In the 2015 budget and the 2016 Defence White Paper, the Government remains firm on its commitment to increase Defence spending to two per cent of GDP within a decade regardless of what that might be and if they, in fact, even need the money.
Kevin Andrews gleefully announced in May last year:
Since its election, the Government has invested more than $22 billion in Defence capability projects.
The Government will provide Defence with $31.9 billion in 2015–16 and $132.6 billion over the Forward Estimates. This is an increase of $9.9 billion over the Forward Estimates when compared to the 2014–15 Budget and represents record expenditure on Defence.
Considering, in the 2014 budget from hell, defence had already seen a nominal increase of $2.3 billion, or a real (corrected for inflation) increase of 6.1%, any further increase in a time of “fiscal constraint” would surely be hard to justify.
But no.
On top of that spending, the White Paper released in February revealed that Defence will go on a $200 billion spending splurge over the next 10 years buying new aircraft, ships, submarines and vehicles for Australia’s fighting forces.
Among the acquisitions are nine new frigates, 12 offshore patrol vessels, seven surveillance drones, an extra seven maritime surveillance planes and new armoured vehicles.
Special Forces like the SAS will also get new helicopters including small “Little Bird” aircraft for counter-terrorism measures.
The submarine fleet will be doubled to 12 to replace the Collins Class.
Bases will be upgraded including RAAF Base Pearce and HMAS Stirling. The US is shifting an optical telescope to the Harold Holt Communication Base at Exmouth.
The number of uniformed personnel will be increased by 2500 to 62,400, the largest number in more than 20 years.
And let’s not forget the $110 million so far committed for the Sir John Monash Centre at Villers-Bretonneux.
Global military spending has begun rising in real terms for the first time since the US began its withdrawal of troops from wars in Iraq and Afghanistan, according to the Stockholm International Peace Research Institute.
Defence budgets rose 1 per cent to $US1.68 trillion ($2.2 trillion) in 2015, making up about 2.3 per cent of the world’s gross domestic product.
With the presumed aim of smaller government and reducing duplication, one of Abbott’s poorer decisions was to subsume the Defence Materiel Organisation with the intent of outsourcing functions under a “smart buyer” banner and in so doing, lost an enormous amount of very knowledgeable and successful expertise.
The appointments in 2004 of two pragmatic, no-nonsense outsiders – Steve Gumley and Warren King – to run DMO were responsible and effective choices. By the end of their tenure, projects were brought in on average at 95 per cent of budget; in respect of capability, 96 per cent are delivered with the requisite capability; and in respect of schedule, the average time overrun was reduced substantially from a decade earlier. These are metrics recognised as not only world class for the defence sector but also for the private sector in general.
In January this year, the Australian National Audit Office acknowledged these improvements, noting “that 73 per cent of the total schedule slippage across the major projects relates to projects approved prior to DMO’s demerger from Defence in 2005”.
In all likelihood, much of what DMO finally achieved in terms of professional project management tradecraft will need to be replicated. If not, it’ll have to be relearnt. The measure of success here is not plaudits from defence contractors but rather the delivery of materiel on time, on budget and according to specification.
The 2015 budget increased Operations funding to $910.7 million in 2015-16 and $1,071.8 million over the Forward Estimates, even though, as the White Paper concludes, “a military attack on Australia is a remote prospect.”
And don’t expect any “savings” in Defence to come from this budget . . . terrorism, China, cyber warfare. The only saving they came up with in the last budget was to cut $5.8 million from the Defence contribution to the Government’s Digital Transformation Agenda. So much for innovation.
The 2014-15 financial statements for the Department of Defence showed net assets of over $72.5 billion. Perhaps someone should have a chat with them about “living within their means.”
So if you are wondering why we can’t afford schools and hospitals . . .
