, as illus­trat­ed both in Cyclone Yasi and in Christchurch recent­ly.

QUESTION: Min­is­ter, has this deci­sion in any way been bought for­ward by the lack of Navy amphibi­ous capa­bil­i­ties?

STEPHEN SMITH: No, the two are unre­lat­ed. We’re very con­scious of the chal­lenges that we’ve got in our Navy amphibi­ous lift, and we’ve had dif­fi­cul­ties there in recent times as you would know. But there we’ve got two pri­or­i­ties. The first one is to make sure that the gap which has emerged is filled so we have a capa­bil­i­ty that’s appro­pri­ate in the run up to the arrival of the LHDs, Land­ing Heli­copter Docks, which will come from Spain and be up and run­ning by the mid­dle of this decade, 2015–2016. I’m in con­ver­sa­tion with my UK coun­ter­part, Defence Sec­re­tary Liam Fox about the pos­si­bil­i­ty of leas­ing or pur­chas­ing of A‑class from the British, and also recent­ly when I was in New Zealand had very good dis­cus­sions with Wayne Mapp, the Defence Min­is­ter from New Zealand, about clos­er coop­er­a­tion on the use in the region of their amphibi­ous lift ship, the HMNZS Can­ter­bury. In addi­tion to that we are look­ing at fur­ther options. All options are effec­tive­ly on the table so far as amphibi­ous lift is con­cerned and I hope in the near future to be in a posi­tion to make some announce­ments about that. But we treat the two sep­a­rate­ly. We haven’t had com­pa­ra­ble chal­lenges in our air capa­bil­i­ty. And we’re mak­ing the adjust­ment today in light of expe­ri­ence we’ve had in the efforts we’ve put for­ward this year, in the face of dis­as­ters both onshore and off­shore, that pick­ing up anoth­er C‑17 is the per­fect match for our air­lift capa­bil­i­ty.

QUESTION: What was the thing that con­vinced you that it was need­ed?

STEPHEN SMITH: Its capac­i­ty. It has much greater capac­i­ty than the C‑130s, and its capac­i­ty to go fur­ther dis­tances. We are a lead­ing nation in the Asia Pacif­ic. Peo­ple look to us for assis­tance and dis­as­ter relief, whether it’s earth­quakes, whether it’s tsunamis, what­ev­er it is in our region. So it gives us a capac­i­ty to fly longer dis­tances with greater and larg­er car­gos on board. So, for exam­ple, the C‑17 can effec­tive­ly trans­port an oper­at­ing the­atre, half a dozen ambu­lances, or as I said ear­li­er five or six Bush­mas­ters.

QUESTION: When will you replace the Cari­bou, Min­is­ter? When are you due to make a choice on that?

STEPHEN SMITH: Well, I nev­er get into the detail of what we pro­pose to do into the future with that def­i­n­i­tion. The Cari­bou has served us well but we need to work through our options on a replace­ment. So Jason may want to add, but we take these things step by step. I’ve made the point repeat­ed­ly as Min­is­ter for Defence, it’s very impor­tant that we get our acqui­si­tion and capa­bil­i­ty pro­cure­ment right. So we take it step by step.

QUESTION: Do you expect the Joint Strike Fight­er to be deliv­ered on time, and are you con­cerned about any pos­si­ble capa­bil­i­ty gap?

STEPHEN SMITH: We’re of course tran­si­tion­ing from the F1-11s through to the clas­sic Hor­nets, the Super Hor­nets, and the F‑35, the Joint Strike Fight­er. When Sec­re­tary Gates was in Mel­bourne in November/December last year for the AUSMIN talks with Sec­re­tary of State Hillary Clin­ton, we spoke about his Base­line Review of the Joint Strike Fight­er, and that’s since become pub­lic.

There are two things which are very rel­e­vant for Aus­tralia: first­ly we’ve cho­sen the stan­dard, or the con­ven­tion­al vari­ant. There are many of the tech­no­log­i­cal chal­lenges and dif­fi­cul­ties with oth­er vari­ants, so we’re con­fi­dent that in the first instance we’ve made the cor­rect choice in terms of the vari­able type of the air­craft. Sec­ond­ly, we in our sched­ul­ing were very con­scious of the fact that this is a chal­leng­ing project, and there would inevitably be some delays to sched­ul­ing, and so we’ve tak­en account of that. We remain con­fi­dent that the Joint Strike Fight­er will be deliv­ered in accor­dance with our sched­uled timetable, and will prove, in con­junc­tion with the clas­sic Hor­net and the Super Hor­net to be a very good fit so far as our strike and con­trol of air capa­bil­i­ty is con­cerned.

QUESTION: How close­ly is Aus­tralia watch­ing China’s devel­op­ment of its stealth fight­er?

STEPHEN SMITH: As I’ve said gen­er­al­ly about Chi­na, Chi­na as a ris­ing pow­er, as a grow­ing econ­o­my, is enti­tled to mod­ernise its mil­i­tary Defence equip­ment, it’s enti­tled to mod­ernise its mil­i­tary, but it needs to do that in a way which is trans­par­ent about its strate­gic inten­tions. And we make that point to Chi­na both pub­licly and pri­vate­ly. We remain con­fi­dent that Chi­na will emerge as a respon­si­ble stake­hold­er, or as the Chi­nese them­selves say, into a har­mo­nious envi­ron­ment.

