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					                               MINISTER FOR DEFENCE

                                  STEPHEN SMITH, MP


TRANSCRIPT: INTERVIEW WITH HELEN DALLEY ON SKY NEWS LATE
AGENDA

TRANSCRIPTION: PROOF COPY E & OE

DATE: 18 JULY 2011


TOPICS: Rizzo Report, Afghanistan, Nielson Poll, News of the World.



HELEN DALLEY:          A highly critical report into engineering and maintenance failures of some
navy ships which was commissioned by Defence Minister Stephen Smith was released today.

When three of the navy's troop, supplies and equipment ships were not able to be called on to
help out during the Cyclone Yasi disaster earlier this year because they needed maintenance,
serious questions were asked.


The Rizzo Report, out today, is so scathing that the Minister announced a complete overhaul of
navy maintenance and management practices and Defence Minister Stephen Smith joins me
now.


Defence Minister, is our navy seriously impaired by these rust buckets?


STEPHEN SMITH:          We obviously had a difficulty, a very substantial difficulty with our so-
called heavy amphibious lift ships, the Manoora, the Kanimbla and the Tobruk, and when I got
very disturbing advice in February that they weren't available as I'd been previously advised, I
asked Mr Rizzo to do the report that I released today.


It shows long term systematic, systemic problems and difficulties. It's a damning report about the
failures of the past but it also provides a very good road map for the future and I'm very pleased
that the new Chief of Navy and Mr Rizzo and the new acting chief executive officer of the
Defence Materiel Organisation are absolutely committed to implementing the recommendations
of the report in full, and that's a good thing.


HELEN DALLEY:             Alright, before we get on to this rosy future that you paint, this report
came about because the three ships that are used in - very much in day to day operations of the
navy, these are the sorts of things that the navy gets involved in all the time. I don't think you can
send a Collins Class submarine to transport troops and to help out in a disaster. So these three
ships are crucial and yet because they were under maintenance it severely impaired the navy's
capability, didn't it?


STEPHEN SMITH:         It's a very serious capability deficiency and I was not shy at the time
about expressing my disappointment about the outcome but I wanted to do three things.


Firstly I wanted to effect an independent review so that we would have recommendations to help
ensure it would never happen again or to minimise the risk of it happening again. Secondly I
wanted to make sure that we covered the capability gap or the capability loss and that's why, at
my instigation, we've purchased the Largs Bay from the United Kingdom, a heavy amphibious
lift ship, and why we're also leasing the Aurora Australis to make sure that we have the cover for
the capability gap. And thirdly, thirdly to make sure that we have a comprehensive transition
plan to the new landing helicopter docks which will arrive in the middle of this century. So
they're the three objectives I set myself and the release of Mr Rizzo's report today is part of that.


HELEN DALLEY:            The reason this all came about was because of the unavailability of
particularly the Tobruk. Now you were told at the time, you were reassured and assured that the
Tobruk would be ready, I think perhaps within 48 hours, to go and help out with the cyclone
disaster, by - you were assured that by senior navy people. Now, it wasn't ready so you were
misled or lied to because it wasn't ready to roll.


STEPHEN SMITH:         Well, the advice I received and the outcome was disappointing and I
made no bones about that [indistinct]


HELEN DALLEY:              What does disappointing mean? I mean, does somebody lose their job
for telling you a fib like that?


STEPHEN SMITH:          One of the - well, I wouldn't characterise it like that. If you read Mr
Rizzo's report he makes it clear that the difficulties we are facing are as a result of long term,
systemic failures and so it's difficult if not impossible to hold any one particular individual or
any one part of Defence wholly responsible.
HELEN DALLEY:           But, Minister, sorry, if they are long term systemic problems, why did
they assure you that something was ready and right to go when therefore they must have known
that it clearly wasn't?


STEPHEN SMITH:           Well, I got advice about the availability of the Tobruk which, in the
event, was wrong. One of the things that Mr Rizzo refers to in his report is effectively sometimes
a conspiracy of optimism, that you wish for the best outcome but what his report makes clear is
that for a long period of time there's been a lack of resources into navy engineering, and we're
agreed today to appoint a new navy two-star admiral to rebuild navy engineering, that the
Defence - that the Defence Materiel Organisation is seriously under-resourced so far as its own
amphibious maintenance group is concerned, and there'll be at least 20 new positions into that
but also a serious long-term failure on the part of navy and the Defence Materiel Organisation to
work cooperatively together.


Now, the new Chief of Navy is absolutely committed to solving that problem and the other point
which Mr Rizzo makes in his report is that there have been any number of reviews in the past,
many of which have drawn attention to the same difficulties, and I've asked Mr Rizzo to chair
the implementation committee to make sure that this report is implemented, because I very
strongly believe that if the recommendations of this report are implemented then future ministers
won't have the same difficulties that I've had.


