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Tuesday, 12 February 2013
Page: 1093

Mr ROBERT (Fadden) (20:29): Before I pass some comments on the very important issue of the appropriation bills, and with your concurrence and that of the minister, I will just rise quickly to acknowledge the student leaders of the northern Gold Coast in the electorate of Fadden. I believe it is important for us all in this great place to recognise our young leaders, as many of us do. It is they who leave a lasting impression in their schools, their communities and, ultimately, our great nation.

These young leaders, who we all recognise, play an important role in setting an example through their actions, making positive choices, collaborating with others, listening and encouraging those they lead, especially in challenging and difficult times. They have the potential not only to leave a lasting impression but ultimately to change our world—which is what we are all here to try and achieve—and, of course, to make the world a better place. Such roles should never be understated, and I know that we do not do that here.

Let me urge these new student leaders to strive to achieve their very best in their current roles, as through their influence they now carry a torch of great responsibility. The great leader never sets himself or herself above their followers in carrying responsibilities. So I say to all of our young leaders: do not rely on your position to convince people to follow you. Instead, build relationships, care for people, show compassion and thoughtfulness, listen to and develop others and leave a legacy that we can all be proud of. Do not raise your voice and prove your argument.

I am pleased to seek leave from the minister to present the names of Fadden student leaders, knowing that their leadership journey will take them to considerable heights and potential.

Leave granted.

Mr ROBERT: Thank you Mr Deputy Speaker, and thank you to the minister at the table.

This brings me on to the issue we are addressing tonight, Appropriation Bill (No. 3) 2012-2013 and Appropriation Bill (No. 4) 2012-2013. I wish to confine my remarks simply to Appropriation Bill (No. 4) 2012-2013, as it deals with $666.36 million of expenditure, which includes an equity injection of $468.77 million within the Department of Defence to support its work program, including operations.

I note the injection is to be offset through a reduction in the defence department's appropriation. Of course, the challenge is that there is no further detail in the explanatory memorandum as to the basis of the appropriation. I can only assume it will cover the cost of capital works, and that there will be some injection in terms of our operational requirements for our nine overseas missions. The largest, of course, is Afghanistan. But there is no wider information and I will seek that through the proper process, through the minister.

I also note that it will be offset in the reduction of the departmental appropriation and, again, I will seek the advice of the minister. But what that generally means is, 'We'll give you the money now, but we are seriously going to take it off you at the next budget round or before.' We will be watching that very carefully, and put the minister and his department on notice that we will not accept any further reduction in the defence budget. Once more, I put on the record very clearly that the coalition will not make any cuts to the defence budget. No cuts; it will be quarantined—guaranteed. We will commit, once we understand the budgetary horror we may well inherit—if indeed we are entrusted with the government's finances—to increase the defence budget at the appropriate time, depending on the budget, by a three per cent real increase per annum, back towards two per cent of GDP.

It is important at this stage of the appropriation debate to recognise that on 650 occasions—it is a staggering number—the Prime Minister, the Deputy Prime Minister and the finance minister repeated their promise to deliver a surplus in this financial year, 2012-13. Six-hundred and fifty times, the three top ministers responsible for the nation's finances promised, including 150 times by the Prime Minister, only to junk it a few days before Christmas.

What is tragic is that this government has overseen the four biggest budget deficits in the history of our nation, with accumulative value in net terms of $172 billion. The government does like to boast that it has offset all new spending since 2009, yet it has been unable to pay for its existing commitments. Net debt has hit an unprecedented level of $147 billion and gross debt of over $261 billion.

But the issue is not revenue, as the government likes to say. It is expenditure. The government is now, as a statement of fact, spending $90 billion per year more than the Howard government did in its last year. The government now is spending $70 billion more compared with its first budget when Labor took office. In the first four months of this financial year, as a statement of fact, government revenues were 4.2 per cent higher than the previous year. Despite crying poor, the government has benefited from a mining boom that has delivered the strongest terms of trade in 150 years: fact. Unfortunately, the government has proven incapable of living within its means. Respected independent forecasters Macroeconomics believe that the budget should already be in surplus by at least $15 billion, or one per cent of GDP, this far in the economic cycle.

One of the areas to feel the greatest pinch of a government desperately trying claw back its finances, but proving unable to despite having revenue of more than $90 billion in the last Howard years, is defence. Defence now has weathered a crushing storm of cumulative cuts, deferments and delays of over $24.5 billion. Let's call it $25 billion since Labor came to power. In this budget alone, 2012-13, $5.5 billion has been cut over the forward estimates; 10.5 per cent has been cut from the defence budget this financial year, and a further $1.66 billion in absorbed costs through the Mid-Year Economic and Fiscal Outlook. That $1.66 billion was for a 6C17, 240-odd Bushmasters and, of course, the conversion of 12 Super Hornets into advanced electronic weapons, the Growlers—three areas of technology and expenditure that, on the surface, are good sets of equipment to purchase. But rather than providing the funds, they said to Defence, 'You must find the funds'; that is, 'They are absorbed; you must find savings.' Therefore, this financial year there is $5.5 billion in the forward estimates from the May budget and a further $1.6 billion from MYEFO—$7.1 billion in cuts, deferments or delays.

