Australian Strategic Policy Institute - Q&A, Defence Strategic Update

AUSTRALIAN STRATEGIC POLICY INSTITUTE – Q&A, DEFENCE STRATEGIC UPDATE 

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PETER JENNINGS: Thank you for that speech, Minister.  I think it's perhaps best for us to start talking about some of these tectonic shifts that you have identified and the Prime Minister identified yesterday.  We do, indeed, live in changeable times.  What, for you, are some of the most significant shifts that we should be thinking about in our current context?

MINISTER REYNOLDS: I think it's the reality that the world that we all grew up in is no more and that is, to put it, very bluntly, economically and security wise, the post-World War II economic and security institutions that have defined our world and our live, are not what they were and that is profoundly impacting where we have gone with these documents and with this thinking over the last 12 months. 

It's not necessarily a bad thing but the fact is our world is very different and we have to define a new rules-based order and encourage very strongly all major State actors to accord with these rules and most importantly, to respect sovereignty. 

PETER JENNINGS:  Do you think there is a prospect that we can kind of reverse these accelerating negative trends?  Once the rules-based orders starts to fray it's a very difficult creature to knit back together. 

MINISTER REYNOLDS: Yes, I do.  But, again, no one country can do it on their own and so part of this document is an acknowledgment that we need to do more of our own heavy lifting and we need to encourage others in our region to do more of their own heavy lifting and not just to rely on a single nation to do that for them. 

One of the things that has most struck me in this job is that I knew that Defence diplomacy was important before I took this role but it is very clear to me now just how critically important our relationships are, not just in our near region across the Indo-Pacific but globally. Just to give you an idea of that, in the first few months I was Minister I have made 16 visits to international counterparts, I welcomed six here and I've had well over 30 via video and virtually since then. 

It's the first time - it's not just us that are worried. I said in my speech and the Prime Minister has said that it's not just us worried by the behaviours that we're now seeing in our region. Other regional friends are now coming out more consistently. But really significantly, if you have a look at last week, the Secretary-General of NATO came out and very strongly indicated an acknowledgment that what happens in our region now matters to NATO a lot and as did the President of the EU. So that is shifting. We have to find a new way of working together. So whether it's looking to a network of interrelationships with people who value what we value. 

PETER JENNINGS: Reading the strategic update, is there just a hint in between the lines that the United States is perhaps less reliable than it once was as a partner for dealing with regional security threats?

MINISTER REYNOLDS: No. Again, the document is very clear and I've been very clear that the United States is still the bedrock of peace and prosperity in our region and it has been probably since World War II. But, again, as I've said, no one nation could or should shoulder the majority of the responsibility for the rest of us. So in my time, and I'm sure that the CDF and the Secretary would acknowledge or agree with, our relationship with the United States, military to military, I think has never been stronger. Certainly at my level with Mark Esper and with the Secretary and CDF's level, we have record levels of interoperability, our training is becoming more sophisticated, the operations we do together is almost seamless. 

PETER JENNINGS: Well let's talk about some of the fun equipment decisions.  LRASM, long-range antiship missile, why LRASM, why now?  What can this do that's particularly relevant to Defence Force capabilities?

MINISTER REYNOLDS: Well, as I said in the speech yesterday and today, we have made a very conscious decision for long-range strike missiles for all three services for a number of reasons. First of all, with the increased militarisation in our region and the increasing accessibility of weapons, and how they're technologically developing, they are now a threat. They are a threat to our deployed personnel.  So we have decided - this is the first acquisition for the Air Force that we're getting from the US Navy. We will be starting training on them next year and will be at IOC by 2023. So this is the first to be on Super Hornets, we'll roll them out to the JSF and have a look at what other acquisitions we do.  But they are to defend our people but also an acknowledgment that, as we know, launch platforms are coming closer and closer to Australia as well, so we have to understand the technology and these are a very, very powerful deterrent. 

PETER JENNINGS: And long-range strike for land forces, I've had a few people ask me questions about what that means. Perhaps you or CDF, what's in your mind for those capabilities?

