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Tuesday, 10 December 2002
Page: 7537

Senator CHRIS EVANS (2:25 PM) — My question is to Senator Hill, the Minister for Defence. Can the minister confirm that in the year 1999-2000 the budget for military equipment acquisitions in Defence was $3.6 billion, allowing for foreign exchange supplementation? Can the minister also confirm that in the last two years this figure has dropped to just $2.5 billion and then $2.2 billion? Doesn't this represent a massive cutback to spending on military equipment over the last two years and, in real terms, wasn't the amount spent last year the smallest capital budget in five years? Minister, hasn't this contributed to the run-down in equipment reported so critically in the department's annual report?

Senator HILL (Minister for Defence) —The white paper of 2000 committed to a significant increase in capability through an enlarged acquisitions program over a period of 10 years. It actually went out beyond 10 years, but it dealt with 10 years in considerable detail. As I said a little earlier in this question time, in real terms it provided for a three per cent increase in each year. That, in my terms, is a substantial increase, not a reduction as suggested by the honourable senator, and the result across the three services will be a significantly improved capability at the end of that period. Even in the 12 months that I have been in the job, cabinet has approved some $2.5 billion of acquisition projects that were within the Defence Capability Plan set out in the year 2000 but which of course need to be approved on a project-by-project basis when they reach the acquisition stage. I hope that puts the honourable senator's mind at rest. This government is committed to providing the Defence Force with the capability they need for the future, and the program is well under way to achieve those goals.

Senator CHRIS EVANS —Mr Deputy President, I ask a supplementary question. I thank the minister for his answer, but I was drawing a comparison between what the white paper says and what his budget paper says and asking whether or not he is meeting the expectations in the white paper. Talking about the future of acquisition projects, Minister, isn't it a fact that Defence annual reports show that the total value of future capital projects has dropped over the last three years from $14.1 billion to just $7.8 billion? Doesn't this show not only that current spending has fallen but that the capital projects in the pipeline have also been wound back over the last three years?

Senator HILL (Minister for Defence) —They certainly have not. These questions or similar questions were asked by the honourable senator in the estimates committee and what was explained to him at that time is that the funding is ramped up over the period of 10 years. Basically, the program is put in place to achieve a certain enhanced outcome by the end of 10 years and, as the projects develop and the acquisitions take place, funding is ramped up. If we take, for example, the possible purchase of the joint strike fighter, we have committed at this stage to the design and development phase some $300 million. If the government ultimately goes to acquisition, it could be out to $12 billion. Naturally, there is a stepping up process as these projects develop, and if the honourable senator looks at it in that light he will see how wrong he is.