Australia: Historic defense spending, plus A$1.2 billion on missiles alone.

Tuesday’s Australian budget presentation shows the Australian Defense Force has big plans to acquire US-made long-range strike capabilities as part of the Canberra strategy to prevent an adversary from easily gaining access to the area of ​​interest. fromAustralia.

In total, the defense budget for next year amounts to 52.588 million Australian dollars (35 billion US dollars), marking the first time that the funding exceeds 50 billion US dollars. This is equivalent to 2.04% of the Gross Domestic Product (GDP). 

The ratio of two percent of national GDP to defense spending is an imperfect but widely used metric for evaluating a country’s commitment to national Defense.

Australia’s overwhelming reliance on US munitions is on display in the budget unveiled on Tuesday. For 2023-2024, the ADF revealed plans to spend A$12.3bn (US$8.3bn) on new equipment, of which some A$1.2bn (US$800m), or just under 15% of the annual total, will go towards US precision-guided munitions (PGMs).

These missiles, which will equip Australian warships, combat aircraft and ground forces, will be procured through the US Foreign Military Sales (FMS) system. Among the major anticipated purchases, as well as projected five-year totals, are:

One of the projects, dubbed AIR 3023 Phase 1, aims to procure a maritime strike weapons suite to equip the RAAF’s F-35A, Super Hornet and P-8A aircraft “to enable air strike against well-placed maritime targets.” defended in complex and littoral environments.”

 The missiles are the American LRASM and the Norwegian Kongsberg Joint Strike Missile. The plan is to spend A$333 million this year and an expected total of A$751 million over five years.

Another project is to equip the RAAF’s F-35A and Super Hornet aircraft with JASSM-ER missiles. The price tag is A$180 million, to be spent in 2023-24, and an expected total of A$558 million over five years.

Australia will buy F-35A and Super Hornet air-to-air missiles AIM-9X and AIM-120D for both combat and practice purposes. Investment of A$135m in 2023–24 and roughly A$1bn over the following five years is planned.

Australia is also planning to purchase additional stockpiles of small-diameter bombs and 500 and 1,000-pound guided bombs. A$172m will be spent in 2023-24, and A$810m over five years.

Australia’s issue is that it falls short of MGP, a threshold it aspires to rise above. And Canberra may have to wait a while: American factories like Lockheed Martin, Boeing, and Raytheon are operating at maximum capacity to restore supplies in Ukraine for the United States and its allies, which were depleted during the conflict.

The Australian Defense Force’s largest single equipment project remains to acquire a fleet of 72 F-35A jets, the last dozen of which are due for delivery next year. The total cost of this long-term project is A$16.4 billion, of which A$870 million will be spent in 2023-24.

Australia isn’t interested in spending all of its money on weaponry. To replace an aging fleet of 59 M1A1 Abrams, the government proposes to purchase 75 M1A2 Abrams main battle tanks and 52 combat engineering vehicles from the United States.

There was some concern that this project may be delayed or scrapped altogether prior to the release of the latest Australian Defense Strategic Review. 

Although surprised that the project survived, the budget explains why: it’s simply too far along to stop now. These vehicles will go into full production in the US this year, with A$971m out of the total budget of A$2,283m being spent in 2023-24.

Despite global economic headwinds affecting Australia and the rest of the world, the Australian economy remains in reasonable shape. The government even posted a fleeting budget surplus of A$4.2 billion, it’s first since 2007. This was due to the high level of employment and strong sales of mineral resources to China, among other countries.

This allowed the government to keep defense spending on its current trajectory, which is important as the defense review shows plans for big spending increases over the next decade.

Australian Defense Minister Richard Marles has stated that defense spending as a share of GDP will exceed its current trajectory to be 0.2% above in 2032-33. By then, Australia will be well on acquiring nuclear submarines under the AUKUS deal. By then, Australia will be well on its way to acquiring nuclear-powered submarines under the AUKUS agreement.

However, it is not all good news. The budget reveals a seemingly intractable structural problem in the Australian Defense Force: Despite its best efforts, it has consistently failed its recruitment targets. In total, the ADF has been reduced by some 2,000 troops in the last two years.

According to budget documents, rising separation rates and below-expected achievement of recruitment targets mean that the ADF’s headcount is expected to be below current projections. The average permanent workforce for 2023-24 is 59,673 troops.

To address these issues, Defense formed a Recruitment and Retention “Tiger Team” that identified a number of initiatives. One of these, funded from this budget, is a two-year pilot program of a $50,000 continuity bonus for junior officers and non-commissioned officers in positions deemed to be of increased risk to Template.

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