Home' Asia Pacific Defence Reporter : APDR June 2013 Contents 2013-14 Defence BuDget
caution on the affordability and
predictability of future annual funding was
contained in Defence Minister Stephen
Smith’s budget overview “The Government
has decided that the Defence funding model will be
based on the four-year Forward Estimates Budget
cycle, determined on an annual basis taking into
account contemporary strategic economic and fiscal
circumstances and a subsequent six-year general
guidance for Defence planning purposes.”
The budget paper’s estimate of $25.434 billion
in ‘Total Defence Funding’ for 2013-14 is a modest
real increase on the previous year, after taking
anticipated inflation into account. The Federal
election in September and/or revised strategic or
national economic circumstances could bring major
changes to 2013-14 Actual Expenditure and the
2014-15 Budget’s Annual and Forward Estimates.
In line with this four-year Forward Estimates Budget
cycle policy, the Government has provided Defence
with $113.1 billion over the Forward Estimates
years 2013-14 to 2016-17. This compares to the
2012-13 Budget, where funding of $103.2 billion
was provided for the 2012-13 to 2015-16 Forward
The Government has preserved funding to reach
targeted personnel numbers, increased cooperation
with US forces, and remaining overseas operations
after draw downs in Afghanistan, Solomon Islands
and Timor Leste.
The key capital investment and sustainment
programs total $11,752m (million) for the coming
year. This is made up a Defence Capability Plan
(Unapproved) $343m; Approved Major Capital
Investment Program $3,269m; Major Capital
Facilities Program $1,150m; ICT Integrated Plan
of Work $291m; Minors Program $197m; Other
Investment $453m; Sustainment Program $5,868m;
and Net Personnel and Operating Costs $182m.
The budget can be sliced and diced in a number
of ways. Among the headline items are operations
$918.5m down from $1,530.3m in 2012-13; capital
investment on equipment and facilities $5,701m
($28,451m over the Forward Estimates); sustainment
$6,050m including $182.2m future costs ($27,172m
in total over the Forward Estimates); intelligence
$507m; ICT(CIO) $974m; DSTO $441m; Vice
Chief Defence Force $1,163m; joint operations
command $46m; capability development $230m;
and net superannuation benefits for current personnel
The annual cost of maintaining single service
capabilities in 2013-14 is estimated as Navy
$4,185m; Army $5,042m; and Air Force $4,113m.
AIR 5077 Phase 3 Airborne Early Warning and
Control Aircraft (3841/3462/87)
Prime Contractor: Boeing (United States).
This project has delivered six E-7A Wedgetail
Airborne Early Warning and Control aircraft, and the
associated ground and support systems.
government recommits to
Big projects – but future
funding remains a challenge
Geoff Slocombe // canberra
After last year’s dramatic pruning of Defence’s budget by $5.454 billion over the Forward Estimates, there was not scope
for further cuts and still maintain the Government’s defence capability intentions. This was probably helped when a ‘slash
and burn’ through all Government portfolio budgets to achieve a surplus was abandoned in the face of falling total tax
revenues and two major new spending initiatives in education and disability care.
Of the $3.672 billion allocated, the most important sustainment products expenditures are for Airborne
Early Warning and Control $163m; F/A-18A Hornet Weapons System $158m; F/A-18F Super Hornet
Weapons System $110m; MRH90 helicopter $121m; Tiger ARH helicopter $104m; tri-service
explosive ordnance $370m and fuel/lubricants $507m; ANZAC Class Frigate $224m; and Collins
Class Submarines $574m.
The Top 30 major equipment acquisition projects have an approved expenditure in gross of $40.024
billion, with $19.483 billion already spent, and budget for an estimated $3.158 billion during 2013-14.
In reading the description for each of these projects, presented in project number and phase order,
the figures in brackets represent, in $ million, the headline figures. For example, AIR 5077 Phase 3
has an approved expenditure of $3841 million, of which $3462 million is expected to be spent by 30
June 2013, and the budget estimate for 2013-14 is $87 million.
Because of space constraints the following three financially smallest Top 30 projects do not have a
description in this article, but they are on the budget website (see later) - JP 2008 Phase 3H - Military
Satellite Capability – Wideband Terrestrial Terminal (42/8/29); LAND 17 Phase 1C.1
Lightweight Towed Howitzers (69/6/47); and SEA 4000 Phase 3.2 - Standard Missile-2 Conversion
and Upgrade (94/20/37).
14 Asia Pacific Defence Reporter JUNE 2013
7/06/13 10:03 AM
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