Page 43 - Australian Defence Magazine June 2022

JUNE 2022 | WWW.AUSTRALIANDEFENCE.COM.AU
BUDGET 2022 FUTURE DEFENCE BUDGET 43
AFTER nine years in office, the coalition government has been voted out. Whatever one might think about its climate and energy policies, it’s hard to deny that those were nine good years for defence funding. In the coalition government’s first year in office in 2013-14, Defence spending was $26.1 billion. In the recent 2022-23 budget it’s $48.6 billion. That nominal growth of 86 per cent. In real terms, which takes inflation into account, it’s still a very hefty 55 per cent.
It’s not just the funding growth that’s been important, but its reliability. In 2016 the coalition government pub- lished its Defence White Paper. Contrary to the widely held view that its commitment was two per cent of GDP, the government did not link funding to GDP. Rather the White Paper set out a 10-year funding line that would be fixed re- gardless of fluctuations to GDP. And it delivered that fund- ing, virtually to the exact dollar.
Even during the pandemic when GDP and government revenue plummeted while stimulus spending soared, result- ing in huge deficits, the government adhered to its White Paper funding commitments, both in word and deed. The 2020 Defence Strategic Update, published at the peak of the pandemic, reaffirmed the White Paper funding line and extended it for a further four years out to 2030. And despite the deficits, the government still delivered the money.
2022-23 BUDGET
The 2022-23 budget, released at the end of March, contin- ued that pattern. It’s $46.8 billion in defence funding once again matches the White Paper and DSU.
Certainly, the plan for what the mon- ey is to be spent on has been adjusted. For example, the $9.9 billion RED- SPICE cyber program was mostly ab- sorbed by the Department of Defence which had to hand a huge pot of money over to ASD. But all plans change, par- ticularly those addressing our rapidly deteriorating strategic environment.
“ALL PLANS CHANGE, PARTICULARLY THOSE ADDRESSING OUR RAPIDLY DETERIORATING STRATEGIC ENVIRONMENT”
Those nine years have not just been
good for Defence but also for Austra-
lian defence industry. Despite peren-
nial concerns about whether Aussie
industry was getting its share of the money, the percentage of Defence’s acquisition budget that is being spent locally has grown, both in absolute and relative terms. Defence’s local industry partners are demonstrating that they can absorb a growing percentage of a rapidly growing acquisi- tion budget. Adding the local acquisition and sustainment spends together, Australian defence industry has grown from somewhere short of $5 billion in 2013-14 to well over $9 billion in 2021-22 (before we even consider defence ex- ports, which, unfortunately, are impossible to measure ac- curately). There’s no public data to say how those dollars
LEFT: Air Force’s Project Air 7003, which would have delivered an armed remotely piloted capability was an early victim of the cuts needed to fund the ASD’s RESPICE cyber-security program
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