Cutting ten billion dollars in spending from the Defence Department sounds dramatic – until you notice it’s to be spread over ten years. Apart from the basic mathematical fact that this immediately reduces the cuts to just $1 billion a year, government money announcements – for both cuts and spending – that are spread over ten years have a strong tendency to be back-ended to the outlying years, which greatly increases the chances that by the time you get to year 6 or 7 a whole range of reasons have been found to justify a major change of plan.
Still, it is a small sign that perhaps the ideologically motivated symbolism that developed over the Howard years that somehow Defence should be quarantined from the cuts, constraints and efficiency measures that apply to every other area of government spending might finally be coming to an end. Having said that, despite these cuts the Labor government says it is still maintaining the previous government’s commitment to increase spending on defence by 3 per cent a year in real terms.
According to the Australian Strategic Policy Institute, Australia’s total budget for defence this financial year is $22 billion, an increase of $2.1 billion on last year. This decade, the defence budget has grown in real terms by 44 per cent, which equates to a compounding annual growth of about 5.3 per cent.
The litany of major cost overruns for defence equipment is well known. As with any other operation, when there is a guarantee of continually growing funds and no expectation of cuts occurring down the line, it becomes more and more likely that large-scale waste and inefficiencies will occur. This is not to say that defence spending should never be increased – although personally I think we’ve spent a lot of money on equipment which shouldn’t be part of our national defence strategy – but rather it should be properly justified and more closely watched.