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Tuesday, 10 December 2002
Page: 7549


Senator CHRIS EVANS (3:02 PM) —I move:

That the Senate take note of the answers given by the Minister for Defence (Senator Hill) to questions without notice asked by opposition senators today relating to the funding and administration of the Department of Defence.

I have moved this motion because it seems clear to me that the Minister for Defence does not have a grasp of the financial management issues in his portfolio and that he really struggled to come to terms with the very serious questions that were asked of him. He resorted to talking about a proposal for the coastguard and about how well our troops are doing. He effectively said, `Don't worry about that; it's all okay.' The minister's answers today reflected that he, like the department, is not on top of the financial management of Defence. The critics and former senior people in Defence are saying that the management of Defence is in very poor shape. This is not a view made up by the opposition; rather, it is a view adopted by a former deputy chief of the defence forces and a view contained in the ASPI report released the other day. It is also the view of the Audit Office, which actually saw fit to put a qualification on Defence's financial reports last year.

It is true that Defence is under enormous operational strain at the moment and that our service men and women are doing an excellent job and performing very well under very difficult circumstances. There is no argument in Australian politics about that, and that is not the issue at stake. They have done tremendously well under very difficult circumstances. But, if we look at the financial management of Defence, if we look at the acquisitions made by Defence and if we look at a whole range of issues that go to the effective management of Defence, there are very serious question marks and very serious concerns. It is so bad that the report on the strategic review released by the Australian Strategic Policy Institute said:

More effective reform of Defence is the most urgent long-term defence policy challenge the Government faces.

It went on to say:

Defence reform is not just a matter of fiscal probity—it's a matter of long-term strategic necessity.

ASPI has identified the major problem in Defence as its management and fiscal issues. That confirms the view expressed by Lieutenant General Des Mueller, who recently retired as the Deputy Chief of the Defence Force, and of course it confirms the judgment made by the Audit Office. We have a serious problem inside Defence. After almost seven years of the Howard government, after four ministers of defence and after so-called reform after reform after reform under different ministers promoting particular biases they held, we have very serious concerns about the ability of Defence management in this country to explain where the money has gone and whether in fact it is worth putting in more.

ASPI basically said in its report the other day that it is not worth putting any more money into Defence, because they would only waste it. That is a terrible indictment of the management of Defence and it is reflected in the minister's inability to answer questions about that financial management and his inability to answer questions at estimates hearings about it. At estimates I spent a great deal of time trying to get the minister to explain where the extra money outlined in the white paper had gone, where the $500 million had gone. But the minister was unable to give us a satisfactory explanation about how the money had been spent.

We do know that, despite all the talk about the white paper, the actual money spent on equipment and capital projects has reduced, and it will keep reducing in the out years as well. The government said, `We've got this white paper and more money is going to go in,' and Labor endorsed and supported that. But, when you look at the budget, the money is not there. It has not been spent on capital projects and it is not there for capital projects in the out years. But we do know, for instance, that there is $800 million in the bank account. While the troops are under enormous pressure and while there are serious concerns about issues like ammunition and the ability to train with live ammunition inside our Army, there is $800 million sitting in the bank. The troops are after $30 or $40 million extra for ammunition, yet the Department of Defence has $800 million in cash on the short-term money market at the same time as the minister is going to cabinet saying that he needs more money.

Something is very wrong. The Audit Office has said there is something very wrong, ASPI has said there is something very wrong and the former Deputy Chief of the Defence Force has said there is something very wrong. The minister today was unable to provide satisfactory answers about the management of financial matters inside Defence. This is a very serious public policy concern that needs to be addressed. The minister has to come to terms with it and we need some answers about where the money is going and whether we are getting value for money. Or are we going to have a further series of Seasprites and heavy torpedoes that will see Australian taxpayers' money wasted for want of proper management? Will we see more terrible acquisition decisions taken that cost us millions of dollars for projects that are years late and that let down our troops? (Time expired)