• The new Australian Signals Directorate cyber and foreign intelligence facility in Canberra, ACT. (Defence)
    The new Australian Signals Directorate cyber and foreign intelligence facility in Canberra, ACT. (Defence)

As Marcus Hellyer wrote for ADM yesterday, this Budget is conflicted: it goes some way to adapting Australia to the shifting security environment, but also invests heavily in acquisition programs that many argue are moving too slowly or based on outdated assumptions. It also shows a struggle for influence that is distracting from pressing national security concerns.

One of the major points from the Budget was an additional $9.9 billion over the coming ten years for the Australian Signals Directorate, with $4.2 billion allocated over the forward estimates period. As Hellyer noted, that doubles the ASD's funding in just a few years. 

Former head of information warfare for the ADF, Marcus Thompson, said this cyber defence investment is “welcome and long overdue”, with 20 per cent cyber rebates for small businesses also encouraging, but 'more is needed to shore up Australia’s multinational-dependent cyber resilience.'

"Our greatest threats come from abroad, but the bulk of our cyber investment goes abroad as it’s dependent on multinationals. More than ever, we need to build stronger sovereign capabilities at home," Thompson said.

This marked increase in funding for the ASD also shows the influence that the organisation wields within the government under the leadership of Rachel Noble, who was appointed in February 2020. Noble has secured a huge investment - the largest in the ASD's history - which she will now use to double the organisation's size and implement a project called 'REDSPICE' to broaden Australia's offensive cyber capabilities.

The government has agreed to deliver Noble's ambitions at a cost to the ADF's hardware. As Hellyer wrote yesterday, 85 per cent of the ASD's new funding will come from $1.5 billion per year deducted from Defence's capability acquisitions compared to a year ago. Cyber has now been prioritised over military equipment - and while the merits of that strategy will no doubt be debated in the coming weeks, the central question is which capability programs will be reduced to pay for Project REDSPICE.

A main contender may be Land 400 Phase 3, the most expensive capability acquisition program in Army's history. The budget for Phase 3 was initially set at $10-15 billion in 2015 but has since ballooned to $18-27 billion, which is both a remarkable increase and a remarkably wide estimate. ADM understands that the government has been sitting on this announcement for weeks and it will be interesting to see whether the final decision reduces the number of IFVs to be acquired, currently set at 450 - or the stockholding of munitions, procurement of spares or investments in supporting infrastructure.

The on-going public debate around Army's investment in armoured capabilities may expose these programs as the easiest targets politically to cut. If that's the case, than one consequence of this budget may be an emerging struggle for influence between Army's senior officers and Australia's cyber spies. 

Another quick $4-5 billion could hypothetically come at the expense of the Army's helicopter replacement program, which will at this stage will deliver the ADF a helicopter capability that is not a step-change from that currently fielded, and in any case may swiftly be marginalised by the US Future Vertical Lift program.

No matter where the axe eventually falls, all Defence capability program offices will now presumably be looking to justify their scope.

Yet it's worth remembering that this budget arrived not long after China established what appears to be military toehold in the Solomon Islands. The failure of the government's 'Pacific Step Up' - including promises of a Pacific Support Vessel that have since gone dark - is surely one of the greatest failures of Australian strategic policy in the past few decades. 

And this is itself a consequences of a wider tussle for influence between Defence and the other arms of Australian power, such as aid programs, overseas broadcasting and diplomacy. Military capabilities are critical, but the Solomon Islands has just demonstrated to the Coalition government what can happen when internal struggles for influence distract from real national security priorities.

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