THE COST OF DEFENCE: ASPI DEFENCE BUDGET BRIEF 2004-05

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Release of the Australian Strategic Policy Institute’s (ASPI’s) Defence budget Brief 2004-05

The Australian Strategic Policy Institute today released its report The Cost of Defence: ASPI Defence Budget Brief 2004-05.

This document has been written to give interested readers greater access to the complex workings of the Defence Budget and to promote informed debate on Defence budget issues.

In releasing the publication, Dr Thomson said that:

“There is a surprisingly large amount of new money for national security and Defence, notwithstanding the emphasis given to Tax and Family in this year’s pre-election budget.” 

“Specific measures for Defence include $815 million for logistics, $654 million for personnel, $300 million for estate upkeep and $132 million to maintain our deployment to Iraq until the middle of 2005.”

“But just like last year, there continues to be a slow shift of spending away from capital investment in future capability to spending on today’s personnel and operating costs.”

“This budget announced that around $2.2 billion of previously planned investment in new military equipment would be deferred from the first part of this decade to beyond 2007-08 because it has become increasingly clear that Defence simply cannot spend the money as quickly as first thought.”

“To improve the delivery of investment projects, there are major reforms under way in the Defence Materiel Organisation (DMO) whose job it is to acquire new equipment.

“This had better work. Later this decade, when the deferred investment funds reappear in the budget, DMO is going to really have its work cut out for it.”

” Overall there have been visible improvement in Defence’s budget discipline, planning and reporting compared with a couple of years ago, nevertheless we think that more could be done to ensure that value for money is being delivered.”

“We’re into the central years of the 10-year White Paper funding period and, as yet, the Government has not decided what Defence funding will be past 2010. That’s one of the reasons why we called for a new White Paper in our 2004 Strategic Assessment.”