Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Defence, Senator Faulkner. Is the minister aware of concerns regarding defence expenditure, as outlined in today’s media? What is the government’s approach to curtailing unnecessary defence expenditure?

John Faulkner (NSW, Australian Labor Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Media reports today do highlight concerns about a number of defence contracts and question whether the expenditure was legitimate. I can assure the Senate that the government will examine all those claims fully. Until then I do not think that anyone should jump to the conclusion that the expenditure was unjustified. For example, the hiring of a Leopard tank in Spain is questioned. Yet I am advised that it was the cheapest option to test weight limits on the water craft for the new LHDs. And, as for the question about the hiring of the Learjet, it was in support of critical combat equipment testing.

But, regardless, I do say that defence expenditures do warrant scrutiny and action and I can assure the Senate that this is happening. The government conducted a comprehensive independent audit of defence expenditure, carried out by Mr George Pappas. We launched an ambitious Strategic Reform Program spanning 10 years to deliver $20 billion in direct savings. The SRP covers multiple streams including workforce and shared services, ICT, logistics and non-equipment procurement, and it will instil a much more cost-conscious culture in defence. This is the first year of a 10-year program. I can assure the Senate that we are on track to meet this year’s target and deliver $797 million of savings under the Strategic Reform Program.

Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister outline to the Senate any specific measures that are being taken to address areas of Defence expenditure such as accommodation and travel?

John Faulkner (NSW, Australian Labor Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Most of the expenditures in question already fall under the scope of the SRP. Specifically, they fall within the non-equipment procurement stream, which is targeted to deliver reforms and savings from the wide range of goods and services that are purchased by Defence. This is one of the most complex streams in the SRP covering a wide range of savings. The areas currently targeted include travel, training, hospitality and advertising costs. The stream is set to deliver the second-highest savings target over the next decade, which is about $4 billion. Already this year, Defence is on track to deliver $176 million of savings in this stream, including $64 million in travel, $44.9 million in professional services and $20 million in training— (Time expired)

Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the minister inform the Senate whether the government is taking any other action to review Defence expenditure practices?

John Faulkner (NSW, Australian Labor Party, Vice-President of the Executive Council) Share this | Link to this | Hansard source

Yes, I have asked the Secretary of the Department of Defence, working with the Chief of the Defence Force, firstly, to review all today’s media claims in case they fall outside the SRP and therefore require additional action; secondly, to advise me if any extension should be made to the SRP to capture additional areas of expenditure; thirdly, to ensure Defence has adequate reporting procedures to give senior management the information and the opportunity to intervene in expenditure decisions of this sort; fourthly, to ensure there is appropriate information within Defence to guide decision making; and, finally, to report progress on these issues regularly. Financial control is critical. All of these issues, if not dealt with already, should be and will be examined. (Time expired)