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Australia Updates Long-Term Defense Plan (May 10)

(EDITOR’S NOTE: All figures in Australian dollars)


The Coalition Government is making a long-term commitment to Defence, with substantial funding increases over the next ten years.

This long-term commitment gives Australia the capacity to build a more combat focused, better equipped, more mobile and operationally ready Defence Force, enhancing our ability to protect our people, interests and values.

The 2000 Defence White Paper committed the Government to increase Defence spending by an average of 3 per cent real growth a year from 2000-01 to 2010-11, adding a further $28.5 billion of resources to Defence over that timeframe.

Now, the Government has decided to continue to increase Defence spending by 3 per cent real growth a year until 2015-16. This will mean an additional $10.7 billion for Defence over the period 2011-12 to 2015-16.

These commitments mean that the Defence budget will grow from $12.6 billion in 2000-01 to $26.7 billion by 2015-16.

Today's long-term financial commitment gives Defence the certainty it needs to plan vital equipment acquisitions.

Due to the size of its acquisition and support programmes, Defence must plan many years into the future and place large contracts that can last a decade or even longer.

The Coalition Government's commitment to Defence has been consistent and ongoing. Despite being faced with an inherited budget deficit of $10.1 billion in 1996, the Government decided in its first budget to quarantine Defence from savings.

A 15-year commitment to an average of 3 per cent real growth in Defence funding is unprecedented in our history. This substantial increase in investment will fund vital projects like the new air combat capability, Air Warfare Destroyers and other priorities set out in the revised 2006-16 Defence Capability Plan to be released later this year.

In addition to the $3 billion in additional funding for 2006-07, provided for in the 2000 Defence White Paper, a further $1.4 billion will be allocated in the coming financial year for new budget measures.

This is the sixth budget in a row that the Government has met or exceeded its 2000 Defence White Paper funding commitment.

The Defence budget will increase to $19.6 billion in 2006-07, up from $10.6 billion in 1995-96. This represents an increase of 37 per cent in real terms. This $19.6 billion commitment to Defence in 2006-07 represents 9.1 per cent of Australian Government outlays and about 1.9 per cent of GDP.

In addition to the 3 per cent real growth commitment and newly announced budget measures, the 2006-07 Budget provides an additional $1.9 billion to acquire a new heavy airlift capability (C-17s), and an extra $1.5 billion over ten years for the Hardened and Networked Army.

The revised 2006-16 Defence Capability Plan sets out the Government's commitment to building a Defence Force able to meet demanding challenges into the future.

The 2006-07 Budget also brings forward $625.1 million in Defence Capability Plan funding over four years, reflecting improved project management by the Defence Materiel Organisation.

Substantial increases in funding in no way changes the Government's commitment for ongoing improvements in efficiency, so that resources can be shifted from the back room to the front line.

The Government has provided an additional $623 million in 2006-07 for Defence operations, comprising:

--$392.7 million over three years from 2006-07 to maintain the present Australian Defence Force level of commitment to Iraq;

--$218.2 million over three years from 2006-07 for deploying and sustaining our Reconstruction Task Force to Afghanistan; and


--$12.1 million in 2006-07 for the surveillance of Australia 's northern approaches as part of Operation RELEX II.

The additional funding for operations in Iraq will continue Australia 's commitment to a Coalition of nearly 30 countries, helping to stop terrorists from sabotaging Iraq 's new democracy .

The 2006-07 Budget places increased emphasis on recruiting and retaining great people, with key initiatives including:

-- funding for the next pay rise in the military Workforce Remuneration Agreement;
-- $194 million over four years for Australian Defence Force recruitment and retention initiatives designed to recover and grow Australian Defence Force workforce numbers;
-- a number of initiatives to improve conditions of service for Defence personnel and support for Australian Defence Force families; and
-- increased remuneration for Reserve personnel.

Other new measures contained in the Budget include:

-- $26.2 million in 2006-07 to sustain and enhance Naval Aviation capability;
-- $95.6 million over four years to operate two Huon Class Coastal Mine Hunter vessels to increase surveillance and patrolling of Australia's maritime approaches;
-- approximately $300 million over eight years to modernise propellant manufacturing at the explosives and propellant facility at Mulwala NSW. This will help us maintain munitions manufacturing in Australia ; and
-- $22.1 million over four years to enhance maritime surveillance and detection.

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A Long Term Plan to Defend Australia