Despite projections that Australia’s Defence spending is set to increase, some projects will be delayed or scrapped altogether as the military looks for the best bang for their buck as strategy is realigned to counteract the growing threat of China in the Indo-Pacific.
Speaking at think-tank The Sydney Institute on April 4, Defence Minister Richard Marles said “tough but necessary” decisions would have to be made in the upcoming Federal budget to accommodate recommendations from 2023’s Defence Strategic Review (DRS).
The review emphasised establishing long-range strike capabilities and air defence systems, acquiring Virginia Class nuclear submarines from AUKUS partner the United States, increasing military production in Queensland, and sharing Northern Territory forward operating bases with U.S. Marines.
To achieve this, restructuring all three ADF branches is inevitable. The cost reallocation would fund pertinent projects to deter “any potential adversaries from actions” against Australia, Mr. Marles said.
Mr. Marles added that he was hamstrung by a Defence budget that was inadequate and contained a $42 billion (US$27.6 billion) shortfall.
“For every $100 Defence had to spend, it was planning to spend $140,” he said.
“In other words, more than a quarter of what defence had planned to buy or deliver, it had no money for. But when everyone knows that the numbers don’t add up, that not all the projects can happen, then everyone is just waiting for the eventual train wreck. In this train wreck, no one knows which projects will survive and whether sunk costs will ever be recovered.”
Labelling the current situation unsustainable, Mr. Marles said the ADF could no longer continue to lose money.
“It is costly for industry and ultimately dishonest. It is devastating for defence morale and it makes clear future planning impossible. But to do so means making hard decisions, even in the context of a rapidly growing defence budget,” he said.
Defence Will Receive More Money Over Next Decade
The refocusing of funding will see the Navy’s project to bolster its surface combatant fleet receive an additional $1.7 billion (US$1.1 billion) as part of an $11 billion (US$7.2 billion) commitment to shore up Australia’s defence of the Indo-Pacific and vital trade routes against potential Chinese aggression.Despite the investment, Mr. Marles was initially diplomatic concerning China, saying “Australia values the most constructive and productive relationship we can have with China.”
However, he then sounded an ominous warning that Australia was priming its military for future conflict.
“Yet the way this era of great power contest will unfold is unclear, and the outcome of the contest is uncertain. Australia and countries in the Indo-Pacific have a vital interest in maintaining a region where sovereignty is protected, international law followed, and nations can make decisions free from coercion.”
However, cracks in Australia’s military veneer have already begun to appear over the delivery of Virginia Class submarines. The supply of the submarines to Australia, expected to start in 2032, is under serious threat after the U.S. admitted on April 2 that production was running 24-30 months behind schedule.
