The government has delivered on its promise to take defence spending to two per cent of gross domestic product, with Defence to receive more than $41.7 billion in 2020-21, rising to $51.4 billion in 2023-24.

The government said total appropriations for Defence were tied to the 10 year funding envelope set out in the 2020 Defence Strategic Update.

Defence Minister Senator Linda Reynolds said the 2020-21 Budget saw sustained strong investment in Australia’s national security, with a focus on regional security, building defence capability and creating jobs, boosting Australia’s cyber resilience and supporting Australia’s sovereign defence industry.

“The Budget delivers the Morrison Government’s commitment to grow the Defence budget to two per cent of GDP in the 2020–21 financial year, and will deliver a stable funding path into the future,” she said in an October 6 statement.

She added that the government would invest $270 billion over the next 10 years to upgrade the capability and potency of the Australian Defence Force. “This includes investing in more lethal and long-range capabilities to hold adversary forces and infrastructure at risk, further from Australia, including longer-range strike weapons, offensive cyber capabilities and area denial capabilities,” she said.

Although a milestone, the Defence Budget was greatly overshadowed by the Government’s other budget measures directed at national recovery from the impact of the COVID-19 pandemic.

In his speech, Treasurer Josh Frydenberg said the government was bringing forward $1 billion in planned defence spending to support jobs, as well as extending a range of health and employment programs for our veterans to help them transition to civilian life.

The federal budget was initially planned for May 12, but with COVID-19 and its impact on revenues and the need for a massive stimulus program, it was decided to defer to October 6.

The Coalition has been generous to Defence, steadily increasing funding since it won office in late 2013. The 2016 Defence White Paper (DWP) featured two funding streams, which the coalition said were critical to executing its plans for Defence.

That’s the commitment to take funding to two per cent of GDP by 2020-21, plus the White Paper funding line, a 10-year plan to pump additional money into defence out to 2025-26. In these tough times, there was speculation that the government could be satisfied with taking defence spending to the promised two per cent of GDP and leaving it at that. That would have meant substantially reduced funding growth.   

But the release of the Defence Strategic Update and Force Structure Plan on July 1 showed the government remained not only committed to the White Paper funding model, but was prepared to go further.

In summary, the 2020/21 Budget papers show a number of developments:

• Long running operations in the Middle East and elsewhere are winding up, with an estimated cost in 2020-21 of $727 million, less than a quarter what it was two years ago. In the absence of new missions, budget papers list zero operational funding in 2023-24.
• More will be spent on acquiring new equipment, with $11.2 billion budgeted for 2020-21, rising steadily to $20.6 billion in 2023-24.
• The Defence Force is growing, with a permanent force of 60,826 this year, increasing to an estimated 62,726 in 2023-24.