Analyst queries future defence funding

A future government may decide it was better to pay off the budget deficit than to
meet old commitments to increased defence funds, an analyst has warned.
Australian Strategic Policy Institute (ASPI) budget program director Mark Thomson
said defence funding continued to be deferred and plans for it were opaque.
There were signs this was designed to hasten the return to surplus, he said.
Dr Thomson said significant defence capital equipment spending had been deferred
past 2015 while the white paper commitment to 2.5 per cent indexation, the main
source of extra funding, had been deferred by four years.
To meet the indexation requirement, national economic growth needed to be healthy in
the period 2014/16 - the same period when the government planned to return the
budget from deficit to surplus.
Dr Thomson said everyone knew that returning the budget to surplus would be a
political pot of gold for the government.
"The fear has got to be that a government working its way from deficit into surplus
... that if they are faced with the decision of sticking with a commitment to three
per cent real growth in the defence budget on average or diverting money to get the
budget back into surplus, that they will do the obvious thing," he said.
Speaking at the launch of the ASPI defence budget analysis on Wednesday, Dr Thomson
said it was disappointing that the most comprehensive defence white paper of the
modern era had been followed by the least comprehensive defence budget papers of the
past decade.
The white paper and the defence budget papers offered only the barest details of how
the government would fund its expansive plans.
He said defence funding would still reach an historic high of $26.8 billion next
year, representing 2.3 per cent of gross domestic product (GDP) and a nominal
increase of $4.3 billion.
Several factors contributed to the jump, including $1.7 billion extra for the cost
of operations in Afghanistan, Iraq, East Timor and the Solomon Islands.
Dr Thomson said the last nine years of increased defence spending meant the
Australian Defence Force was well placed to perform the sort of operation conducted
in East Timor in 1999.
"Given the sort of responsibility Australia has shouldered for the immediate region,
that is a good thing that we have managed to get our capabilities in order for
that," he said.
"We have seen from Iraq and Afghanistan that the ADF (Australian Defence Force) can
make small but nonetheless valued contributions to US coalition operations."
Dr Thomson said the issue was about what the ADF might be required to do, with the
white paper proposing the ADF be able to participate in state-on-state warfare using
high-tech aircraft and warships.
"If we are going to have those capabilities in 2030 we need to get about the job of
initiating those projects and delivering them," he said.
"At the moment, we have precious little information about what is going to happen to
get us between now and there, so we can't be sure."