Budget Review 2022–23 Index
David Watt
The Defence budget maintains the Government’s commitment to
the spending goals set out in the 2016
Defence white paper and the 2020
Strategic update, but does reflect some shifting priorities,
principally around the need for increased cyber warfare resources.
Table 1 indicates a rise in Defence funding over the forward
estimates of 7.4% in nominal terms and 4.3% (based on the CPI forecast for 2022–23
of 3%).
Table 1 Total
Defence funding—Portfolio Budget Statements (PBS) ($ million)
|
2021–22
|
2022–23
|
2023–24
|
2024–25
|
2025–26
|
PBS 2022–23
|
45,252
|
48,615
|
51,605
|
53,459
|
55,526
|
Note: These
figures represent a combined total for the Department of Defence and the Australian Signals Directorate.
Source: Australian Government,
Portfolio budget statements 2022–23: budget related
paper no. 1.3A: Defence portfolio,
Table 4a, 15.
Measures
If Government funding to Defence has maintained its recent
trajectory, the Budget measures bring some new things to the Defence budget and
reflect current priorities.
Defence’s ‘lethal and non-lethal’ military
assistance to Ukraine, announced by the Prime Minister on 27 February 2022,
will total $91 million, of which $70 million is additional funding (Defence
will absorb the rest). This is for the current financial year. Defence will
also make a contribution to the cost of purchasing thermal coal for Ukraine,
but the actual amount is ‘not for publication’ (nfp) for commercial reasons.
The Government’s
recent announcement about the creation of a new large
vessel dry dock facility at Henderson in Western Australia is also
reflected in the Budget. Budget
measures: budget paper no. 2 2022–23 states that the Government will
‘invest up to $4.3 billion’ in this project and that funding for it will
delivered through a ‘Commonwealth-led funding and delivery model’ with money to
come from the Integrated Investment Program (p. 71).
Similarly, the
7 March 2022 announcement by the Prime Minister and the Minister for
Defence that Australia would seek to build a new submarine base on the east
coast is also included in the Budget measures. The media releases stated that the
Department of Defence estimated that ‘more than $10 billion will be needed
for facility and infrastructure requirements to transition from Collins to the
future nuclear-powered submarines, including the new east coast submarine base’.
This ‘transition’ includes the building of a Nuclear-Powered
Submarine Construction Yard in South Australia. Budget paper no. 2 states
(p. 72) that Defence will meet the cost of purchasing the land for the
construction yard from existing resources but, unsurprisingly given the long
time frame involved, makes no other mention of funding for submarine
infrastructure.
The Defence planned expenditure by cost category is outlined
in Figure 1 as follows.
Figure 1 Planned expenditure
by cost category
Source: Australian Government,
Portfolio budget statements 2022–23: budget related paper no. 1.3A: Defence
portfolio, Table 4b, 15.
Workforce
In a media
release on 10 March 2022 the Prime Minister and the Minister for Defence
announced plans to expand the Defence workforce by 18,500 personnel by 2040. If
successful, the Government’s plan would bring the number of total permanent Australian
Defence Force (ADF) personnel to almost 80,000 by 2040. With the addition of
the Australian Public Service (APS) staff, the total permanent workforce would increase
to over 101,000 by 2040.
Given the long time frame for the expansion in personnel
numbers it is perhaps unsurprising that this is only reflected in the planned
workforce allocations across the forward estimates in the PBS in 2024–25 (see Table
2 below). Given that the estimated ADF numbers for the current financial year are
slightly lower than the Budget estimate stated they would be in last year’s Budget,
it looks as though Defence may face recruitment challenges in meeting the
targets set by the Government.
Table 2 Workforce numbers
|
2021–22
|
2022–23
|
2023–24
|
2024–25
|
2025–26
|
ADF PBS 2022–23
|
59,862
|
62,063
|
62,735
|
63,597
|
64,532
|
ADF PBS 2021–22
|
61,468
|
62,063
|
62,735
|
62,905
|
|
Defence APS PBS 2022–23
|
16,001
|
16,991
|
16,466
|
16,735
|
16,946
|
APS PBS 2021-23
|
16,405
|
16,439
|
16,456
|
16,447
|
|
Source: Australian
Government, Portfolio budget statements
2022–23: budget related paper no. 1.3A: Defence portfolio, 20; Australian Government, Portfolio budget statements 2021–22: budget related
paper no. 1.3A, Table 8, 21.
Capability
Defence has been funded to spend $16.2 billion on capability
acquisition during 2022–23 (PBS, p. 16). However, the PBS shows that the Capability
Acquisition program looks to be underspent on the 2021–22 Budget projection by
$861 million. The Australian Strategic Policy Institute’s Marcus
Hellyer has pointed out that this was true for the previous year as well
and has been critical of the slow delivery of a number of major projects.
Despite the Government’s September
2021 announcement that the Attack Class submarines (SEA 1000) would no
longer be acquired in favour of nuclear powered submarines acquired through the
AUKUS partnership, there is ongoing expenditure for SEA 1000 in the Budget
papers. Close to $500 million has been budgeted for 2022–23 and the cumulative
expenditure for the project to 30 June 2022 is estimated to be $3,210 million
(PBS, p. 109).
This is in addition to the $691 million budgeted for
sustainment of the Collins Class submarines that currently provide Australia’s
submarine capability (PBS, p. 118).
Operations
Outcome 1 in the 2022–23 PBS (pp. 25–26) lists 24 active
international and domestic operations, an increase of 2 from 2020–21.
The estimated cost of major operations for 2021–23 continues
the decline seen in recent years. This is primarily due to the drawdown of
Australia’s presence in the Middle East region under Operations ACCORDIAN,
HIGHROAD and OKRA, and the associated savings in the forward estimates.
The drawdown of overseas operations means that the two
largest items in the Budget for operations during 2021–22 are Operation Flood
Assist and Defence’s contribution to the COVID-19 response package ($257.9
million between them), which are both domestic operations.
Defence Cooperation Program (DCP)
The cost of the Defence Cooperation Program, through which
Australia promotes defence capability in regional partners in the Pacific and
Southeast Asia, has fallen from an estimated $236.3 million for 2021–22 to $227
million in 2022–23 (PBS, p. 99). This is a small drop but one that is taking
place in the context of the bilateral
security framework agreement between the Solomon Islands and China. In the
light of this agreement, the logic of not spending more on the DCP has been
questioned by the head of the ANU’s National Security College, Rory Medcalf,
who is quoted
in the Australian as saying that there is a case for expanding the
DCP:
… there is surely a strong case to increase them. It’s hard
to see the logic of reducing this effort at a time when the contest for
influence is accelerating, and the strategic use of defence diplomacy has never
been more important.
All online articles accessed April 2022
For copyright reasons some linked items are only available to members of Parliament.
© Commonwealth of Australia
Creative Commons
With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.
In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.
To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.
Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.
This work has been prepared to support the work of the Australian Parliament using information available at the time of production. The views expressed do not reflect an official position of the Parliamentary Library, nor do they constitute professional legal opinion.
Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Enquiry Point for referral.