The Cost of Defence: ASPI Defence Budget Brief 2011-12

The Australian Strategic Policy Institute today released The Cost of Defence: ASPI Defence Budget Brief 2011-12.

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:

This year’s budget shows that the implementation of the government’s 2009 Defence White Paper is continuing to fall behind schedule.

After Defence handed back $1.5 billion this financial year, $3.9 billion of recurrent funding has been cut from across the next decade and $2.4 billion of planned investment in new equipment has been deferred until after 2014.

Nonetheless, the Defence budget will amount to $26.5 billion next year representing 1.8% of GDP.
 
The deferral of investment is due to the slower than planned delivery of existing projects by industry, and the slow commencement of new projects.

This year’s deferrals add to an already unrealistic ‘bow wave’ of investment in the second half of the decade. Further delays are inevitable.

While the cuts to recurrent funding partly reflect the delayed introduction of new capability, it’s increasingly clear that Defence was simply granted more money than it needed in the 2009 Defence White Paper.

The government needs to get its plans for Defence back on track. The future investment program needs to be brought in line with what can feasibly be achieved over the next few years, and steps need be taken to improve Defence’s understanding of its budget.

The time has come to abandon the promise of 3% real growth in defence spending and instead fund Defence on the basis of what they can realistically and sensibly spend.