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Monday, 24 February 2014
Page: 683

Mr COLEMAN (Banks) (12:12): I move:

That this House:

(1) notes that Defence is a critical responsibility of the Australian Government, which:

(a) requires substantial investment in order to ensure Australia's military preparedness; and

(b) suffered from material budget cuts under the former Government in recent years;

(2) recognises the plans of the Government to make no further cuts to Defence expenditure, and to increase Defence expenditure to 2 per cent of GDP within a decade; and

(3) commends the Government on this approach to Defence expenditure planning.

Defence expenditure is critical for this parliament, for this government and for our nation—and not just today but also into the future. We find ourselves in a situation today where defence spending as a proportion of GDP is the lowest it has been since 1938—that is, since before the Second World War. Defence spending now is just 1.59 per cent of GDP. This low figure is a consequence of a number of politically expedient cuts to defence spending which were made by the previous Labor government, particularly towards the end of its term in office. The coalition is determined to ensure that there are no further cuts to defence spending—and, indeed, to work towards increasing defence expenditure to 2 per cent of GDP within a decade. This is a very important goal because we need to ensure a significant level of defence expenditure to enable our military to prepare for the challenges that lie ahead. We are now spending six times more on social security and welfare payments than we are on defence. Again, that is a reflection on the lack of emphasis on Defence spending under the previous government.

Back in 2009, the Labor government put in place a Defence white paper which called for three per cent real growth in Defence spending through to 2017-18 and 2.2 per cent thereafter. But of course that did not happen; in fact, what happened was that the Labor Party made some substantial cuts to Defence expenditure to the detriment of our military, particularly in the final years of office.

In 2007, according to the Defence Intelligence Organisation, 5.7 per cent of nominal government spending was in Defence. But by 2012 that had fallen to just 4.9 per cent. So it was 5.7 per cent in 2007, when Labor came into office; 4.9 per cent by 2012. That is a very significant change in the budgetary priorities of the nation. Labor cut Defence spending by almost five per cent in 2010-11 and then by a massive 10.5 per cent in 2012. The 2012 cut was the largest reduction of the Defence budget as a percentage since the end of the Korean War. That is just an extraordinary and unexpected cut to Defence expenditure.

We are now sitting down at 1.59 per cent of GDP on Defence and, when you compare that to a number of another nations around the world, that is a very low figure, unsustainably low. Singapore spends 3.6 per cent of GDP on Defence; Vietnam is 2.4 per cent; South Korea is 2.5 per cent; Russia is three per cent; the UK is 2.5 per cent; and the USA spends 4.5 per cent of GDP on military expenditure.

It is critical that we get our Defence spending back to that level of two per cent of GDP to enable us to plan for the challenges that lie ahead. You have to ask yourself: why did we end up in this situation? Why did Labor cut Defence so substantially? You very rarely, if ever, hear an argument where somebody says 'the right thing to do is cut military expenditure'. Nobody says that. The Labor Party does not say that publicly but, when it is politically convenient and when they want to move some money around to account for the fact that they have so inefficiently spent money elsewhere, Defence is a politically convenient place to cut.

There were huge blow-outs under the previous government: $6.6 billion in border protection; $2 million advertising a border security plan targeted at people smugglers within Australia, which is a shameful waste of money. Of course we had the bungled BER scheme, and the NBN which lurched from one disaster to another under Labor. There are a whole range of failures in budget planning which left Labor in the position of looking for places to cut. They spent nearly $70 million advertising the carbon tax. They spent $100 million on an assistance package for the live export industry. They only had to spend that money because of the knee-jerk decision to basically end the trade overnight. They spent nearly $70 million on set-top boxes that cost $350 each; when you can walk into Harvey Norman and buy one for about $150. And let's not forget the pink batts home insulation scheme, which cost just under $3 billion.

So there has been huge mismanagement of the finances of the nation under Labor. As a consequence, they looked for places to cut, and Defence was somewhere they found. They consistently overestimated revenue. They took rosy financial forecasts and tried to bank the money before the revenue came in. It is always a problem when you spend money before you have it, and that is what they did consistently. As my colleague the member for Fadden has said, Labor used Defence as its personal ATM, to help it address its ongoing budget blow-outs, and that was a shameful piece of budget management.

The Rudd Rebellion by Bruce Hawker is a tremendously interesting work. He made some comments about Labor's expenditure review committee and expressed a relief that Labor decided to focus its saving plans on less politically sensitive areas such as defence. In that statement I think we see a lot about the thinking—or lack thereof—that the previous, Labor government put into our defence planning.

The previous government had their own white paper in 2009, which set out a certain level of spending that was required. That government said, 'Yes, we'll do that,' and then they did not. Not only did they not meet the relatively modest increases called for in the 2009 white paper; they actually did the opposite. They very substantially cut defence expenditure.

So we are now in this situation where our defence spending, as a percentage of GDP, is the lowest it has been since before the Second World War. That is an extraordinary situation, and not one that this current government supports. The Lowy Institute has said that, under short-term political pressures—that is exactly what it was: short term political thinking—the Rudd and Gillard governments began deferring much of their own plans to modernise the nation's military. I emphasise that these were the previous governments' own plans. They delayed or cut more than $20 billion in defence investment.

The Lowy Institute went on to say that the impact of that 10.5 per cent budget cut in 2012 is only now being fully understood. Maintenance, logistics and training are underfunded. Some capabilities, such as tanks, have been effectively mothballed. That has a very significant impact, and it is certainly something that this government will address.

We cannot be sure of what security challenges we will face in the future. The area is inherently uncertain. History tells us that we cannot always predict security challenges before they arise. But one thing we can be sure of is that it is better to be prepared for eventualities than not to be prepared. This government is strongly committed to preparing our military to face the challenges that may arise in the future.

The Labor Party's record in this area is one of political expediency. It is one of taking money out of Defence because of budgetary problems that occur in other areas. Imagine the government of the day putting out a defence white paper—a lengthy process in 2009—committing to the targets, and then, when the going got a bit tough politically and, particularly, financially, basically abrogating those targets and walking away from them completely. That was absolutely the wrong thing to do. This government is committed to turning around investment in our defence forces. That is why I am moving this motion today.