Last year I went to the RSL's National Congress in Melbourne as Leader of the Opposition.
And when I spoke, I outlined our commitments for veterans.
Since then we have begun to honour each and every one of those commitments.
And over the weekend the Minister and I announced the fulfilment of another.
We have established a new forum to give veterans a voice in the highest levels of Government.
It is the Prime Ministerial Advisory Council on Ex-service Matters.
Together with the RSL the Council will provide government with continuing advice on the needs of the veterans community.
This proceeds from a deeply held view on the part of the Government that the first responsibility of government is the security of the nation.
And it follows therefore that government has a particular responsibility towards those who have worn the nation's uniform.
Because there is in my view no higher calling than to wear the uniform of Australia.
I am also pleased to announce tonight the appointment of the new Secretary of the Department of Veterans' Affairs.
Mr Ian Campbell the current Australian Electoral Commissioner, will be appointed as Secretary for a five-year term from 22 September 2008.
Mr Campbell brings a lot of experience to the position.
He was deputy president of the Repatriation Commission and a member of the Military Rehabilitation and Compensation Commission between 2000 and 2005.
He has also held Senior Executive Service positions in the employment and health portfolios.
I am sure that Mr Campbell will be working closely with the RSL in the years ahead.
Tonight I would like to speak to you about the long-term defence of Australia.
While I will focus on defence, the Government takes a broad view of what constitutes national security.
We need to respond to our increasingly complex and interconnected security environment, where the lines between traditional notions of external and domestic threats are blurred.
We need a new whole-of-government national security strategy of which our national defence policy is the core component.
We need a new approach that brings together all the elements of traditional and non-traditional security capabilities that will ensure Australia responds to the full breadth of the threat spectrum that now confront us:
* Responding to the increased militarisation of our own region;
* Dealing with the continuing threat of terrorism;
* Acting on the challenges to sovereignty facing the Pacific Island countries;
* Preparing for the new challenges of energy security; and
* Anticipating the impact of climate change on long-term food and water security.
As veterans you understand the breadth of the challenges we face in the defence of this nation.
During this session of Parliament we will have Australia's first ever National Security Statement.
That Statement will set out the way we will approach the full range of our national security challenges - from defence to domestic security.
It will outline the institutional framework within which the Government will determine our national security policy settings for the future.
Defence, of course, remains the single most critical component of national security.
And getting long-term defence policy settings right will be done through the Defence White Paper due later this year.
The White Paper will set out in detail the strategic terrain we face.
It will also set out the type of defence capabilities Australia will need.
It will also dictate the type of force structure we will need - a structure which will in part need to last us until the middle decades of the century.
The 21st century looms as the century of the Asia Pacific.
By 2030, and possibly even by 2020, the Asia-Pacific region will be home to the largest and most dynamic economies in the world.
And these economies will all be closely tied to each other through trade and investment.
This economic power means that the Asia-Pacific region will also be the source of much, if not most of the world's income, investment, ideas, innovation and technology.
This will bring enormous economic opportunities for Australia.
It will also bring some strategic risks.
And the task of an effective national security policy is to maximise the opportunities and minimise the risks.
Driving much of the change in our region will be the rise of China.
China will be the most dynamic major economy in the first half of this century - followed by India.
According to some estimates, by 2020 China will replace the United States as the world's largest economy.
China's economic growth will change the way it sees its own role in the world.
And it will change the way others see China - the Olympics are a great example of that.
Over the long term it is clear that China will have more political influence in our region.
Our other major Asian trading partner, Japan, will remain a major world economy even if it is not recording the growth rates of China.
An ageing population will have a major impact on Japan by 2050, with more than one-third of its population over 65.
But given its stature in the region and its continuing strength, Japan remains a major global and regional power.
The United States is likely to remain the world's only superpower through to the mid-century.
Over the coming decades, the United States may see its position decline relative to other economies, but it will remain a major economic influence and a powerful source of ideas, innovation and technology in the global economy.
You only have to look at the US's unmatched capacity for transforming new ideas into new technology.
The United States accounts for around one-third of all world patents.