ANGUS CAMPBELL:  Sure, Peter, thanks. That means that we need to study very carefully and it needs to be looked at within the suite of capabilities the Defence Force has. But it's all about reach and either establishing or re-establishing that reach. So we'll be studying it the next couple of years to make recommendations to the Minister and the Government. 

PETER JENNINGS: So this is deployable capability, CDF, it's not about lining the beaches around the coastline or anything like that?

ANGUS CAMPBELL:  That's right. Let's have a look at it. 

MINISTER REYNOLDS: It's not - yes. 

PETER JENNINGS:  CDF, let me ask you a different question. I actually was emailed by Tess Newton Cain who wanted me to ask you about what does this policy document do for climate change, the Boe declaration in the Pacific identifies climate change as the biggest strategic threat in the region, and then I think very much connected to that is a sense of what the document talks about in terms of ADF assistance to wider civil authority both domestically in Australia for disaster response but also for international HADR as well. 

ANGUS CAMPBELL:  Sure. A really strong thread that connects this work with the 2016 White Paper speaks to engagement to partnership, to building communities of security in our region and a deep Australian commitment to doing so and to being part of a community of nations. That is something that we have been doing very strongly in the Pacific with the step up over recent years but something that we did and have done since the first humanitarian assistance disaster relief mission to Samoa and Tonga, 1919, 101 years ago. The Royal Australian Navy went to assist with an outbreak of Spanish influenza. So we've been in the region for more than 100 years and we are there as a member of a neighbourhood and continue to be so. 

The longer term issues for Australia, and Australian national policy, Defence being a part of that policy with regard to climate change, they will proceed nationally.  What we can do in terms of the immediate opportunities that the Force Structure Plan presents to us is see those capabilities that have a natural dual use opportunity, whether they're rotary wing, the air mobility opportunity beyond the C130J, army watercraft, and the engineering effects that we and the Pacific and South-East Asia have in combination, all these have and are and will continue to be used in response to the mitigating issues that might arise, whether they arise, whether it's domestic or regional. 

PETER JENNINGS: General, thank you. Secretary, a billion dollars here, a billion dollars there, pretty soon you're talking a lot of money and $570 billion-odd for the decade for Defence as a whole $270 billion for capability. Is this all affordable in terms of what the document has set out within that envelope of funding?

GREG MORIARTY: Peter, for the Department it's very important and we very much appreciate the Government's commitment to that very - ten years of a funding profile that allows us to do the planning that we need to do to bring these capabilities into being. It also allows us to give certainty to Australian business so that we can work with our business partners and the Government has now decided, as you know, that Defence Industry is a fundamental input to capability and that's how we intend to approach our relationship with Australian business.  So it allows us to build those relationships, let business know what capabilities want so that they can make the business decisions they need, the investment decisions to build sovereign capability for Australia. 

But, as you know, that funding profile is set and within that we must deliver the capabilities that the Government has directed us to. That means if there are pressures, we will need to do one of several things. We will need to go back to Government and say because of either the need for sovereign capability or because of complexity, because of work force, we need to slow that down, push things to the right to allow us to deliver that capability for you. We can descope, we can ruthlessly prioritise, to prioritise what is important for Government and to push off other capabilities and that's what the Integrated Investment Program allows us to do. 

It allows us to come to Government with options and say we need these sovereign capabilities, we need to develop our work force, we want to build Australian industry, we can do it in this time, or we can't do it all within the funding envelope that you've given us. These are the options for us, for Government to take about what it decides to prioritise and what it decides not to. And the prioritisation process is what has happened here where we've done some work, Government has taken decisions about what its priorities are over the next ten years and we will now need to implement those priorities. 

MINISTER REYNOLDS: And, Peter, from the Government's perspective, that's why in these documents there is a lot of effort in transparency and also in the numbers because as the Secretary has said, we are going to have to continue to keep making hard decisions about what we trade-off, what we have to trade-off, what we descope or what we discontinue. So we've been very transparent in these documents. So Australians need to know how we're spending their money. 

PETER JENNINGS:  I mean there are no easy choices left in terms of what can be descoped. 

MINISTER REYNOLDS: No, there's not. 

