Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

My question is to the Minister for Defence, Senator Johnston. What action has the minister undertaken to ensure that the government meets its pre-election promise to have defence spending at two per cent of GDP within a decade? Can the minister confirm that the movement towards meeting this promise will begin in next year's budget and that it will be fully outlined in the defence funding guidance accompanying next year's budget?

David Johnston (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

I thank the honourable senator for the question. It would be the first time in six years that a Labor senator has shown the slightest bit of interest in the Defence portfolio and the national security standing of this country—

Opposition Senators:

Opposition senators interjecting—

David Johnston (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

in terms of funding—not the slightest bit of interest. This is a very important and crucial question for the financial wellbeing of the Australian Defence Force. What I have been confronted with as the new minister has been an absolutely shambolic state of finances. It is almost a modern miracle that when Typhoon Haiyan went through the Philippines we were able to field two C17s, a C130 and turn HMAS Tobruk around and send them up there to deal with that. We predeployed to people in the face of that cyclone. These are the sorts of things we are finding almost impossible to do because the resourcing of this portfolio has been plundered by the Labor Party for the last six years: $16 billion in four years just ripped out of this portfolio—and the senator comes in here to say, 'What are you going to do about it?'

What we have said is that, first of all, there will be no further cuts—and may I say, in the face of what we have seen in the last four years, that is one hell of a turnaround, can I tell you. There will be no further cuts to the defence budget. We have then said that we will firstly thereafter steady the ship—that is, we will scope out what the damage has been to the capital account of the Defence portfolio into the next 10, 15 and 20 years, bearing in mind that senators on the other side would not understand that shipbuilding is a 20-year proposition from its inception.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I have a supplementary question, and perhaps the senator might like to attempt to answer this question. Does the minister accept findings by the Australian Strategic Policy Institute which show that achieving the government's promise to increase defence spending to two per cent of GDP within a decade would require an annual real rate of growth of around five per cent each year over the next 10 years, or around $35 billion? Will you now commit to that target?

David Johnston (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

The most important finding of the Australian Strategic Policy Institute in its examination of successive Labor budgets was that the former government had reduced the defence department's budget to an 'unsustainable mass'. That is the legacy that I have inherited from you fellows—an unsustainable mass.

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

Mr President, I raise a point of order on relevance. The minister has completed half of his answer and it has not got to the specific question about the government's commitment.

John Hogg (President) Share this | Link to this | Hansard source

The minister is addressing the question and the minister still does have 23 seconds remaining.

David Johnston (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

This is the issue with the Labor Party in government: 'We're going to have Joint Strike Fighters, we're going to have submarines, we're going to have rockets to the moon—but please don't mention the dollars because we've got none. We don't ever want to talk about the dollars because we're interested in the photo opportunities, not the actual substance of the portfolio.' (Time expired)

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Minister, when addressing ASPI last week you said that the government would only begin increasing defence spending 'as soon as broader economic circumstances permit'. Minister, are you walking away from your pre-election commitment or will you now commit to the $35 billion that you have been promising?

David Johnston (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

When I said that we were confronting broader economic challenges, one of the principal ones was what we have heard about today: an NBN allegedly going to cost $4 billion; now it is $73 billion.

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

Mr President, on a point of order on relevance: the minister has started in a completely different area. We need to have a response to the question about the pre-election promise from the government.

John Hogg (President) Share this | Link to this | Hansard source

There is no point of order at this stage. The minister still has 41 seconds remaining.

David Johnston (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

Can you imagine the confidence of the men and women of the Australian Defence Force fighting on the front line knowing that the shadow minister, who is in waiting were there to be a change of government, has a track record of the sort of financial management—

John Hogg (President) Share this | Link to this | Hansard source

Order! Senator Moore is on her feet and she has the right to be recognised, but I will not recognise her until there is silence.

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

Mr President, again on relevance, we have now gone another 20 seconds to this answer and, again, there has been no movement towards an answer to this question. I ask you, Mr President, to draw the minister's attention to the question.