HELEN DALLEY:             But can you see why the gov [indistinct] - why the community might
have a little laugh at that? Here's the - the guy who wrote the report saying there's been reports
like mine written before, they've been taken no notice of. Why shouldn't the community expect
real action?


STEPHEN SMITH:             Well, I have made the point repeatedly and the next part of the wave of
reform that I will institute is as a result of Dr Rufus Black doing a review on accountability.


The single biggest issue and challenge we have in Defence, in my view, is the lack of personal
and institutional accountability. Now - and I've made the point that if you read Mr Rizzo's report,
it's very difficult to hold one part of Defence or one particular individual responsible for
effectively 20 years of difficulty but the Black Review, which I'll release in the very near future,
which has at its heart notions of accountability will, in my view, go a long way to ensuring that
into the future we have individual and institutional accountability.


There's a long term cultural difficulty here that Defence needs to come to grips with.


I'm making sure that in the case of our amphibious ships that we do exactly what I said we'd do
when this matter came to attention in February, that we cover our capability gap, we put in - put
reforms in place to try and make sure it doesn't happen again and we'd have a much better
comprehensive plan for the future, which is what we're doing.
HELEN DALLEY:            The community would expect, wouldn't it, that there should be
accountability already in the Defence Department? There's a Chief of the Navy, there's a Chief of
the Defence, there's a Minister and then down from there there's other people. Surely there's a
head of maintenance, a chief of maintenance who should be responsible.


STEPHEN SMITH:            Well, in terms of those positions, all of those things are true and Mr
Rizzo's report, as I've described it today, is a damning report about the failures of the past. What
I want to do is to try and make sure that we solve the problems for the future and that's why I've
responded in the manner in which I have today.


All of his recommendations have been accepted by the Government and by Defence. Mr Rizzo
himself, an independent expert who I asked to effect - effect an independent review of these
circumstances, will be responsible for the implementation of the recommendations and, at the
same time, I've asked Navy and Defence to provide me with a range of comprehensive advice
dealing with our heavy amphibious lift capacity into the future.


HELEN DALLEY:            Could I ask you why there needs - why you need to beef up some of
these areas, particularly say the Defence Materiel Organisation to get 20 new jobs? Now,
presumably that's spending more taxpayers' dollars when the Defence budget is huge each and
every year. It's something like $25-27 billion a year. Shouldn't that amount of money already
ensure that we properly maintain our ships and that one person is responsible for that?


STEPHEN SMITH:          Again the point that the report makes clear today, there has been a long
term structural decline in the resources going to navy engineering capacity. So we need to
rebuild the engineering skills in navy. There's been a decline in the resources in the relevant
amphibious support group in the Defence Materiel Organisation, we need to rebuild this - rebuild
that.


Now these problems don't emerge overnight. We're also dealing with three ships, the Manoora,
Kanimbla and the Tobruk that are anywhere from 20 to 40 years old. And I also committed
myself at the time to doing my best to ensure that the problems I inherited were not inherited by
my successors. And so the ship that I've ensured we've purchased from the United Kingdom, the
Largs Bay is five or six years old and is in very good condition. So it's qualitatively different
from the circumstances that I and my predecessors have inherited.


HELEN DALLEY:           If I can move on to another area about Defence, The West Australian
newspaper had a story in the last couple of days claiming that an official from the SAS
Association said that Afghanistan could become another Vietnam in terms of the treatment, and
ongoing treatment of veterans. Now this SAS Association official has said that the Department
of Veterans' Affairs which I know is different to Defence has been hit with something like 3400
claims for compensation, from diggers who have served in that 10-year conflict in Afghanistan.
Now is that true?
STEPHEN SMITH:         Well firstly it's my local paper so I know the story you're referring to
and the story does make the mistake of conflating or confusing a number of things. Firstly in
terms of Afghanistan, we have had during our time in Afghanistan 182 casualties. In other words
182 men who have been wounded in the face of conflict with the enemy.


HELEN DALLEY:           And you're talking going back [indistinct]


STEPHEN SMITH:          From our commencement in Afghanistan back at the beginning of this
decade. So we've had 28 fatalities and 182 wounded. We've had 17 soldiers wounded this year.
At the same time through the Department of Veterans' Affairs and through Defence, we've had
about 3400 claim for compensation from over 1100 diggers. Now this can be anything from a
training accident, most of the compensation claims either relate to arthritis or muscular skeletal
injuries [indistinct]


HELEN DALLEY:           But from serving in Afghanistan?


STEPHEN SMITH:          Yes, yes, but they [indistinct]


JIM HARNWELL:           Well then that's still an injury out of that war.


