• Treasurer Josh Frydenberg's 2021 Budget has increased Defence spending to 2.1 per cent of GDP.
Josh Frydenberg via Twitter
    Treasurer Josh Frydenberg's 2021 Budget has increased Defence spending to 2.1 per cent of GDP. Josh Frydenberg via Twitter

As readers are aware by now, government has managed to make good on its two per cent of GDP pledge with this year locking in a 2.1 per cent spending level for Defence from this week’s Budget.

This is the bare minimum if the ambitious plans outlined in the 2016 Defence White Paper and 2020 Force Structure Review and Defence Strategic Update are to be delivered. Given that it takes about a decade for such plans to be delivered (at least historically), the confirmation that the decade-long strategic warning time is no longer in place makes planning and spending even more relevant. Getting $270 billion out the door is a feat in itself.

Minister Price said the Government has kept the wheels of defence industry turning over the past year by accelerating the payment of $26.9 billion in invoices to defence companies, keeping Australians in jobs and businesses going from 2021 into the future.

“The Government’s additional funding to defence industry grant programs has also supported small and medium sized businesses throughout the COVID-19 pandemic, building a strong future for this great sector,” Minister Price said. “Small businesses are the backbone of our defence industry. These business are contributing to ADF capability and supporting the nation’s economic recovery.”

Budget in depth

The Top 30 Military Equipment Acquisition Projects in the Portfolio Budget Statements (PBS) is now presented with an enhanced view of Defence’s military equipment acquisition projects, which includes other elements of acquisition that contribute to an overall capability (excluding workforce), according to the portfolio Budget statement. The projects are also grouped in the revised domain structure introduced through Defence’s Capability Program Architecture as detailed in the FSR.

The Military Equipment Acquisition line corresponds to the historical presentation for this table, which would principally include the project elements relating to the acquisition of major systems, such as aircraft, ships or vehicles.

Where projects involve other elements that are not part of the major capability system, these have been included within the Other Project Inputs to Capability line. This could include facilities, information communications technology, and research and development. While it does not capture all fundamental inputs to capability (FICs) it does go a long way towards capturing more of the costs associated with Defence’s largest acquisition programs.

The approved value of the 30 programs is $121 billion, with $11.6 billion to be spent this financial year.

After many disappointed words in my Budget coverage over the years there has been a small win for budget nerds everywhere; Defence’s Top 5 ICT projects now warrant their own listing in the PBS! Some of this spending is also accounted for the expanded Top 30 Military Equipment Acquisition Projects listings but it is good to see it separated out into a discrete listing for the first time.


Project Name


Project Number/ Phase


Approved Project Expenditure $m


Estimated Cumulative Expenditure to 30 June 2021 $m


Budget Estimate 2021-22 $m




Defence Enterprise Resource Planning (ERP) Program


ICT 2283 604 315 146

This project will meet ADF demands as it modernises capabilities and builds high-performing business functions. The Program will modernise, integrate and transform Defence's approach to managing its finance, logistics, supply, engineering, and maintenance functions.

Fleet Information Environment Modernisation


NAV 2273 Phase 1




186 114

The project will transform the Navy IT systems to a modern IT platform.

It is replacing the current Fleet Information Environment and delivering a continuous design and update capability that will perpetually refresh the IT platform, hardware and software to improve cyber security and avoid obsolescence.

Core Simulation Capability


ICT 9711 Phase 1-A 315 155 84 The project will deliver services required to deliver a Core Simulation Capability. This will provide critical training support to the ADF’s future force through a significant upgrade and expansion of its simulation capability. The capability will: enable Defence to link live and simulated training together for large scale Joint and Combined collective training; and deliver on-demand distributed mission training to the single services of the ADF and Joint Operations Command.

Vetting Transformation


ICT 2270 150 48 61 The Vetting Transformation Project will deliver a transformed vetting capability to support implementation of agreed personnel security reforms and will improve identification, assessment and mitigation of personnel security risks, in response to increasing insider and foreign interference threats directed at Australia.

Airborne ISREW Capability


ICT 555 Phase 1 194 52 47 This project is approved to procure and install the necessary Information Communications Technology into Defence’s Single Information Environment to enable the four MC-55A Peregrine aircraft including mission, ground and support systems being procured by the parent CASG delivered project AIR555 Phase 1.


 Total Top 5 ICT Projects (Gross Plan) = 1,883 757 451

Now bring back the First and Second Pass approvals list, either for the year that was or the year ahead… 


Despite a budget only being released seven months ago, the ADF workforce has seen an uptick in overall numbers; 77,139 last year to 77,873 this year, a .95 percentage change.

This sees 61,468 permanent ADF (79 per cent) and 16,405 APS employees (21 per cent) in the mix with no mention once again of Defence’s contracted workforce. This figure has been at the centre of Senate Estimates questioning for some time with no good answer yet accepted by the committee from Defence.

Infrastructure spending is on a strong rebound with the year-on-year growth in programs having to complete with other national programs. With $5.8 billion to be spent this financial year, the figures ramp up to $6.9 billion, $7.4 billion, $7.6 billion and $7.5 billion over the estimates period.

The huge downturn in operational spending from $4.5 billion to $1 billion over the coming four years will be a huge saving for the department. To perhaps offset this somewhat, the Defence Cooperation Program (DCP) budget is sitting at a healthy $155 million for activities with regional neighbours.

The DCP advances Australia’s strategic interests, according to the PBS (a full breakdown of these activities can be found from P102 of the PBS). In line with those interests, the DCP-priority countries and regions include Papua New Guinea, Indonesia, Timor-Leste, the South Pacific, South East Asia, Pakistan and the Middle East. This is done through directed funding to specific programs alongside the Defence International Training Centre. The objective is to maximise Australia’s security through developing close and enduring links with partners that support their capacity to protect their sovereignty, work effectively with the ADF and contribute to regional security.

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