Greg Sheridan has an interesting piece in The Australian today on the decline in defence spending. His central claim is that cuts to defence in the Budget means that our defence spending, as a percentage of GDP, will be lower than at any time since 1938.
His graph though didn’t allow a proper analysis of recent funding because WWII pushed the scale so high that any changes since Vietnam were almost indiscernible.
So here is a graph of funding since Vietnam. I have used real dollars, not % of GDP, because that is probably a more accurate measure of our actual force capability.
I was surprised to find that the preconception that the Coalition spend more on defence than Labor really does hold true. Growth in defence spending, in real terms, under Fraser was 3.9%, under Hawke-Keating 0.5%, under Howard 3.7% and under Rudd-Gillard it is heading for 1% by 2014.
The Rudd-Gillard period is interesting though. Rudd began with big increases in defence spending, 11.2% in 2008 and 6.7% in 2009. Rudd also promised 3% real growth in defence spending until 2017-18 in his 2009 defence white paper. This growth is represented by the red-outlined, white bars in the graph.
Since then defence spending has been flatlining, and the $4 billion in budget cuts announced this week, will make it go into reverse and decline by 8% by 2014. The shaded red bars represent defence spending before the budget cuts.
(I have updated the ASPI Almanac with the cuts from Budget paper no. 2. There is another $2.1 billion cuts that I have not been able to include in this chart because ASPI’s figures only go to 2014.)
These cuts mean that defence spending will fall $6.5 billion short of Rudd’s 3% white paper target in 2014. Perhaps Rudd’s target was unrealistic but spending will still be $4.5 billion less in 2014 than if the Rudd-Gillard government had kept the Howard government growth rate of 3.7% since 2007.
What is the most concerning aspect of these cuts is that they seem to based on the government’s political needs to deliver surpluses not Australia’s security needs.