STEPHEN SMITH:           Well of course - well - but what the article that you referred to made the
mistake of doing was to somehow try and conflate training, accidents or injuries or compensation
claims as a result of injuries which occurred in the normal course of events with the number of
wounded soldiers that we've had in armed conflict with the Taliban.


HELEN DALLEY:           So you're saying they're not all compensation claims out of front line
battle [indistinct]


STEPHEN SMITH:          That's right, that's right, yeah [indistinct]


HELEN DALLEY:           [indistinct] with the Taliban?


STEPHEN SMITH:          But having said that obviously we take the treatment of soldiers whether
they've been wounded in battle with the Taliban or whether they've been injured or particularly
whether for example they're suffering from post-traumatic stress disorder. We take this very
seriously. In terms of post-traumatic stress disorder our soldiers are screened before they go to
Afghanistan, they're monitored while they're there, there's compulsory screening when they
finish their deployment and over the next four years we'll spend something like $80 million
making sure that appropriate services, support and counselling is made available to any of our
soldiers who have that difficulty.
 So whether it's the compensation [indistinct]


HELEN DALLEY:            So you're not belittling those injuries?


STEPHEN SMITH:           Absolutely not [indistinct]


HELEN DALLEY:            Because the other figure that [indistinct]


STEPHEN SMITH:            [indistinct] whether it's a compensation claim or whether it's as a result
of a training accident or injury on the job or it's a result of fighting the enemy, we treat them very
seriously, we give them all the support that we can and that's the case whether you'd regard there
is a compensation claim for a work injury or as a result of military action.


HELEN DALLEY:           Alright is it true that these figures show that 920 injured and wounded
soldiers had received compensation?


STEPHEN SMITH:           It would be in that order. It would be in the order of 1000.


HELEN DALLEY:            Was that the figure before you said was 1100 in fact?


STEPHEN SMITH:          Well I'm not sure what figure you're referring to. What I said is that
we've received in terms of claims of compensation [indistinct]


HELEN DALLEY:            Have you paid compensation to something like 1100?


STEPHEN SMITH:           [indistinct] claims of compensation, about 3400 claims of compensation
from about 1100.


HELEN DALLEY:            And have you paid out about 920 or 1000?


STEPHEN SMITH:           It would be at least that amount over a period of time, over the period
[indistinct]


HELEN DALLEY:            That's still a substantial number of people who are being injured
[indistinct]


STEPHEN SMITH:         Well of course it is but the point I'm making is that that's a much better
system that we're actually making such compensation payments for people who are deployed
than not.
HELEN DALLEY:             I suppose you could look at it like that but a number of people would say
well there's a lot more - you're down playing the number of injured and wounded.


STEPHEN SMITH:          No, well this is the confusion that The West Australian [indistinct]


HELEN DALLEY:           But you only talk about 180 [indistinct]


STEPHEN SMITH:          No that is not true. The confusion that The West Australian - The West
Australian article effected, either inadvertently or advertently was to somehow pretend that
either Veterans' Affairs or the Government or Defence was inverted commas; hiding these
matters and only talking about 182 people who have been wounded in battle. That's not the case.


Whether it's a compensation claim for a training accident, whether it's post-traumatic stress
disorder, Veterans' Affairs, Defence and the government takes these matters very seriously and a
whole range of support mechanisms are put in place, including, for example - so, if you're talking
about the SAS in Perth, a government contribution of $10 million to the SAS welfare fund.


So, none of these things deserve anything other than absolute attention on the part of the relevant
government departments and absolute sympathy so far as the government is concerned.


HELEN DALLEY:            I want to move on to some political issues. Obviously, the carbon price
package is the thing that seems to be driving all the headlines and is the great talk and,
obviously, it was released last week, the package.


The Government expected a bounce because of the very generous compensation, the assistance -
generous compensation to low and middle-income earners, the assistance to the steel making and
the coal industry. But today's Nielsen poll in Fairfax, and I think we can show some of the
figures, shows that your primary support is down to 26 per cent and that Julia Gillard's support as
preferred Prime Minister has fallen to 40 per cent, while Tony Abbott's has risen to 51 per cent.
How do you explain that drastic decline in support?


STEPHEN SMITH:           Well, we're in a long haul race. The next election will be in the third or
fourth quarter of 2013, so we have more than two years to go. That's the [indistinct]


HELEN DALLEY:           Will it? Because there are a number of [indistinct]


STEPHEN SMITH:          That's the first point.


HELEN DALLEY:           [indistinct] forces, including the Opposition [indistinct]
STEPHEN SMITH:          Well [indistinct]


HELEN DALLEY:           [indistinct] Leader, who are calling for you to [indistinct]


STEPHEN SMITH:          Well, I'm sure [indistinct]


HELEN DALLEY:           [indistinct] have another election.


STEPHEN SMITH:         Well, I'm sure Tony Abbott would love to have an election any day of
the week. But the problem is that the next election will be held in the normal course of events:
September, October, November of 2013 in the usual way.


