Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Defence Science and Personnel) Share this | Hansard source

I rise today to speak on Appropriation Bill (No. 3) 2009-2010. This bill represents a part of the standard process of the budget cycle; however, this bill combined with Appropriation Bill (No. 4) 2009-2010 seeks appropriations to the value of over $2 billion. In anyone’s language that is a significant amount of extra taxpayer money being sought by the Rudd Labor government—the very same government that has put Australia in tens of billions of dollars worth of national debt.

It is entirely appropriate that any appropriations being sought by a government, particularly any above those already budgeted for, should be examined very carefully. In this case, the amount alone obviously warrants careful examination, but, beyond that, any appropriations sought by the Rudd Labor government require an extra level of examination.

This is a necessity born of the Rudd Labor government’s extremely poor track record in managing Australia’s budget and their complete lack of follow-through on their own intentions to ensure that financial statements are transparent. It was the Rudd Labor government’s intention to increase the transparency of budgetary information under the auspices of Operation Sunlight. It was also their intention to take over public hospitals, it was their intention to end Japanese whaling and it was their intention to single-handedly solve the problem of climate change. As we have all learned, this government has had many intentions, but, after over two years in office, they remain just that: intentions. Intentions without a program of clear and executable actions amount to pipe dreams, and this government has been in cloud-cuckoo land, dreaming, for far too long.

It is now beyond any doubt that this Labor government has no ability to deliver on any of its intentions, promises or policies. For example, the intent of Operation Sunlight was to increase transparency of budgetary estimates and improve the readability of budget papers, yet this latest appropriation bill still smacks of Labor’s light touch in regard to transparency. An increase in transparency could be described in layman’s terms as being like installing a large glass window in a brick wall, thereby allowing the outside world to peer through and see what is on the other side. However, transparency according to the gospel of Prime Minister Rudd and his Labor disciples would be more akin to installing a small cat flap in the highest corner of the wall which can only be as accessed with a ladder and opened with a key. Now, the only key that regularly opens this cat flap is wielded by the freedom of information laws, and even then the Rudd Labor government does its level best to hinder those attempting to gain access to what should be classified as public information. That is hardly what I would describe as transparency in government.

The Rudd Labor government’s interpretation of ‘transparency’ makes it incredibly difficult to analyse exactly what the additional money in this bill will be used for. But, then again, that is how the Rudd Labor government like to operate: if nobody knows where the money is going, then they assume they cannot be held accountable. How wrong they are. This government has shown that it is willing to continue its spending binge and has demonstrated that it has no appreciation for taxpayers’ money. Having highlighted that point, I will now speak on this bill as it relates specifically to the Defence portfolio.

This bill includes an additional $690 million worth of extra funding for the Department of Defence—again, a considerable amount of money in anyone’s terms. Some of this extra funding will be used to account for items that are always subject to changes in their price, and that component of extra funding is therefore unavoidable. These items generally include such things as fluctuations in fuel prices, additional funding for operations and changes in exchange rates, which are all supplemented on a no-win, no-loss basis. However, these are only educated assumptions. There is no actual breakdown of the $690 million provided through this bill. In fact, this bill states that there is $528 million earmarked for ‘the protection and advancement of Australia’s national interests through the provision of military capability and the promotion of security and stability’. A further $108 million is to be used for ‘the advancement of Australia’s strategic interests through the conduct of military operations and other tasks directed by government’. It is plain to see that the level and amount of information substantiating the appropriation of over half a billion dollars of taxpayers’ money is, I am afraid to say, more than just a little light-on; it is downright shameful and a deliberate act of obfuscation.

Even if we were to believe the recent statements by the member for Rankin on this bill, where he casually stated that the additional funding would be recouped in future defence budgets, how could anyone assess the validity of those statements? There are no line items. There is no detail. There are only three extremely broad statements in this bill that give no indication whatsoever as to the use of this money.