John Hogg (President) Share this | Link to this | Hansard source

I do draw the minister's attention to the question. The minister now has 23 seconds remaining to address the question.

David Johnston (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

So when I was talking to ASPI, Mr President, about the wider challenges confronting the government in financial circumstances, can I tell you that the successive deficits the former Labor government delivered, the policy of ripping out $30 billion in ASPI's— (Time expired)

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

My question is also to the Minister for Defence, Senator Johnston. Minister, I am amazed at the gall of the Labor Party to ask questions about the budget given that they released two defence—

John Hogg (President) Share this | Link to this | Hansard source

Order! You need to ask your question. Order! I remind all senators on all sides that statements are disorderly at the start of a question. That has been well and truly established before. Senator Fawcett, ask your question.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Do you want me to start again, Mr President?

John Hogg (President) Share this | Link to this | Hansard source

No, just ask your question.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

I refer to the fact that the previous Labor government released two defence white papers, so why is it necessary for the incoming coalition government to commission another defence white paper?

David Johnston (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

I thank the honourable senator for his interest in defence. The previous Labor government has left me and the new government a number of financial hand grenades, most of them with the pins out. The first of these was the 2013 defence white paper. This was a 148-page document with only a page and a half devoted to how the defence white paper was to be funded. Bad enough as that sounds, the key omission was that there were no costings attached to an array of procurements—that is, 'We are going to buy all this stuff but we are not going to tell you where the money is coming from.' Not one single dollar figure appeared anywhere in the whole document—not one single dollar figure!

What was clear to me from the day that this white paper was released in May of this year, was that it is a completely flawed document, totally lacking in financial credibility. When I was appointed Minister for Defence, the first thing that became apparent to me was that my worst fears had been realised: the government's strategic objectives and forced modernisation plans, as described in this white paper, are completely unaffordable. They have simply treated defence like an ATM, and those proposals in this white paper were unaffordable in the face of $16 billion of cuts. The portfolio was financially on its knees. That is the legacy that the Labor Party had given us: grand plans on the front foot, making grand announcements in front of jet fighters and helicopters, but no dollars. The major problem was that there was not any funding for any of those announcements. That is what we are confronted with. (Time expired)

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I have a supplementary question. Given that, in the 2009 white paper, the Labor government promised to increase defence spending by three per cent per year in real terms, Minister, why do we have a situation where over 5,000 jobs in the defence industry manufacturing sector have been lost, including in my state of South Australia?

David Johnston (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

Since the 2009 defence white paper was delivered by Labor, most notably in the 2012-13 and 2013-14 budgets, defence has had to delay 70 projects, reduce the provisions of 35 and cancel a further seven. Cancelling, delaying or suspending projects means only one thing—jobs in the Australian defence industry have been lost. There have been lost, as a result of Labor's incompetence, 5,000 highly skilled jobs in the defence industry since 2009. Guess where they have been: in South Australia and Victoria. The Australian government is committed to supporting the local defence industry, and there will be, as I have said in an answer to a previous question, no further cuts to defence spending by this government. Defence expects to spend $5.4 billion, or around 59 per cent, of the DMO's total military equipment acquisition. (Time expired)

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I have a further supplementary question. Can the minister confirm that Labor's Strategic Reform Program is now considered a failed project that produced few, if any, savings for defence?

David Johnston (WA, Liberal Party, Minister for Defence) Share this | Link to this | Hansard source

As many interested in this place would know, the Strategic Reform Program was to yield $20 billion over 10 years. The program lasted about nine days. That is because the budget that was brought down straight after the 2009 white paper failed to deliver any money in support of it. The promises of 2009 were simply left twisting in the breeze by a government that never regarded defence as a priority. Even worse, they regarded it as nothing more or less than a cash cow to be plundered. That is the legacy of Labor in defence.

By the time of the 2011-12 budget, the promises contained in and surrounding the Strategic Reform Program were never even mentioned. Labor's failed attempts to balance their overall budget were a step too far for a government that spent money as if there were no tomorrow. They treated defence as a convenient ATM. (Time expired)

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

Mr President, I ask that further questions be placed on the Notice Paper.