The parliament is functioning well and what is occurring now is that the government is going
through the very difficult task of trying to affect a long-term structural reform that is in our
nation's interest.


There are two - there's too much carbon in our economy and too much carbon in our
environment, and we need to reduce that.


Now, that requires a big structural change, and any structural change that a government tries to
effect is difficult to get public support for, particularly in the first instance.


I wasn't expecting any miraculous bounce in the polls a week after it. I'll pay much more
attention to where we are in 2013. But the Prime Minister is doing the tough job of selling in a
very strong and determined way a reform which we very strongly believe is in our nation's long-
term interests.


HELEN DALLEY:            Alright. Well, you can't seem to escape very damning headlines. The
headline splashed across The Sydney Morning Herald and the Fairfax papers today was that Julia
- oh, Gillard down for the count. Is she?


STEPHEN SMITH:            Well, absolutely not. And if you have been watching her performances
and watching the way she's been taking the carbon reform message to the community over the
last week or so, she's anything but down and anything but out. She will campaign on this issue
from now until the next election and she will continue to argue, as the Government argues, that
this is in our long-term national interest.


And it takes a long time for people to absorb all of the detail of a big reform. Some of the
feedback I get from people in my own electorate is that they haven't yet fully come to grips or to
come to terms with the compensation payments for household or for individuals, whether it's
pensioners or self-funded retirees.


So, this is a long haul race and the same sorts of difficulties that the government is finding now
in the short term are difficulties that any Government has found when it's tried to effect a major
structural economic reform. Whether it's reduction of tariffs, whether it's floating the dollar and
the like.


And the difficulty for Tony Abbott is the election's not next week, the election will be in more
than two years time and the community can make their judgement then.


HELEN DALLEY:          Alright. I want to move to the other story that's been breaking and
moving very fast, which is the scandal surrounding News Corp(*) and the defunct News of the
World in the UK.


Now, Bob Brown - there's so many issues there, but I've only got a short amount of time. Bob
Brown here last week called for an inquiry into - generally into the media. The PM seemed to
leave the door open to that possibility. Tony Abbott has said he doesn't see the need. What's your
view?


STEPHEN SMITH:          Well, fir [indistinct] we have to be careful to keep things that have
occurred in the United Kingdom separate from here. If we had in Australia similar instances of
people hacking into other people's phones, then there's a very short response here, which is that's
unlawful and people would be prosecuted for doing it, as they should.


Secondly, we al [indistinct]


HELEN DALLEY:           And you feel confident that's not happening?


STEPHEN SMITH:           Well, there's certainly no evidence that I've seen which would lead
people to believe that. But there's a very simple remedy if it has or does occur.


HELEN DALLEY:           Alright, so [indistinct]


STEPHEN SMITH:          It would be unlawful here [indistinct]


HELEN DALLEY:           Okay, so [indistinct]


STEPHEN SMITH:          [indistinct] under any number of pieces of legislation.
HELEN DALLEY:           Of course. So, if there's no evidence of that, is it necessary to have a
media inquiry in your view?


STEPHEN SMITH:          Well, I think - to me, the most important issue arising generally out of
these circumstances are questions of privacy. And the Law Reform Commission has before it a
reference on privacy.


I think this is an area where there will be a lot of concentrated attention. Not just by members of
parliament, not just by the media, but also by the general public. I think there's a growing view
that we need to be very careful about the privacy interests of people who are the subject of media
reporting.


HELEN DALLEY:               Alright. And just finally, your colleague Minister for Communications,
Stephen Conroy has blasted the Murdoch-owned Daily Telegraph, claiming that they're pushing
for regime change by urging another election. Is this just sour grapes on his part? They've taken a
political position. Isn't that okay for newspapers to do that [indistinct]


STEPHEN SMITH:          Well [indistinct]


HELEN DALLEY:           [indistinct] to disagree with you?


STEPHEN SMITH:            [indistinct] I'm not going to comment on what the Minister for
Communications has said about his portfolio. All I ask for in terms of newspapers or journalists
is that you get a fair go. And often, I find, the biggest complaint that members of the public will
draw to my attention, or colleagues will draw to my attention, is when something is incorrectly
or wrongly reported, and there's a fair amount of publicity about that, but there's not the same
amount of publicity about the correction or the retraction.


But look, in the rough and tumble of your profession and my profession, there are a whole range
of things where people will take a different view, form an opinion, form a view. The only thing I
ask of Australian media is to report the facts and report them correctly. And if you make a
mistake, to acknowledge you've made a mistake.


HELEN DALLEY:           Stephen Smith, we'll leave it there. Thank you so much for joining us.


STEPHEN SMITH:          Thanks Helen, thanks very much.

				
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