Minister for Defence - Staunching Labor’s $16 billion Defence haemorrhage

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Senator the Hon David Johnston

Minister for Defence

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16 May 2014

This Budget is about delivering on the Abbott Government’s commitment to build a strong and prosperous economy for a safe and secure Australia. That means a strong and capable Australian Defence Force (ADF).

Against the backdrop of an extremely difficult Budget, the Government is committed to staunching six years of budget haemorrhaging under Labor in which $16 billion was stripped or delayed from the defence portfolio.

The full extent of the fiscal carnage inflicted by Labor is only now becoming evident.

From 2009-10 to 2016-17, $16 billion was cut or deferred from the Defence budget including $9.2 billion from the Defence Capability Plan.

Labor’s legacy of mismanagement means Defence now faces a deficit of $12 billion on current plans over the next decade with an additional $18 billion required to achieve Labor’s hyped Force 2030.

As a result, Labor left Defence $30 billion short of being able to achieve the objectives outlined in the former government’s fanciful 2009 White Paper.

This Government has triaged the damage under Labor through our commitment to ensure no further cuts to expenditure.

Now that we have staunched the bleeding, we have initiated treatment in the form of the White Paper and associated reviews.

We will do the hard, methodical work that Labor never did to complete the recovery with our commitment to boost spending to two per cent of Gross Domestic Product within a decade.

We will put Defence on a credible, sustainable path to achieving our two per cent commitment, based on a sound, comprehensive review of the strategic risks Australia could face and the force structure and support capabilities the ADF will need to deal with them.

Labor’s dishonest hollowing out of Defence to fund misguided policies stops with this Budget. The Government can now begin the work of aligning a credible military strategy with a strong and sustainable ADF for a safe and secure Australia.

Labor’s Defence capability fantasy

• Labor’s White Paper blueprints were a $30 billion Defence fantasy.

• Labor left 119 key projects delayed, 43 severely degraded and eight cancelled.

• Labor cut or deferred $9.2 billion from the Defence Capability Plan.

• Under Labor Defence was some $30 billion short of meeting its own stated defence capability goals over the period out to 2023-24.

• If no new money was to come, and none was planned, the DCP would have needed to be cut by a further $12 billion just to keep Defence afloat. A cut of this size is the equivalent of cancelling the Joint Strike Fighter program.

• Labor tried to hide this hoax from the Australian public by not releasing an approved DCP after 2009.

• To give just one example of poor decision making on Defence, Labor cancelled the Self Propelled Artillery project that had selected a super South Korean built gun. In its stead they selected more towed artillery pieces – because they were cheaper in the short term. However, analysis undertaken by Defence has shown that the towed guns are more expensive to deliver the same capability effect over their life.

• At least 43 projects inherited by the Abbott Government are now unlikely to meet their planned capabilities because funding has been sliced. They will have to be re-assessed or cancelled.

• The Abbott Government has reaffirmed its commitment to secure Australia’s maritime borders with the purchase of an additional 58 Joint Strike Fighters for $12.4 billion, eight P-8A Poseidon maritime surveillance aircraft for $4 billion and re-commitment to the Triton Unmanned Aerial Vehicle – a program which had stalled under Labor.

• The Abbott Government will carefully and methodically implement a fully funded White Paper, Force Structure Review and First Principles Review which will be delivered next year.

Media contacts:
Mark Dodd (Minister Johnston’s Office): 0477 389 560
Rebecca Horton (Minister Johnston’s Office): 0477 389 554

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