PETER JENNINGS:  And there's a lot of really necessary choices to be made in terms of things to be added to the strength of the Defence Force as we go forward.  So this is going to be a really tough game to play, it seems to me. Speaking of tough questions. Minister, it is all about China, isn't it?

MINISTER REYNOLDS: This is not about any single country, Peter, but it really is about our deteriorating geostrategic circumstances. Look, in relation to China, as I've said in my speech, we welcome their economic development, we welcome them as a responsible regional partner but where behaviours are not consistent with the standards not only do we expect of ourselves but we also expect of all other regional nations in terms of sovereign respect, in terms of, as I said, adherence to rules-based order, then we are calling that behaviour out. 

PETER JENNINGS: I want to perhaps, if I can, quickly get all of you to offer some thoughts on South-East Asia. You've all had deep experience of the region, Greg was ambassador in Jakarta. I mean it seems to me that very much part of this document is the thought that we are going to be lifting our engagement with the region quite dramatically. We don't call it this but it's the sort of South-East Asian equivalent of the Pacific step up. We know that we have to do more. What's your thoughts on that? Perhaps, Angus, what does that mean in terms of ADF engagement and, Greg, maybe you could offer a few thoughts on Indonesia in particular?

ANGUS CAMPBELL: So very significant region, perhaps the significant region for our future and a region in which we have a very long and strong history of ties, an ASEAN partner nation now for 46 years. I think you will see deeper connections at the personal level, at the level of exercise and development of interoperability and a strengthening of understanding between the two countries at many levels, but in the military sense a coming together of like mind on a range of security issues and it's very promising. I've spoken to many of my colleagues in the region over the last few weeks and have been doing so throughout the COVID-19 experience.  And we've got very strong relationships and they're just going to continue to grow. 

MINISTER REYNOLDS: The Defence Corporation Program is probably one the most important programs our nation has to engage with our friends and our partners in the region. It is pretty much the jewel in the crown. Our Defence personnel, who are deployed in these positions right across the region, have great relationships, great friendships with their counterparts and my relationships with many of my regional counterparts, again, is critically important. 

People like Australians, they want to trade with us, they want to have defence relationships with us and increasingly so in countries that we haven't traditionally had a stronger defence relationship as perhaps we should have, and most recently with India, with the CSP that's signed, we have had an exponential increase in the military-to-military activities over the last four years with India, and that's continuing to grow. 

I'm now an interlocutor for India with Indonesia to start up a new trilateral maritime exercise series. So there's a lot of these mini laterals, multilaterals and I think that's really the key for the future is how do we bring all of those together to support each other economically, and also in terms of peace and prosperity and shaping the world we want to live in, in the Indo-Pacific. 

PETER JENNINGS: I will ask Greg about Indonesia, but are you able to share with us any of the comments that you might have had from your colleagues reacting to the strategic update?

MINISTER REYNOLDS: I've had many comments. Some of them have been made publicly in their own nations and some of them privately to me but I think it's safe to say that so far the response from regional partners has been incredibly strong, very, very strongly supportive. 

PETER JENNINGS: Thank you. And Secretary, Indonesia?

GREG MORIARTY:  But first of all, the Indo-Pacific is core strategic geography for Australia and that's why I think it's very appropriate that the Government has identified the Indo-Pacific as the region in which we will focus our Defence planning and build up our Defence diplomacy and engagement and in that, of course, Indonesia is a vital partner for us. 

I've been very, very pleased to see the way in which our Defence engagement has strengthened over the last couple of years.  A lot of that has to do with sort of the changing environment, the way in which we are having more strategic perceptions in common with Indonesia.  But Indonesia, the prosperity of Indonesia, its unity, its strength is vitally important for us but it's also vitally important for ASEAN because a strong and prosperous Indonesia means a strong and prosperous ASEAN. 

When Indonesia was going through a lot of internal turmoil many years ago after the Asian financial crisis, I think it was very evident that ASEAN lacked that unity of purpose and when Indonesia, as the largest member of ASEAN, when it has the confidence to bring that together, I think ASEAN is a stronger grouping when Indonesia feels confident about its place. 

MINISTER REYNOLDS: And Indonesia was one of the first ASEAN countries to come out today very strongly backing our policy. 

