Defence Spending, Airline Insurance, Ansett Airlines

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September 25, 2001

Defence Spending, Airline Insurance, Ansett Airlines






Jewish Community Solidarity Rally

Caulfield Park, Melbourne

Sunday, 23 September 2001

11.40 am

SUBJECTS: Defence Spending, Airline Insurance, Ansett Airlines


Ill start on Australias involvement in the US, how were going to fund our

defence involvement. I mean, how are you envisaging that we do that?


Well the Australian Government has made it clear that under the ANZUS Alliance

an attack on the United States is considered an attack on Australia. And we

have the obligation to come to mutual defence. The Australian Government has

made it clear that it will be responding to American requests for assistance

when they are made. And that will be part of an international response to terrorism

and our defence forces stand ready to meet that challenge and they will make

a contribution along with all of the nations of the world that want to take

a strong stand against terrorism.


I imagine though it would be quite costly, Im just wondering how we are looking

at paying for it?


Well we maintain a very large defence force out of our Budget – billions and

billions of dollars. Theyre highly trained and skilled. And theyre highly

trained and skilled for the circumstances like this.


Would you look at a levy like we did with Timor?


We already have a defence Budget which fully funds the Australian Defence Forces.

It fully funds the way in which theyre trained and deployed for acts of war,

acts of terrorism. Thats why we have a defence force.


So you rule out any kind of levy to fund it?


Well weve funded the Australian Defence Force. We funded it in last years

Budget, as part of a White Paper. We in fact indicated that wed be building

up our defence forces and its proven I think to be a very good decision that

we indicated last year as part of our White Paper that we would be building

Australias defence forces. We allocated additional funds over a 10 year period

in this Budget. And as part of the White Paper defence, the Australian Defence

Force has been built up to a level which is required but its a level which

will be significantly in excess of previous force capacity.


Will there be additional funding made for airline security in the Budget?


Look there are two issues in relation to airline security. The first is of

course airline security itself, and this is a matter for airlines and we are

discussing it with the airlines as a Government. But in addition to that there

is the question of insurance. International aviation underwriters have indicated

that they are going to limit under their insurance policies their liability

where airlines are involved in crashes or damage to third party or property

like you saw in the World Trade Centre. This will require a co-ordinated international

response. The Australian Government has been asked to help in relation to its

own airlines. We have indicated that we will be making available assistance

to keep those airlines in the sky but I would make it clear that I think there

is going to have to be a co-ordinated global response in relation to this.

Especially in relation to limiting liability.


Mr Costello, you say that our defence force is fully funded and will increase

over the next 10 years or so but in light of the extraordinary events of September

11, and us invoking the ANZUS Treaty might more funds be made available if



The Australian Defence Force is fully funded in relation to its strike capabilities,

with a build-up which was agreed last year and funded in this years Budget.

So we have now put in place a capacity to rebuild our defence forces. We anticipated

in the wake of East Timor that there would be more demands on the Australian

defence forces. We had a White Paper. We decided to increase funding over a

10 year period. We funded it in this years Budget. We have the capacity to

build it up. We have the capacity to deliver it. It was a decision that we

thought would become necessary and unfortunately I think the events have proven

we were right. Nobody would want these kind of events but when you are building

defence forces youve got to be prepared for all eventualities including, we

will find ourselves involved in the international fight against terrorism and

the Australian troops I believe will deploy themselves in the capacity in which

they are asked to with great distinction.


Mr Costello, just on Ansett, are you glad to see Qantas will have 10 of the

planes up in the air on Tuesday?


I think its a good thing to get those planes up in the air. The Government

wants to make sure that, first of all regional centres are properly serviced

and we are now getting good coverage in relation to regional centres, nearly

all of them. Secondly that we restore capacity on major trunk routes. Qantas

is now making sure that its got additional capacity through bringing planes

back, through also leasing of Ansett planes. And thirdly with new entrants

that may be putting together bids to try and resume some of those Ansett services.

Thats a matter for the Administrator. But we would welcome any moves to get

those trunk routes up and going as soon as possible.


Do you think that the regional airlines, quite a few of them are flying now,

its a good sign and that we might be on our way out of this mess?


Well weve now got full, we are working towards full coverage in relation to

regional routes. Weve now got good coverage. The Government stands ready,

willing and able to encourage full coverage. Well take the steps that can

help that occur.

Thanks very much.