Hugh White on defence spending

Defence challenge: reconciling Australia's warfare shopping list with reality

I knew it was probably all pie in the sky - the Abbott promise to increase Defence spending up to 2% of GDP.  Hugh White explains why:

Abbott has promised toincrease the defence budget, setting a target of 2 per cent of GDP by2024. That would be enough to cover all the current plans, but defence spending would have to grow at almost 5 per cent in real terms everyyear for a decade.

This would be unprecedented in peacetime. For example it is much faster than when the Howard government grew defence spending from 2000-2007, when fiscal and economic conditions were much rosier and the ADF was heavily committed to the war on terror. One wonders whether the Abbott government is really willing for Defence spending to grow so fast when it is cutting so hard everywhere else.

If not, then big savings will have to be found. And though efficiency campaigns and personnel cuts can deliver small savings, big savings only come from cutting big investment projects.

That puts the spotlight on four big new capabilities planned for the next decade. They are the new submarines, a new class of warships, a new fleet of armoured fighting vehicles for Army, and the F-35s. Without massive defence budget increases, at least one of these
projects will need to be scrapped or drastically scaled back if the government is to produce a financially credible defence policy.

 I say we keep the Army at home for a change, and put the money into the submarine program.