Labor inflates defence spending figure with ‘accounting trickery’

Added: 2026-06-02

[00:00:00]Well, the Albanese government has been accused of cooking the books by using more than 10 billion dollars in veteran welfare payments to bolster its headline defense spending figure. Labor changed the way it calculated defense funding early this year after the US demanded spending climb to 3.5% of GDP. Joining us live is the shadow foreign minister Ted O'Brien. Ted, good to see you. So, was it an easy trick for the defense minister to pull off though, the inclusion of pensions, which is a European standard?

[00:00:29]>> Good morning, Pete. It's certainly just a matter of funny money accounting trickery, really. Um the pressure has been on the Albanese government to increase defense spending and for good reason. The number one job of government is to keep its people safe and there's been an enormous deterioration in our capability.

[00:00:46]But, you don't improve Australian safety by taking welfare payments from one spreadsheet into the defense spreadsheet and suddenly Australia is safer. People just don't believe that stuff, Pete.

[00:01:00]>> Yeah, but has he got cover though if if other nations, European nations are doing that?

[00:01:07]>> Well, he might have political cover, but to be honest with you, the real point is is he making Australians safer? And the answer to that is no.

[00:01:15]>> Still on defense, Ted, the first official change has come in regarding the first August subs that we'll be getting next decade, hopefully. So, we'll be getting three old Virginia class subs instead of two. We were supposed to get a new one, but that one's been nixed. But, now we have an option of getting five. So, does that make a change more palatable?

[00:01:37]>> Pete, this has been a a bit of a disaster for the Albanese government because they can't explain this away.

[00:01:45]The original optimal pathway, as the minister would call it, was to actually have not three second-hand used subs, uh but for one of those to be new.

[00:01:59]Now, I'm a big fan of AUKUS. In fact, I think it's absolutely critical to our future as a country. But now, the minister's trying to celebrate the fact that he's not going to get a new one.

[00:02:10]Uh in fact, they're all going to be second hand.

[00:02:13]Um that just doesn't cut it. Uh you know, it's like a dodgy used car salesman. You want a new vehicle and you walk away saying, "Ain't it great? I've got a second hand one." Uh it may not last as long, but uh haven't I done a good deal?

[00:02:28]That's effectively what the minister is trying to tell the Australian people. Um it's hard to trust them when, you know, they're not honest about tax, not honest about subs.

[00:02:39]>> to be fair though, wasn't this America's decision? Wasn't this America's call because it needs to prioritize its own new subs?

[00:02:47]>> Well, it hasn't been clear. And even if it is, it's up to the Australian defense minister just to speak straight with the Australian people.

[00:02:57]I mean, Australians aren't fools. Uh you you can't come out, uh you know, shaking pom-poms saying, "Ain't it great? We've got something second hand that we thought we're going to get new." I mean, just come straight. Thankfully though, Pete estimates is on this week, and I have confidence my colleagues will go after um the uh these issues um in estimates.

[00:03:17]>> So, the way things are going, might it have been better to stick stick with the French, Ted?

[00:03:24]>> Uh well, look, I mean, people will hypothesize on what could have happened there, but I'm actually a big believer in AUKUS. I I do think that the nuclear-propelled submarines are the best for Australia's own interests, and therefore I I think it was a good call.

[00:03:40]Unfortunately, what we have seen though is just a a pretty complacent Albanese government. Um and if it's not going to increase spending on defense, moreover, it's going to keep cannibalizing our capability in other areas to pay for these subs. So, they've sort of made a bit of a mess of it, but we're still seeking bipartisanship on the program.

[00:04:01]>> Okay, let's uh switch topics and get to the one that's a big one around the corner in about an hour and 15 minutes from now, Ted. So, the Fair Work Commission is going to make its call on the minimum wage. Do you support a wage rise for our lowest paid today?

[00:04:16]>> Well, we respect the independence of the body, and while we'll never complain about workers getting more pay, what really matters, Pete, is real wages, not just the wage that might hit your pocket. In other words, how far does your pay go? How much can you buy with the money you earn? And under the Albanese government, real wages have gone backwards. That's the problem. And this is all comes back to homegrown inflation. So, the more prices rise due to government spending, the more wages have to catch up, and the more tax you pay to the Albanese government. So, the only real winner out of wages going up with real wages going down is Anthony Albanese and Jim Chalmers.

[00:05:00]>> We'll have to leave it there, Ted O'Brien. Thanks, as always.