The headline figure of $36.4 billion for Defence spending is on track to meet the government’s commitment of two per cent of GDP funding by 2020/2021
The headline figures for the 2018 Budget will come as no surprise for many ADM readers: $36.4 billion (including ASD, which is now a stand alone agency answering to the Defence Minister, led by Mike Burgess and LTGEN John Frewen, the ADF’s newest 3 star) and $160.7 billion over the forward estimates period of four years.
Operational funding has dropped from $903.1 million last year to $750.1 million this year, down 17 per cent, mainly due to the wind up of fast jet operations in January this year under Okra in the Middle East.
In the era of the Defence Integrated Investment Program and a lack of detailed supporting websites, the Budget has become the go to place for program numbers and how major programs for both acquisition and sustainment are progressing. Big announceables for the Budget seem to be a thing of the past, with the government preferring a constant drip feed of decisions as they are made rather than saving them up.
Perhaps the biggest shock in the papers is related to people. The numbers surrounding the Defence workforce have dropped significantly, particularly around the APS. Figures last year showed the head count stable at 18,200 APS across the four years. The 2018 figures tell a different story. Even accounting for the loss of the ASD headcount, the drop will have a noteworthy affect on how the department does business.
The Budget papers themselves offer no insight into the thinking behind this move apart from ‘reshaping programs to align the workforce with the priorities outlined in the 2016 Defence White Paper’ or ‘Machinery of Government’ for those who speak public service lingo. There is also a glaring omission of contractor or PSPs levels in the Budget papers this year.
Total full time defence workforce average for both uniformed and APS is forecast to be 76,167 (down 99 people from 2016-2017) and is forecast to stay around that level across the forward four years of estimates, with growth in uniformed numbers rather than APS.
- Uniformed (78.5 per cent – up 2.5 per cent from last year)
- Navy – 14,689
- Air Force – 14,295
- Army – 30,810 (green)
- APS – 17,970 (21.5 per cent)
Budget papers this year, as mentioned previously, now lack figures on the level of contractor, consultant and service provider support into the Department. Angela Diamond, acting chief financial officer for Defence, commented that given the flow of people across these three categories it was difficult to keep track of head count numbers, with the department using a dollar figure instead. However, she confirmed that the First Principles Review supported the outsourcing model.
Steven Groves, currently the chief operating officer at the Department of Home Affairs, will be taking up the Defence CFO role in the coming weeks. He replaces Philip Prior who left the organisation earlier this year after 12 years in the role.
The new Major Service Provider panel framework is still bedding down but there are early questions being raised as to how the system will work in a practical sense, particularly for SMEs.
Space
The Government will provide $41.0 million over four years from 2018-19 to grow the Australian space industry, including by establishing a National Space Agency. The Department of Industry Innovation and Science will manage this funding.
This includes: $26.0 million over four years from 2018-19 to establish a National Space Agency, which will coordinate domestic space activities for Australia; and $15.0 million over three years from 2019-20 to establish the International Space Investment project, which will provide grants to strategic space projects that generate employment and business opportunities for Australians.
“The Space Industry Association of Australia welcomes the Commonwealth Government’s long term commitment to the space,” Michael Davis, chair of the Space Industry Association of Australia said.
“The benefits of a National Space Agency and an investment in a Space Based Augmentation System (as set out in two SIAA White Papers) have been the subject of detailed research and lobbying by the SIAA and other key players in the Australian space sector over the last 18 months.
“Our advocacy for the establishment of a national space agency and a program of investment in space infrastructure, such as the SBAS system, and has been recognised and we now know that these programs will be funded.
“We were pleased to be involved in the Expert Reference Group on Australia’s Space Industry Capability chaired by Dr Megan Clark. We look forward to the release of that report and the Commonwealth Government’s response.
“It is vitally important that the recommendations of the Expert Reference Group be accepted and implemented. This will ensure that the new Agency has the necessary support from both government and industry to achieve the long term goals of industry engagement and economic development by promoting collaboration and investment nationally and internationally,” Davis said.
Universities around the nation have welcomed the move and have already begun positioning themselves to host the new Agency.
“This is an investment which allows us to compete in the global space race, and the Space Industry Association of Australia predicts we can increase our share in the market from 0.8 to four per cent within 20 years,” Flinders University space archaeologist Dr Alice Gorman said.
“We are talking about an industry that will need engineers, scientists, researchers, archaeologists, and even writers and artists. Some skin in the game also gives our voice credibility on issues like space junk and space treaties.”