The Australian Strategic Policy Institute has released its annual Cost of Defence analysis, concluding that this year’s defence budget puts investment in a holding pattern and that Australia would have to fight with the forces currently in its arsenal if conflict were to break out in the next decade.
The report states that to meet a threat in the next 10 years, Australia needs to urgently enhance the preparedness and readiness of the current force, in parallel to developing longer term capabilities and capacity.
It gives the government credit for establishing key blueprints such as the Defence Strategic Review and for committing to major investment in AUKUS, acknowledging the gravity of the strategic circumstances Australia faces now and in the years ahead.
“Yet the unassailable logic of those strategic conclusions—that there exists the possibility of major power conflict within the next 10 years and possibly with no warning at all—hasn’t been matched by a sense of urgency in addressing the capability and capacity of our defence forces, and our nation, to respond,” it says of this year’s budget.
“Put simply: if a major-power conflict, into which Australia would likely to be drawn, were to eventuate any time within the next 10 years, the ADF would be required to fight with the forces currently in our arsenal—the so-called enhanced force in being.”
It notes that of the $5.7 billion allocated to Defence in the four-year forward estimates period, two-thirds isn’t funded until 2027–28. Moreover, it is divided between only three activities: the AUKUS submarines, early investment in the surface-combatant fleet, and the acceleration of investment in long-range strike, targeting and autonomous systems. None of these is likely to result in fielded capabilities until well into the 2030s.
The report states that in one sense, it is understandable for the government to hold back on major funding amid ongoing questions about the costs of future needs and the requirement for significant further analysis from Defence about the best way to integrate the force and achieve the so-called strategy of denial.
“Substantial additional analysis is required from Defence to better understand the force structure, force posture, preparedness and readiness requirements of the ‘Strategy of Denial’ and integrated force, and their costs. Government will then need to calculate how best to deliver on its plans, and balance its ambitions with how much Defence can actually spend in any given year,” the report states.
Nonetheless, the “pervasive abstemiousness” of the 2024-25 defence budget creates the biggest risks, it adds.
It concludes that May’s Defence portfolio budget statement provides little to ally strategic concerns identified in the government’s own defence blueprints. The lack of detail, and the cancellations, divestments, delays and rescoping of projects and activities, are creating a nation-sized game of Jenga—removing capability bricks from the foundation of our forces to recast them into future capability bricks.
“As all who play that game know, you soon reach that point where only one or two capability bricks remain at the base, creating untenable fragility throughout the tower and a propensity for the whole to topple. If Defence places most of its focus and new resources on the new capability bricks of the future integrated force, and little focus on preparing the current foundational capability bricks of the force in being, we fear that that day has arrived.”
It says there is no clear Australian path to alternatives that other nations are pursuing— such as experimentation with masses of small drones, and huge investments in rapid prototyping for the introduction into service of new technologies.
The report also finds that workforce will continue to be a risk for Defence as it competes in an economy that has full employment or close to it.
Click here to read the full report
