This report, prepared by Mark Thomson, gives interested readers greater access to the complex workings of the Defence Budget and promotes informed debate on Defence budget issues.
This year’s federal budget contained few surprises for Defence. Consistent with the government’s overarching theme of fiscal discipline, there were no substantive new Defence funding measures beyond the routine supplementation for overseas deployments. Moreover, Defence will have to absorb $912 million of the cost of enhanced force protection for our troops in Afghanistan, with most of the money coming from Defence’s existing capital investment program. It remains to be seen how exactly this impost will be accommodated because, in a marked departure with previous practice, the government has failed to signal which acquisition projects it plans to proceed with in the next twelve months. In the longer-term, further pressure on the Defence budget cannot be discounted, given the government’s promise of returning to surplus in three years’ time.