Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

A letter has been received from Senator Fifield:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The Gillard Government's undermining of the defence budget affecting the capability of the Australian Defence Force.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

David Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

I want to deal with a very important issue in terms of Australia's national security that has evolved—particularly over the last three years but more broadly over the last four—since Labor was elected to government in 2007.

Labor has cut $25 billion from the Defence budget since the Defence white paper of May 2009. In the latest budget cut they cut spending by 10.5 per cent, reducing the share of GDP spent on defence to 1.56 per cent. That is the lowest level in 74 years. Next year, 2013-14, will see that share of the vote for defence go to 1.49 per cent. That is the lowest share of the national budget since 1937. This government is taking us back more than 70 years in defence funding. In 2009 the Labor Party boldly put forward a plan of three per cent real growth, indexed at 2.5 per cent out to 2017-18 and at 2.2 per cent thereafter to 2030. They also put forward a strategic reform program and a very bold defence capability plan. Not for one second has this government funded that plan. They put on the table a very significant plan for Australia's national security and defence funding—a plan which the opposition supported. Then we see, four days prior to this year's May budget, the Minister for Defence announcing a $5.5 billion cut from the Defence budget into the forward estimates. Coupled with these cuts, deferrals and delays, there has been a total of $25 billion taken out of Defence since the release of the 2009 white paper. The minister seeks to insult our intelligence by telling us that this will have no effect on front-line capability. We have young men and women in forward operating bases in Tarin Kot, Al Minhad, Kandahar and Kabul who are fighting the war against terrorism for all of us. It is an insult to our intelligence to think that budget cuts of these magnitudes will not affect their training and their equipment—and their training with new combat equipment. This is delusional.

I want to draw the Senate's attention to the words of Dr Mark Thomson, a very esteemed and respected commentator from the Australian Strategic Policy Institute. In the latest budget analysis he said:

The plans set out in 2009 are in disarray; investment is badly stalled, and the defence budget is an unsustainable mess.

That is what the defence minister has delivered to Australia: an unsustainable mess in defence funding. So inept are this minister and this government that they actually returned to general revenue $1.5 billion they were unable to spend last year. This is a scandal.

This week we have seen a further incident. A very highly respected, esteemed and experienced man was transferred from his post as Secretary of the Department of Defence—a man laden with corporate knowledge, former Major General Duncan Lewis, the former Special Operations Commander and Australia's National Security Adviser. This very esteemed, knowledgeable secretary had a five-year contract. One year into that contract he was taken from Defence and moved sideways. This is a significant negative event for Defence on top of these budget cuts. Why did this happen? What is it all about? Looking back through what has gone before in recent weeks, I see that former Major General Lewis told an ASPI dinner recently:

As things stand I don’t think we are structured or postured appropriately to meet our likely strategic circumstances in future.

He then went on to say:

We have come a long way since Mr Tange harangued the services in 1973, but if we don’t go further—much further—we run the risk of becoming irrelevant.

These are not words this minister could possibly wish to hear.

Can I say that one of the reasons why the opposition is so concerned about Defence funding is that this government's budget plans for a surplus—a notional surplus; a mythical, Walt Disney surplus—are in complete and utter disarray? They are founded upon a carbon tax that this government has decided not to go forward with in the technical sense that it was designed. This budget surplus is founded upon a mining tax that has had the guts cut out of it by the states increasing their royalties and by declining coal and iron ore prices. This has left the government with nowhere to go and a massive black hole in financing.

What really worries me is that the next round—the midyear financial economic statements—is going to take further money from the Defence portfolio. This minister and this government treat Defence as nothing more or less than an ATM. When they ring up the numbers on their calculator and they do not come in as they would like, they reach into Defence and pull out billions of dollars. This must have—logically and with common sense—a very significant impact and effect.

Can I very briefly talk about Navy? We have recently had two very damning and significant reports. The Rizzo report says that in terms of engineering all of our Navy ships are in a very poor state of repair. Then we have Mr Coles telling us about submarines. Both reports detail gross technical and cultural failures. I pause to say that Mr Coles's second instalment is due as of now. I have it on reasonable authority that his second report is so damning and so condemning of the administration of this government and this minister that it will be restricted. The report will not be released for public consumption.

The minister himself has been critical of Defence when he found he had no amphibious capability in the face of Cyclone Yasi in Queensland in 2011. We have seen vessels that have fallen into complete disrepair and which have had to be cashiered long before they were expected to be:Manoora and Kanimbla, two of our most significant amphibious assault ships. They are tied up in Sydney and are to be put down, if you like. The Choules was purchased at great expense—$100 million. The first time we took it out of the Heads in Sydney we burned out a transformer and it is out of action for six months.

