The Defence funding for 2024-25: $55.687 billion

Key Observations: 

• Significant increases outlined in the new National Defence Strategy (NDS) to be seen in 2027-28
• Defence spending in 2027-28: $67.393 billion, nearly $7 billion increase from previous year
• Defence funding projected to reach $100 billion by 2033-34, over 2.3% of GDP
• 2023-24 defence budget: $53.331 billion (1.99% of GDP), a 6.3% increase to 2.03% of GDP for 2024-25
• Government’s commitment to increasing Defence funding is the largest in decades
• Budget includes $50.3 billion over a decade for capability enhancement as part of the National Defence Strategy
• Personnel costs exceeded estimates by around $1 billion due to cost of living increases
• Capability acquisition expenditure was $2 billion less than estimated due to procurement slowdown
• Sustainment costs exceeded estimates by $943 million

New equipment and program announcements:

• $81.9 million for shipbuilding jobs
• $166.2 million over five years for small and medium businesses and local defence industry
• $28 million for Defence Trade Controls Amendment Act 2024 reforms
• $232.3 million for international military support, including $144.3 million for Ukraine

New Parliamentary Joint Committee on Defence to cost $17.5 million

Significant increase in maritime project spending:

• Nuclear submarines: $475 million (last year) to $2.8 billion (2024-25), increasing to $4.97 billion (2027-28)
• Payments to US and UK industrial bases for nuclear subs capacity
• Hunter-class frigate project: $813 million (2024-25)
• Arafura-class offshore patrol vessels: $587 million (2024-25)

Reduced scope for Hunter-class and Arafura-class projects

•  F-35 Lightning project nearing completion: $12.4 billion spent, $370 million (2024-25)
• Increased spending on weapons for F-35s and Super Hornets: $412 million (2024-25) for LRASM and JASM-ER
• Personnel challenges: need for 63,597 uniformed personnel (2024-25) vs. 58,600 actual (2023-24)
• Public servant employment goals: 18,000 (2023-24) to 19,127 (2024-25), rising to 20,150 by 2027-28

A key observation regarding the new National Defence Strategy (NDS) as it outlines a marked increase in defence spending, with a projected budget of $67.393 billion for 2027-28, reflecting a substantial $7 billion rise from the previous year. By 2033-34, defence funding is expected to soar to $100 billion, which will constitute over 2.3% of the GDP.

For the fiscal year 2023-24, the defence budget stands at $53.331 billion, accounting for 1.99% of GDP. This figure is set to increase by 6.3% to reach 2.03% of GDP for 2024-25. These increments underscore the government’s strong commitment to enhancing defence funding, marking it as the largest increase in decades.

In line with the National Defence Strategy, the budget includes a provision of $50.3 billion over a decade dedicated to capability enhancement. However, the observations indicate some variances in expenditure estimates. Personnel costs have exceeded initial projections by approximately $1 billion, attributed to rising costs of living. Conversely, capability acquisition expenditure fell short by $2 billion due to a slowdown in procurement processes. Additionally, sustainment costs surpassed estimates by $943 million.

In the upcoming days, we will provide more detailed breakdowns and analyses.

References:
https://www.australiandefence.com.au/news/news/government-hands-down-2024-budget
https://www.defenceconnect.com.au/geopolitics-and-policy/14072-budget-2024-nothing-new-in-generational-investment-for-adf