By contrast, Australia accounted for 1.6 per cent and China 1.8 per cent in 2004.
The United States has shown time and time again that it can rise to any challenge and constantly evolve.
So nobody should ever underestimate the ability of the US to maintain its global leadership role.
The United States will also remain strategically dominant given the vast array of military capabilities available to future US administrations.
The Asia-Pacific region will become more prosperous and its population will continue to grow.
Militarily, however, as it has already become economically and politically, the Asia-Pacific will become a much more contested region.
The region's total population will exceed four billion by 2020, or 56 per cent of the world's total.
Australia's population will only experience modest growth, growing to around 35 million by 2050.
But China's population is expected to peak at around 1.5 billion in 2030.
India will near the 1.8 billion mark by mid-century.
Indonesia's population could be as high as 350 million.
The demographic changes in our region will mean that by 2020 when we look to our north, we will see a very different region to the one we see now - one where population, food, water and energy resource pressures will be great.
We have to add one more element to this mix when we are looking at the future, and that is the existing military and political fault lines.
We still have North and South Korea technically at war.
We have mainland China and Taiwan still unable to resolve basic questions of sovereignty - although recent developments might give rise to some optimism.
We have unresolved border disputes between many countries including between China and India and between China and its maritime neighbours in the South China Sea - but it is reassuring to note that these disputes have been managed to this point.
In short, we have a rapidly changing region, but one still characterised by a number of unresolved flash points arising from unsettled territorial disputes.
As nations grow and become more affluent, they also update their military forces.
We see this in our own region.
We see a substantial arms build-up over time.
We need to be aware of the changes taking place. And we must make sure that we have the right mix of capabilities to deal with any contingencies that might arise in the future.
The growth in Asian and US military expenditures has dominated recent increases in global military spending.
And, as a general observation, the modernisation of Asian military forces is being characterised by significant improvements in air combat capability, and naval forces - including greater numbers and more advanced submarines.
We are also witnessing a gradually increasing ability to use military assets more powerfully through more advanced communications, joint command and intelligence systems.
As we look at our own Australian defence needs for the decades ahead, we need to ensure we are at the forefront of military technology development and acquisition.
Our armed forces must be equipped to deal with the emerging security environment.
For that, we need to further develop key capabilities.
We need a first rate and flexible land force - one capable of taking on challenges from contributing to high-end military engagements through to delivering post-conflict reconstruction support.
We need an enhanced naval capability that can protect our sea lanes of communication and support our land forces as they deploy.
And we need an air force that can fill support and combat roles and can deter, defeat and provide assistance to land and maritime forces.
It is not easy to tailor a force to meet every possible contingency, so we need to choose our equipment and our people carefully.
Of course, technology itself does not win wars or ensure a nation's defence.
To make the most out of technology you need the best trained, best commanded forces possible.
Properly trained professional soldiers with the ability to think tactically and strategically are the decisive factor.
And on this score, Australia has been richly blessed as evidenced by our soldier's performance in the field.
But all of this will come at a price.
That is why the Government has already committed to making sure we stay ahead of the game by extending the real growth of the defence budget by 3 per cent per annum to 2017-18.
That is why defence has been quarantined from the Government's efficiency dividend in the last budget.
That is why we will continue to do so in to the future - so that any savings realised in the defence portfolio are re-invested back in to the future of the ADF.
We also have to realise that our national security relies on more than a strong defence force.
It relies also on careful management of the foreign relations we have with countries around us with our allies and friends around the world.
The Government's strategic policy involves three components - what we call the three pillars of our international policy:
* a firm commitment to our alliance with the United States;
* comprehensive engagement with Asia and the Pacific; and
* comprehensive engagement with the United Nations and the multilateral order.
Our alliance with the United States is and will remain the bedrock of our strategic policy.
It is an alliance with a long history.
And the military cooperation between our two nations goes back even further - to the First World War.
This year is the 90th anniversary of the Battle of Hamel when Australian and US troops first fought side-by-side under the command of Sir John Monash.
Under this Government the alliance will be strengthened through greater and closer operational cooperation.