Can I tell you that Success is in urgent need of being replaced? We have spent approximately $100 million on Success and it will not go sailing ever again. It has instability problems and the whole of the second skinning of it has been a failure. It is everything that you look at in terms of Navy's management: I think we really only have three surface capital ships that do not have some form of major engineering or mechanical fault. And what is the minister doing about all of this? While there is massive investment in the maritime on the North-West shelf of Western Australia, we are a trading nation. What is this government doing? What is this minister doing? Nothing more or less than cutting the Defence budget.

We have had 25,000 people coming to our shores in unauthorised fashion this year, and this government cuts Defence— (Time expired)

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Just at the start of my contribution to this matter of public importance, I rise to say to the coalition opposite me that this afternoon's debate really is a facade. It is on because there are members of the Defence Force in this building as part of the Parliamentary Defence Program.

In fact, if the opposition were really serious about having a debate about Defence they would not have struggled to get their five members on their feet to support this. If I go to section 75 of the standing orders, it says:

… in order to proceed the proposal must be supported by 4 senators, not including the proposer, rising in their places.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Mr Deputy President, I rise on a point of order. I know that latitude is given on these debates on the issue of relevance, but I would submit to you that, given that the Senate standing orders requirement has been satisfied, and it is not suggested that it has not been satisfied; and given that we are now embarked on this debate, it is necessary, in order to be relevant—even in the most extended understanding of that term—for the senator to address the topic before the chair.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I will remind Senator Crossin of the debate, even though the context of the standing orders relates to the debate. But I draw her attention to the debate at hand.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy President, they have been caught out, flapping around like a fish out of water. This is what happened: they decided today that they would put up an MPI about Defence and the budget. But what happened? Senator Johnston proposes it and gets to his feet. That is all fine. And their whip, Senator Kroger, gets to her feet. That is all fine. And the manager of the opposition, Senator Fifield, gets to his feet. That is all fine. But Senator Back and Senator Ruston get to their feet and they are not in their places. The standing orders specifically say:

… supported by 4 senators … rising in their places

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Mr Deputy President, I rise on a point of order. Your indication to the Senator is now being openly defied.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I know that we can link Senator Crossin's comments back to the debate because she is referencing the debate in relation to the standing orders that govern the debate. But, Senator Crossin, in the spirit of the debate I would ask that you address the matter concerning the debate.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

That is right, and we are talking about an MPI that relates to Defence and the budget.

Finally, when you in the chair, Mr Deputy President, suggest that perhaps the matter was supported, Senator Boyce jumps to her feet because she realises that she needs to be the fifth person.

The point I am getting at here is that if the opposition were really serious about what is happening in Defence and the state of the defence budget they would be all lined up, sitting in their places and ready to jump up like a jack-in-the-box to prove they are serious about a debate on defence. They would not be scratching around like a crow looking for a worm, trying to find at least five of their members who could support this MPI. It was not the case that they were all lined up; they had to scratch around to find five. Occasionally when you look you think it is supported because there are a whole lot of people standing up, but in fact they were not in their right places. They do not know what to do and they do not have a strategy.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Mr Deputy President, on a point of order, seriously: the senator is now a quarter of the way through her time and has not addressed the topic at all. Her colleague Senator Mark Bishop, who does know something about defence, has come into the chamber and is visibly embarrassed by Senator Crossin. I ask you to insist that Senator Crossin address the topic of the MPI.

Jacinta Collins (Victoria, Australian Labor Party, Parliamentary Secretary for School Education and Workplace Relations) Share this | Link to this | Hansard source

Mr Deputy President, on the point of order: the senator is addressing the topic. In reflecting on the level of support in this chamber from Senator Johnston's colleagues she is directly relevant to the topic. Senator Brandis is making much of nothing, for the third time.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Crossin, I indicated earlier that you are technically correct by referring to the standing orders that govern the debate, but the spirit of this particular aspect has been that we discuss the matters and the subject topic before the chamber. I would ask that senators undertake that spirit of the discussion in relation to this matter of public importance. Also, Senator Crossin, you need to be careful not to reflect on the chair. I called that in order as the matter was proposed. You have the call.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy President, and you are right, you did call it in order after a few minutes of grappling around trying to find five people who were going to support it. And Senator Brandis, if I have significantly got up your nose and upset you, I am really pleased about that. Perhaps what I could do again is highlight to the people who might be listening on broadcast that there is not sufficient support across the other side of this chamber for a decent debate on defence.

If we are going to put a discussion about the defence budget in perspective, in 2009-10 the Labor government, for the first time, budgeted over $100 billion for defence across the forward estimates. That was the first time that had been done, and it took a Labor government to do that. In this 2012-13 budget the government has budgeted $103.3 billion for defence across the four-year forward estimates period. This level of funding will maintain Australia's status in the top 15 nations in terms of world defence expenditure, along with Canada either 13th or 14th on that list.

The global fiscal environment has affected the funding that many governments are devoting to defence. Countries such as the United States, Canada and the United Kingdom have all recently announced reductions to their defence spending. On a per capita basis, Australia continues to be second on the list of military expenditure in the G7 countries. Senator Brandis, put that figure your head as you walk out: we are second on the list of military expenditure by G7 countries. In real dollar terms, we spend a far greater amount than any of our regional neighbours.

