Minister for Defence – Budget 2014-15 – Defence Budget Overview

In Budget 2014-15, the Abbott Government has delivered on its promise of no further cuts to the Defence Budget and reaffirmed its commitment to growing the Defence budget to two per cent of GDP within a decade.

This Budget is about building a strong and prosperous economy for a safe and secure Australia, and that means a strong and capable Australian Defence Force (ADF).

Against the backdrop of a difficult budget, the Government will lay down a deliverable and sustainable path to our target following the 2015 Defence White Paper and associated reviews which will determine the capabilities we need to ensure Australia’s national security in coming decades.

The Government will provide Defence with $29.2 billion in 2014-15 and $122.7 billion over the Forward Estimates – up $9.6 billion increase on the figure provided by the previous Government.  This demonstrates our firm commitment to a strong and capable Australian Defence Force (ADF).

The Budget includes a total of $436.8 million in 2014-15 and $669.4 million across the Forward Estimates for the continuation of Operations in the Middle East, enhanced border security under Operation RESOLUTE, the provision of ADF support to the November summit of G20 leaders in Brisbane, and the Defence contribution to the search for Malaysia Airlines Flight MH370.

The Government has also provided Defence with an additional $338.7 million in 2014-15 and $1.6 billion across the Forward Estimates to fund our election commitments, which include:

•           New indexation of the Defence Forces Retirement Benefits (DFRB) and Defence Force Retirement and Death Benefits (DRRDB) superannuation schemes – $320.4 million in 2014-15 and $1.4 billion across the Forward Estimates; and

•           Reinstatement of the popular ADF Gap Year Programme scrapped by Labor – $18.3 million in 2014-15 and $191.8 million across the Forward Estimates.

To start repairing the damage done by Labor’s Defence cuts and delays, we have brought forward $1.5 billion in spending from 2017-18. This includes an increase of $500m in 2013-14 to purchase vital capabilities and a further $1 billion distributed across 2014-15, 2015-16 and 2016-17.  $520 million has been deferred from 2017-18 to 2019-20 and 2020-21 to provide Defence with an achievable funding growth path. 

These actions by the Abbott Government will provide Defence with a stable and sustainable funding growth path, in contrast to the mess left by the previous Government, which never owned up to the unbridgeable gap between its Defence promises and its unwillingness to pay for them.

The Government has also agreed to Defence retaining the proceeds of sales of Defence property.  This will mean an additional $37.9 million in 2014-15 and $110.6 million across the Forward Estimates for reinvestment in Defence capability.

Defence will not be immune from the Government’s insistence on value for money. The Government is committed to finding ongoing efficiencies in Defence administration and redistributing these to the sharp end. Defence has identified $1.2 billion in back-office savings over the Forward Estimates which will be reinvested into Defence capability.  Also, in keeping with our election commitment to get the Budget back under control, an efficiency dividend of $75.8 million across the Forward Estimates has been applied to the non-capability aspects of the Defence Budget. 

Defence will also play its part in the longer-term effort to put the nation’s finances on a sustainable footing. The Government will implement a modern, fully-funded accumulation superannuation scheme for the ADF to further complement the attractive employment offer the ADF provides. The scheme will provide, for the first time, superannuation scheme choice, rate of contribution choice, and portability of benefits for Australians who choose to serve our country. Importantly, we will pay our superannuation obligations when they are due, rather than deferring them for future generations to bear.  

Further work is required to ensure we have the Defence capability we need, when we need it in an uncertain world.  That is why the Government is undertaking a Force Structure Review, which will be the basis for the new White Paper to be released in 2015.  The White Paper and resultant Defence Capability Plan will provide the Australian community and Defence industry with the clarity and certainty that Labor failed to deliver. We will lay out a clear, fully-funded plan for a strong and secure Australia.

For more information and access to the Portfolio Budget Statement go to http://www.defence.gov.au/budget/14-15/pbs/


Media contacts:

Mark Dodd (Minister Johnston’s Office):                         0477 389 560
Rebecca Horton (Minister Johnston’s Office):                 0477 389 554

 


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