PM: I've called this news conference today to announce the new senior leadership team of the Australian Defence Force. I'm pleased to say today that Air Chief Marshal Angus Houston will be reappointed as the Chief of the Defence Force and will continue to command the Australian Defence Force for another 3 years
The Government has great confidence in his leadership and in the performance of our service men and women. His reappointment as Chief of Defence Force will ensure a continuity of leadership for Australia's military during a high operational tempo and reflects on the great work being done by the ADF.
I'm also pleased to announce a number of other senior military appointments. Lieutenant General David Hurley, currently the Chief of Joint Operations, will be appointed as the new Vice Chief of the Defence Force.
Rear Admiral Russell Crane, recently the Deputy Chief of Navy, will be promoted to the rank of Vice Admiral and appointed as the new Chief of Navy.
Lieutenant General Ken Gillespie, the current Vice Chief of the Defence Force, will be appointed as the new Chief of Army.
Air Vice-Marshal Mark Binskin, currently Air Commander Australia, will be promoted to the rank of Air Marshal and appointed as the new Chief of Air Force.
These senior service appointments will take effect from 4 July this year and will be for a period of 3 years. Each of them, that is the Vice Chief of Defence Force, the Chief of Navy, the Chief of Army and the Chief of Air Force have been recommendations made to the Government by Air Chief Marshal Angus Houston the CDF. We've accepted his recommendations.
I would like to thank the outgoing service Chiefs who will be retiring from their respective services. Vice Admiral Russ Shalders has been the Chief of Navy for the last three years and before that he was Vice Chief of the Defence Force. He has served in the Navy for more than 40 years having joined as a cadet midshipmen in 1967. Under his command the Navy has met its many operational commitments and I salute his service.
Lieutenant General Peter Leahy has served two terms, a total of six years as the Chief of Army. He is the longest continuously serving head of the Army since General Sir Harry Chauvel in the 1920's. During the last six years he has commanded the Army during one of it's busiest times of operations. He has also been instrumental in preparing the Army for the future through the hardening and networking Army initiative aimed at modernising our Army and enhancing the land force with two additional battalion groups.
Air Marshal Geoff Shepherd has served as the Chief of Air Force for the past three years. He's had a distinguished career as a fighter pilot and has held a number of senior command appointments. He leaves the Royal Australian Air Force in good shape and recruiting and retention at good levels with no critical categories.
I want to pay tribute to Admiral Shalders, General Leahy and Air Marshal Shepherd for their hard work, their dedication and their commitment to defending Australia. On behalf of the Government and the people of Australia I thank them for their many years of dedicated service to the nation.
I also want to congratulate the new leadership team on their appointments. This team has strong credentials and experience in leadership and management and in a joint operational environment. They are well placed to assist the Australian Government to meet our security policy challenges into the future. And the Defence Minister and I look forward to working with them in their respective roles into the future.
National security is fundamental business for the nation. It is fundamental business for the Government of the nation and as I have said before there is no higher calling for the nation than that which we see with our men and women in uniform. I salute their service the men and women of the ADF. I salute their leadership. I salute those who are retiring from leadership positions as I do the service of those who we now appoint to these senior and most responsible missions within the Australian Defence Force.
I might now turn to the CDF for some remarks and then I'll ask the Defence Minister to add.
AIR CHIEF MARSHAL HOUSTON: Thank you Prime Minister, can I start by saying I'm deeply honoured to be appointed for a further three years and I thank the Prime Minister and the Minister for their trust and faith in me.
I should say right at the outset I'm humbled by the fact that I will continue to lead the people of the ADF. It's the people of the ADF who have achieved remarkable outcomes over the last three years, it's incredible what they have done on operations around the world and of course that challenge will continue through the next 3 years.
So my priority will continue to be looking after the people and ensuring that we retain them and their families so that we have an ADF that can meet those challenges now and into the future.
I'd like to congratulate the new leadership team, General Hurley, Admiral Crane, General Gillespie and Air Marshal Binskin. They are a very experienced group of officers and they will form a very cohesive and effective team.
I'd also like to take this opportunity to recognise the great work that the outgoing Chiefs have done. General Leahy, Air Marshal Shepherd and Admiral Shalders. To a large extent the reason we've been so successful in operations is because of the incredible emphasis that the Chiefs have had on the professional standards of their people and also the intense preparation that's gone in to the preparation of our people before they go away on operations. So to all three of those I say a very sincere thank you and I wish them well for the future.
Thank you very much Prime Minister. The ADF is a great Force and I think behind us we have the team to lead us into that future. Thank you.