As part of the 2012-13 budget, there has also been a significant reprioritisation of $2.9 billion to ensure that funding is directed to high-priority areas including a range of new—that is new—cost pressures across the portfolio, including the following priority areas for investment. So let us have a look at exactly what they are: $700 million additional investment in Collins class submarine sustainment; $550 million for information technology remediation activities across Defence; $400 million for improved housing for Australian Defence Force personnel; $330 million for relocation of defence units from Moorebank to Holsworthy to allow development of the intermodal transport hub; $270 million in additional funding for Navy fleet sustainment; $220 million for investment in maintenance and upgrade of the defence estate; $160 million for fringe benefits tax liabilities; $150 million for enhanced garrison support services; and, finally, $70 million for further investment in international engagement under the Defence Cooperation Program. These are some of the areas that we have had to resource. We have had to look at the defence budget recommendations to work out how we meet these and to ensure we have minimum impact on the delivery of core defence capabilities. We are doing this.

But what does the budget review actually mean for our troops? As a senator for the Northern Territory and living in Darwin, I know that we have had thousands of members of the defence forces who have been on operations for our country in recent years. The 1st Brigade is once again preparing some of these troops for operations in Afghanistan, and I want to use this opportunity put on the record my strong and unwavering commitment to our troops in Afghanistan. The protection of our forces over there is, and has always been, our highest priority. Our government has committed to force protection initiatives worth $1.6 billion following the Force Protection Review initiated by former defence minister Senator Faulkner. The improvements delivered so far include new lighter body armour, upgraded combat helmets, longer range machine guns and upgraded Bushmaster vehicles.

As many of you would know, the insurgents in Uruzgan province use IEDs, improvised explosive devices, to hit our troops and our troops were suffering from some of the heavy injuries they sustained, including loss of limbs and in some cases loss of life. So, on 12 December last year, the Minister for Defence, Minister Smith, and the Minister for Defence Materiel, Minister Clare, announced the purchase of four route clearance systems that will be used by Australian Army engineers to detect and clear explosive hazards, creating a safer pathway for troops as they patrol Uruzgan province.

At that time our ministers also announced that we will upgrade around 200 Bushmaster vehicles to provide troops with an even higher level of protection against IEDs. The upgrades are occurring and include energy-absorbing seats and stronger welding to reduce further the probability of lower limb and spinal injury occurring from an explosion.

Bushmasters have saved Australian lives in Afghanistan. The vehicles have proven to be very effective, providing Australian troops with mobility and protection, particularly against these damaging IEDs. I recently represented my colleague Minister Warren Snowdon at the Australian Industry and Defence Network-Northern Territory gala awards dinner in Darwin and I had the privilege of having a look at the static display of the Bushmaster and other hardened vehicles that were there with, of course, their professional and knowledgeable crews from the Australian Defence Force on hand to guide us through this new upgrade. I had a look in a Bushmaster. It was quite impressive as to the reinforcements, the length and now the capability of this vehicle.

On 12 July this year, Minister Smith and Minister Clare announced the proposed acquisition of a further 214 Bushmaster Protected Mobility Vehicles for the ADF. This announcement is in addition to the purchase of 101 Bushmasters announced by the government in May last year. So we are listening. We have reversed recommended budget measures in relation to airfares for single people. We have a defence community that deserves the best support, a defence community that will, as we know, ensure that our country is posturing efficiently, effectively and intelligently into the future. This government recognises this by the way in which we fund our Defence Force, by the way in which we support our groups on the ground out in the field in Afghanistan. As I said at the beginning of my speech, this is a government that has, for the first time in many years, provided an increase in this budget over the forward estimates. (Time expired)

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I am glad that the coalition have brought forward this MPI motion this afternoon. I think that much too often this hour is a total waste of oxygen and I tend to avoid it, but this particular subject does deserve further scrutiny. I listened carefully to Senator Johnston's remarks and I found myself in agreement with some of them, particularly where he refers to the direction taken by the 2009 Defence white paper but then the decisions taken subsequently to avoid grappling with some of the priorities that it set out. I think in essence what we have done is set the Australian Defence Force and the Defence Materiel Organisation an impossible task. I was hoping for a contribution from Senator Crossin that would maybe take us back to first principles. Maybe Senator Bishop or Senator Feeney, who do know a fair bit about this area, can help answer some of the questions that I am going to put this afternoon about why we write white papers in the first place and even go back to first principles as to why we maintain the degree of defence spending that we do. Minister Smith put forward, at an Australian Strategic Policy Institute event, fairly recently the standard, which I think would be acceptable and understood by most Australians as to their expectation, that the purpose and the reason why we do this is for 'the defence of Australia against a direct armed attack'. However, the 2009 white paper significantly confuses this. The traditional and most clearly understood explanation of the reason that we maintain the defence forces that we do is for 'the defence of Australia against a direct armed attack'. Actually it is not the direct experience of the deployments in the post-war era, which are obviously a very significant marker and a way to define the period. That is not at all what the Australian Defence Force has been doing. I want to quote an article by Hugh White in the September issue of The Monthly. He is somebody who does an enormous amount of thinking about these issues. He says:

