RE: Australia:Defence Review
Some more recent news from a couple of weeks ago.
Defence Budget set to rise
Gregor Ferguson | Adelaide
The Commonwealth government will make Defence its priority in the 2002-2003 financial year, with analysts predicting a budget rise of up to eight per cent to cover the cost of Australia’s contribution to the US-led campaign against terror and increased border security.
Federal Treasurer Peter Costello, who is scheduled to reveal the 2002-2003 federal budget on May 14, said on April 5: “I want to make it clear that …in this Budget round our priority is strong defence and strong border protection. And what that means is we will have to be very tight in other [national budget] areas because the priority we are giving is to our soldiers, to the fight against terrorism and to the defence of our borders.”
In the 2001-2002 financial year Australia’s defence budget was $12.75 billion in cash terms. This included a $500 million increase over the previous year, which had been promised in the White Paper. But the budget still required augmentation earlier this year to the tune of a further $362 million to cover the cost of Australia’s contribution to the US-led campaign against terror since September 11 and the resulting blow-out in equipment operating and maintenance costs.
The government has promised a further $500 million, or four per cent, rise in the coming budget to meet a White Paper commitment to increase defence expenditure annually by at least three per cent in real terms. But the additional costs of sustaining a naval and special forces task group in the Gulf and Afghanistan, along with the increased cost of patrolling Australia’s northern approaches to deter people smugglers and other illegal activities, could see the budget rise this coming year by as much as a further $500 million, according to analyst Derek Woolner of ADFA’s Australian Defence Studies Centre (ADSC).
And that doesn’t take into account the possibility of US action against Iraq, and the cost of Australian support for such a move.
Costello refused to be drawn on speculation that Australia could act alongside the US in any action against Iraq. “There is currently no military action by allies in Iraq,” he said April 5. “If that were to occur and if Australia were to be asked to make a contribution we will consider that at the time. But it is far too premature to be speculating in relation to Iraq. There is still a job to be done in Afghanistan, it has got to be brought to completion, we are committed to seeing that through. Our troops will be funded to see it through.”
If Australia were to become involved in any operation against Iraq, the extra costs would likely be met by a budget supplementation later in the 2002-03 financial year, Woolner said. But the likely scale of such costs might already have been discussed at senior levels within the Commonwealth government to ensure that the financial implications of such action on Australia’s budget don’t come as an unpleasant surprise to budget and defence planners if and when the issue arises.
Both Costello and the Minister for Defence, Senator Robert Hill, have declined to put a dollar value on the coming year’s defence budget. But regardless of any possible increase, Australia’s defence budget will likely still be ‘tight’, sources have warned. The government remains committed to the ambitious, $47 billion capital equipment program outlined in the Defence Capability Plan announced last June. However, this Plan is subject to periodical review, and the first major update is due later this year; it’s impossible to rule out the possibility that priorities will be re-ordered and certain programs deferred or stretched out to ease short-term pressure on the defence budget, ADSC’s Derek Woolner said.
Regards, Glenn.
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