• Budget documents shed light on a few Defence issues.
    Budget documents shed light on a few Defence issues.

Funding for Defence spending remains on track this year at $36.4 billion, setting the government on a path to meet their 2020/2021 two per cent of GDP funding target.

The Budget isn’t hiding any shocks for the Defence community this year, with the document building on delivering the streams of capabilities outlined in the 2016 Defence White Paper, Defence Integrated Investment Plan and Defence Industry Policy Statement along with the National Shipbuilding Plan, Defence Export Strategy and Defence Industrial Capability Plan.

“This budget continues Defences path towards two per cent of GDP, noting that growth in the next two years is moderate,” according to ASPI’s new Budget analyst, Dr Marcus Hellyer. “Consequently to hit two per cent in 2021 there will need to be a substantial jump from 2019-2020 to the following year.

“Cash flow for JSF has hit $2 billion in spending this year, a first for a major program. And we’re starting to see the shipbuilding projects ramp up in earnest. About $1.1 billion is slated for this year. Defence will have to confront how much of their cash flow will go towards this effort.”

Defence’s APS workforce will take a hit thanks to the departure of ASD from the count as well as ‘Machinery of Government’ changes that see the head count fall sharply across the forward estimates. Uniformed personnel will grow by 2.5 per cent compared to previous years with the total workforce forecast to sit at 76,167 people.

This figure does not account for contractors, consultants or service providers, noting that the Budget papers no longer account for these people in any way.

Operational funding has dropped by 17 per cent from $905 million to $750 million, mainly thanks to fast jet operations under Operation Okra in the Middle East winding up earlier this year.

ADM Comment: Big announceables for the Budget seem to be a thing of the past, with the government preferring a constant drip feed of decisions as they are made rather than saving them up.

Minister Pyne in particular has been busy releasing contract announcements on a regular basis and the performance report of the CDIC, Innovation Hub and Next Gen Tech Fund was also released this week.

Stay tuned for Defence Week on Thursday for more on the Budget along with ADM’s complete coverage of all things Budget related in the June edition.

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