… few people in government or Defence think that Australia faces any credible risk of major military attack, and fewer still believe we could defend ourselves if we did … Of course, apart from defending our shores, the ADF has always had something to do—peacekeeping in the Middle East,—

I suspect he uses that term euphemistically, if the invasion of two countries on the other side of the world could be described as peacekeeping, but we will let that go—

nation-building in East Timor, tsunami relief in Indonesia or fighting bushfires in Victoria—but these aren't reasons enough to have a defence force.

It is an extremely thought-provoking article. To my mind, it goes to an enormous degree to how the 2009 Defence white paper set an impossible range of strategic goals. Since then, as Senator Johnston quite ably demonstrated, the Australian government has failed to provide the resources needed. In effect, that might be a good thing because I think in fact some of the positions taken in the Defence white paper of 2009 are significantly flawed. The procurement decisions that go back several decades and the force structure that prevails at the moment are significantly confused and do not pay regard to the idea that this is about 'the defence of Australia against a direct armed attack'. In fact, what we are kitting ourselves out for is providing force elements to expeditionary invasions by the United States government on the far side of the world or the more prosaic, but to my mind far more important, interventions in our regions where in many instances the ADF were welcomed or, for that matter, those domestic interventions, such as after the floods in Queensland or the Victorian bushfires, where in many instances the first boots on the ground are those of the Australian Defence Force. But the white paper sets us on a path of building 12 gigantic submarines and sets us on a path of procuring joint strike fighters at the cost of billions and billions of dollars. We have kitted out main battle tanks apparently for fighting battles of World War II. There are the air warfare destroyers that appear to be aimed at giving us significant offensive capabilities in the region. But, to my mind, that goes directly against defence minister Smith's observations at the ASPI event. I think there is substantial confusion at the very headwaters, if you like, that then leads to all the ongoing procurement decisions and debacles that we have seen in recent years as to what kinds of security challenges and genuine security threats, of the century that we are now in the second decade of, look like and therefore how we should kit ourselves out particularly, in a more narrow sense, for the role that we want the ADF to play.

There is one issue that I would like to raise and I suppose senators will understand why I raise it. I am going to quote the Lowy Institute, who pointed out as long ago as in 2006:

Climate change is fast emerging as the security issue of the 21st century, overshadowing terrorism and even the spread of weapons of mass destruction as the threat most likely to cause mega-death and contribute to state failure, forced population movements, food and water scarcity and the spread of infectious diseases …

I was reading from a document so I could not tell whether there was eye-rolling around the chamber over the fact that a Greens senator would seek to link climate change as a genuine security threat, because in fact the 2009 white paper reduces that issue to a footnote and suggests that we do not need to worry about climate change as impact on national security until the 2030s, which I think is absolutely delusional and quite dangerous.

If you look at the literature you see that a large number of situations around the world at the moment in various trouble spots and regions of great political and military instability already have the fingerprints of climate change on them. This is not something abstract about parts per million of CO2 in the atmosphere; it is about water resources disappearing. It is about changes in the ability of given regions to produce food, which can then have direct impacts on political stability.

I understand this from a book which I would thoroughly recommend—I would table 76 copies of it if I had them with me—called Tropic of Chaos, which goes through trouble spots around the world and identifies the fingerprints of climate change. It does not matter whether or not you believe it is human induced. I will come to that in a moment. The ADF apparently developed a classified report in 2007 identifying the threat of climate security, but the white paper, for reasons I cannot fathom, said that it should be dealt with in 2030. The attorney for US Army Environmental Command states:

For the military, whether the warming is caused by man, is naturally occurring, or is some combination of the two is immaterial. The military cannot wait for the science to be perfected to begin planning for the potential effects of global climate change.

We know that budgets are tight and resources are not endless, but I am extremely concerned that we are nonetheless posturing our defence forces for the wrong kinds of conflict. Of course we have to be prepared for direct armed attack, but I believe we have to be prepared for the kind of low-intensity conflicts that are already arising around the world as a result of instability brought on in fragile states by climate change. It is something that I do not believe can be ignored any further.

I do not believe the traditional state-to-state war scenario should be the sole focus of defence spending, particularly in the context of the kind of situations that we are already sending the ADF into, in which some of the gigantic procurement decisions made by this government will be utterly useless. While we are spending money on things like a gigantic fleet of submarines to put us into the South China Sea, air warfare destroyers or Joint Strike Fighters, the enormous opportunity costs of those spending decisions mean that we cannot do certain things. I think that, in fact, directly undermines our defence capabilities. The lack of a consistent, coherent, honest and independent national security strategy is seriously a threat to us at the moment. Defence spending without that national security strategy really undermines our security.

