Defence: Program Funding

Senator Johnston asked the Minister for Defence, upon notice, on 11 January 2010:

1. With reference to the Government commissioned report, 2008 Audit of the Defence Budget which identified that ‘a real growth rate of 3.5% in capital expenditure on SME [Specialised Military Equipment] [is required] just to replace today’s equipment. To deliver the capabilities proposed in the recommended Force Structure Option requires a growth rate of 4.2%’: How does the Government intend to fund its proposed capabilities when over the next 3 years there is negative real growth in the Defence budget of ‑0.43 per cent in 2010-11, ‑1.85 per cent in 2011-12 and ‑4.06 per cent in 2012-13.
2. With reference to the report, Cost of Defence: ASPI Defence Budget Brief 2009‑10 which states, ‘that over the next decade that defence spending growth has been pared back to 2.2% real per annum. On past trends, this will be insufficient to even maintain the force in a ready state – the average trend has been 2.7% annual growth since WW11’: How will the Government fund its Defence White Paper commitments when funding drops to 2.2 per cent real growth per annum, below that that needed to sustain the Australian Defence Force.

Senator Faulkner - The answer to the honourable Senator’s question is as follows:

1. and (2)  The Government’s long term funding model delivered under the 2009 White Paper provides 3 per cent average real growth to 2017-18, 2.2 per cent average real growth from 2018-19 to 2029-30, and 2.5 per cent fixed price indexation for the period 2009-10 to 2029-30 applied from 2013-14.  In conjunction with Strategic Reform Program savings this model delivers sufficient funding on a year-by-year basis to deliver the capabilities outlined in Force 2030. 

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