Minister for Defence – Budget 2013-14: Defence Budget Overview

On 3 May, the Prime Minister and I released the 2013 Defence White Paper.

The 2013 Defence White Paper (the White Paper) addresses the range of significant international and domestic developments which influence Australia’s national security and defence settings, including their impact on force posture, future force structure and the Defence budget.

The White Paper outlines the capabilities that the Australian Defence Force (ADF) will need in the coming years to address strategic challenges.  The Government is committed to ensuring that the ADF has the capability and culture it needs to effectively serve Australia’s national security interests.

The Government remains committed to a Defence budget which ensures the ADF can meet the Government’s operational, force posture and preparedness requirements and deliver the core ADF capabilities the Government requires to protect Australia’s national security interests.

The Government has decided that the Defence funding model will be based on the four-year Forward Estimates Budget cycle, determined on an annual basis taking into account contemporary strategic economic and fiscal circumstances and a subsequent six-year general guidance for Defence planning purposes.   

This aligns Defence funding with the Commonwealth’s broader budget process, which provides certainty for planning purposes in the short-term, and is consistent with the historical management of the Defence budget and the inherent difficulty in forecasting fiscal circumstances in the longer-term.

In the 2013-14 Budget, the Government has provided $113.1 billion (including $1.4 billion for Operations) to Defence over the Forward Estimates, with the Budget growing from $25.3 billion in 2013-14 to $30.7 billion in 2016-17.  This compares to $103.2 billion (including $1.9 billion for operations) in the 2012-13 Budget Forward Estimates.

For general guidance for Defence planning purposes, the Government has also provided Defence with funding guidance of around $220 billion over the subsequent six years from 2017-18 to 2022-23.

This six-year funding guidance is based on the need to continue increasing investment in Defence capabilities as outlined in the White Paper and an assessment of sustainable growth in the Defence Budget after 2016-17.

In conjunction with establishing the new funding model for Defence, the Defence budget has been reprofiled over the Forward Estimates for expenditure on priority Capital Investment and Sustainment Programs.  This includes the acquisition of 12 new EA-18G Growler aircraft, as announced in the White Paper, for which the Government will also provide Defence an additional $200 million in 2014-15.

The Government is also committed to increasing Defence funding towards a target of two per cent of GDP. This is a long-term objective that will be implemented in an economically responsible manner as and when fiscal circumstances allow.

Defence funding in the Forward Estimates and general guidance in the following six years will enable Defence to plan and progress the acquisition of important Defence capabilities, including:

  • The acquisition of 12 new build EA-18G Growler electronic attack aircraft, at a cost of $2.94 billion;
  • Early replacement of the Armidale Class patrol boats, acquisition of Hydrographic Survey Vessels, upgrades to Minehunter Coastal vessels and deferral of the Multi Role Offshore Combatant ship;
  • The replacement of replenishment ships HMAS Success and HMAS Sirius;
  • Additional funding for investment in Australian-developed phased array radar technology for the Future Frigates;
  • Establishment, in partnership with the United States, of a jointly-operated C-band radar space surveillance installation at the Harold E. Holt naval communication facility in Western Australia;
  • Acceleration of enhancements to Special Operations capabilities; and
  • The consideration of acquisition of P-8 maritime surveillance aircraft.

The reprofiling of funding will also enable Defence to progress a range of additional investment priorities, including:

  • $599 million in additional sustainment activities in Navy, Army and Air Force;
  • $236 million in additional funding for approved major capital equipment projects;
  • $91 million in additional funding for Information Communications Technology;
  • $120 million to establish two new industry development funds: the Priority Industry Capability fund and the Defence Innovation Realisation Fund; and
  • Early investment in priority major capital facilities works and maintenance of the Defence estate. 

The reprofiling of the Budget will in the usual way involve adjustments to the priority of activities across Defence, including proposed capability acquisitions.  Details will be provided in the next Public Defence Capability Plan, to be published before the end of the 2012-13 financial year.

The Budget will continue to involve:

  • no adverse impact on overseas operations;
  • no reduction of the number of military personnel in the Army, Navy and Air Force.  The Government remains committed to maintaining an ADF workforce of approximately 59,000 permanent members;
  • no adverse implications for equipment for forces about to be deployed or on deployment; and
  • no adverse impact on our enhanced practical cooperation with the US. 

For more information and access to the Portfolio Budget Statement go to http://www.defence.gov.au/budget/13-14/index.htm

Media contacts:

Minister Smith’s office:  Andrew Porter 0419 474 392 and Sacha Fenton 0467 784 528

Defence Media Operations (02) 6127 1999

 


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