It was only with further research that we were able to garner information that revealed that $87.7 million would be used to reimburse Defence for the costs of extending its military presence in Iraq to 30 June 2009. It was only then that we could ascertain that approximately $153 million would be used to meet additional costs arising from movements in the exchange rate, and only then that we could conclude that $29.4 million was to be used to cover overspends on operations. Furthermore, we were able to ascertain that, of the $690 million, almost half, $309 million, would be used to address pressures caused by the graded other ranks pay structure review, superannuation, rental allowances and higher fuel costs. Lastly, $43.4 million would be provided to the Defence Materiel Organisation for operating costs, and a commensurate sum would be taken from the Department of Defence operating budget. None of this detail was contained in the bill.

The government’s assertion that this money would be offset in future years is not credible, and it is simply not acceptable that there is such limited detail in the bill with regard to the appropriation of over half a billion dollars of taxpayers’ money. Finally, it is in complete contrast to the Rudd Labor government’s own intention to introduce more transparent financial information under ‘Operation Sunshine’. This is to be expected of the Rudd Labor government. This is to be expected, as it has a strong track record of obfuscating, hiding, blacking out or otherwise simply not including key financial data. This is the government that released a defence white paper some 144 pages in length while only including 1½ pages of vague budget estimates. This is the government that released a white paper that, along with the defence budget papers, was labelled as ‘the least comprehensive of the past decade’. In fact, the Australian Strategic Policy Institute, ASPI, went as far as to say:

… there is a glaring absence of substantive information on funding, investment and reform.

This is the government that released the Pappas report only because it was requested under freedom of information laws. It must be remembered that the current Minister for Defence has a reputation as being a pro-accountability and pro-disclosure political practitioner, but the strength of the Rudd government’s rhetoric machine seems to drown out all attempts to reveal the truth and stops cold any attempt to gain any access to any information that may be politically damaging.

There is a very simple reason why this government would want to say that it is pro-accountability and pro-transparency: it is what it thinks the public wants to hear, and this government is all about image. I believe the Pappas report—which, for those who are unaware, is an independent audit of the defence budget commissioned by the Rudd Labor government—is a prime example of this government’s failure to embrace its own rhetoric regarding transparency and accountability of government processes. For example, the Pappas report states that, in order to deliver capability set out in the white paper, defence spending requires real annual growth of 4.2 per cent. Yet the Rudd Labor government’s 2009-10 defence budget states that real defence spending will only increase by three per cent annually out to 2018 and by 2.2 per cent from 2017-18 to 2029-30. Simply put, this means that the government cannot afford to purchase all of the capability laid out in the white paper, including its 12 new submarines, which are going to cost at least $100 billion through their life cycle. It is no wonder that this government did not want to release the Pappas review. Its conclusions simply fly in the face of its own policy intentions.

The deliberate act of obfuscation of information is the modus operandi of this government, a government that is all spin and rhetoric and no substance or policy. Perhaps that is why it believes that it can base its future acquisition policy on the central premise that the Department of Defence can find $20 billion worth of savings over the next decade. Never mind that such savings have never before been accomplished by the Department of Defence and never mind that the vast majority of commentators agree that $20 billion of so-called savings is simply an unrealistic target.

The core issue pertains to the fact that there is very little detail from which to assess the strength of this so-called savings program or to assess the strength of the government’s defence policies. As Mark Thomson from ASPI put it, ‘Very little detail is available on the program.’ He went on to say that there is approximately $5.9 billion worth of savings, identified as part of the overall program, which remains unexplained. Again, in simple terms, this means that over a quarter of the government’s quintessential Defence savings program is not budgeted for and that it certainly does not provide an adequate amount of evidence to support its central notion that the savings program is achievable. This translates into a situation whereby we cannot critique the government because we have no benchmark on which to assess the government’s policy; it is a policy vacuum. We simply have to take on faith that this government knows what it is doing—and that, my friends, really is a bridge too far.

The Rudd Labor government’s commitment to defence over the next few years is nothing more than that originally planned and less than the coalition’s guaranteed minimum three per cent annual growth. As I have stated, this government’s defence policy hinges on the premise of savings of $20 billion. Nearly the same amount that was recklessly spent on Rudd’s cash splash can be found internally within the Department of Defence, but it is still required to fund an ambitious acquisition program. The $20 billion savings over 10 years will be difficult for the Defence bureaucrats to find, if not impossible. As Geoffrey Barker from the Australian Financial Review stated after the release of the white paper in 2009:

This year’s Defence budget has retreated from transparency, accountability and reality with the speed of an Iraqi regiment fleeing into the desert. But here is the rub … nor is it possible to know how Defence will find $20 billion in savings over the decade through the strategic reform program. It was particularly galling given that last year’s Defence Portfolio Budget Statement promised that the White Paper would ‘include the fully costed Defence capability of the future and fully costed support functions informed by a long term cost model’. It didn’t—and neither has the budget.