But this is the cen­tu­ry of the Asia Pacif­ic, the rise of Chi­na, the rise of India, the rise of the Asi­at­ic economies com­bined, that has sig­nif­i­cant influ­ences in our part of the world, in our region, but also inter­na­tion­al­ly. And so the bilat­er­al rela­tion­ship between the great pow­ers of the Unit­ed States, Chi­na, India, will be all-impor­tant in the course of this cen­tu­ry.

But we’re con­fi­dent that these chang­ing influ­ences can be man­aged, and con­fi­dent that Chi­na will emerge into a pos­i­tive envi­ron­ment. But like every oth­er nation, Aus­tralia believes that Chi­na should be trans­par­ent about its mil­i­tary mod­erni­sa­tion and trans­par­ent about its strate­gic inten­tions.

QUESTION: Is the way it’s going about it at the moment… [indis­tinct]?

STEPHEN SMITH: Well Chi­na and India are coun­tries of a bil­lion peo­ple, Aus­tralia is a coun­try of 25 mil­lion peo­ple, and Chi­na and India and the Unit­ed States and Japan, will remain in the top four or five economies.

Aus­tralia is a small coun­try, in terms of pop­u­la­tion, but we remain in the top 12 coun­tries so far as size and econ­o­my is con­cerned, our pros­per­i­ty is con­cerned, and also our defence and peace-keep­ing is con­cerned. So it pro­ceeds on a faulty premise to com­pare Australia’s mil­i­tary acqui­si­tions or force with Chi­na, India or the Unit­ed States. But we make an appro­pri­ate con­tri­bu­tion to our nation­al secu­ri­ty, through our Defence acqui­si­tions, as a mid­dle-sized pow­er like Aus­tralia should.

In terms of bud­get and finances, the 2009 White Paper sets out our Force 2030, sets out our bud­get rules, and sets out our Strate­gic Reform Pro­gram. That is a big chal­lenge to the Aus­tralian Defence Force and to the Aus­tralian Gov­ern­ment, but we are on track to meet those ambi­tions. And I’ve made the point repeat­ed­ly, for the first time in the mod­ern era, per­haps ever, we now have those exter­nal para­me­ters around our Defence bud­get.

What we need to do is to improve the inter­nal rigour, par­tic­u­lar­ly in the acqui­si­tion and pro­cure­ment area. And we’ve seen in recent times a num­ber of dif­fi­cul­ties and prob­lems emerge in the Defence acqui­si­tion area, and we’ll see some lag effects.

My pre­de­ces­sors and Jason’s pre­de­ces­sors have made sub­stan­tial changes in try­ing to man­age risk in the Defence acqui­si­tion pro­cure­ment area. With the first class and sec­ond class approvals and the Projects of Con­cern, we believe we’ve made a range of improve­ments to min­imise the risk, but in Defence acqui­si­tions, deal­ing with dif­fi­cult projects, strate­gic inten­tions down the track, and use of cut­ting edge tech­nol­o­gy, we always have these chal­lenges, but we need to man­age risk much bet­ter.

QUESTION: Min­is­ter, are you con­cerned that indus­try will desert the Gov­ern­ment over the car­bon tax?

STEPHEN SMITH: Well, the Prime Min­is­ter and the Min­is­ter for Cli­mate Change, Greg Com­bet, have been out today mak­ing remarks about that. We have put out our pro­pos­al. We’ve made it clear we want to do that in close con­sul­ta­tion with indus­try and with the com­mu­ni­ty.

What is very appar­ent to all con­cerned is that in the end, if we want to face up square­ly to the chal­lenges of cli­mate change, we have to put a price on car­bon, and we have to move to an emis­sions trad­ing sys­tem, that’s a mar­ket solu­tion. In my expe­ri­ence, at the end of the day indus­try always much prefers a mar­ket solu­tion, but if we are to make progress on cli­mate change, if we are to make progress on reduc­ing the amount of car­bon in the atmos­phere, we need to put a price on car­bon, we need to move to an emis­sions trad­ing sys­tem, and that’s what we’re doing.

QUESTION: [Indis­tinct] sup­port local indus­try?

STEPHEN SMITH: Look, in the end, what indus­try wants to do will be a mat­ter for indus­try, and what the Aus­tralian community’s judge­ment is in the end will be a mat­ter for the Aus­tralian com­mu­ni­ty, but we believe that we have to face as a nation, square­ly up to the chal­lenges of dan­ger­ous cli­mate change, and the only effec­tive way of doing that is to place a price on car­bon and to move to an emis­sions trad­ing sys­tem and a mar­ket based approach, which in my expe­ri­ence, indus­try would much pre­fer, than alter­na­tive mech­a­nisms.

Press release
Min­is­te­r­i­al Sup­port and Pub­lic Affairs,
Depart­ment of Defence,
Can­ber­ra, Aus­tralia

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