PM's defence plan to blow out surplus

Tony Abbott's signature election promise to boost defence spending to 2 per cent of GDP within a decade has put pressure on the government to start spending more money immediately and blow out its planned return to surplus.

Sources have told The Australian Financial Review that the Defence Department has told the government that unless it starts spending extra money now by bringing forward projects and acquisitions, it will be unable to spend all the extra money required to hit the 2 per cent target by 2023-24.

But bringing forward spending would disrupt the government's mid-term fiscal strategy and push back a return to surplus which the May budget estimated would occur in about 2021.

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