Defence Budget 2020: rivers of gold

As signalled in the policy updates released in July this year, Defence is moving beyond the two per cent of GDP measurement as a benchmark to spend $270 billion over the coming decade on acquisition programs as part of a wider funding effort of $575 billion over the decade to 2029-30 for the Department including the ASD as its own separate authority.

The Budget papers this year forecast total spending of $42.75 billion this financial year (2.19 per cent of GDP for those keeping track) and the trend only set to increase across the forward estimate period with GDP reaching the 2.38 er cent mark in 23-24.

The rivers of gold announced on July 1, carrying on from the 2016 Defence White Paper have been brought to life in the Budget this year. The trick will be spending the money quick enough to deliver on the plans of government.

Defence industry has also played a vital role in the coronacoaster that is 2020, helping the wider economy weather the ups and downs of the pandemic that has affected every part of modern life globally.

Minister for Defence Senator Linda Reynolds was very positive about how Defence and Defence Industry worked together during this period.

“Australia’s defence industry has demonstrated remarkable versatility throughout the COVID-19 pandemic, and will continue to keep Defence capabilities and our Australian economy moving,” she said. “Supporting Australia’s defence industry is crucial to our economic recovery and the creation of more jobs.”

During this period the government has implemented a $1 billion investment package aimed at boosting Australia’s defence industry and supporting thousands of jobs across the country. This includes increased funding of over $110 million for Defence innovation, industry grants, skilling and micro credentialing, and cyber training for Defence industry.

The re-launch the Skilling Australia’s Defence Industry (SADI) Grants program, which will deliver $39 million over the next three years to support a skilled workforce in the defence industry sector has also been welcomed. The new version of the program sees the equal co-contribution element removed.

“In addition to these grant initiatives, the Government is announcing a further $4 million to establish the Joint Strike Fighter Industry Support Program, delivering more opportunities for Australian industry participation,” the Minister announced. “This builds on the success of the New Air Combat Capability Industry Support Program, which has delivered 46 grants to 25 Australian companies, worth $21.7 million.

“Already we have fast-tracked a range of capability, infrastructure, skilling and workforce initiatives over the next two years, including a $300 million national estates works program focusing on regional areas, and $190 million on infrastructure projects in the Northern Territory.”

ADM has previously reported on this infrastructure drive and has yet to see evidence of it reflected on AusTender.

Around 4,000 Australian jobs will be supported over the 2020-21 and 2021-22 financial years through the delivery of this economic package, according to the Minister. The measures will continue to support and grow the 70,000-strong workforce in defence industry, supply chains, and down-stream suppliers who are benefiting from our investment in defence, she said.

On the operational side of the house, Defence has stepped up to the plate over the past year and the government sees more of the same in the years ahead. This is a trend that the government expects to continue into the longer term with more Reservists being mobilised and a greater focus on humanitarian aid and disaster relief (HADR) response capabilities, also available through the Pacific Step Up program and Defence Cooperation programs in the region.

ADM's full Budget breakdown will be abailabe in the November edition of the print magazine as well as extended online coverage in Defence Week for Premium members.