The Cost of Defence 2020-2021
(Source: Australian Strategic Policy Institute; issued Aug. 12, 2020)
Despite the current economic uncertainty, the government has recommitted to the generous funding line in the 2016 White Paper, and even extended it by four years. That results in Defence receiving over half a trillion dollars over the coming decade.

Report author Dr Marcus Hellyer said, 'It's a huge commitment by the government. Despite growing budget deficits and declining GDP, the government has locked in major long-term growth in the defence budget. It will grow well past 2% of GDP. That shows how concerned the government is about our security environment.'

That funding includes $270 billion for new military capability which is set out in the new Force Structure Plan. The new report examines where that money is being spent. A lot of it will be spent on new strike capabilities that can target adversaries' forces at greater range.

Dr Hellyer said, 'The ADF has well and truly entered the "age of missiles". There's potentially $100 billion in the plan for guided weapons. That will give it significant new offensive and defensive capabilities.'

One of the key challenges to generating the future force and the level of sovereign industry capability that the government is seeking is that Australian defence industry will have to grow considerably to keep up with Defence's rapidly growing acquisition budget.

By the end of the decade, Defence could be spending $10 billion on equipment here in Australia. Last year it was a little over $2.5 billion.

'To get there, Australian defence industry is going to have to eat a very large elephant. The government is probably going to have to invest more in helping local industry grow. That means greater investment in R&D to grow high-tech Australian enterprises,' Dr Hellyer said.

This report is in part funded by Saab Australia.

Click here for the full report (82 PDF pages), on the ASPI website.


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