Budget reveals cutbacks on funding for Australia’s military and navy, in order to pay $billions for nuclear submarines.
Budget reveals pressures on Defence for savings to fund nuclear-powered submarines, The Strategist, 10 May 2023|
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Spending is rising faster than inflation in each year, broadly following the profile set out in the 2020 Defence Strategic Update, but the two big changes over the past year—incorporating the switch from the French conventionally-powered submarine to the AUKUS SSNs, and the unexpected surge in inflation—are squeezing real spending relative to the budget planning ahead of last year’s election.
……………………..AUKUS is a long-term program and the budget forward estimate period, out to 2026-27, only contains the very beginning of spending on the submarines. However, the Defence Department’s portfolio budget statement shows that initial commitment is expected to reach $5.6 billion over the next four years. The statement shows an initial $515 million will be spent in 2023-24, which will include the establishment of the Australian Submarine Agency to manage the project.
The portfolio statements show a big payment of $3.7 billion on submarines in 2025-26, however they say the final allocation of spending will be decided ahead before the end of June.
Capital spending on new capabilities is taking a hit elsewhere. The downsizing of the Army’s planned purchases of infantry fighting vehicles will have an impact over the budget period, with capital outlays in 2024-25 and 2025-26 falling 7.6% from last year’s estimate to $8.5 billion. Capital spending in the Air Force is down 13.1% to $6.9 billion in the same period.
The Navy is also taking a hit on capital outlays. Defence has split out the naval shipbuilding and sustainment program from general acquisition of naval capabilities while the cancellation of the French program also makes direct comparison with last year’s portfolio budget statements difficult. However, Navy capital spending, excluding the shipbuilding and the nuclear submarine program show a 35% or $5.3 billion fall out to 2025-26. The naval shipbuilding program is only $891 million over that period.
……… The portfolio statement highlights the difficulty Defence has had in meeting its staffing targets with the total workforce of 75,464 people falling 3600 short of the goal set last year. The army has had the greatest problem, missing its target by 8.3%, reflecting a higher number of resignations. The Defence department public service met its recruitment target.
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