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Tuesday, 23 June 2009
Page: 3998

Senator JOHNSTON (2:23 PM) —My question is to the Minister for Defence, Senator Faulkner. Both the white paper and the recent Defence budget were roundly criticised due to the lack of detail regarding costings for capability. There will be somewhere around $44.9 billion spent on planned new initiatives over the next decade, and $9.5 billion over the next four years. My question to the minister is: where is this money for the $44.9 billion of new initiatives and associated projects over the next decade coming from?

Senator FAULKNER (Minister for Defence) —I think I explained to Senator Johnston yesterday when he asked me a similar question about the Defence budget that when the budget was announced the government delivered a new financial plan. I indicated that it would fully fund the Defence white paper, and I think I mentioned the figure of $308 billion that I expected to be spent over the decade. What I did not have an opportunity to do yesterday—and I do very much appreciate an opportunity to expand on this today, courtesy of the question that Senator Johnston has asked—was to speak about what I described as the second element of the government’s financial plan, which of course is its Strategic Reform Program. I can inform Senator Johnston through you, Mr President, that that program will cut wasteful Defence spending. The Strategic Reform Program, as well as other savings initiatives, will deliver around $20 billion in savings across the decade. And, I might say—and this is a very important point—that those savings will be reinvested back into priority Defence programs and capability acquisitions. (Time expired)

Senator JOHNSTON —Mr President, I ask a supplementary question. I thank the minister for that answer. Minister, you will recall that I mentioned $44.9 billion in the first question. Even if your $20 billion—or, actually, $18.2 billion—can be found in internal savings and the $10.8 billion is injected as new money as and by way of the three per cent every year, where is the remaining $16 billion coming from?

Senator FAULKNER (Minister for Defence) —As the Department of Defence indicated at Senate estimates on, I think, 3 June, the estimated overall cost of buying the capabilities that were outlined in the white paper will be between $245 billion and $275 billion out to the year 2030. Officials at the table indicated at that time that the new funding model that the government has decided on will cover the cost of those acquisitions. The government, as Senator Johnston would know, has also made a commitment to grow the Defence budget in real terms by three per cent on average until 2017-18—(Time expired)

Senator JOHNSTON —Mr President, I ask a further supplementary question. Minister, there is the $20 billion in savings and the $10.8 billion in new money that you have set out. Yesterday you introduced $308 billion of expenditure over the next decade. Precisely where is the $308 billion coming from? Is it borrowed?

Senator FAULKNER (Minister for Defence) —It is off budget funding, Senator, as I thought you would have realised—

Senator Johnston —So where’s it coming from?

Senator FAULKNER —Senator, the government’s commitment is budget funding for Defence to ensure that we have reform in Defence and to ensure that Australia gets the best possible Australian Defence Force that money can buy. I would suggest through you, Mr President, to Senator Johnston that that means there will be improved value for Australian taxpayers over the long term. This is something that Senator Johnston should appreciate if not celebrate.