Defence Update

The Defence outlays allocated to investment of a capital nature (capital equipment, capital facilities and housing investment) in 1991/92, represents 27. 1% of estimated total Defence expenditure of $9,435m which equatesto zero growth, a predictable if unsatisfactory figure given the well publicised 1986 Dibb report and 1987 White Paper recommendations. In financial terms that is $2,620m, of which $2,185m is major and minor capital equipment, $331m for capital facilities $104m for housing investment.

The 1991/92 Defence Budget shows an increase of $369m or 4. 1% on 1990/91, and is 9. 3% of total Commonwealth Budget outlays, and 2. 4% of GDP. That’s not much different to the previous year and nor is the percentage of funds devoted to investment.

As the Minister for Defence, Senator Robert Ray, said at the time, the outcome reflects “an appropriate balance between the containment of cost pressures and the provision of the resources and planning stability needed to progress the major development and efficiency programs which were . . . set out in the Force Structure Review and related activities.

“The Government’s decision to set Defence planning guidance at an annual zero real growth for both the 1991/92 Budget and the 1992/95 Forward Estimates period, reflects our intention to continue this approach”, he added.

Budget Paper No. 1 makes the point that because of the long lead time for many equipment acquisitions, payments made during 1991/92 will largely reflect project approvals in earlier years. It also says that substantial progress continued to be made on major Defence White Paper equipment initiatives, including the Collins class submarines and the ANZAC frigates. It further says the most significant equipment decisions taken in 1990/91 were to commence construction of two Over-the-Horizon Radars (OTHR), with an associated Co-ordination Centre, and the purchase of new automatic test equipment for the F-111C strike/reconnaissance jets.

In 1991/92 $657m ($591m in 1990/91) is provided for the new submarines and $337m ($282m) for the ANZAC frigates, net of the New Zealand contribution. Funding for the OTHR JORN project jumps to $120m from $33m.

Money for the Australian and US built FFG guided missile frigates declines this financial year to $120m from $211m the previous year. Funding for the F/A-18 tactical fighter comes down to $110m from $122m. The F-111 avionics update is put at $65m ($63m), and there are a range of other major items.

The Budget documents show that an allocation of $117m has been made in 1991/92 for new equipment projects, including additional Raven combat radios, wheeled armoured fighting vehicles (WAFVs), an F-111C simulator upgrade, a satellite based navigation system and further stages of the supply and financial redevelopment systems. Some of these details are still to be announced.

The major items in outlays for Defence facilities this year are $50. 3m for the relocation of the Defence Signals Directorate from Melbourne to Russell Offices ACT, $34m for development of 2 Cavalry Regiment in Darwin NT, and $24. 7m for the second stage of redevelopment of the naval base at HMAS Stirling, near Fremantle WA.

Personnel costs (salaries, pensions and provision for future pay rises) is estimated to represent 42. 4% of Defence outlays, as against 40. 7% in 1990/91 and is reflected in increased pension costs and the introduction of the ADF Ready Reserve.

The decision to reduce Defence outlay guidance from 1 % real growth to zero saves $84m in 1991/92 and a further $825m in the following four years. Australia’s basically Navy participation in the Gulf crisis cost $69m in 1990/91 and is estimated to cost a further $27. Sm in later years.

ADF personnel numbers in 1991/92 are put at 67,664 permanent, 698 for the newly created Ready Reserve and 3,193 for other Reserve forces. Navy personnel numbers are calculated at 15,543, Army at 30,314 and Air Force at 21,807. All are down between 1. 5% and 1. 1% on the previous year. Civilians represent about 25% of total Defence staffing, but their numbers are expected to fall by 164 to 24,248 in 1991/92.

The Budget papers note that following the Wrigley Report on “The Defence Force and the Community”, a substantial range of support activities currently undertaken within Defence will be opened up to competition. These areas include catering, stores/ transport, base support, training activities and equipment maintenance.

They say that the first stage (targeted to have tenders called no later than the end of 1992) involve approximately 2,100 ADF and 1,100 civilian positions. “Other activities are to be identified and opened up for competition over the longer term”, the papers say.

In the Defence Facilities area, outlays have averaged about 3. 3% of the Defence Budget over the decade to 1990/91. The increase in Facilities outlays, particularly in 1994/95, reflects planned developments relating mainly to the support of northern and western operations outlined in the Force Structure Review and to the Defence Logistics Redevelopment Project.

The Budget papers confirm that in 1991/92 the Defence Science and Technology Organisation (DSTO) activities will be directed towards improving its skills base with particular

phasis on supporting key Defence capabilities confirmed in the Force Structure Review: intelligence and surveillance (including OTHR); mine warfare; and command, control and communications.

The reduction in DSTO’s budget to $221. 1m (from $227. 2m in 1990/91) reflects the transfer of responsibility for the Environmental Engineering Facility to the Army and the Range Measurement Branch to the Air Force ($4. 2m) and the completion of a laboratory project at Pyrmont NSW ($2. 5m).

DSTO is increasingly undertaking a range of commercial activities. They include consultancy and training services, contract research, hire of specialist facilities, sale of intellectual property rights and collaboration with industry in product development.

DSTO operates a trust account for such transactions and continues to participate in a number of joint venture companies such as Defence Technologies Australia Pty Ltd. Following a small decline in 1991/92 the Defence science area is expected to remain broadly constant at about 2. 3% of total Defence outlays.

Australian Democrats Lobby for $738M Defence Cuts in Alternative Budget

Any Australian wearing a uniform or for that matter with any appreciation of history could well be left well and truly astounded by the massive Defence cuts put forward by the Australian Democrats in their alternate budget strategy.

To gain an overall saving of $738m in fiscal 91/92, the Democrats if in power would do the following, among other things: Cancel all naval exercises involving nuclear capable warships. Withdraw all RAN ships from Pacific and SE Asia patrol. Cancel the Meko frigate program. Cancel the Collins submarine project even though the first examples were under construction. Cancel the DDG destroyer and Oberon submarine updates. Mothball one complete squadron of F/A-18s. Withdraw and scrap the entire F-111 force. Close the Pine Gap and North West Cape joint facilities despite their recently proven ability to detect and deter a preemptive nuclear strike which in view of the ongoing turmoil in the USSR and the fact that perhaps not all of the massive inventory of nuclear warheads will be returned to Russia is something to seriously question (refer p. 32 April 91 AA). Abandon all exercises above Army brigade level. Mothball the entire artillery, reconnaissance and APC regiments.

So with virtually nothing left of any deterrent value, which after all is the entire focus of the Democrats Defence philosophy, do they offer any area of growth. Yes, you guessed it, they actually propose to form a Conservation Corps which would be staffed by volunteers to perform conservation tasks which build skills relevant to defence needs.

We don’t wish to be political though it might well be worth remembering the above when next you vote, after all, we’ve only got one Australia. (Jim Thorn)