Brendan Nelson (Bradfield, Liberal Party, Minister for Defence) Share this | Hansard source

By definition, the non-farm GDP deflator takes into account general price movements in the non-farm sector—and over the last three years defence has done very well from it. If you take the forecasts out to 2011, we can expect some reductions in non-farm GDP deflator. In addition to that of course there is the three per cent increase in funding which the government has budgeted out to 2016. In simple terms, yes, by definition of the fact that the non-farm sector is catered for by the deflator, we have added into that an additional three per cent. In this budget we also budgeted for logistics, which, including what was done in the previous budget, takes us out to $4 billion for logistics—there is $1.8 billion additional in this budget. I do recognise that that additional funding for net personnel and operating costs will need to be dealt with before 2010. I also acknowledge in the context of the question that some of the through-life support and costs of maintaining defence will be in some cases below the three per cent. In other case, it will be above it. But, given all of the reasonable forecasts that we have got, yes, we do believe that it is adequate.

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