Defence Update- White Paper Analysis

Defence Equipment Procurements Not Expected To Be Affected By White Paper

Defence spending, which is expected to be restrained to about 2% of gross domestic product (GDP) until well into the 21st Century if current strategic circumstances prevail, will still allow most if not all planned major capital equipment procurements according to the Defence White Paper released in Parliament late last year. The Defence Minister, Senator Robert Ray, said that the White Paper, named “Defending Australia” endorsed a wide range of new capital equipment procurements and updates, most of which would have high local content. Defence officials said spending of 2% of GDP would enable the capital investment programme to continue, partly because growth in the economy should automatically increase the current annual Budget figure of $9.64 billion.

However this has not been accepted as realistic by the Federal Opposition and some senior Defence commentators who consider expenditure of 2% of GDP is much too low, not only maintain the re-equipment schedules, but to provide a reasonable degree of Australian Defence Force operational readiness. As it is, the 2% of GDP currently applying is the lowest percentage in those terms since 1949. “The Government continues to claim that it is committed to Defence self reliance, but fails to credibly address the central issue of how it is going to fund it,” Senator Jocelyn Newman, the Opposition Defence spokesman said. But Senator Ray said that the decision to permit Defence to run five year budget cycles from 1996-97 would create confidence in the defence industry and assist in planning.

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