JOURNALIST:
If the defence capability plan is, as you say, deliverable, contrary to what this report says, and if there is as we hear now, a $12 billion gap between the estimate originally given and the current figure, how will you deliver it without increasing defence spending substantially?
TREASURER:
The important thing with defence capability is to set down the capability which you believe is required to meet our strategic needs and our strategic doctrines. As I said earlier, that will change from time to time. It has already changed. When we were setting down the kind of capability that we thought Australia would want back in the late 1990s, it was a pre-Timor, pre-Iraq, pre-Afghanistan, pre-Solomon Islands world. And our capabilities have to adjust and the Government will ensure that we will have a capability which meets our strategic needs and our strategic doctrines, and we will ensure that that is delivered within budget requirements. And I make this point, that defence expenditure has gone up in this country very substantially. The Budget this year is about 25 percent higher than it was thought that it would be five years ago. We have delivered on that. We have allocated the money down through the forward estimates for the White Paper. What we have to make sure, is, that as we deliver these items, we deliver them to the capability which is required.
JOURNALIST:
In the context of that changing security environment, is the, are the subs still useful or are they a white elephant in a sense? Are they not suitable to the current challenges that you are facing?
TREASURER:
When we entered the Collins Class Submarine contract, we did say because in the pre-war on terror, pre-Iraq, pre-Afghanistan, pre-Solomon islands, pre-East Timor world, Australian defence doctrine was to protect the maritime approaches against a land invasion. And that was a decision that was entered into in the mid to early 1980s. The lead times are so great, we are still going through full-cycle docking now. Now the reality is, we have the Collins Class Submarines, they work. They have taken a lot of rectification and a lot of money, but there is no point in having submarines if they are not fully capable. And having the submarines will ensure that they are fully capable. It proved to be an expensive decision.
JOURNALIST:
The overnight bombing, Treasurer, does that mean that there are still geo-political risks for the global economy?
TREASURER:
Well, first let me say the bombing in Iraq is a terrible blow, of course, to the UN, to the effort to re-build Iraq and to the families of those people who have been killed. And Mr de Mello was a good friend of Australia and our heart goes out to him and his family. What it tells you, is, that Iraq is still a very dangerous place and the re-building of Iraq is going to be a long and arduous process, but the international community can't walk away. The re-building of Iraq is important, not just for the Iraqis, but it is important for stability in the Middle East.
JOURNALIST:
Should Mr Tuckey resign over using ministerial letterhead to ask South Australian police to drop charges against his son?
TREASURER:
Well, Mr Tuckey has made a statement to the House of Representatives this morning. He has apologised for any misleading comment that he might have made in the Parliament yesterday, and he has indicated that as he looks back on it, that perhaps he should have handled it in a different way...
JOURNALIST:
How important...
TREASURER:
...and you know, what else can you ask? I don't believe that Mr Tuckey was trying to get some personal advantage, I think knowing Mr Tuckey as I do, he probably felt the situation was wrong and he'd take the opportunity to point it out to somebody...
JOURNALIST:
But...
TREASURER:
...and if I may say this, pointing it out to a Labor Minister in a South Australian Government, it was very unlikely that the Labor Minister was going to come under the influence of Wilson Tuckey.
JOURNALIST:
Mr Costello, how can you (inaudible) personal advantage, he asked that a fine be reconsidered on behalf of a family member, how appropriate is that for a Minister to use Ministerial Letterhead to do that on behalf of a family member?
TREASURER:
And what happened? He was told no...
JOURNALIST:
But...
TREASURER:
...so what...
JOURNALIST:
...how appropriate is it to ask...
TREASURER:
...well as I said, no advantage was obtained, and I think if you sit back and look at it, would anyone have expected a Labor Minister to have given advantage? Now you say, how wise was it to write the letter, well it wasn't effective, and I think that if Mr Tuckey had his way again, he wouldn't do it.
JOURNALIST:
Would you do it? On behalf of a member of your family?