Under this Government, security policy cooperation will also be strengthened with a number of regional partners including Japan, Republic of Korea, Indonesia, Maylaysia and Singapore.
When I visited Japan in June, the Prime Minister and I agreed to deepen our security cooperation even further.
When I visited Korea at the start of August I agreed with President Lee Myung-bak that Australia and Korea would begin to look at how we could move in the same direction.
We already have a strong history of military cooperation with South Korea - I think we need to use that base to build our cooperation for the decades ahead.
Across South East Asia I am also determined to strengthen our security cooperation.
The strength of our ties with Malaysia and Singapore must be maintained and developed.
The Five Powers Defence Arrangement has been an important part of our defence engagement since 1971.
And it remains the only multilateral defence treaty in our region with an operational element, which helps in our shared fight against terrorism.
With Indonesia I was pleased that President Yudhoyono and I agreed in June to strengthen our cooperation under the Lombok Treaty.
The Lombok Treaty provides a framework for increased security cooperation to combat terrorism, and transnational crime and other security threats.
It provides a framework for cooperation between our defence and domestic law enforcement agencies.
We are committed to developing fully this security relationship.
The Government also wishes to expand its security policy cooperation with India.
Together with our security policy dialogue with China.
Our security and political relationships with our smaller neighbours are also critical.
This Government has deliberately sought to put our relations with the Pacific island nations on a new footing.
We recognise that Australia and the Pacific Island nations share a common goal of stability and prosperity in our region and that the best way to achieve that is through closer cooperation - including in defence and security.
As the Asia-Pacific region changes, we will need to think about how we want the region to look in 2020.
We need to think about how we can ensure that our region is stable and prosperous in the decades ahead.
To that end, we have started a regional conversation about how to shape the future of our region, rather than simply let it be shaped by events.
We have started the discussion about how we can develop an Asia Pacific Community.
If we do not start to think now about where we want the region to go, we run the risk of competition and tension overriding cooperation.
Australia is well placed to begin this process of discussion.
As a middle power, we can propose ideas that other larger powers might have trouble taking the lead on.
Another example of this is the International Commission on Nuclear Non-proliferation and Disarmament.
The danger posed by nuclear weapons has not disappeared.
In fact, some argue that the threat is as great as it has ever been because more states now have nuclear weapons and the threat of the technology spreading, including perhaps to terrorist groups, has grown.
So we need to galvanise the international community behind efforts to prevent the spread of nuclear weapons and work towards the goal of their eventual elimination.
I have appointed Gareth Evans to co-chair the Commission with former Japanese Foreign Minister Ms Yoriko Kawaguchi.
Their task is to lead a group of experts to come up with some new thinking - based on hard-headed strategic analysis - about how we deal with nuclear weapons.
And about how we re-energise the Nuclear Non-Proliferation Treaty.
Australia has the credibility and the drive to lead initiatives like this - in part because they are in our interest, but also because they make a positive contribution to the international community.
As a middle power, Australia has much to gain from strong global institutions, particularly the United Nations.
That is why we are seeking a non-permanent seat on the UN Security Council in 2013-14.
Creative middle power diplomacy is once again hard at work in enhancing our enhancing our security policy cooperation across East Asia; in strengthening our alliance with the United States; in reaching the regional and multilateral nuclear non-proliferation agenda; and in building the region's long-term cooperative architecture.
But diplomacy must always be reinforced by a credible national defence strategy .
The changes in our region are, in reality, the major changes facing the world.
I see two main strands to our response to the changing strategic terrain.
First, we have a diplomatic strategy that is aimed at keeping our region peaceful and prosperous.
Second, we need to make sure that we have an Australian Defence Force that can answer the call if it is needed.
The calls we make will be diverse - from responding to natural disasters to conducting offensive combat operations - and our forces need to be able to respond to a range of contingencies.
And the truth is our defence has been overstretched for a long time.
The tempo of current operations has too often taken precedence over proper planning for personnel and equipment for the future.
Getting this right will require much work.
And that is what we are doing through the White Paper process.
The Government looks forward to a long-term constructive relationship with the RSL as we build Australia's defence force to meet the demands of the 21st century.