Release The Cost of Defence: ASPI Defence Budget Brief 2008-09
The Australian Strategic Policy Institute today released The Cost of Defence: ASPI Defence Budget Brief 2008-09.
This document has been written to give readers greater access to the complex workings of the Defence budget and to promote informed debate on defence budget issues.
In releasing the document, ASPI Defence Analyst Mark Thomson said:
Defence is not short of money at the moment. Not only will they hand back $812 million of unspent funds this year, but they’ll receive an extra $939 million in price indexation for next year. This explains why they’ve been told to absorb around $1 billion of operational deployment costs in 2008-09.
Nonetheless, the Defence budget will still exceed $22 billion next year representing 1.8% of GDP.
Deployment costs continue to mount. Over the next three years, a further $702 million will be spent in Afghanistan and $268 million in Iraq, which will bring the accumulated cost in these two theatres to $2.1 billion and $2.3 billion respectively.
For the long term, the government extended 3% real growth in the Defence budget from 2016 to 2018.
Unfortunately, Defence’s long-troubled acquisition program again looks to be faltering. Another $2.3 billion of planned investment in new equipment was deferred in the budget.
In a sign that recent personnel initiatives are making a difference, the permanent defence force has grown for the second year in a row, after having fallen across the preceding three years. Over the next four years the force is planned to grow from just over 53,000 to around 57,500.
Despite the present healthy budget situation, Defence is likely to need more money to deliver the plans presently in place for the defence force. For this reason, the recently announced decade-long $10 billion internal savings program is critical.
But even for a colossus like Defence $1 billion a year is a lot of money. To free up this much money will demand root and branch reform to how Defence goes about its business.