Abstract
The prevalent issue concerning the Australian defence industry in the March
quarter 2009 has been the
question of how much the financial crisis and
pressures on the budget will result in a deferment of
expenditure by the
Australian defence industry. The Rudd Government has said that it expects
the
financial crisis to take $115bn from its revenue in 2009, while the
Australian Bureau of Statistics figures
confirmed, as at the end of March,
almost 600,000 people are jobless. Almost all sectors of the economy
and
the government are ailing. This makes Rudd’s election promise of a 3%
real increase in defence
spending per annum from 2009 onwards a difficult
one to keep. Defence is targeted to have a 3% real
increase in funding for
its $22.4bn budget in 2009, with similar rises each year until 2018.
The
global financial crisis has already forced the Defence Department to shelve
plans to buy billions of
dollars' worth of military equipment, including a
new $5bn maritime surveillance system. The economic
downturn will also
mean the navy will not exercise the option to acquire a fourth air warfare
destroyer
worth $2bn, and it could force a one-year delay in plans to
spend $16bn on 100 F-35 joint strike fighters.
A white paper designed to
chart Australia' s defence strategy to 2030 is due to be published next
month.
However, doubts are emerging as to whether the National Security
Committee of Cabinet (NSC) will sign
off on the document in time. It was
originally planned to be released in December 2008. The RAAF had
hoped to
replace its 32-year-old fleet of Orion AP-3C maritime surveillance planes with
a combined mix
of unmanned aerial systems and a new patrol aircraft, the
Boeing P-8A Poseidon. The Rudd Government
has now effectively ended hopes
for the early acquisition of the $1.5bn Global Hawk Unmanned Aerial
System
– part of an ambitious 15-year project to revolutionise maritime
surveillance requirements. Drafts
of the white paper, which is expected to
be released mid-year, reportedly call for a fleet of 12 newgeneration
submarines (costing up to $25bn), and 100 new Joint Strike Fighters (costing
about $16bn).
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