Minister for Defence – House of Representatives
(Source: Australian Department of Defence; issued Aug. 17, 2011)
Transcript: House of Representatives Question Time

ANDREW WILKIE, MEMBER FOR DENISON: Mr Speaker my question is to the Minister for Defence. Minister, Australia plans to purchase as many as 100 Joint Strike Fighters at a cost of $16 billion dollars but the US program is deeply troubled by cost overruns, capability shortfalls and schedule slippage.

US Senator John McCain has dubbed it a train wreck. While you’ve said the program is rubbing up against Australia’s cost and schedule limits.

Minister, this program is vital to Australia’s security in light of our retired F-111s, ageing FA18s and limited Super Hornet’s. And the 14 JSF that we’ve committed to buy will not fill the gap.

Minister, what are our cost and schedule limits and what is Plan B?

SPEAKER: The Minister for Defence.

STEPHEN SMITH, MINISTER FOR DEFENCE: Well thank you, Mr Speaker and I thank the Member for Denison for his question and acknowledge his long standing interest in national security matters.

Of course, Australia’s air combat capability is a vital part of our national security framework. I make this point crystal clear at the outset and I’ll also make it at the conclusion of my remarks: I will not allow and the Government will not allow a gap in our air combat capability.

But let me refer to some of the facts here. The Member referred to the F111, of which we had 24. It served us very well. We now have about 70, 71 in fact, Classic Hornets.

They are subject to an upgrade and maintenance program and we expect that they will be retired by the end of or at the end of this decade. We also have 24 Super Hornets, 20 have arrived and 4 to be delivered by the end of the year.

The White Paper and the Defence Capability Plan talk in terms of around or up to 100 Joint Strike Fighters at an estimated cost of $16 billion: what the Government has actually committed itself to and announced is 14 Joint Strike Fighters.

We expect the first two of those to be delivered to us in the United States for training purposes in the course of 2014/2015.

There are a number of advantages that Australia has in this project. Firstly, we sensibly chose the conventional variant and not the other two variants, which have been the subject of most difficulties so far as the program is concerned.

Secondly, in working out our schedule and cost, we put in sufficient padding to make sure we did not suffer, most importantly, a capability gap.

I was recently in the United States. I discussed this matter with Secretary of State for Defense Panetta, with Ash Carter, his Assistant Secretary on Capability, who is the nominee for Deputy Secretary and also with the Joint Strike Fighter Program office itself, including Admiral Venlet.

I made it clear that our concern was rubbing up against risk on schedule. We are proposing in conjunction with our Joint Strike Fighter program partners to do an exhaustive risk assessment of delivery schedule by the end of this year.

My advice, or the advice I have from my Department, is that we are in the position to wait until 2013 to make a judgement about whether alternate arrangements are required to ensure that there is no gap in our capability. I’m not proposing to wait until the last minute. I’m proposing to recommend to the Government that we make that decision next year.

There is an obvious option or Plan B, which I have stated publicly in the United States and on my return here.

SPEAKER: The Member for Dixon. The Minister for Defence has the floor.

STEPHEN SMITH: I’ve stated publicly in the United States and here that there is a viable alternative. While the Government has not committed itself to this, the obvious alternative is the Super Hornet.

So I’m proposing to recommend to Government in the course of next year whether there is a need for us to take alternative steps to ensure there is no gap in our air combat capability. So far as cost is concerned, we’ve committed ourselves to fourteen at a cost of about $3 billion.

What further orders if any are placed will be judgements for the Government at the time. So far as cost is concerned, the single biggest variable is whether the United States reduces the number of Joint Strike Fighters for its Navy and its Air Force. That is something that we are also closely monitoring in the context of the United States Defense budget difficulties and general budget difficulties.

But so far as the Government is concerned, we will not allow a gap to occur in our air combat capability.

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