http://au.news.yahoo.com//080513/2/16ua3.html
Tuesday May 13, 07:54 PM
Govt to lift defence spending by 3%
The government will lift defence spending by three per cent - taking the defence budget to around $22.6 billion - and do so annually for another nine years.
The funding boost until 2017-18 is two years longer than expected.
Otherwise, the defence budget contains few surprises, with fresh initiatives likely to appear once the government completes the Defence White Paper and associated Force Structure Review next year.
Defence Minister Joel Fitzgibbon said increasing underlying defence spending by an average three per cent in real terms for the extra two years is a big boost.
"The increase will provide an extra $2.8 billion to Defence over two years in 2016-17 and 2017-18 and will ensure that our soldiers have the necessary equipment, training and support they require to undertake their difficult work," he said.
The budget features total funding of $1.036 billion to maintain overseas defence operations, including $618.9 million for Afghanistan, $174.3 million for East Timor, $215 million for Iraq and $27 million for the Solomon Islands.
A total of $4.8 billion will be spent on current equipment procurement projects and another $4.5 billion on maintaining and upgrading existing equipment.
What little there is of new equipment spending includes $26.8 million for rapid acquisition of new weapons and other material to support ongoing operations.
Mr Fitzgibbon said the government would spend $650 million on establishing two new infantry battalions and increasing the size of the army by 3,000.
He said the previous coalition government launched the project to raise the extra battalions but did not commit enough funding.
"Despite the former government's shortfall, the Rudd government is absolutely committed to delivering the two battalions."
The budget also allocates $148.7 million to boost recruitment of "Generation Y" members, women, indigenous Australians and those of ethnic backgrounds. Another $165.1 million will go to encouraging those already in the defence force to stay on.
Defence Personnel Minister Warren Snowdon said the government recognised that people were the most valuable resource and recruitment and retention would continue to be top priorities.
Defence budget papers reveal the government has deferred significant spending until future years.
Equipment spending of $45 million will be moved from 2008-09 to 2013-14.
Another $1.065 billion of new capital investment has been moved from 2008-09 forward over the next decade, mainly due to contractor delays and revised estimates for buying equipment from the United States.
Defence under spending of $679.7 million for equipment projects in 2007-08 will be carried forward to 2012-13 and beyond.
As a major purchaser of foreign equipment, Defence has done well from the strengthening of the Australian dollar. But under its no-win-no-loss arrangements, it will have to hand back to the government $126.5 million in foreign currency earnings in 2008-09.