Budget + Policy

Australia will adopt a defence strategy of denial, and will develop anti-access and area denial capabilities to detect an adversary and prevent them from entering an operational area, the new Defence Strategic Review says.

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An eye to the future

The good news is that the Albanese government has pledged to maintain defence spending at “at least” two per cent of GDP, but what is Defence actually going to spend its budget on?

The government has introduced legislation to Parliament to establish the $15 billion National Reconstruction Fund to re-invigorate Australia's manufacturing base.

Defence associate secretary Matt Yannopoulos has warned companies that Defence will no longer tolerate poor behaviour by IT companies quitting one contract in favour of a better paying contract somewhere else in defence.

The new Defence Strategic Review (DSR) sees the ADF delivering “impactful projection” of power to an adversary well beyond the mainland.

The Labor government plans to spend $48.699 billion on defence this financial year, in line with the funding trajectory established by the former Coalition government.

The Government has announced details of the Defence Strategic Review, including the Terms of Reference and the independent leads who will conduct the Review.

Defence is to receive record funding of $48.6 billion this financial year, in line with coalition government commitments made with the launch of the 2020 Defence Strategic Update (DSU). But it still may not be enough.

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Defence budget challenges ahead

In the recent federal election campaign, both major political parties pledged to keep Defence spending at or above two per cent of GDP, but with the ALP now in power, how will the change affect the recent budget and projections for future defence spending?

The federal budget will increase funding for cyber capabilities at a cost to Defence capability acquisitions. The central question now is where the axe will fall.

The 2022-23 defence budget is a conflicted program. In keys ways it acknowledges and responds to a changing world, but in others it is still a relic of an earlier time.

Taiwan’s defence budget and military strategy have come under intense scrutiny in a series of high level meetings convened on the island in the wake of Russia’s invasion of Ukraine.

In a virtual meeting on 6 January, Prime Minister Scott Morrison and Japan’s Prime Minister Fumio Kishida signed a Reciprocal Access Agreement between the two countries to enable ADF and Japan Self Defense Force co-operative activities.

Australia and Japan are about to sign a reciprocal access agreement to make it easier for their respectively militaries to visit each other’s countries for exercises and other activities, according to reports in Japan.

The unprecedented clampdown on Defence’s engagement with media imposed by Defence Minister Peter Dutton has reinforced the importance of Senate Estimates in prising information from sometimes-reluctant Ministers, senior ADF officers, and bureaucrats.

Blunt threats made in Chinese mainstream media, and more recent remarks by an Australian senator warrant yet another examination of Australia’s strategic circumstances and the likelihood of an attack on mainland Australia.