PETER JENNINGS: Thank you. CDF, I did want to ask you a question about the grey zone which is now a much larger part of the sort of strategic lexicon of Australian Defence thinking, and a number of people here, I'm sure, would recall about a year ago the General gave a speech to an ASPI function about political warfare which is really same thing under a slightly different name.  What is your sense of the role that the ADF can play in this grey zone challenge which almost by definition is areas that is actually short of military conflict?

ANGUS CAMPBELL:  Peter, we see in the Force Structure Plan enhancements to things like intelligence of reconnaissance capability, and also to cyber capabilities of various forms. Those can give us awareness and give us opportunity in particular domains. But I would offer that much more importantly if you want to both defend yourself and, on occasions where your interests are engaged, seek to prosecute action in that ambiguous grey zone, you need to think like those who are becoming accustomed to employing grey zone tactics. 

Typically that means thinking across all the elements of national power that might be at play and not necessarily responding like for like but asking the question how can cost be imposed on actions that are in breach of the rules-based order, violate international law or are in some way diminishing or destabilising of regional security. 

So it's a first start with a very dynamic sense of how to think about the problem, look at all of the choices and options that you have and the subtly that might be required and the patience that will be required and then ask the question with any particular element or object within the Defence Force or any other part of a government instrumentality what can we do with it in the tactics applied, in the procedures employed?  I think we have to think grey if we're to effectively respond to grey in the ways that is suitable for us and appropriate for the nature of our democracy and our values. 

PETER JENNINGS: It's fascinating. 

MINISTER REYNOLDS: One of the most effective ways that we're doing that is taking the information that we have and sharing it, the old sunlight, sharing it with regional friends who don't have the same capabilities we do and actually showing them what's happening and they can take their own actions but that is incredibly important. 

PETER JENNINGS: Thank you. 

MINISTER REYNOLDS: And appreciated. 

PETER JENNINGS: Let's take a couple of questions from the audience.  I will ask you to put your hand up and a person will come with a sanitised microphone for you and let's - I'm going to go to Kim and then Michael at the back. So just behind - back row, Kim Bergmann and then we'll go to you, Michael. 

QUESTION: Thank you for much for that. Kim Bergman from Asia Pacific Defence Reporter. COVID-19, I'm interested in, well, the Minister's assessment but perhaps others, why you see it as a strategic risk because once countries succeed in containing the virus and we all get used to washing our hands more frequently, won't life then return pretty much to as it was six months ago?

MINISTER REYNOLDS: Well, Kim, I think we'd all like to share your optimistic assessment of the situation but I think sadly, that that's not the case. Those of you who would have heard the Prime Minister yesterday, he very deliberately made references and analogies to the 1930s and he did that for a number of reasons but the main one is that there are a lot of parallels. 

In the 1930s it was a post-pandemic world which had been severely impacted by the pandemic. It was going through economic uncertainty, rules-based order was certainly deteriorating and there were great technological advances, particularly in aviation. So when you get a combination like that of circumstances, we hope, we hope that you're right. But there is no vaccine on the horizon yet, and as we know, there are certain actors who are making hay during this economic instability, during the pandemic. 

PETER JENNINGS: I saw one very credible report the other day suggesting perhaps 300,000 deaths in the US by the time of the presidential election. Michael. 

QUESTION: Minister, you're managing things on two very different timeframes.  The first one is delivering those big long-term capability programs well over decades, but the second is the new urgency in the update, particularly around accelerated acquisition of advanced weapons and closing gaps and sustaining ADF military operations. And you spoke yesterday about accountability and reform. How are you going to use accountability and reform to drive this urgency and this rapid implementation that clearly you and the Prime Minister expect?

MINISTER REYNOLDS: Michael, that's a very good question and one that goes fundamentally to the heart of what I do and what Melissa does. There's a number of parts to that. The first one is what we have in this documentation. You can't hold anyone to account for anything if you can't measure it and that you can't actually hold someone accountable for deliverables. So these documents are the first step in that. 

In the document itself, we've got ten years, as you know, the ten years funding certainty. Where we've actually gone into contract, we've got actual numbers and they will not change and if they do, this is what I've said, you hold me and you hold these two gentleman to account for that in a more transparent way. 

