Don’t believe any shiny headlines about huge increases in defence spending because this budget does not deliver them nor does it even foreshadow them in the forward estimates.
Instead, the vast bulk of the government’s promised $50.3bn in extra defence spending over the next decade is at least five to 10 years away.
This is the reality – a politically convenient one – of the government’s defence funding promises. Everything major – including the bulk of the funding for the AUKUS nuclear-powered submarines and its new fleet of Hunter-Class frigates and general purpose frigates – is over the horizon in terms of funding.
As such, these grand promises cause the government little short-term financial pain and are therefore politically safe. Such promises, if one were a cynic, are therefore easily breakable because real money – the tens of billions that they will eventually need – has not been allocated to future defence budgets.
In other words, we will have to take the government at its word that is it really, truly committed to its promise to lift defence spending from its current 2 per cent of GDP to 2.3 per cent in a decade’s time. The political will of this – or future governments – will truly be tested only when the eye-watering bills for the new nuclear-powered subs fleet begin to arrive in the early 2030s.
Labor says it will boost defence spending by $50.3bn over the next decade, but only $5.7bn, or just over 10 per cent of this, is foreshadowed in the four-year forward estimates outlined in this year’s budget papers.
This is not an entirely cynical ploy by the government. Major planned defence acquisitions like the nuclear subs and the new fleet of general purpose frigates can’t be paid for years ahead of them actually being built. But the problem is that when these bills finally arrive, they will be huge and they will all come at once. This is why many commentators believe that even the government’s headline promise to spend $330bn on new weapon systems over the decade may not be enough to pay for its new-look military force, including long-range missiles, air and maritime drones and enhanced air defences.
The budget papers highlight the serious problems the Australian Defence Force faces in recruiting enough soldiers, sailors and airmen and women to man their current force, much less an expanded future force.
The budget admits that “Defence is forecasting to be below the required ADF full-time workforce for 2024-25 due to high separation rates and lower than expected achievement of recruitment targets over recent years”.
It claims that ongoing investment in recruitment and retention as well as new recruitment strategies including allowing non-Australian citizens to join, will contribute to stabilising and then building and sustaining the ADF workforce.
The truth is that this ADF workforce will grow to the required levels only if the government throws more money at salaries and at conditions of service to entice defence personnel to make a long-term career in the service rather than use it as a temporary means to gain qualifications for the private sector. But this will also require much more long-term investment than the government is budgeting for. This defence budget was an easy one for the government. The true test of its political will on defence spending is yet to come.
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