Defence has faired comparatively favourably from the 2016 Budget handed down by Minister Morrison on 3 May 2016. The key highlights are as follows:
- Defence will get $32.3 billion for the 2016-17 financial year and increase of $590 million over last year, or 3.1 per cent in line with inflation.
- This matches spending as a percentage of 2015-16 GDP (1.9 per cent). However, the Government will grow the Defence budget to 2 per cent of GDP by 2020-21, three years earlier than originally planned.
- Defence spending over the forward estimates ($142.9 billion) reflects commitments in the white paper released earlier this year that outlined an ambitious upgrading of the country’s maritime capabilities.
- The government’s commitment to invest $89 billion in ships and submarines over the next 20 years is anticipated to create more than 3,600 jobs and thousands of additional jobs with suppliers. In particular the government is promoting this investment as securing future advanced defence manufacturing capability and they are closely linking to their “jobs and growth” strategy for the upcoming election.
- Over the next 10 years, the government will provide $1.6 billion to fund Defence research and development and cyber capabilities. The Next Generational Technologies Fund will invest in strategic technologies; a Defence Innovation Hub to encourage collaboration on innovation; and a Centre for Defence Industry Capability to build the capacity of Australian industry to support Defence.
- $686 million is provided for continued operations in Afghanistan, Iraq and the Middle East.