Sky News – 4 March, 2015

DAVID SPEERS: Kevin Andrews, thank you for your time.

KEVIN ANDREWS: Thank you, David.

DAVID SPEERS: The original pay offer of 1.5 per cent has now been increased to two per cent. Was the original decision below inflation a mistake in hindsight?

KEVIN ANDREWS: The Government at the time had to try and balance the difficult fiscal and economic situation it was in, whilst at the same time providing an appropriate pay  rise for Defence. Since I’ve been in the job for a couple of months, I’ve been looking at it, along with the assistant minister Stuart Robert. I’ve been talking to a lot of my backbench colleagues, particularly those who have constituencies with large numbers of military personnel. And we came to the decision that we could extend it to two per cent, which is slightly above inflation. I think that reflects a special compact between the military in Australia and the broader community. We ask them to do very significant things on our behalf; on behalf of the nation, and this is an appropriate reflection of that.

DAVID SPEERS: I mean, the economic and fiscal pressures you refer to haven’t changed much. If anything, they’ve worsened. So again, was it a mistake originally to offer the paltry – the more paltry 1.5 per cent payout?

KEVIN ANDREWS: Look, these are always matters of balance. This is not a science. It’s a matter of trying to apply what we think is appropriate. But my strong view is that there is a special compact between the Australian people and the military.

DAVID SPEERS: And that wasn’t there before?

KEVIN ANDREWS: Well, I came into this job – many of my back bench colleagues, Ewen Jones in Townsville, Natasha Griggs in Darwin. People right around the country; Andrew Nikolic, Linda Reynolds, people who had very senior roles in the military. I’ve talked to them about it over the last couple of months.

DAVID SPEERS: Presumably the Prime Minister has been talking to them as well.

KEVIN ANDREWS: Yes, we’ve all been talking about it. And gradually we came to a position that we, A, could afford to this, and B that we should do it. It’s the right thing.

DAVID SPEERS: It’s going to cost $200 million over the forward estimates. That will come, as I understand, from within Defence, specifically where?

KEVIN ANDREWS: Well, we have underway the first principals review. Which is a fancy name for looking at the structure of the Defence. And I’ve got the report from that and it’ll be going to the National Security Committee soon. And that will lead to efficiencies in Defence. So we can find the money.

DAVID SPEERS: All right, and we will be told at some point where that’ll come from?

KEVIN ANDREWS: It’ll be part of the overall efficiencies; I presume there’ll be more details in this year’s Budget.

DAVID SPEERS: Has this whole pay issue, this whole episode damaged – do you think, the Government’s standing in the Defence community?

KEVIN ANDREWS: No. I don’t. I believe that the Defence community understands the Government’s situation. They, like all Australians, know that we’ve got huge debt and deficit. And we can’t do everything that we might want to do. But again I think this is the right thing to do for the military.

DAVID SPEERS: Can I ask you about the announcement yesterday of sending up to 300 troops to Iraq as part of a new deployment – what exactly are they going to be doing? Training the regular forces in Iraq – will that mean that they stay within the base that they’re going to be at, north of Baghdad? Do they go outside the wire? What exactly is the mission – or the rules of engagement there?

KEVIN ANDREWS: They will stay in the base. This is a very large base. It’s about six kilometres by seven. So it’s a half marathon to run around, it’s a very large area. There’ll be – there’s Americans there, about 500 Americans as well. And essentially what they’ll be doing is training the officers of the Iraqi military.

DAVID SPEERS: Right.

KEVIN ANDREWS: It’s not basic training like you might get at Kapooka if you went into the army in Australia. It’s about how we can ensure that there’s a proper command and control structure; that you’ve got an Iraqi army that can work out how to put missions in place, to deploy their troops – all of those things which are the higher level training which our people will be giving.

DAVID SPEERS: And how much trust do you have in those officers, in the Iraqi military, because it was only in December – a few months ago that the Iraqi Prime Minister stopped millions of dollars being paid out to so-called phantom soldiers that didn’t really exist. It’s been well-documented, the corruption problems in the Iraqi military. How much faith do you have?

KEVIN ANDREWS: Well, we’ve been working through the advise and assist mission with the counter-terrorism forces, who are the elite, if you like, of the Iranian – the Iraqi military. With the regular forces, we do have trust in them. This is not a mission without risk though – we know that. We are sending in a very significant force protection element as part of this. So we know there are risks there and we’re trying to address them. But we believe that this is the appropriate thing to do, because ultimately if Daesh is going to be defeated, it’ll have to be on the ground by the Iraqis.

DAVID SPEERS: But again, I mean, force protection’s important. What about the problems with corruption in the Iraqi military? There’s limits to what we can do about that, but ultimately this is about the structural integrity of the whole [indistinct].

KEVIN ANDREWS: And that’s something I believe the Iraqi Government is addressing, as you alluded to in your question. There are certain things we can control and certain things we can’t. We’ve looked at this very carefully, I’ve just come back from the Joint Operations headquarters where we’ve been given an update, a briefing on the Taji base – and all the aspects of that. So we will maintain that sort of intelligence as to what’s happening, to ensure as best we can that the forces that go in will be able to be useful. We think this is a useful contribution, we think it’s proportionate, but it’s not open ended. We will review it to ensure that we’re achieving the outcomes we want.

DAVID SPEERS: Finally – just on submarines, I wanted to ask you a back-to-basics question. What do you actually want from our next fleet of submarines?

KEVIN ANDREWS: Well, we need submarines that are going to have the capability to serve the nation in 15, 20, up to 40 years’ time.

DAVID SPEERS: Doing what, though?

KEVIN ANDREWS: Well, they do a range of things. They are the first-line deterrents. They have a very significant part in terms of intelligence gathering. We know that in 20 years’ time, probably half the submarines in the world will be in our region. So these are very significant military assets that we must have and we must have the best.

DAVID SPEERS: So they’ve got to be able to patrol long range, gather intelligence as well as be the front line defence for Australia.

KEVIN ANDREWS: Yes, they’re very much the front line deterrents for this nation.

DAVID SPEERS: Now, why have you excluded the Swiss from –

KEVIN ANDREWS: Sorry, the Swedes.

DAVID SPEERS: The Swedes. Yes.

KEVIN ANDREWS: I’m sure the Swiss would build submarines David.

DAVID SPEERS: The Swedes – the Saab from being part of this process.

KEVIN ANDREWS: Because the Swedes haven’t built a submarine since 1996. They recently were involved in the refurbishment of, I think, six submarines from Singapore.   But Singapore are now buying new submarines, and they’re buying them from the Germans. Our assessment has consistently been that the Swedish submarine industry, while starting again, is simply not up to the standard that the Japanese, the Germans and the French have at the moment.

DAVID SPEERS: All right. Defence Minister Kevin Andrews, we’ll have to leave it there, thank you very much for joining us.

KEVIN ANDREWS: Thanks David.