Collins Class Submarine, Peter Reith, Coastguard, Taxation

Radio Interview with Jeremy Cordeaux

Transcript - Radio 5DN - 27 November 2002

CORDEAUX: Good morning.

CREAN: Hi Jeremy how are you?

CORDEAUX: I'm fine. Let's just visit the Collins Class Submarine for a second. Do you think we were sold a pup? Would you, if you'd had your time again in government, sign off on it?

CREAN: Now we're talking about the announcement today about the torpedoes?

CORDEAUX: Well I mean just the whole thing because it has really been a litany of problems and upgrades and weapon software problems and noise and periscope problems and all of that. Where we set about to reinvent the wheel, that maybe we could have bought a hell of a lot cheaper. Now the torpedo thing today, that's just the latest in a long line of expensive modifications and problems?

CREAN: But it's a very interesting one Jeremy because up until July last year there was a tender out and it was progressing satisfactorily. There were three bidders in and the maximum cost for a torpedo that actually fitted was $250 million dollars. Do you know what happened in July last year?

CORDEAUX: What?

CREAN: Peter Reith, the then Defence Minister scraped the tender process. Threw it out and said they'd go for this one torpedo. This has not only blown out in cost, it doesn't fit. Now this is the same Peter Reith that now is involved in consulting, lucrative consulting work for the providers of defence equipment. So I think there are some real questions, Jeremy, as to why Reith threw out the tender process and what was the basis upon which this new, unsatisfactory, costly, ill-fitting alternative developed.

CORDEAUX: So it's going to cost us 200 and something million dollars, then we've got to modify the actual boats so that they can accommodate the torpedos.

CREAN: Which is ridiculous.

CORDEAUX: It is ridiculous.

CREAN: And you're right about the fact that these are the sorts of things that need to be got together right in the beginning, but when you actually change a tender process in the middle you've got to ask yourself why? Reith might be out of the Parliament but the Government has still got to be accountable on this. Because we know of Peter Reith's form on the ‘Kids Overboard', he deliberately lied about it and he's now taken, he's actually signing up his lucrative defence contract while he was still a Minister. It's just totally inappropriate that a minister can walk out of a cabinet and sign up in an industry that he had responsibility for.

CORDEAUX: So there should be a period of time….

CREAN: And I've indicated a twelve month period and yes there is no involvement and the Prime Minister still hasn't adhered to that. But now we see newspaper reports yesterday they want to appoint Peter Reith to the ABC board. This a person that has abused the conflict of interest, he's abused the people's trust and the Government is thinking about putting him on the public broadcaster…

CORDEAUX: Don't you think that's just sort of flying a kite?

CREAN: Well if it's flying a kite it should be a kite that's pulled down pretty quickly. He is not an appropriate person for that board.

CORDEAUX: This conflict of interest that you bring up, surely there should be somebody in Government or in the Public Service that can check, generally, not just specifically in defence, but generally any of these potential or embarrassing conflicts of interest?

CREAN: Absolutely and I've advocated that as an independent person, that it's not left to the Government. If in fact there is a perception of a conflict of interest or there's doubt about it, the independent person has to sign off.

CORDEAUX: Do you think, just go back to my first question, do you think the Collins Class Submarine and they way we approached it all at the time was in the best interest of the taxpayer?

CREAN: I think it certainly was in the interest of the nation that we had a submarine capacity Jeremy, and I think that was agreed by everyone at the time. It's a different argument as to whether the letting of the contracts have been managed well in the taxpayers' interest. It's certainly in their interest for us to be a more secure nation but it's not in their interest to have their money wasted around it. But you see this whole argument as to why we need to be a more secure nation is why I'm announcing today the need for a Coastguard. You know we're the largest island continent in the world and we don't have a maritime policing authority and this Coastguard is what will give us that authority. The ability to patrol our borders and have police interception and enforcement and prosecution powers.

CORDEAUX: So what do we have now?

CREAN: We have the Navy doing it on our behalf but they don't have those powers.

CORDEAUX: Aren't they doing it very well?

CREAN: Well they're not doing it as well as we can do because they are stretched and it's very costly to send out their patrol boats and their frigates. The Patrol boats can't go into the blue water and that's why the types of vessels I'm talking about today need to be bigger. But if you send a frigate out to do this work, Jeremy, there's no landing capacity to intercept the vessels. The people have to jump some ten feet to get into the water and these frigates cost a million dollars a day.

CORDEAUX: Wouldn't we be better off with a fleet of rapid response patrol boast than $10 billion dollars worth of submarines?

CREAN: Well they're two different capacities and at the time in terms of strategic defence, which is still the position, the need for some submarine capacity was essential to our defence. What we're talking about with the Coastguard is not defence but policing authorities. It's a bit like you have the troops to defend the nation but you have a policeman to make your community safe. What we need is a cop on the beat, patrolling our borders and it's not just for the people smugglers Jeremy, it's for the gun runners, the drug smugglers, the illegal fisheries, it's about our security, it's about our jobs.