With greatest respect to Senator Johnston, simply quoting defence spending as a ratio of GDP is utterly valueless. Who cares? Are we getting value for money? Are we getting the kind of capabilities that we are going to need to confront the security challenges of this century? Those are the things that I want to know. The financial metrics that Senator Johnston is putting before the chamber I dismiss as completely irrelevant. What matters, I think, is whether we are going to be properly positioned to face up to the genuine security threats, what our strategy is for meeting and responding to those threats, mitigating those that we can, adapting to those that we cannot mitigate and only then coming to the decision of what role we want the ADF to play. The opposition have declared themselves not competent, because the senior leadership team is infested with climate change deniers. Can you imagine if you took into national security debates denial of the most significant security threat of the 21st century and simply pretended that it was not happening?

Opposition Senators:

Opposition senators interjecting—

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I notice some of the senators are acting up, and this will be hard to hear. You are pretending that the most significant security threat facing the world's nations in this century does not exist. How lovely for you! How nice that must be!

I look forward to the development of the next white paper. I hope it is not a wasted or missed opportunity. But one thing I want to underline is that we cannot wait until the 2030s to confront these questions. (Time expired)

Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

Another wacky, off-the-wall, largely irrelevant contribution from the Greens. I do not quite know what Senator Ludlam was saying in all of that but I do know that the Greens have fairly consistently said that they do not support a well-resourced Defence Force. They would cut Defence very sharply, so as far as this debate is concerned they fall very much on the side of the government even though they have taken a little trouble today to pretend that they have a difference of view with them.

What we have today is a government with, effectively, no policy on defence. The government came to office talking the talk about wanting to have a strong Defence Force. The then Prime Minister, Mr Rudd, brought forward in 2009 an ambitious scheme for resourcing and building a strong Defence Force with a very impressive shopping list of kit for the Defence Force over the next 20 years, leading to a new, refreshed, re-equipped Defence Force in 2030. We can argue about whether or not it was a good vision, but it was at least a vision.

The problem with this vision was that, almost from the first day it hit the deck, it began to crumble. It began to disappear. Bits and pieces were pulled out here and there until, eventually, in this year's budget the government took the 2009 white paper quietly out the back and shot it. It is not around anymore. It is gone. It is dead in the water. This white paper was hard to believe to begin with and became positively incredible by the time it was put to sleep.

So we have now a situation where the government has systematically withdrawn the resources from the Defence Force—and particularly Defence acquisition—which would have been necessary to build either the 2009 white paper that Mr Rudd postulated or, indeed, any other kind of credible Australian Defence Force for the challenges of the 21st century. It is impossible to imagine that what this government is doing is anything other than treating the Defence budget as a gigantic cash cow to raid at will as it finds itself running seriously short of cash and needing to find some way of supporting the increasingly improbable, razor-thin budget surplus of 2012-13. And it is not just me who has said that; it is every expert in this area. Every person who is a serious commentator on the defence scene in this country and beyond who has bothered to comment on this has made very much the same kind of conclusion. There is nothing to support this government's plan.

Senator Crossin's rather thinly disguised ignorance in this area demonstrated how bad the government is at engaging with this question. She talked about how the government has notched up $100 billion in spending on defence, but that is over four years. It is an easy claim to make over four years. The reality is that the defence spending in the budget is not going up. It is going down, and amalgamating the figures over four years does not alter that fact.

Senator Crossin talked about the extra spending in the portfolio and she talked about $700 million being spent on the Collins replacement project. There is not a person in Australia who has even the slightest interest in Collins and our submarine capability who does not know that that $700 million is about papering over the reality that the government does not have a plan to build a new submarine. It needed to have made the decision two or three years ago on the new submarine. It cannot make that decision. It is stymied. It is paralysed by fear. It is a rabbit caught in the headlights on the question of the submarine and, as a result, is commissioning more interim studies to bide the time until somebody else takes the reins, preferably a party of a different persuasion, and makes the big decision for them. Nothing is happening with this, and pretending that there is somehow a commitment to spending in the defence sector is just laughable.

I have said that this is an absolutely deplorable situation but what do other people think about this? Professor Alan Dupont, from the University of New South Wales, has made devastating comments about the way in which the defence budget has been handled and about the decline in defence spending. Peter Cosgrove, a former Defence chief, said:

I do worry that we are developing some gaps in our defence structure that will be very tough to claw back later on. I may not be as pessimistic as (others), but I would applaud the day when we can restore a high level of funding for defence.

Peter Cosgrove is a very credible figure in this landscape. Peter Leahy, a former Chief of Army and now professor at the University of Canberra, said:

The 2009 white paper is dead on the floor, butchered by the withdrawal of funds. There's no way they can deliver it. On current funding levels, there will need to be dramatic changes.

