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Wednesday, 17 June 2009
Page: 6439


Dr KELLY (Parliamentary Secretary for Defence Support and Parliamentary Secretary for Water) (4:12 PM) —Hopefully, we will return to some decorum. I would just like to highlight that the honourable member has completely misrepresented and misunderstood, in fact, the nature of the budgetary process that we have created to deliver the great Defence Force that we seek to defend this country going forward, after finding so much to do in remediation with the mess that was left to us by the previous government. In my area of the defence estate, $200 million a year was ripped out of the maintenance of the defence estate, and this has accelerated the problem that we now have in redressing that. It will now require $30 billion to deal with remediation.

The new funding model that has been put in place which we have been completely open about does actually deliver what will be required for this Defence Force. That includes the three per cent real growth rate out to 2017-18, the 2.2 per cent real growth rate that will take place from there out to 2030, and the 2.5 per cent indexation mechanism, which will come into effect from this financial year. Of course, added to that will be a reinvestment of the savings that will be achieved under the Strategic Reform Program—the $20 billion savings, every cent of which will be reinvested in the defence program. In addition to that, there will be the other less salient features of the new funding model, which relate to the efficiency gains, the no-win no-loss arrangements and the reprogramming of certain funding. So the mechanisms are all in place. The areas for savings have been identified well and truly as a consequence of the budget audit that was entered into and the Pappas and the Mortimer reviews. These have clearly identified areas within Defence where the savings will be achieved. We have been completely open about that. The Defence leadership is completely confident we will achieve those savings. The capabilities that we have outlined in the white paper, the most significant improvement in capability in the Defence Force’s history, will be delivered through this process. That process will take place over the period out to 2030. It will not happen overnight. But, certainly, we have delivered the mechanisms that will achieve that result for this country.