PM: Defence Minister
FITZGIBBON: Thanks Prime Minister of course I want to join with the Prime Minister in congratulating Angus on his reappointment and congratulating the rest of the new leadership team. We have great challenges before us and I look forward to working with them, I have great confidence in them.
Those challenges are many but I've said on a number of occasions it's my view and I think it's the view of the Government that the single biggest challenge facing the Australian Defence Force in the future is our people and skills shortage and on that basis I've asked the new leadership team to make this a particular focus.
In addition to training and sustaining the respective services, each service Chief will be directly responsible for ensuring that sufficient trained and skilled personnel are available. It is only through the force of strong and professional leadership that this goal will be achieved.
Each service Chief will report to the Chief of the Defence Force, to the Minister for Defence, the Minister for Defence Science and Personnel and through us to the Prime Minister and the National Security Committee of the Cabinet. Every three months or more if required the service chiefs will spell out in detail the progress they have made in meeting the exacting requirements of their respective services for skilled trades and professions.
This will require tireless effort and tight focus on the part of each service Chief. It is a tough challenge in the face of almost full employment and a booming mining industry. However there is no choice but to succeed. The best available military equipment is of little use without sufficient high quality personnel to operate and sustain it. Again I have great confidence in them in progressing this very important issue and I will look forward to working with them.
PM: Thanks very much Defence Minister. Turn to you for questions.
JOURNALIST: (Inaudible) Houston you took over running the Defence Force 3 years ago at a time when you said one of your main concerns was going to be looking after the people in the Defence Force which you have repeated. It was at a time when the Military justice report was out, very damning report on the state of morale and a whole lot of issues in the Defence Force. How do you feel that, that has improved over the last 3 years?
AIR CHIEF MARSHAL HOUSTON: We've put an awful lot of emphasis on military justice and I think if you have a look at how we have gone in implementing the military justice recommendations, we've completed most of them and I'm pleased to say that I think the way we handle military justice now is enhanced and improved. And certainly we give it an awful lot of attention.
JOURNALIST: Can I ask Defence Minister, you've spelt out that your going to require all the Chiefs to meet very rigorous targets in terms of recruitment and retention. Obviously one of the main ways you attract skilled labour is to pay them more. So is the Government going to do its bit by looking at remuneration for defence personnel?
FITZGIBBON: Remuneration will always be part of the mix of course, but the reality is that we can never hope to compete with other industries, in particular the mining industry, on the remuneration front alone.
That's why we need to find new and innovative ways to encourage personnel to stay rather than to leave. We want to make sure that when the defence family is sitting around the kitchen table thinking about an offer to leave and therefore thinking about whether to stay or to leave. We can put things on the kitchen table which provide them with additional incentives. Which to say, one example of that of course is our efforts to extend free medical and dental services to all Defence families. I think it is innovative projects like this that might just make the difference when defence families are trying to make this difficult decision.
JOURNALIST: Mr Rudd, the Iraq war enters its sixth year I think tomorrow. You have called it the greatest foreign policy failure since Vietnam. What are your thoughts as the fifth anniversary approaches and the sixth year goes in.
PM: Well I've been to Iraq on a couple of occasions and visited the Australian Defence Force in the field and my experience of them in the field, both when I visited them in opposition and since I've visited them as Prime Minister is that they themselves a doing a first class job within the operational ambit that they have been given. So there is no criticism of them at all. In fact, nothing but praise.
On the overall wisdom of embarking upon this war in the first place, our position is well known and I go back to what I said some time ago. Which is that if you're going to embark upon a war like that, have it very clearly in mind from day one, what your exit strategy is to be and what you're mission statement is to be. And I think that's been one of the problems which the operation in Iraq has confronted from day one.
JOURNALIST: Mr Rudd you and Mr Fitzgibbon are both going off to the NATO meeting. Do you now believe that with the changes that are being made and the changes that you will push there and that are being discussed there, that the war in Afghanistan is winnable?
PM: I believe that it's only responsible to remain militarily engaged in a conflict where you are putting our men and women in uniform on the line, is if you believe it is winnable. It is I think the first time that an Australian Prime Minister has attended a NATO summit. The reason I am going to Bucharest to attend the Summit is very clear cut. I want to be confident that NATO collectively and the European contributors to it have embarked upon a long term strategy to secure success in Afghanistan and against fixed benchmarks.
That is what has galvanised our thinking and my decision to go and the Defence Ministers decision to go. The Defence Minister has already attended to NATO Ministerial level meetings, one in Edinburgh and the second in Vilnius with the same objective in mind. As I've said to the President of the United States recently on the telephone confirming to him privately what I have said publicly: this Government has committed itself to Afghanistan for the long haul. But for that to be delivered in the long haul, this Government must have confidence that there is an agreed strategy on the part of all the combatant and participating states that there is a strategy to secure success.
