Page 30 - Australian Defence Magazine May 2019

BUDGET 2019
CONTEXT
Defence No surprises
MANAGING cash flow is everything in Defence, so steady cash coming in allows its people to focus on the difficult task of ramp- ing up major projects and not on working out how to slow projects down to match reduced cash flow without creating capability gaps.
So, Defence would have been very happy with the 2019-20 budget which delivers ex- actly what was expected with no surprises. I noted a year ago that the 2018-19 budget represented a moderate approach which is continued this year.
In short, the top-level numbers are $38,735 million (including both the De- partment of Defence and the Australian Signals Directorate). That’s a 1.2 per cent increase in real terms. Ironically, it’s a very slight decrease as a percentage of GDP to 1.93 per cent. That’s because GDP grew faster than 1.2 per cent in real terms.
Nevertheless, the budget’s forward esti- mates see Defence funding reach two per cent of GDP by 2020-21 in accordance with the government’s White Paper commit- ment. That will be a big jump for the next government to fund as it will need to in- crease the Defence budget by $3 billion next year, or over five per cent in real terms. Those sorts of increases can be hard for Defence to absorb even if the government can come up with the money. But again, that growth has been in the plan since the 2016 White Paper, so Defence can’t say it wasn’t warned.
Consistency is key
So rather than surprises, of which there were none, it is consistency that is the real story of this budget. In fact, it has been the story of Defence funding since the 2016 White Paper.
MARCUS HELLYER | CANBERRA
Defence planners don’t like surprises. Particularly those planners who are trying to match dollars to projects.
30 | May 2019 | www.australiandefence.com.au
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