Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

Yes. So there are a range of terms of reference he is seeking in relation to defence procurement. Obviously, we are willing to work through those constructively with Senator Xenophon. He has raised that and we will have that discussion with him, and I just wanted to make sure I put that on the record.

The second point is in relation to the Australian Government Actuary. On 24 May there was a letter from the Australian Government Actuary which sets out the response to the coalition's dissenting report on this bill, which I think is important reading because it demonstrates the falsity of some of the assertions that Senator Ronaldson is making today and that were made in the dissenting coalition senators report. There were three aspects of the coalition's report that the Australian Government Actuary disagreed with. The first was, and I quote:

The dissenting report claimed that the departments of Defence and Finance and Deregulation reached different conclusions based on AGA advice. I can confirm that the statements made by both departments are correct and that they are not inconsistent.

Second, on the use of fiscal balance figures—and I am quoting from the Aust­ralian Government Actuary here:

The dissenting report misrepresented our advice in relation to the use of fiscal balance and cash expenditure figures by selectively quoting text out of context. We specifically stated that in the context of the current costings the short-term fiscal balance costs probably are not unreasonable when used in a decision-making context.

Third, and I quote again:

The dissenting report suggested that the AGA's position was that cash expenditure figures are the most appropriate basis on which to cost this bill. This is diametrically opposed—

diametrically opposed—

to the Australian Government Actuary's actual advice, which made it clear that we believed the best measure of the underlying costs to the Commonwealth was the increase in the unfunded liability together with the increase in the notional employer contribution rate.

So, leaving all of the technicalities aside, essentially the Australian Government Actuary are refuting three propositions that were made in the dissenting report by coalition senators. They are also saying that the government should be looking at fiscal balance and unfunded liabilities. I again remind the Senate that the fiscal cost of the bill is $1.7 billion over four years and the unfunded liability increase is $6.2 billion.

The fact that the coalition does not have a funding stream for this is demonstrated by the amendment we have not got to, which is amendment (4). That is the amendment seeking to get around the issue of this not being allowed to be a money bill, which requires the parliament to appropriate money for this purpose. You do not have savings for this. You did not do it in government, and nothing Senator Humphries or Senator Ronaldson have said today explains that to the 30,000 people you keep speaking about. You had 11 years in government, with far higher increases in revenue than this government is experiencing, and you never, ever chose to put in place this change. You did not properly fund it in the election campaign and you are not properly funding it now. That really goes to the heart of the reality of your position in this debate. You have not done what would be required, were you serious about funding this bill. Again I say I look forward to seeing whether your election policy actually funds this, because it would be contrary to all of your form to date. Maybe, when you stand up in this place and talk about this, people will have regard to your form, not to what you say you are going to do. I would also make this point, because there was some discussion about Defence expenditure. I am not sure if it is being pressed but this is in response to some assertion that we do not have sufficient regard to the importance of military service and to those serving. I would remind those opposite that, in addition to the obvious ongoing costs of operations, in the 2010-11 budget this government funded in excess of $1 billion for additional force protection measures and, in the 2011-12 budget, an additional $252 million for the C17 Globemaster and $177 million for the Bay Class vessel to extend our amphibious capability. We spend over $20 billion per annum.