Australia unveils record $37 billion defense budget

Australia unveils record  billion defense budget

CHRISTCHURCH, New Zealand — Australia will spend a record AU$55.7 billion (U.S. $36.8 billion) on defense during the next fiscal year, according to budget documents unveiled May 14.

The figure equates to 2.02% of gross domestic product and represents a 6.3% increase from last year.

Australia’s national defense strategy released last month, promised a significant increase in spending, but that does not start until 2027-2028, when defense expenditure is slated to reach about AU$67.4 billion.

Beyond that, the government still has a ways to go to hit its defense spending goal of AU$100 billion by 2033-2034, which would be 2.3% of GDP.

In this latest budget release for the 2024-2025 time frame, the government has set aside AU$16.7 billion for equipment acquisitions in the coming fiscal year, plus another AU$17.2 billion to sustain existing assets.

The Navy receives a significant allocation of AU$10.7 billion. Nuclear-powered submarines are starting to consume an enormous portion of the budget as the trilateral AUKUS agreement progresses.

Notably, spending on nuclear submarines will snowball from last year’s AU$475 million to AU$2.8 billion in the coming year, eventually reaching AU$4.97 billion in 2027-2028.

By comparison, six Hunter-class frigates and six Arafura-class offshore patrol vessels are to receive AU$813 million and AU$587 million, respectively.

The budget makes no reference to 11 new general-purpose frigates, which the government is expected to select next year.

The Army is promised AU$11.8 billion as it procures expensive assets such as Boxer armored vehicles, Redback infantry fighting vehicles, Huntsman self-propelled howitzers, High Mobility Artillery Rocket Systems, M1A2 Abrams tanks, National Advanced Surface-to-Air Missile Systems, and UH-60M Black Hawk and AH-64E Apache helicopters.

The Air Force will receive AU$9.5 billion, with F-35A fighter jets being its single-most expensive acquisition; nine of 72 fighters remain undelivered.

Budget figures also revealed that the arrival of four MC-55A Peregrine electronic warfare aircraft is running two years behind schedule.

The Australian Signals Directorate, which conducts foreign signals intelligence, cybersecurity and offensive cyber operations, will receive AU$2.7 billion. A further AU$1 billion is allocated to defense intelligence.

Australian military procurements are handled by the Capability Acquisition and Sustainment Group. The government in 2021 formed the Guided Weapons and Explosive Ordnance enterprise to promote the sovereign production of missiles and munitions. Together, they will receive AU$1.3 billion in the next fiscal year.

For its part, Ukraine garnered AU$144.3 million in military aid for the year ahead, as it continues its fight against a Russian invasion.

Meanwhile, the Defence Department wants 63,597 uniformed personnel and 19,127 civilian employees in the year ahead. The Australian Defence Force, or ADF, is currently made up of 58,600 uniformed personnel.

“[The Department of] Defence is forecasting to be below the required ADF fulltime workforce for 2024-25 due to high separation rates and lower than expected achievement of recruitment targets over recent years,” the budget document stated.

The new budget also noted that last year’s spending on personnel costs surpassed estimates by AU$1 billion because of increased living costs. About AU$16.7 billion is to be spent on the workforce this coming fiscal year.

Approximately AU$6.6 billion will go toward maintaining the security and condition of Defence Department property. Before the budget was announced, Defence Industry Minister Pat Conroy promised between AU$14 billion and AU$18 billion would go to upgrading and hardening military bases in northern Australia over the next decade.

“The Northern Territory is critical to the defense of the nation, not just in defending Australia, but projecting power out into our region against any potential adversary,” Conroy said.

The 2024 National Defence Strategy, released last month, cited “increasing strategic competition” between China and Australian ally the United States, adding that the former seeks “to change the current regional balance in its favor.”

“China has employed coercive tactics in pursuit of its strategic objectives, including forceful handling of territorial disputes and unsafe intercepts of vessels and aircraft operating in international waters and airspace,” the document stated.

Jennifer Parker, an expert associate at the Australian National University, warned that despite promised increases in defense spending, there is “a significant gap in ADF capability over the next 10, maybe 15 years. This gap coincides with the most strategically unstable geopolitical situation since [World War II].”

Gordon Arthur is an Asia correspondent for Defense News. After a 20-year stint working in Hong Kong, he now resides in New Zealand. He has attended military exercises and defense exhibitions in about 20 countries around the Asia-Pacific region.

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