Warren Snowdon (Lingiari, Australian Labor Party, Minister for Defence Science and Personnel) Share this | Hansard source

I am aware of the ASPI report and, whilst I appreciate the diligence with which the ASPI team have gone about their work, I am afraid we do not agree with their outcomes—isn't that a surprise to you! I do want to make the observation that the opposition effectively shares the same policy towards Defence budgets—and for that I thank them. I know that we share a commitment to ensuring that we develop the defence capability, as we have decided to do.

Let me just make some observations about the calculation of the $33 billion shortfall, which assumes a three per cent growth in the Defence budget from 2008-09 to 2017-18 and a 2.2 per cent real growth beyond. Unfortunately this fails to take into account that, when the new funding model for Defence was announced in the 2009-10 white paper, there were deferrals and reprogramming of funding in the early years that were publicly announced in the 2009-10 budget. Additionally, the three per cent growth predicted was never three per cent constant annual growth, but rather an average growth rate over a longer period of time. In the 2010-11, 2011-12 and 2012-13 budgets, there were expenditure reductions applied to the Defence budget totalling $8.9 billion over the period 2010-11 to 2020-21 as detailed in Defence's portfolio budget statements.

Could I also refer further to whether or not the Defence budget has been cut over the decade. The white paper announced that government had decided the Defence funding model would be based on the four-year forward estimates budget cycle, determined on an annual basis and taking into account contemporary strategic, economic and fiscal circumstances. That, I think, is surely understood by everyone. This aligns Defence funding with the Commonwealth's broader budget process. It provides certainty for planning in the short term but recognises the difficulty in forecasting fiscal circumstances in the longer term—which, as we know, is an art which is not perfect.

The Defence budget for 2013-14 is $25.3 billion. This, as we also know, is $1.1 billion higher than the 2012-13 budget of $24.2 billion. This will grow to $30.7 billion by 2016-17. The government will provide Defence with $113 billion across the budget and forward estimates. This compares to $103 billion in the 2012-13 budget and forward estimates, or a $10 billion increase over the four-year period. In dollar terms, this is more than has ever been spent before on defence, and that, I am sure, is well appreciated.

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