We've also, in the handouts that you see will go with the two documents, we have unpacked the naval ship building plan in a different timeframe so that very clearly you can now see, because there was some conflation between constant outturn dollars and time frames, whereas now what we've got is for those longer term, in this case the ship building program, it is very, very clear how much of that money - so that's a bracket of funding into the late 2050s - is 163 to sort of the late 170s but again over that timeframe. 

So we're getting much better in defence through the First Principles Review, we've had a much more strategic centre and we are providing more capabilities as a smarter customer within CASG, not only to reform their own processes and their own transparency, as you can see under the great leadership of Tony. So it is a journey. 

But in terms of how we go into contract, how we manage contracts, how we project management, and from my end, the political end, how do we make that transparent and accountable. And if we do have changes, how do we make that clearer why we have made the decisions to change as we have done in this document because as you will see, there are a lot of changes to the original IIP. So it comes down to, I think, project management 101. It comes down to transparency and greater reporting, but also being very clear about your timeframes and you're right, we are still going through the smart buyer process and how we do rapid acquisitions, how we do spiral acquisitions and project development. So it's a journey but we are absolutely on the pathway. 

PETER JENNINGS: Thank you. Now we'll have a quick strategic question from Professor Paul Dibb and I'll finish with Catherine, if that's okay, Minister, after that.  So Paul. 

QUESTION: Minister, given the importance of long-range strike missiles, which I endorse, by the way, to be able to attack an adversary including the adversary's infrastructure, what are the prospects for local manufacture given that what that would mean for greater self-reliance and sovereignty, particularly referring to high-intensity conflict?

MINISTER REYNOLDS: There's two aspects to that, Paul. One is in relation to this particular capability, to the LRASM.  We are acquiring them from the United States Navy because that is where the capability and that very high-end technology rests.  Like with many other programs, wherever we can, we are now looking at how do we bring that IP and also that the build and sustainment and maintenance here to Australia. 

We've done a very, very good job over the last sort of more than the term of our Government, but actually increasing local sustainment to the point with Collins now. I think that's over 97%. So wherever possible, transferring the IP here where we can. The Joint Strike Fighter is another great example. Obviously it's a foreign military sale but again we've got 50 companies in the global supply chain, $1.7 billion worth of industry here in Australia. So in relation to that capability, given we're just at the start of this process, we are doing this in partnership and we are with the United States Navy in this case. But we will look at that. But, again, we have to be realistic about project by project, which ones we have to acquire overseas, whether in partnership, whether we're just getting them, like, off the shelf or whether we're starting to look to develop the capability here. 

ANGUS CAMPBELL: Minister, I'd also note that Defence, Science and Technology have been working with University of Queensland on hypersonic research for a number of years and we can do science and technology in this country ,as you know, Paul, and I think that's there's a bright future for innovative Australian technology companies. 

MINISTER REYNOLDS: Yes. 

PETER JENNINGS: Catherine, last question to you. 

QUESTION: Thank you very much for your insights this afternoon. I was very glad to hear about transparency and clarity, particularly from the Minister and Secretary there. In that vein, is the IIP going to be updated publicly since it's been four years now?

MINISTER REYNOLDS: Well, I'm not sure, Catherine, how much more transparent we can be than we've been in these two documents. I think you've got more information and more certainty in terms of the numbers and, as I've said, this is a journey. Yes, we are looking at ways that we can keep more information out there.  So, yes, we are looking at ways we can do that but I think what you've got in these two documents is a great start. 

PETER JENNINGS: Well, colleagues, it's been a really fascinating hour, and, Minister, CDF, Secretary, I want to thank you for taking the time. I've lived the joy myself of being producing a number of these documents over the years, and I really do want to congratulate you for bringing something out which is substantive and timely and original in terms of the new directions that it's setting for the Defence organisation and the Defence Force. That's great for us. It means we'll be in business for a long time picking away at the strands of all of these things, finding the things that we disagree with as well as the things that we agree with. 

So I'm looking forward to mining this scene for some little time to come. But I want to thank you for your openness and for taking the time to be with us today. Can you please thank the Minister, Secretary and CDF.

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