Mark Thomson, from the Australian Strategic Policy Institute, said:

… in the last budget there were savings methods across the decade of $2.9bn in increased efficiencies, and efficiency dividend of $400 million, and that brings us to $12bn.

He is referring to the so-called savings there. He said further:

You have to look back to the draw-down from Korea in 1953 to see anything like this.

Hugh White, who has already been quoted in this debate, said:

WE SHOULD thank Julia Gillard and Wayne Swan. Their budget cuts have destroyed the defence policy of the 2009 white paper, and that is a good thing because it was a bad policy.

He went on to say:

We pretend to be a middle power and we say we're a middle power but we have the defence capability of a small power.

That is a very disturbing comment for him to make, because it reflects what most people think, that under this government we have seen a draw-down capability.

David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

So is Hugh White's strategic vision one you are signing up to?

Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

You will get your turn in a minute, Senator Feeney. For the Minister for Foreign Affairs to say in the Senate last week that 'there will be no adverse impact on operations—they are all fully funded' is ridiculous. It is like saying: 'We're sending the Australian Olympic team to London. When they're there they'll have all the resources that they need but when they get back to Australia there will be no money for training. There will be no money for recruiting and there will be no money for the things that drive our level of excellence in sport.' It is preposterous to suggest that we can make the kinds of cuts, $25 billion worth of cuts, in the defence budget that this government is making and pretend that they do not affect frontline operations of the Australian Defence Force. Of course they do and only, with respect, fools would maintain that somehow these cuts are not affecting the frontline of Australia's defence, particularly in operations like Afghanistan. We have the midyear economic statement to come in which we can expect more of the same. You need more money, you have to make big cuts to get your mythical surplus back into some kind of pretend reality and there will be more cuts to come in this budget. It is an absolutely deplorable situation. The men and women in uniform know that as well. Senator Bishop, I challenge you to cite a single authority that has endorsed your approach to the defence cuts in this budget.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

In some respects, the motion really is most unfortunate. It represents—

Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

It's not a motion.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

The motion before the chair.

Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

It's not a motion; it’s a matter of public importance.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

The motion before the chair is in some respects most unfortunate. It misrepresents the factual situation in a very deliberate and partisan way. It is as though the opposition believes or seeks to assert that two years of the Gillard government is totally responsible for the aggregation of problems that bedevil Defence and challenge government ministers of either persuasion. Let me acknowledge two matters at the outset: first, I readily concede that there are significant ongoing structural problems facing Defence, the defence community and what is commonly known as the defence family; second, I assert that the only way to permanently and properly address those matters is primarily through a bipartisan approach of the major parties likely to hold the Defence portfolio in government. So at the outset I do criticise the opposition for bringing in an overtly partisan motion on defence to the Senate yet I proffer a solution in my remarks that is, at its heart, structurally non-partisan.

Let me say also that our government brings good form to this debate, a considered approach and a set of significant achievements over its four years in government. Let me outline our form in one respect only to put it on the public record. The then opposition in the period from 2000 to 2007 spent an inordinate amount of time getting on top of important issues in defence, with inquiries, parliamentary committees, committees of review, relationship building with Department of Defence officials and, critically at the time, strong support to Howard government proposals for acquisition or reform. That work resulted in the white paper 2007-08. That critically resulted in the development of a strategic reform plan, worked out in conjunction with the service chiefs.

It was agreed we needed to find $20 billion in savings over a 10-year period. That agreed level of savings was done by negotiation with the service chiefs and through engagement with industry. The key decision was to plough all of those savings back into Defence budgets.

The first two years of the strategic reform plan worked well. Savings targets were achieved. Moneys were ploughed back into Defence budgets. Capability acquisitions were fully funded—in fact, so overfunded that some funds were returned to government. The net of that two or three years work is that the strategic reform plan instituted and implemented by this government has been working well. But I do not say for one minute that it is enough. It is only a start and can only be a start.

Why do I then say we need to have a revised, renewed and reinvigorated bipartisan approach to Defence matters? I say that because in the last two weeks the Senate Foreign Affairs, Defence and Trade References Committee has tabled a major report into Defence procurement, which is at the heart of the defence budget—the subject matter of the MPI before the chair today. That references committee, as we all know, is chaired by an opposition senator. There are three or four opposition members, only two government senators and one Greens or Independent senator. It spent 18 months on its inquiry and delivered a unanimous report with a unanimous set of findings and a unanimous set of recommendations. Major budget and account issues were discussed between the members and agreed between the members and they offered a considered way forward to a promised land of achievement and satisfaction in Defence.

Everyone in the Defence community knows the principal problems in Defence procurement are cost blow-outs, schedule and time delays, and flawed risk analysis. In any project that has gone overboard in the last 20 years, any one or all three of these problems were the cause. Why does that continue to occur year in year out under successive governments, successive ministers, successive chiefs of defence, successive service chiefs and successive departmental secretaries? Only this week we saw the appointment of a new departmental secretary—roughly the 4,000th in the last 16 years. It is really just not good enough when soldiers are dying at the other end of the world.