There you go. What is outstanding about the latest defence budget is that there is not one new dollar being spent. The budget papers state against almost every new initiative:

The cost of this measure will be met from within the existing resourcing of the Department of Defence.

If that is true, why is the government asking for more money through this appropriation bill? Why does it feel so insecure about this bill that it has failed to identify exactly what this additional funding will be used for? Perhaps more worrying is that the government is asking for over half a billion dollars more than that approved in the most recent budget, which has been described as lacking in substantive detail and costings.

There is a widely held belief in academia, and even within the Department of Defence, that there has been a complete lack of transparency with regard to defence funding now and into the forward estimates. In the 2009-10 budget, there is a commitment to increase real defence spending by a maximum of three per cent annually to 2018 and by 2.2 per cent from 2017-18 to 2029-30. However, if you read a little more closely, you notice that the numbers are not what they seem. Defence’s total funding of $26.6 billion in 2009-10 shows an increase of 14.9 per cent, largely because of the $1.4 billion commitment to support our forces in Afghanistan. However, the increase in 2010-11 is only 1.45 per cent, to $27.028 billion. After that, the funding level falls even further: to $27.001 billion in 2011-12 and to $26.337 billion in 2012-13.

No wonder the government is using this bill to ask for more money; it never had enough to begin with. It never had enough to deliver on its promises contained in the 2009 white paper. This is a government that does not care what costs it incurs. It does not even care where the money comes from. All it cares about is looking good in front of the camera.

I wish to briefly outline now one further example of this government’s failure to be honest with the Australian public. I am referring to this government’s shadowy policy on Defence Force base closures. Within the Pappas report a total of 12 pages were dedicated to the topic of, as the government likes to call it, base rationalisation. Of these 12 pages, the vast majority of this information was simply blacked out purely for political reasons. This government is deliberately obfuscating this information in order to delay a politically tough decision so that it can protect marginal Labor seats. Quite simply, if this government was as serious about achieving savings in defence as it likes to think it is, then why weren’t the blacked-out recommendations in the Pappas review adopted? Instead, yet another review was commissioned—one that conveniently will report just after the next federal election. So much for transparency and accountability. Instead, this government has demonstrated that it is more than willing to put its own interests ahead of those of the community. More than that, it has demonstrated that it is willing to engage in the deliberate obfuscation of any information that may harm its members’ chances of being re-elected. In reality, if this Rudd Labor government was serious about ruling out base closures, it would not be conducting yet another review. If it was serious about saving money, it would get its hands dirty and implement its base rationalisation strategy. Instead, it has done neither; it has just postponed a tough decision via the implementation of yet another review.

This bill again reflects the Rudd Labor government’s addiction to debt. It has run out of money and it is asking for more. This is one of the most common tenets of the Rudd Labor government. The other, as I have talked about today, is that it deliberately obfuscates any information that seems to be politically sensitive regardless of the public’s right to have access to that information.

At a time when Australia’s defence forces are being asked to do more heavy lifting both regionally and globally, this Rudd Labor government is stripping $20 billion from their budget. They will tell you that it has been taken from corporate overheads and that it will not affect our frontline troops. Well, that simply is not true. It is already having an effect on our troops, on our reserves most noticeably, as they too are being asked to do more with fewer and fewer resources. They are even running out of ammunition, thanks to this government’s reckless spending policies. In typical smoke and mirrors style that we have become accustomed to with the Rudd Labor government, there is no real detail as to how Defence will secure the savings it has been asked to find, and that is simply unacceptable. What is worse is that this government is hell-bent on making sure that no-one can ever access its policy and it has a deliberate motive to hide, black out and otherwise obfuscate information critical to the natural mechanisms of a healthy democracy. This is a government that talks the talk but refuses to walk the walk. It is a government full of spin with no substance and a government that refuses to make the hard and tough decisions.

See this speech in context