Joel Fitzgibbon (Hunter, Australian Labor Party, Minister for Defence) Share this | Hansard source

The first, of course, was to ensure that Defence, in the short term, had sufficient funding to undertake its tasks at a level appropriate to do that job effectively—as efficiently and as safely as possible. The second was to put the defence budget back on a sustainable footing. Not only did the new government inherit a serious inflationary situation in the economy, we also inherited a dysfunctional defence budget full of black holes. Let me give you a couple of examples. There are the so-called net personnel and operating costs—these are the sustainment costs of keeping our defence capability going. There was a shortfall of up to $7 billion over the course of the next 10 years, a shortfall the new government has to fill. Second, there is the enhanced land force—this is the two new battalions being raised. There was up to a $700 million shortfall in the funding of that project. Again, the new government has to fill this hole.

Do you think the now Leader of the Opposition when he was defence minister allocated funding for the overdue pay rises for our troops? No, he did not. There was an $800 million shortfall over the forward estimates. In addition to that, we now have to find the money for failed capability—just take the Seasprite helicopters, for example. Not only did the former government flush a billion dollars or more down the drain; the new government now has to find the money necessary to replace that capability.

There is no doubt that we met the first objective—that is, the continuity in funding. In the coming fiscal year, we will spend a record amount of money on defence, up seven per cent on what will be spent in the 2007-08 year. On the second objective—that is, putting the budget back on a sustainable footing—we have substantially laid a very solid foundation. Prior to the election, we said that we would grow the defence budget by three per cent annually out to the year 2016. On Tuesday night we announced that we would grow the defence budget by, on average, four per cent annually right out to the year 2018. This lift in funding means more money for defence, but the additional two years means that we can now plan for capability and force structure on a decade-long basis. We will have the confidence to be able to do so as a result of these new initiatives.

Properly financing our defence needs is not just about stumping up the cash; it also requires a lot of hard work. It means ensuring that Defence is an efficient organisation and that every dollar spent is a dollar spent well and efficiently. It means showing leadership and having the courage to take the tough decisions necessary to ensure scarce money is not being squandered in layers of bureaucracy. It means stopping the waste and mismanagement which has become so synonymous with defence procurement in this country.

In addition to the white paper, the government has commissioned nine companion reviews which collectively will reassess the way we do things right across the non-military side of the Defence organisation including issues like management structures and information technology. The new government is putting in place a plan to ensure that, over the course of the next decade, defence not only gets the money it needs but also that every dollar stretches further and taxpayers get value for money. The work on that plan commenced last December and it received a big boost in Tuesday night’s budget.

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