Let me put on the public record a potential solution which, if faithfully implemented, might overcome this recurring, useless, tired set of problems which seem apparently intractable but which are not. I suggest we adopt four principles for Defence budgeting, Defence accounting and Defence management: accountability, transparency, responsibility and empowerment. Apply these four principles across the board to the military arms, the civilian workforce and the DMO within the wider Defence community. In practice, it means organisational change and significant streamlining. Firstly, empower each service chief, not a committee, with full responsibility for all facets of project delivery post second-pass decision by government. Secondly, restructure the DMO so it becomes a specialist acquisition agency, independent of CDF and reporting to the minister, that is properly a centre of excellence in a critical world. Thirdly, provide for a targeted, yet limited, strategic role for the Capability Development Group. Fourthly, eliminate the competition between sectors of the Defence community for technical and engineering capability.

What we have at the moment between each of the services, the DMO and the Capability Development Group is the most useless, senseless, worthless and expensive form of competition for recruitment of highly skilled labour in engineering and technical capacities. You could not manufacture a greater waste of time than the Navy, DMO and the Capability Development Group competing to attract and retain the same group of highly skilled technical and engineering people. The net result has been that the DMO has hundreds and hundreds of vacant positions on the engineering side of its organisation. The Capability Development Group needs to take advice from Navy. But guess what? The Rizzo review and the other report that came down revealed in considerable detail that Navy has just about zero engineering capability. It has been run down and run down over the last 15 or 20 years—really since the 1988-89 period. It is inconceivable when you think about trying to run the most technically advanced warships in the world, which at their heart are nothing other than floating electronic factories, that the Navy has vacancies in the hundreds and hundreds for engineers and like classifications.

The fifth thing that should occur is that we should inject real contestability into decision making and guarantee that whichever government—our government or the coalition's government—is provided with independent advice from key agencies. That is sound, thought-out, thorough and independent advice from the DMO, the DSTO and technical experts, because all the floating set of committees we currently endure do is sieve out and reduce to very senseless and basic propositions very complex issues that do not get the attention of government. That is one of the root causes of why projects go bad, remain bad and continue to get worse for five, seven or nine years until all of a sudden some minister gets a file on his desk 10 years after the project commenced and has to do a presser and cancel $1.6 billion—just write it off—because the platform will not fly or sail or anything it was designed to do.

With any problem or set of problems there is always a solution, and the solution is at hand. (Time expired)

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Senator Bishop started by indicating that the Labor government had form in relation to defence.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

Good form!

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Good form? Well, that just makes it even worse if you said 'good form'—form most certainly yes; good form most certainly no. In relation to that matter, it is a real pity that Senator Bishop was not making these sorts of comments and suggestions when his preferred prime ministerial candidate was actually running the show. I think if you listen to what Senator Bishop said, implicit in that was his view that in the last two years, under the present Prime Minister, we have seen slippage in relation to the defence budget. I will just go through what the form is, so that there is no doubt in anyone's mind about what the form is. Dennis Richardson is the fourth Secretary of Defence in the last four years under this government. That is form number one. Twenty-five billion dollars has been slashed from the defence budget since the Australian Labor Party came into power. That is form number two. Good form, Senator Bishop calls it; bad form, I call it. Spending in GDP terms is at 1937 levels—1.49 per cent next year. Good form? I do not think so. Bad form—most definitely!

I now want to refer to some of the comments made by other commentators in this area in relation to this crisis facing the Department of Defence—a crisis in a funding sense and the ensuing crisis of confidence amongst those who are serving this nation. I think it was Senator Humphries, and maybe Senator Johnston as well, who referred to Lieutenant General Peter Leahy, a former Chief of Army, who said that the current round of cuts, these cumulative cuts, will undoubtedly lead to personnel reductions and a crisis of confidence in the defence forces. I want to read a comment from Dr Mark Thomson in his 2012 ASPI defence budget analysis. He said:

The plans set out in 2009 are in disarray; investment is badly stalled, and the Defence budget is an unsustainable mess.

We all know that the former defence secretary, Duncan Lewis, who was an ex-special forces commander and National Security Adviser, has had a frosty relationship with Minister Smith for some time. Lewis recently stated at an ASPI dinner:

As things stand I don’t think we are structured or postured appropriately to meet our likely strategic circumstances in future.

So that is five bits of bad form, not good form, as Senator Bishop said at the start of his contribution. That is five bits of really bad form.

What is the outcome of this bad form? The outcome, as we know from media reports today, is that the cadets are now the next ones in the gun. They are the next ones whose funding will undoubtedly be cut. I could stand here for two hours and talk about the benefits of the Australian Defence Force Cadets. I will not do so and I would be bitterly disappointed if there was anyone in this place who does not support cadets.

