The Australian Strategic Policy Institute (ASPI) today released its 2008–09 Defence budget update.

The Update examines defence funding as of late 2008 taking account of the government’s mid-year budget revisions, the latest Defence Annual Report, and the impact of the Global Financial Crisis.

The Update argues that, despite the deteriorating economic situation, it is neither desirable nor necessary for the government to step back from its long-term commitment to increase defence spending in real terms by 3% per year.

Not only does defence spending contribute to activity across the Australian economy, but now would be the wrong time to put long-term plans for the Australian Defence Force (ADF) on hold.

In recent years, the Department of Defence (Defence) has struggled to increase its personnel numbers and suffered major delays in acquiring the equipment that the ADF needs for the 21st century.

With ADF recruiting having only recently turned the corner, and many new acquisition projects still in their early stages, it is important that momentum be maintained through continued funding growth.

It is also worth remembering that Defence is committed to find $10 billion of savings across the next decade to meet funding pressures within its budget.

Other key points from the Update are:

• Around $22.4 billion, or roughly 1.8% of GDP, will be spent by Defence in 2008–09

• Even though ADF retention has reached a fifteen-year high and recruitment rates have improved significantly in recent years, serious problems remain in a number of areas including the submarine force and many skilled trades.

• Investment in new equipment continues to be a problem area with $1.9 billion of acquisition spending deferred since the last budget due to delays in existing projects and the slower than expected approval of new projects.

• Notwithstanding the reduction in Australia’s commitment to Iraq, overseas deployments continue to involve around 3,000 personnel at a cost of more than $1 billion in 2008-09. 

The Australian Strategic Policy Institute (ASPI) today released a new report on Papua New Guinea.

Australia and Papua New Guinea have a close relationship. A change in government in Australia and the recent re-election of Sir Michael Somare provide an opportunity for reassessment and readjustment to restore a more productive interaction between the two countries.

The report, written by Ronald May, considers PNG government policies over the last decade which aimed to improve economic performance and governance. It considers in-depth the Australia–Papua New Guinea relationship and suggests ways in which the relationship could be enhanced.

These suggestions include:
• technical assistance and cooperation in areas such as coastal surveillance, the tracking of international criminal activities, legislative drafting, audit processes, IT development and environmental monitoring and conservation
• increased people-to-people interaction through cultural, media, sporting and academic exchanges

‘Australia’s ‘re-engagement’ with Papua New Guinea has been welcomed on both sides of the Torres Strait. But Australia must guard against perceptions that in its enthusiasm to see Papua New Guinea go ahead it does not compromise the latter’s sovereignty. Regular joint consultation at various levels of government and civil society is needed, drawing on the expertise built up over the years by Australians working in Papua New Guinea.’

The Australian Strategic Policy Institute (ASPI) today released a new report on how the Southeast Asian terrorist threat might evolve in the future.

The report was launched by Attorney-General The Hon Robert McClelland MP, at Parliament House. In his speech, the Minister welcomed the publication of the report and said it help Australians better understand the critical challenges faced by our country, and by countries in Southeast Asia.

The regional terrorist threat remains high on the list of Australia’s national security priorities. It is time to take stock of the regional security environment and to ask how the Southeast Asian terrorist threat might evolve in the future.

This report, authored by Peter Chalk and Carl Ungerer, analyses the changing nature of religious militancy and sets out a framework for understanding the forces and trends that are driving jihadist extremism in the region.

A number of policy recommendations are made on the appropriate next steps in Australia’s regional counter-terrorism strategy including leading a diplomatic campaign to ensure compliance with international counter-terrorism conventions.

At the launch, author Dr Carl Ungerer said despite the absence of a major bombing campaign in Southeast Asia since 2005, the regional terrorist threat remains real and requires constant vigilance and monitoring.

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.  

Release of ASPI Strategic Insight  Making it count: Australia’s involvement in Afghanistan 

The Australian Strategic Policy Institute (ASPI) today released a new report on Australia’s commitment in Afghanistan. The report, written by ASPI Research Fellow Raspal Khosa, argues Australia’s security interests are tied to the success of the International Assistance Force (ISAF) mission in Afghanistan. 

Afghanistan will become the main focus of Australian Defence Force Operations supporting Australia’s wider interests over the next year. Recently the Australian Government announced it will commit $619 million in 2008–2009 to Operation Slipper: Australia’s contribution to the ISAF armed state-building mission in Afghanistan. 

The report makes three key recommendations on how Australia’s commitment in Afghanistan can increase its effectiveness: 

• focus on security sector reform by training competent Afghan security forces 
• improve reconstruction and development efforts through better coordination of civil and military resources 
• engage with Pakistan to contain cross-border insurgent activity.

 Author Raspal Khosa contends the only way to expedite our withdrawal and protect our interests is to work towards a sustainable, democratic and secure Afghanistan.