CORDEAUX: It should be, it makes sense to me. Why couldn't we take the submarines, I don't even know where they all are at the moment but couldn't we use the submarines as a kind of a cop on the beat?

CREAN: No, because submarines are Navy, they're defence, they haven't got the law enforcement capacity that a Coastguard or a policing force need.

CORDEAUX: Surely the critics of what your saying, the critics will be saying we don't need to set up another bureaucracy and where are we going to get the money for these patrol boats?

CREAN: Well we have to find the money and I will be announcing the amount today and it is affordable over the period of time that I'm talking about.

CORDEAUX: You will commit, a Labor Government would commit money to this?

CREAN: Yes, absolutely and that's what I'll be announcing today. But as for the additional authority, lets' just understand it. If you're requiring Navy to do this activity, Navy is not doing their core business. If a frigate is tied up in a very costly exercise, what about the frigates that are needed up in Iraq enforcing the sanctions of defending our borders from any defence attack? That's what we have a Navy and defence forces for. What we've got to deal with though and it's not being dealt with properly, there's no purpose built Coastguard, there's no dedicated policing authority and the people that go out and do this function haven't got the powers and they don't own the boats.

CORDEAUX: Well we've got, I think it is, 35,000 kilometres of coastline which is largely unprotected and I'm not surprised there are illegal handguns on our streets and the streets of particularly places like Sydney are awash with heroin, I'm not surprised, we can't police that coastline without a Coastguard, as you say.

CREAN: Well that is why I'm not only today….and I've talked on your program before about the need for a Coastguard to better protect our borders, I'm committing for one today, committing the boats, the personnel, also tapping into that huge volunteer network that is out there, resourcing them, because they are expected to do it on their own at the moment. They are the eyes and ears for us on our coastline and we need them. And the other thing that I am committing to today, Jeremy, is funding for the improvement to our intelligence gathering network, a new under-the water radar capacity that can actually pick up wooden boats, can actually pick up other movements and can interact if we need to involve the Navy, all of our air surveillance authority, but a much more coordinated role run by a department that is charged with the responsibility. I might also say that I've advocated, Jeremy, is what we need is a Department of Homeland Security. This is something the Americans have just passed into law. If we have got this heightened security in our country, we've got to coordinate it better and therefore this new department will be responsible for this new statutory body, being the Coastguard, and coordinate better the protection of our borders.

CORDEAUX: If, further down the track, this infrastructure that we have here in South Australia to build submarines, the Submarine Corporation, Mike Rann is very keen on trying to bring together all of the Naval ship building places, tasks, companies, infrastructure, bring them all together to the one place here in South Australia, you would have to for a Coastguard manufacture or would you buy patrol boast of one kind or another?

CREAN: No, we would ensure that we built them here.

CORDEAUX: What would you say of Mike Rann's initiative to get such Naval vessels built here in South Australia?

CREAN: Well I think that there will be opportunities for here, for jobs in this, but there will be opportunities in other parts of the country as well. I mean these are significant investments and we should be using the investments not just to protect our borders and make the people more secure, we should be looking for the job opportunities that spin off it as well. And South Australia is well placed, well placed to be part of any contracts that are let.

CORDEAUX: We have 19 million people in Australia and the baby-boomers are retiring or getting ready to retire if they can afford to, so the number of people who are actually contributing through tax will be shrinking. I see a story in the Herald Sun which you may have seen, it talks about our retirement or our aged-care costing us about $5 billion per year from the year 2020 and with the falling birthrate where will the tax-payers come from to support this? Then you've got to look at defence of this country which is going to be an ever increasing cost. What are we going to do to afford all of the things that we need?

CREAN: We have got to prioritise better and we have got to work better with the states. There is too much buck-passing between the state and federal governments, particularly on health and aged care. And this is why a partnership with the states – which I have been advocating for some time now, Jeremy – is the way in which we can get a more efficient use of that money. Of course we have to make these investments in our future, I mean, it is in our interests to make them because people like you and me will need them - not for some immediate time, but no doubt down the track, but certainly our parents do. And I think we do have to make these choices about fundamental rights to health and aged care and dignity in retirement.

CORDEAUX: It's all going to cost, Simon, it's all going to cost. And if we haven't got the money would you, in the federal government with all the states being Labor governments at the moment, would you be tempted to lift the GST? You've got to get the money from somewhere?

CREAN: We certainly will not be touching the GST. The GST is their baby. They want to disown it and pretend it is not a Commonwealth tax. The GST has seen this country pushed to the highest taxing level ever in our history and you have got to ask yourself - what for? Why have we still got the problem with aged care? Why have we still got them with health? Why have we got declines in bulk billing? Because the Government's priorities are wrong and it is not working as it should with the states. I am the only one committed to saying we will work with the states to get a better outcome. This Government is just squandering the opportunities. And we are going to be left with a big problem but we are going to have to face up to it.

CORDEAUX: Simon, good to talk to you.

CREAN: Thanks very much Jeremy.

CORDEAUX: All the best.

ENDS