• Image: Jim Chalmers MP via Twitter
    Image: Jim Chalmers MP via Twitter

Defence funding for 2023-24 has exceeded $50 billion for the first time, though the substantial increases foreshadowed in the recent Defence Strategic Review (DSR) won’t appear for a decade.

In line with the DSR, the Defence budget features significant reshuffling, with funds redirected to areas deemed higher priority.

For the first time, the defence budget papers acknowledge spending for initial implementation of the nuclear powered submarine program over the next four years. But the government isn’t saying how much, citing commercial sensitivities.

In the same vein, there are no figures cited for “Securing a Unique and Critical Defence Capability”, again citing commercial sensitivities. That’s likely the Commonwealth’s acquisition of a stake in Canberra radar company CEA.

Defence Minister Richard Marles said over the next four years, the Government will invest more than $19 billion to implement the immediate priorities identified in the DSR.

That includes $9 billion for the nuclear-powered submarine program through AUKUS, $4.1 billion for long-range strike capabilities and $3.8 billion to enhance northern base infrastructure.

There’s $900 million to establish the Advanced Strategic Capabilities Accelerator and through AUKUS Pillar 2.

The Minister said central to the security of Australia is the collective security of our region.

Importantly, there’s additional funding for key defence partnerships in the Indo-Pacific, to be delivered within Defence’s existing resourcing, including through an initial $7.8 billion reprioritisation of the Defence Integrated Investment Program, he said.

With the DSR, the government announced a series of projects for reprioritisation, mostly upgrades to base facilities but including cancellation of a planned second regiment of self-propelled howitzers and reduction in the acquisition of infantry fighting vehicles from 450 to 129.

Marles said this initial reprioritisation will be expanded in the first National Defence Strategy to be delivered in 2024.

“Building on the Albanese Government’s commitment to implement the recommendations of the Defence Strategic Review and to commence the work to deliver Australia’s nuclear-powered submarine program, Defence spending as a proportion of GDP will lift above its current trajectory to be 0.2 per cent higher by 2032-33,” he said in a media statement.

That 0.2 per cent amounts to some AU$30 billion over the six years beyond the forward estimates.

Defence budget papers show spending for 2023-24 will reach $52.558 billion – 2.04 per cent of GDP – up from $49.131 billion – 1.93 per cent of GDP – in 2022-23.

What’s notable in the budget documents is a reduction of $1.1 billion for acquisition of new equipment, down from the previous estimate of $$13.46 billion to $12.35 billion.

Budget papers list the top 30 acquisition projects. Again, number one is the acquisition of 72 F-35A Lightning aircraft, of which the final dozen will be delivered in 2023-24.  Total budget is $16.456 billion, with $11.6 billion spent to June 30.

The list features a number of projects for acquisition of precision missile capabilities. Through Project AIR 3023 Phase 1, the RAAF is to acquire LRASM and JSM anti-ship missiles to equip F-35A, F/A-18F and P-8A Poseidon aircraft.  The budget is $751 million with $333 million to be spent in 2023-24.

Under Project AIR 6004 Phase 2, $558 million is to be spent equipping aircraft with JASSM-ER (extended range) missiles.

The RAAF is boosting its war stocks of AIM-9X and AIM-120D air-to-air missiles. Under Project AIR 6000 Phase 5, Defence will spend a total of $902 million for unspecified numbers of these missiles, with $135 million to be outlaid in 2023-24.

The RAAF’s acquisition of an additional seven MQ-28A Ghost Bat uncrewed aircraft, making a total fleet of 10, in confirmed. Total acquisition cost is $454 million with $145 million to be spent in 2023-24.

Ahead of the DSR release, there was speculation that the Army project to replace its fleet of 59 M1A1 tanks with 75 M1A2 tanks and 52 combat engineering vehicles could face reduction or even cancellation.

The budget papers give an indication why it survived – it’s simply too far advanced.  These vehicles enter full rate production in 2023-24, with $971 million of the total $2.283 billion budget, to be spent in 2023-24.

The ADF has long acknowledged a personnel problem, with all three services falling short of recruitment targets. In all the ADF has shrunk by around 2,000 in the last two years. 

The budget papers say the increase in separation rates and lower than expected achievement of recruitment targets means the ADF workforce is forecast to be below current guidance. The average permanent workforce for 2023-24 is 59,673.

The government’s budget papers express a high level of optimism, pointing to a target of 65,595 personnel in 2026-27. However, the long term tend is not encouraging with average growth of less than 60 personnel a year since the 2016 Defence White Paper.

To address these issues, Defence formed a Recruiting and Retention “Tiger Team” which identified a number of initiatives. One being funded in this budget is a two-year pilot of a $50,000 continuation bonus aimed at junior officers and non-commissioned in position where the workforce is regarded as at greatest risk.

A detailed analysis of the FY2023-2024 budget will appear in the June issue of ADM.

comments powered by Disqus