Major military projects face $6.5bn blowout and 97-year delay

Peter Dutton has issued a warning about China as a dispute rages over who is to blame for a massive financial mess.

Peter Dutton has refused to take any responsibility for delayed military projects as Labor and the Coalition accuse one another of making a “mess” of defence.

Twenty-eight major military projects, including the Hunter-class frigates, have been confirmed to be running behind schedule by a cumulative 97 years and over budget by $6.5bn.

And the department has been told it will need to “justify every dollar it spends” after it was revealed to be one of the worst offenders in terms of budget blowouts.

The Opposition Leader and former defence minister accused Labor of postponing project delivery in order to spend the money elsewhere in the meantime.

“It’s a cute way of taking money effectively out of Defence and delaying the expenditure,” Mr Dutton claimed on Monday.

Opposition Leader Peter Dutton says Australians are living in the most uncertain times since the end of World War II. Picture: NCA NewsWire / David Clark

Speaking to reporters, Mr Dutton sought to frame the Coalition as superior to Labor in terms of Defence management.

He said the war in Ukraine and the global tensions over China’s expanding influence meant Australians were living in the most “uncertain times” since the end of the Second World War.

“We don’t know in Europe whether there will be a broader conflict – the use of nuclear weapons is being spoken about at the moment – and equally in the South China Sea or in relation to Taiwan,” he said.

“There’s obviously incredible uncertainty over the coming year.”

Asked if he took any responsibility for the 28 delayed projects, Mr Dutton said: “I take responsibility for cleaning up Labor’s mess”.

Earlier, Defence Minister Richard Marles sought to blame the Coalition for the delays and cost blowouts, saying the Albanese government “inherited a complete mess” from its predecessor.

Speaking to reporters in Canberra, Mr Marles argued the Coalition had focused on the “hoopla” of Defence announcements while allowing project delivery and costs to get out of control.

The Opposition will retaliate by saying Defence spending fell to its lowest amount in GDP terms since 1938 under the Rudd and Gillard Labor governments.

Mr Marles promised to bring in new measures to make the Defence department more accountable to government, including monthly updates on projects of concern to get them back on track.

“We accept the responsibility of government and we do so going forward; no ifs, no buts about all of that,” he said.

Defence Minister Richard Marles has promised to improve the way military projects are delivered. Picture: Mike Dugdale

Mr Marles said it would be a “real challenge” to deliver the delayed projects on time and within budget while reducing the department’s long-running strain on the federal budget.

“I think Defence has been a pretty significant offender over the last 10 years and we certainly mean to change that going forward,” he told ABC Radio.

“We know that Defence spending is increasing, we know it represents one of the medium to long-term pressures on the budget, and what the long-term requires is that the quality of spending needs to be excellent.”

Mr Marles said Australia “can’t afford” to have gaps in its Defence capability, promising to improve delivery with monthly reports on each of the delayed projects.

The Albanese government earlier this year ordered an independent review of the Defence Department, which is due to provide its recommendations by March 2023.

Defence expenditure is set to increase to more than $80bn by 2032.

Treasurer Jim Chalmers last week warned that Defence was one of the “big five” cost blowouts facing the federal budget amid debate over whether the “stage 3” tax cuts should be pared back.

Mr Marles told ABC Radio that wasteful defence spending must “come to a stop”, but he insisted Labor hadn’t changed its position on the tax cuts.

The stage 3 cuts will abolish the entire 38 per cent tax bracket from 2024, meaning anyone earning between $45,000 and $200,000 will pay only 30 cents of every dollar they earn in tax.