Defense Strategic Review Calls for Cost Prioritization After Morrison Administration Overcommits $42 Billion in Projects

Australia’s most important review of defense forces and capabilities in decades reveals critical budget struggles, with proposals that multibillion-dollar programs may need to be rolled back and others scrapped made it

A Defense Strategic Review to be released Monday revealed that in the last years of the previous administration, $42 billion worth of critical defense projects were pledged under budget and unallocated over the next decade.

At the same time, the Morrison administration cut the defense budget by about $14 billion.

After undergoing a review conducted by former ADF chiefs Sir Angus Houston and Stephen Smith, Defense Minister Richard Maruls had to decide whether to accept the review’s recommendations.

Some of the recommendations call for scrapping or rolling back programs that are not in line with Australia’s capacity targets.

Throughout the published chapters of the DSR, which focused on finances and resources, reviewers found that the previous coalition government had grossly overpromised for the project while siphoning money from the defense budget.

The review uncovered significant funding commitments from the former government. $32.2 billion in setting up a guided weapons and explosives manufacturing business. And his $1.9 billion to achieve Pillar 2 of AUKUS was all done without a provision in the budget.

Meanwhile, the review found that the DoD budget for the 10-year plan from 2022-23 to 2031-32 would be cut by $14 billion, of which $2.7 billion would be transferred to other agencies and $3.2 billion as an efficiency dividend. I know it has been paid.

An additional $9 billion allocated to the Strategic Reserve Account to support the activities of the 2016 Defense White Paper has been diverted elsewhere.

New capabilities requirements mean that existing capabilities can be maintained and severe labor shortages need to be addressed, requiring Marles to make difficult decisions and trade-offs to manage the immediate defense budget. there is.

Last month, Marrez told Congress that the 2016 defense white paper provided $30 billion in procurement spending over the next decade, but within two years the previous government “quietly reallocated” $9 billion of that from the State Department. “I did.”

“The Integrated Investment Program is a 10-year procurement schedule for the defense. Ten years after the opposition made its announcement without funding, IIP overprogramming is estimated to be 32% next year,” he said. said last month.

“What this means is that we have no money at all for almost a quarter of what the Pentagon plans to buy.

“That’s the legacy left to us by our opponents. It’s literally all announcements, no delivery. It’s as if we think we can go into battle with a megaphone and declare submission to our enemies.”

The review recommends that the government revert the $18-21 billion LAND400 Phase 3 to just 129 vehicles, from an initial commitment to procure and support up to 450 next-generation infantry fighting vehicles. Expected.

The review recommends the complete cancellation of the LAND 8116 Phase 2 project implementing the 2nd Regiment of Army Self-Propelled Howitzers.

The money saved by rolling back that program can instead be spent accelerating and expanding programs like the LAND 4100 Phase 2 project. This will allow more ground forces to intercept and destroy surface threats.