BUDGET 2009-10

DEFENCE REMEDIATION

The Minister for Defence Joel Fitzgibbon affirmed today that the Rudd Government would invest approximately $30 billion over the decade to fill the holes in the Defence budget that have been inherited from the former Government.

“The former Government failed to recognise that funding Defence capabilities is far more complex than simply the purchase price of new equipment,” Mr Fitzgibbon said.

These shortfalls are a direct result of the failings of the past Government, which did not properly fund a wide range of critical support areas across Defence or accurately calculate the costs of maintaining and operating major military equipment.  The Defence White Paper process undertook detailed examination of all major aspects of the Defence organisation, and revealed areas that had previously been significantly under-funded and required remediation.  The remediation will occur across three main areas; the Defence Capability Plan (DCP), budget provisions and the enterprise backbone.

The Government will invest almost $6 billion over the next decade to remediate the DCP, which includes almost $1 billion within the forward estimates.  The DCP remediation fills critical equipment and capability gaps that were not previously budgeted for.  This includes acquiring both new technology and replacing current equipment that is reaching obsolescence.  Examples include ensuring that the Navy has Mini Typhoon self defence systems for the ANZAC frigates, new mortar weapons for Army and the replacement of Heavy Landing Craft and Ocean-going tugs.

The Government will invest almost $18 billion over the course of the next decade to remediate budget provisions within Defence; this includes over $4 billion dollars over the forward estimates.  The remediation of Budget provisions involves the unavoidable costs associated with maintaining the current force where no, or inadequate, budget provisions had been made in the past.  The largest example being the Net Personnel and Operating (NPOC) costs for the operation and sustainment of major equipment, which includes fuel, personnel wages, spare parts, maintenance and facilities upkeep.  The NPOC shortfall totals almost $10 billion over the decade.

The Government will invest almost $6 billion over the next decade to remediate the enterprise backbone; this includes over $1 billion dollars over the forward estimates.  The support backbone involves remediating critical support areas of Defence that have been run-down over recent years, including the Defence estate and information and communications technology (ICT) systems.

One example of the remediation required in this area is the Townsville wharf.  Townsville is one of two primary locations for mounting Australian Defence Force operations, and will be essential for the loading and offloading of the Navy’s Landing Helicopter Dock ships when they enter service from 2014. 

The requirement for a berth that could accommodate the new ships was deliberately not planned or funded by the former Government thereby hiding future costs associated with the Landing Helicopter Docks ships.

Media contacts:

Christian Taubenschlag (Joel Fitzgibbon):         02 6277 7800 or 0438 595 567

Defence Media Liaison:                                       02 6265 3343 or 0408 498 664