What does that mean in real terms? They are just headline numbers. In real terms, you are seeing ADF Reserves' salaries and payments now being cut by 20 and 30 per cent, where many reservists on face value may not be able to achieve their 20 days, which will disadvantage them in terms of their housing, their loans or their health benefits. It is incumbent upon the minister to guarantee that all reservists will have a minimum of 20 days, noting that a competent and capable reservist needs about 35 days to be an effective reserve soldier, especially in Her Majesty's loyal army.

Thirty-seven per cent of all defence projects have been cut, deferred or delayed—including phase 2 of the counter-IED, the improvised explosive device project. If there was ever a catchcry of a project that highlighted the difficulties that we are in now in terms of the budget cuts, it is cutting a counter-IED program. If there was ever a challenge in terms of what our soldiers, sailors and airmen and women face in combat operations in Afghanistan, it is the existing and all-pervasive threat of improvised explosive devices. In terms of further supporting the weapons intelligence teams and the technology on the ground, for phase 2 a delay of 12 months is unacceptable. I have informed the minister of this personally and asked him to look into it when we addressed the ministerial response in the House last week.

Funds for cadet units have been savagely cut, so that there are no longer entitlements to ration packs, there is no travel overseas, there is no subsidised travel to other annual camps and the like. Budgets for existing units in terms of the signal squadrons, the engineering regiments, the cavalry regiments, existing operational budgets in terms of the training activities on a day-to-day basis have been cut by up to 30 per cent. A report by John Kerin in the AFR on Monday indicates that Defence may well be short by up to $1 billion just in doing its day-to-day functions here.

I take at face value what the minister has said, that our operations and our operational tempo have not been impacted by the defence cuts, but I can tell you absolutely everything else within our Defence Force has been impacted—in many cases, significantly. The logistics program, in terms of pulling logistics together and saving money over the long haul, has been thrown into disarray, with a cut of $145 million to the logistics program at Lavarack Barracks in Townsville. It was delayed just before Christmas, found out by the Townsville Bulletin—and, again, the minister still has not confirmed it, yet everyone knows what has happened. The cuts to defence are palpable.

The Prime Minister tries to assure everyone it is business as usual, going down to DSD, no less—only the second time a media event has been held in such a sensitive place, which looks like recklessness in terms of using a defence establishment of that sensitivity as a media stunt—to announce a new cybersecurity centre. But she cannot say where it is, what it is going to cost, what it is going to do that is different from the DSD Cyber Security Operations Centre, when it is going to open and who is going to run it. Smells like a media stunt, looks like a media stunt; perhaps it is a media stunt.

This year's total spending will be 23.8 per cent of GDP. The Treasurer, in full flight, said Labor has always had budgets that are a lower percentage of GDP than the coalition's, which is odd because the Howard-Costello spending in their last year was 23.1 per cent of GDP. So I am not too sure where the Treasurer's mathematics came from.

Twenty-seven new or increased taxes are what this government has brought about since coming to power, and the impacts are all too easy to see: a 10.5 per cent reduction in the defence budget this year—10.5 per cent. I served in the Defence Force in the 1980s, during the last, long period of Labor government, and watched the defence budget cut to the bone then. The impact of that was not seen until 1999, when we deployed 5½ thousand of our combat troops to East Timor on stabilisation operations. We were poorly equipped. We were well trained and we were well led, but we lacked the necessary capability and resources. The Howard government swore that would never happen again and went on the greatest re-equipping, modernisation, hardening and networking of our Defence Force in the modern era, to the point where, in their last six budgets, the defence budget increased in real terms by 3.9 per cent.

Labor came to power promising a defence increase of three per cent in real terms, up to 17, 18 and 2.5 per cent thereafter. In fact, before the last election in 2010, the Prime Minister and the Minister for Defence promised on no fewer than 38 occasions that they would increase the defence budget in real terms by 3.8 per cent. But all we have seen are cuts; that is all—10.5 per cent this year alone and over the forward estimates, or $5.5 billion. When you add in the MYEFO absorptions of $1.6 billion, it takes you to a staggering $7.1 billion. You cannot cut a military force by that enormous quantum over five years and not expect to see an impact. Over the last five years, a cumulative $25 billion has been cut, delayed or absorbed. That is the equivalent of an entire defence budget—an entire defence budget—for a year that has been taken out. If the government think that has no impact, no adverse consequences, they are kidding themselves. The impact is only too obvious and ready to see.

The good news is that the coalition guarantees there will be no cuts—quarantined, guaranteed. I simply ask the Minister for Defence to provide the same guarantee. Provide it. The problem is, even if he did—notwithstanding I think he is an honourable man—Labor said 38 times before the last election that there would be a three per cent real increase, but we have seen a 10.5 per cent decrease. Six hundred and fifty times, the top three finance leaders of our nation—the Prime Minister, the Deputy Prime Minister and the Minister for Finance and Deregulation—said we would have a budget surplus this year. They said it 650 times and that promise was broken before Christmas. Then of course we have the ultimate betrayal of 'there will be no carbon tax in the government I lead'. So I fear that, even if the Minister for Defence were to make that promise, when trust has been betrayed to the extent it has, it would fall on deaf ears within the nation.

The coalition will not allow this to happen. We will rebuild our Defence Force. We will rebuild the nation's trust in our defence capability and we will not sacrifice future operational capability for a budget surplus for a political fix.