JOURNALIST: (inaudible) victory in Afghanistan?
PM: Success or victory in Afghanistan, one of the criteria lies in ensuring that you have a sustainable, successful, civilian Government in Kabul with effective control over the bulk of the country. And secondly what therefore flows by way of a military strategy and an economic and aid strategy underpinning that to secure that objective. If there's one criticism which I think all are agreed on. It's been a failure so far effectively to integrate the military arm of the operation with the civilian arm of the operation to ensure that there is a total strategy for Afghanistan country-wide which integrates all elements.
Let me give you one example. You can deploy as our brave troops in Afghanistan, some of whom we have lost tragically, to clear out an area. But unless you have a capacity to ensure that, that area then is sustained under first of all, reasonable security control and secondly, you are in a position to ensure that having done so, that there is as civilian and economic livelihood to sustain the local population. Then you end up being on a merry go round. That's just one example.
So we have some pretty clear cut ideas as we head off to Bucharest. And the reason I am going to Bucharest is, in the middle of my visit to the United States and elsewhere is because I regard this engagement which involves such a large number of Australian troops as being very important. And this Government has got to have some confidence that there is a strategy agreed upon by all which is capable of ensuring or securing success in the long term.
JOURNALIST: Mr Rudd also on your trip, there's been speculation that the talks in China are going to be very difficult not just on Tibet obviously but on the economic side. What's your thoughts on that discussion?
PM: Well I think the reason I'm visiting China at this stage is because China is our largest trading partner. It makes basic economic sense at a time of global economic uncertainty that we attend to our principle economic relationships and China is there front and centre. Secondly, apart from trade of course there is an investment relationship in both directions. What the Treasurer did recently was make absolutely clear cut what our guidelines would be for the treatment of inbound investments from Government related entities wherever they happen to occur around the world. Whether sovereign wealth funds for example, emanate from the United Arab Emirates. Whether they emanate from the Russian Federation. Whether they emanate from the Peoples republic of China. Whether they emanate from elsewhere.
And certainly in my discussions with Chinese authorities and with the Treasurer's discussions with Chinese authorities, we've received no negative response to us making that non discriminatory position absolutely clear.
JOURNALIST: What is our exit strategy from Afghanistan, is it the same as our mission (inaudible)
PM: The mission statement defines where we wish to be in terms of the objective which I referred to before, against which particular timeframe and thirdly whether all the assets, civilian or military, are in order to achieve that and then against that benchmark, when you should therefore consider withdrawing Australian forces or drawing them down. Now that is all contingent on there being an agreed strategy to begin with and as the Defence Minister has said I think following his return from both Edinburgh and Vilnius - what has staggered him and staggered the Government generally is that when we embarked on a recommitment of forces to Afghanistan some years ago that there was no such common agreed strategy between us and the allies.
FITZGIBBON: Could I just say on that point, I can report that we now have received the relevant draft documents for the Bucharest summit and we have indeed been feeding in our views on that strategy. So we are hoping that in Bucharest we will get a new road map and in addition to that a public declaration which makes clear our objectives in Afghanistan and or course clearly articulates a strategy for Afghanistan.
JOURNALIST: Your office confirmed last night that you have had one meeting with the entrepreneur Ian Tang -
PM: If we are going to go into other things can I suggest that our, if your ok with the military side of things, I am happy to stay here for other...
JOURNALIST: Just on Afghanistan, your predecessor began a significant effort in terms of reconstruction there. Is it fair to say that that reconstruction program at best is minimal if not has been stalled completely?
PM: Well progress across the country is mixed. There are a number of provincial reconstruction teams across the various provinces of Afghanistan and the reports from some areas are better than others. It's plain if you look at the map of Afghanistan, the further north and west you go, the easier it is to achieve success because the security environment is more benign, more benign - not absolutely benign, but more benign.
The further south and east you go the harder it gets because the security environment becomes much less benign. Therefore the results from the activities of provincial reconstruction teams is varied. But what is missing in my judgement Malcolm and I turn to the Defence Minister for his views on this, is how that, lets call it PRT, Provincial Reconstruction Team approach to building the civilian economy of Afghanistan - whether that is effectively integrated with a real military strategy across all parts of the country and in the south and the east that is an open question. That's one of the, again one of the reasons that we're heading off to Bucharest (sic).
Because our time is limited I will come back to your question now if that's ok.
JOURNALIST: Your office confirmed last night that you've had one meeting with the entrepreneur Ian Tang since your election to Prime Minister. Can you tell us precisely when that meeting occurred, at whose behest it was, and what you discussed?
