Pauline Hanson’s defence spending boost would cost extra $225b, budget office says

One Nation leader Pauline Hanson’s plan to dramatically increase defence spending would cost taxpayers at least an extra $225 billion over the next decade, parliament’s independent policy costings agency has found.

The analysis from the Parliamentary Budget Office comes as Opposition Leader Angus Taylor urges Liberal supporters not to seek to “blow the country up” by deserting the Coalition for One Nation as the right-wing populist party soars in opinion surveys.

Hanson’s surge in the polls – she has become Australians’ preferred prime minister, according to this masthead’s Resolve Political Monitor – has focused attention on her policy platform, including defence spending and overhauling industrial relations to make it easier to fire “lazy” employees.

Hanson previously echoed billionaire businesswoman Gina Rinehart by calling for an increase in defence spending to 5 per cent of gross domestic product, but last week clarified that she favoured a target of 3.5 per cent of GDP on core defence spending.

This matches the level the Trump administration has urged allies and security partners to spend as it calls on them to do more to meet their own needs. Australia currently spends about 2 per cent of GDP on defence, a figure set to rise to 2.4 per cent by 2037.

“We need to increase it,” Hanson told Sky News last week. “I’d like to see more defence spending in drones and missiles. We cannot just rely on the United States to come to our aid. We have to be able to defend ourselves as a nation.

“I’m looking at 3.5 per cent of the GDP.”

A new paper released by the Parliamentary Budget Office, which costs political parties’ election promises, finds that increasing defence spending to 3.5 per cent of GDP by 2037 would cost the budget an extra $225 billion over the next decade compared with the current policy settings.

The Coalition’s plan to increase defence spending to 3 per cent of GDP would cost an additional $106 billion compared with the current spending trajectory over the same period.

The budget office analysis notes that it can be difficult to quickly step up defence spending, because of the complexity of the projects involved.

“Acquiring hardware or increasing staffing can involve a significant lead time, particularly for activities such as design or tender processes, and operational costs are naturally tied to these assets,” the analysis states.

“As such, in practice, except for ‘shovel-ready projects’ that are prepared and lacking only funding, increasing cash outlays may involve a lag.”

Hanson said she would fund extra spending for defence by abolishing the Department of Climate Change, cutting funding for Indigenous programs, scrapping the SBS, reducing ABC funding and ending duplication in health and education funding.

A One Nation spokesman said last week that Hanson’s call to spend 5 per cent of GDP on defence was based on a pledge by NATO nations to spend 3.5 per cent on core defence and a further 1.5 per cent on related areas such as infrastructure, the defence industrial base, civil preparedness and resilience.

This means One Nation would have to spend significantly more than $225 billion to hit its overall 5 per cent defence funding target.

Spending 5 per cent of GDP on defence by 2037 would cost an extra $579 billion over the decade, according to the budget office.

Leading defence economist Marcus Hellyer said this month that immediately lifting core defence expenditure to 5 per cent of GDP would increase the defence budget to about $692 billion over the four-year forward estimates, up from $277 billion under the current policy settings.

Asked about reports of an exodus of Liberal Party members abandoning their party memberships for One Nation, Taylor said on Sunday that “the answer right now is not to blow this country up”.

“I understand the frustration that people have right now. They’re frustrated that we didn’t win the last election,” he told Sky News. “The answer isn’t to blow the place up.”

Taylor said new party president Tony Abbott was “doing a great job at getting out and energising the membership, retaining those who are frustrated, and many are, I understand that”.

Opposition foreign affairs spokesman Ted O’Brien said he completely disagreed with Hanson’s view, expressed at the National Press Club last week, that Australia should cut foreign aid funding to Pacific nations that also receive support from China.

“I mean, the idea that you effectively hold a gun to the head of our Pacific neighbours – that’s not what a friend does,” O’Brien told the ABC’s Insiders.

“The relationship that we have with the Pacific Islands is far deeper than development money, and if you were to narrow the debate to just that, well, you’ve got to be careful who you want to go into a bidding war with.”

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