Defence Minister Richard Marles has given a pretty clear indication that the Defence budget next month will feature cuts and reordering of some programs.
Speaking at the Sydney Institute on Thursday night, the Minister said that meant not proceeding with some programs.
“It means re-profiling some. It means delaying others, re-scoping them. But unless we do that, the numbers don’t add up,” he said.
The Minister said doing this actually built morale within the defence force, “because people now know that what’s going on is real.”
“This is not make-believe money, or make-believe announcements, or hoopla – it’s actually fair dinkum. And whilst there are difficult decisions that you need to digest, at least there is a sense that what’s happening is fair dinkum and real,” he said.
In his speech, Marles affirmed that defence spending was on track to reach 2.4 per cent of Gross Domestic Product (GDP) by 2033–34.
Defence funding for 2023-24 reached $52.6 billion, an increase of seven per cent, although only one per cent in real terms. Defence spending over the forward estimates isn’t expected to feature major if any increases until 2027–28.
The next budget will be delivered on May 14. By then, the government may have released the new national defence strategy, with the budget reflecting any changes in priorities.
The 2024-25 budget is likely to feature significant spending on the AUKUS nuclear submarine program and changes to force structure from the 2023 Defence Strategic Review.
“The strategic context for the 2023–24 defence budget is complex and extremely challenging,” noted Australian Strategic Policy Institute analysts after the last budget was handed down.
“There’s currently a gap, and quite a significant one, between the rhetoric of the 2023 DSR and the 2023–24 defence budget (and forward estimates). How Defence and the rest of government will work together to bridge the gap will become clearer over the coming year.”
Program cuts, though unspecified aren’t unexpected.
Opposition defence spokesman Andrew Hastie warned of this late last year, saying the Minister claimed the defence budget was on the right trajectory but it was actually going backwards in real terms.
“Moreover AUKUS is going to soak up a good portion of the Integrated Investment Plan (IIP) and the overall defence budget and unless we expand the defence budget, we are going to have to cut other capabilities which is what’s happening with Army,” he said.