PM: I think it was in November, December something like that. In Brissy. 10 or 15 minutes. A cup of coffee. Hello, how are you. I've known this guy for quite some time. It was a personal meeting.
JOURNALIST: Just on the budget, you're continuing to warn of the inflation legacy left to you by your previous Government. You also guaranteed or you said that battlers won't be hit in your budget. You've also said you are not going to carve into what some people call middle class welfare. You've also got a big education program and a big health program. Are you painting your self into a corner? Because if you not making cuts to those big ticket areas. How are you going to find the cuts you need?
PM: Well no one has ever said that crafting a budget is easy. One of the reasons by the way it's not easy is that we decided for national security reasons to quarantine the Australian Defence Force. About which I think they are reasonably happy. About which various other agencies of state may be less happy. But that's been an important discussion. But we believe that national security requires effective long term planning. The kit and equipment used by Navy and Air Force and the Army is expensive stuff. Long term acquisition programs and certainty in my judgement is required. Also on the Defence Force recruitment side.
So no one says that framing a budget is easy when you actually have those core priorities as well as looking after working families, as well as investing in the future. Were fully mindful of that, this will be tough, you know there will be difficult expectations to meet, but you know it's what we're elected to do. To govern, to make hard decisions. The core underlying principle though is this. To make sure that we have a budget outcome which produces downward pressure on demand, downward pressure on inflation, and therefore, downward pressure on interest rates.
If you look at the report released this morning on the impact of the previous Government's discretionary, attitude to discretionary grants. Whereby they are effectively adding billions of dollars to demand over the last triennium, that's a lot of money flowing out there. Therefore we take a disciplined approach to budget management in order to produce a disciplined outcome on public demand and therefore downward pressure on inflation and downward pressure on interest rates, in contrast to our predecessors. On the expenditure side, there will be tough choices to be made but we intend to get the balance right between responsibility on the demand side and investing in the economy's future and that means sustaining our commitment to an education revolution.
JOURNALIST: How long will Defence be quarantined, is it only this budget or is it future budgets? Is it responsible to permanently quarantine Defence?
PM: We made a very clear cut pre election commitment that we would sustain the allocation of 3% real, through until 2016. I was going to say 15, 16 so there you go. And that's because in our deliberations with our Defence colleges there are very, very long lead times in decisions and this is in many respects a unique portfolio because of that. So with 2008 that's through to 2016 against the normal, should we say, fiscal and funding parameters of Government, this isn't bad certainty for the ADF.
FITZGIBBON: Can I say on that, maintaining 3% real growth and quarantining Defence from cuts doesn't mean that we won't be looking for savings and efficiencies within the Defence portfolio. We've been led to a very difficult budgetary situation. We will need that 3% real and more. We will need to find savings within Defence to be reinvested in Defence if we are going to make up that lost ground.
PM: So savings found within the Defence portfolio we've been speaking to the CDF and secretary of the Department about this. The intention is, and this is what will occur is to reinvest those within defence. The Defence Minister made a speech last night about a $6 billion black hole and we've got to meet that within the framework of 3% real guarantee out to 2016. Plus identifying savings and reinvesting those in portfolio priorities.
JOURNALIST: Mr Rudd, can I ask, your Petrol Commissioner starts at the end of the month, the ACCC's monitoring petrol prices. What's your message to Australian Motorists as they approach Easter and fears that petrol prices will rise and at some stage is it that the competitions not going to help and your going to have look at the tax regime - especially the 10% GST on fuel?
PM: The key thing that we said prior to the election and we've honoured that commitment is to appoint a petrol commissioner. Remember the previous Government had 12 years to act on this. They failed to do so. The only time that the ACCC began to be given anything like formal monitoring powers was after we announced the decision to proceed with the petrol commissioner in June-July last year. That's after the previous Government had been in for eleven and a half years. Point one.
Point two, is the whole underlying thrust of that appointment and the extra powers given to the ACCC is to ensure that maximum competition policy pressure is brought to bear on the oil company majors. That hasn't occurred up until now. And you've seen recent statements both by commissioner Graham Samuel and others about the upcoming Easter period. We believe that these are the right measures to take at this time to assist struggling motorists. We really get the message that working families are under all sorts of financial pressures at the moment mortgages; petrol prices; grocery prices and other cost of living impacts such as child care. And that's why our response to that is to deliver the tax cuts. We've been criticised for that. We are going to deliver the tax cuts to working families to help them make ends meet.
Secondly we are going to deliver on our commitment to increase the child care tax rebate from 30% to 50% and thirdly to deliver on our commitment to provide working families with an education tax refund. These are designed to help the family budget overall.
And we've got to go. Thank you very much