Opposition Leader Peter Dutton has said the Coalition will support tough budget cuts – such as reducing spend on the National Disability Insurance Scheme – to pay for new nuclear-powered submarines, as Defence Minister Richard Marles confirmed the government would spend 0.15 per cent of GDP each year on the program.
Marles said on Tuesday the details of the spending on the eight nuclear-powered submarines would be contained in the May budget.
Opposition Leader Peter Dutton has offered the government Coalition support for budget cuts to fund the purchase of submarines.Credit:Natalie Boog
“[The defence budget] is currently running at 2 per cent of GDP and is expected to grow to 2.2 per cent of GDP… It is an investment in our nation’s economy. And it is an investment that we cannot afford not to make,” he said.
Dutton, who was defence minister in the Morrison government when the AUKUS alliance was formed, suggested winding back spending on the National Disability Insurance Scheme as one area the government could look to for budget cuts to fund the submarine purchase.
“In my budget-in-reply speech last October, I said that we would work with the government if they had tough decisions to take, for example, keeping the NDIS sustainable,” Dutton told ABC TV’s 7.30 on Monday night.
The National Disability Insurance Scheme, which serves about half a million Australians, will cost about $35 billion this financial year but is expected to rise to $50 billion in 2025-26.
It is one of five spending areas named by Treasurer Jim Chalmers last year as priorities for budget repair.
“[The NDIS is] an incredibly important program, but it needs to be sustainable – and if the cost trajectory on that is going to result in it falling over then I think the government itself has pointed out that that’s not sustainable,” Dutton said.
The Greens warned the $385 billion price tag would force the government to make cuts to spending on health, education, housing and Indigenous Australians.
“Unlike the Coalition, the Greens will not be co-operating with the government to force budget savings on critical public services to pay for these submarines,” Greens senator David Shoebridge said.
“[Tuesday’s] announcement will force Labor to deliver austerity budgets to funnel billions of dollars offshore to fund the US and UK nuclear submarine industries. With this one decision, Labor is mortgaging our future in order to stoke regional tensions with a dangerous escalation in regional defence spending.”
The Greens also objected to relying on the United States’ submarines and crew until the new vessels were ready, saying it compromised Australian sovereignty, and raised concern the alliance would cause unrest with Australia’s regional allies while fuelling an arms race.
Albanese on Tuesday morning said the AUKUS agreement to build eight new vessels in Adelaide represented the biggest single investment in Australia’s defence capability in its history, and would create about 20,000 direct jobs for Australian engineers, scientists, technicians, administrators and tradespeople.
“The scale, complexity and economic significance of this investment is akin to the creation of the Australian automotive industry in the post-World War II period,” he said.
South Australian Premier Peter Malinauskas said his state was very excited about the news.
“The numbers [of jobs] are eye-watering. [What] matters most from a South Australian perspective is it gives us the ability in the long term to genuinely build up the capability and improve our state and nation’s economic complexity, unlike ever before,” he said.
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