The other outcome, just one that I can think of straight off the top of my head, in relation to these five points of bad form was the stripping in the federal budget of recreation leave travel entitlement for single ADF members aged 21 and over. It has been changed. The fact that it was even contemplated is an absolute reflection on this government, a complete and utter reflection on this government. It was only changed because the ex-services community and others said this was completely and utterly untenable.

Why are we in this position? We are in this position because this current Prime Minister, in a desperate attempt to get herself through to November of this year, when Kevin Rudd can no longer contest the prime ministership because we will be in an election year next year, is spending like a drunken sailor to maintain her position in the polls and within her party, all of which is unsustainable. We are now confronted with a $120 billion black hole. We are seeing a government lurch from financial crisis to financial crisis. Treasurer Swan at question time today refused to rule out any raid on the Future Fund—the last bit that the Australian Labor Party has not been able to get its grubby mitts on has been the Future Fund. This is a Prime Minister who is spending purely to keep her job. She has no concern for the job of anyone else in this country and she certainly has no concern for the Australian Defence Force and the personnel who are serving this country so well.

David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

We are a government committed to delivering a surplus on time and as promised. The 2012-13 budget delivered by Treasurer Wayne Swan ensures that we will achieve this before any other major economy. In contemplating the importance of that, I am reminded of a quote from a former chairman of the Joint Chiefs of Staff of the United States military forces who said, 'The greatest single strategic threat faced by the United States is its national debt.'

A surplus is part of our strategy to ensure the strength of our economy and the future economic security of our nation. A strong economy is good for all Australians. However, the fiscal reality of the global situation means that there are very clear implications for Defence, as there have been for all government departments and agencies. But what the opposition has failed to appreciate and sought to politicise in its own flamboyant and hysterical terms is that Australian Defence Force operations will not be adversely affected by budgetary restraint. There will be no adverse impacts on operations in Afghanistan, East Timor or the Solomon Islands. There will be no reduction in the number of military personnel in any of our three services—Navy, Army or Air Force. There will be no implications for the equipment of forces about to be deployed or their deployment. There will be no reduction in conditions or entitlements for service personnel other than those being considered as part of the ongoing strategic reform program.

There will be a minimum impact on the delivery of core defence capabilities, and from a strategic perspective there has been no fundamental change to our defence budget. There has been no fundamental change because when one sets aside the hysteria and hyperbole from those opposite, we can come to the cold, hard facts—and cold, hard facts which generally escape those opposite. We saw the claim being made that the defence budget had been cut by $25 billion—what errant nonsense; what dangerous and destructive nonsense. When well conducted, a defence debate should be bipartisan. Instead, it is now in the hands of the hysterics and crisis mongers opposite and not receiving the cold analysis that defence matters require.

In fact, the reality is that defence spending has been cut across the forward estimates from $109 billion to around $104 billion. For people who are passionate about defence, and I am one, those savings measures have been difficult and they involve difficult choices. But please do not let the people of Australia or any of those in the defence family who are listening to this debate imagine for a moment that the defence department is facing the kind of wholesale crisis those opposite dearly wish was the case. When one considers the level of defence spending in this country, let us just bring a little fact and reason to the debate, however uncomfortable the opposition are with those that. For the first time ever in this nation's history, this government has budgeted over $100 billion for this nation's defence across the forward estimates. That is to say, notwithstanding these cuts, we are still spending more on the defence of this nation today than those opposite ever did.

Further, let us take a moment and look at the various miscellany of quotes those opposite have flung at us. They have flung quotes at us from various characters inside the defence debate who are at odds, some of whom do not agree with one another let alone the opposition. Dr Mark Thomson from ASPI is a classic case in point—a highly credentialled gentleman, a person whose utterances in the defence debate are always taken very seriously, a man who believes the defence budget as it presently exists is open to further cuts and that a smaller force would be justified. I am sure that if those opposite had a clue about what it is that they are discussing, they might have neglected to quote him in the terms that they did.

We see when we look at the opposition and their conduct in these matters that while they are always keen to add hysteria and crisis to the debate, they do not come to this conversation with a commitment. They do not come to this conversation with anything like an undertaking to the defence family. In fact, their undertaking is as follows:

The Coalition will commit to restoring the funding of Defence to 3% real growth out to 2017/18 as soon as we can afford it.

'As soon as we can afford it'—that means never. That means that, God forbid, if those opposite should ever form a government, we will see on day one various Liberal characters roll out to the front and say: 'Oh my goodness, we cannot afford it. There's no money for defence. It's someone else's fault.' We know the game that is being played but, most critically, so do the men and women of our defence forces, and so do the loyal people who staff and work so assiduously in the Department of Defence.

The Liberal Party is not coming over the hill to save the defence department from Labor Party cuts; rather this is a $70 billion black hole operation that is going to try to roll into government and then blame every failed commitment— (Time expired)