TREASURER:
Well fortunately my 16 year old son is not a truck driver.
JOURNALIST:
(Inaudible) breached the code of ministerial conduct though, Treasurer, did he breach the code?
TREASURER:
Well look, Mr Tuckey has, he has gone back into the House, he has apologised to the House, he has clarified the record. If you ask my view, I think he probably, looking back on hindsight wouldn't do it again, and if he hadn't have done it, this wouldn't have arisen. Did he get any advantage from it? No. You know, when you think about it, writing a letter to a State Labor Minister is unlikely to influence the Labor Minister, it is much more likely the State Labor Minister will do what he probably did in this case, ie, give it to the Federal Opposition...
JOURNALIST:
So was he right to do it?
TREASURER:
...and create trouble for you.
JOURNALIST:
So is it alright to do it Mr Costello, the difference is whether you get away with it or not?
TREASURER:
No I didn't say that.
JOURNALIST:
Mr Costello...
JOURNALIST:
Are you saying it is alright to do it?
TREASURER:
No I didn't say that. I said as he looks back on it, he probably regrets it, and believes he shouldn't have done it. That is precisely what I said.
JOURNALIST:
Is it alright for a Minister to do that?
TREASURER:
As I said, as he looks back on it, he believes he shouldn't have done it, and wishes he hadn't.
JOURNALIST:
Mr Costello you have recently given a series of speeches about social capital and the importance of trust in society including between voters and the public.
Why should the voters trust the Howard Government and place trust in their Ministerial Code of Conduct if it is seemingly continually broken but that doesn't seem to matter?
TREASURER:
Well, you say that the Code of Conduct is broken. I haven't seen the particular clause that you say is broken. Now, you ask me this question about Wilson Tuckey, should he have done it? He looks back on it, and he realises he shouldn't have. OK. Do I think it is wise for Ministers to do that? No I don't.
JOURNALIST:
How important is it for the economy next week...
JOURNALIST:
Just back to the defence...
TREASURER:
Yep.
JOURNALIST:
...has the Government yet identified anything in the current defence capability plan that it can adjust out of it to get the thing into a financially manageable state, are there any specific elements of that DCP that you can see that can now be taken out of it?
TREASURER:
Well, look when you do a capability, you say to yourself, what do we think we have to be capable of doing to meet our legitimate defence of Australia, and our strategic interests? Now that is not immutable. You don't say everything that was there stays and we just keep on adding. What you do, is, you say, in a particular environment, as we know understand it, with the calls that we are likely to have, what do we need to be capable of? We said this when we brought down the White Paper. It is not immutable...
JOURNALIST:
So what is mutable now?
TREASURER:
...and that is why we have a review, and we go through those things and we take strategic advice and it comes back and the Government makes a decision. Now I am not going to stand here and announce that, the outcome of that review today, because it is not being done by me. It is being done by Defence, it will come to the National Security Committee, and it will go to the Cabinet. But this idea that everything that was, stays, regardless of whether or not the capability as we now understand it, requires it, and we just add on, would not be a proper, would not be a proper prioritisation of what we need in defence. Now let me make the point, and I have made this before. There has been no shortage of money allocated by this Government to Defence.
You heard what I said - an extra $38 billion, a Budget this year, 25 percent above what we were expecting some years ago. What we have got to make sure is, that money is applied to the defence capabilities which we require as we now understand them. That is my message.
JOURNALIST:
So would you be relaxed about the F-111's retiring early?
TREASURER:
Well, again, this is a matter which is going to be considered by the Defence Department and will be brought to the National Security Committee. I am not going to pre-empt what they say, I have read in newspapers that there are some people that want to make a recommendation in relation to
F-111's, I want to hear the argument. I haven't received it yet. But it will come, and I am sure that it will be a very, very strong argument.
JOURNALIST:
Treasurer, how important is it next week...
TREASURER:
Last question.
JOURNALIST:
...that the COAG to come up with a set-water resolution?
TREASURER:
Very important. Absolutely important. Thanks.