THE HON. JOEL FITZGIBBON MP
Minister for Defence
Tuesday, 12 May 2009
079/2009
BUDGET 2009-10
DEFENCE BUDGET OVERVIEW
The Minister for Defence Joel Fitzgibbon announced today that the Rudd
Government will fund the 2009 Defence White Paper and deliver Force 2030
through a robust financial plan.
Defence will have a new funding model that will provide greater long-term
funding certainty and ensure that Defence has the funds it needs when it
needs them. This funding model will impose discipline on Defence spending
and remediate the chronic under-funding that has been inherited from the
previous Government, while ensuring Defence can purchase the military
equipment outlined in the White Paper and properly support Australia’s
serving women and men.
The Government will also implement a significant program of reform, aimed at
cutting wasteful Defence spending while providing long-term funding certainty
so that Defence can run its budget more efficiently in the future. Efficiencies
and savings generated by the Strategic Reform Program and other initiatives
will drive deep changes to policy, practices and culture within Defence and
deliver around $20 billion in savings across the decade. These savings will
be reinvested into priority Defence programs and capability acquisitions. This
reinvestment provides an enormous incentive for Defence to achieve the
$20 billion worth of savings.
“The Strategic Reform Program, announced as part of the White Paper
process, will achieve greater efficiency and implement improved business
processes across areas such as non-equipment procurement, improved
inventory management and information and communications technology (ICT)
reform,” Mr Fitzgibbon said.
The White Paper sets out some $43 billion worth of new initiatives over the
decade. These will be met in full by:
Continuing our commitment to growing the underlying Defence budget
by 3 per cent average real growth to 2017-18, as promised in the
2008-09 Budget, followed by 2.2 per cent average real growth to
2029-30.
Fixed indexation at 2.5 per cent each year to 2029-30, the target
for consumer price inflation agreed by the Australian Government and
the Reserve Bank of Australia, for the purposes of Defence planning.
The new Defence indexation arrangements will avoid year-to-year
volatility in the Defence budget, caused by fluctuating short-term
inflation movements. Previous arrangements have undermined stable
Defence planning and budget management across a full range of
activities.
A program of reform, efficiencies and savings that will generate around
$20 billion worth of savings over 10 years.
These combined measures will result in Defence receiving approximately
$146 billion of additional funding across the life of the White Paper to 2030.
This fully covers off the capability and other funding requirements set out in
the Defence White Paper.
The Government has also committed to:
Continued no-win, no-loss arrangements for net additional costs of
overseas operations and foreign exchange risks, to assist in Defence
planning and in meeting real Defence costs.
The transfer of funding for the Defence Materiel Organisation (DMO)
Service Fee from the Defence appropriation to the DMO direct
appropriation.
Defence meeting any shortfalls against the White Paper funding plan
through internal efficiencies.
The range of savings planned in this Budget will be drawn from
comprehensive efficiencies in administrative, sustainment, workforce, estate,
and ICT functions. Out of Defence's total effort on savings, reprioritisation
and reprogramming, $2 billion will be returned to the Federal Budget over the
forward estimates. These funds will be returned to Defence beyond 2015-16
in line with revised funding needs.
“Over the decade, Defence will receive approximately $308 billion under the
Government’s new financial plan. The task of delivering on the Government’s
new White Paper commitments has already begun,” Mr Fitzgibbon stated
today.
“The coming year will see important investments in projects and initiatives that
will deliver on our promises.”
Mr Fitzgibbon said funding for the White Paper initiatives for 2009-10 include:
Key capability acquisitions and projects such as artillery systems,
replacement of light vehicles, upgraded rifles and enhancements to
ADF command and control systems, satellite communications
capability and counter-Improvised Explosive Device (IED) initiatives;
Commencing work on a Cyber Security Operations Centre that will
monitor threats and provide response assistance across Government
and critical private sector systems and infrastructure;
Improvements to Defence Science and Technology Organisation
(DSTO) facilities, including to the Missile Simulation Centre;
Remediation of Defence’s ICT;
Pay improvements for non-commissioned soldiers, sailors, air men and
women;
Recruitment and workforce stabilisation initiatives for the Navy;
Improvements to ADF healthcare;
Greater flexibility in ADF housing and accommodation, enhancement to
mental health care, remuneration and assistance to families; and
Remediation of ageing power, water and sewerage infrastructure
across our Defence bases, and refurbishment of old working and live-in
accommodation.
The Government will deliver a public Defence Capability Plan (DCP) later this
year. The DCP will provide further information on the profile of White Paper
acquisitions.
Mr Fitzgibbon reaffirmed the Government’s commitment to reform in Defence
to ensure that Australia gets the best Defence Force our money can buy, and
improved value for the tax payer over the long term. It will also see the
beginning of the reforms that will fund the White Paper and deliver Force 2030.
Media contacts:
Christian Taubenschlag (Joel Fitzgibbon):
02 6277 7800 or 0438 595 567
Defence Media Liaison:
02 6265 3343 or 0408 498 664
NEWS 
