Australia’s defence budget for the 2021–22 financial year will rise by 4.4% to AUD44.61 billion (USD34.84 billion), including AUD1 billion for the Australian Signals Directorate, the federal government announced in its annual budget statement on 11 May.
Defence-related expenditure as a share of gross domestic product (GDP) will reach 2.1%, a slight decrease on the previous year but of no great significance given the faster-than-anticipated recovery of GDP from the 2020–21 Covid-19-affected budget.
Newly appointed Defence Minister Peter Dutton noted in a statement that the government had delivered on its 2020 commitment to grow the defence budget to 2% of GDP, with a 10-year funding model of AUD575 billion over the decade to 2029–30. This includes a AUD270 billion investment “in the capability and potency of our Defence force”, he added.
Portfolio budget statements show funding over the forward estimates – the three years beyond the new budget – will grow by 7.9%, 6.2%, and 4.2%, with the figure for the 2024–25 period set at AUD53.3 billion.
The budget statements anticipate capability acquisition costs for 2021–22 will reach AUD15.76 billion against the 2020–21 figure of AUD12.65 billion. Forward estimates show this spending rising to AUD20.1 billion in 2024–25.
Sustainment costs will increase by 6.3% to AUD12.9 billion in 2021–22 but then soar by 26.4% to AUD16.3 billion by 2024–25.
With Australia drawing down its presence in the Middle East and focusing on the Asia-Pacific region, funding for overseas operations is set to fall from AUD765 million in 2020–21 to AUD279 million in 2021-22, then down to AUD32 million in 2022–23.
At the same time funding for the Defence Cooperation Programme assisting regional countries is set to increase from AUD126.9 million in 2020-21 to AUD155.3 million in 2021-22.
Looking to read the full article?
Gain unlimited access to Janes news and more...