Australia — Defence Budget Overview 2011-12

Defence Bud­get Overview – Realign­ing the Bud­get
In the 2011-12 Bud­get, Defence will under­take a sig­nif­i­cant realign­ment of its budget.

This realign­ment aims to: 

• Ensure that Defence has the fund­ing it needs, when it needs it; and 
• Reduce oper­at­ing expen­di­ture through increased efficiencies.

As a result of the realign­ment, Defence will return to Government: 

• $1.1 bil­lion in 2010-11 and an addi­tion­al $1.3 bil­lion over the next four years by repro­gram­ming Major Cap­i­tal Invest­ment Pro­gram fund­ing; and 
• $0.4 bil­lion in 2010-11 and an addi­tion­al $1.3 bil­lion over the next four years from reduced oper­at­ing expen­di­ture, adding to sav­ings from the Strate­gic Reform Pro­gram (SRP);
• $87 mil­lion in 2010-11 and an addi­tion­al $111 mil­lion over the next four years for low­er than planned costs asso­ci­at­ed with acquir­ing the fifth C‑17 aircraft. 

In total, Defence will reduce its call on the bud­get by $1.6 bil­lion in 2010-11 and $2.7 bil­lion over the next four years (2011–12 to 2014–15).

The repro­gram­ming is nec­es­sary to bet­ter reflect real­is­tic achieve­ment of mile­stone deliv­ery pay­ments by indus­try for capa­bil­i­ty and infra­struc­ture projects. This accom­mo­dates antic­i­pat­ed delays in project deliv­ery from industry. 

In 2010-11, cap­i­tal expen­di­ture has slipped by $1.1 bil­lion which will have flow-on impacts in future years. 

The expe­ri­ence to date with the Strate­gic Reform Pro­gram has demon­strat­ed that reform in Defence is nec­es­sary, achiev­able and sustainable. 

With the ben­e­fit of this expe­ri­ence, the Gov­ern­ment con­sid­ers that Defence can and should do more to reform. 

The White Paper and the work­force and shared ser­vices stream of the SRP pre­dict­ed a net increase in the Defence APS work­force of 1,655 from 2010-11 to 2013–14.

Reforms to shared ser­vices and oth­er effi­cien­cy mea­sures means that Defence can reduce this over­all fore­cast APS work­force growth by 1,000 over the next three years.

This includes the appli­ca­tion of the Government’s increased effi­cien­cy div­i­dend to Defence. Under this whole of Gov­ern­ment mea­sure, the effi­cien­cy div­i­dend will rise from 1.25 per cent to 1.5 per cent in 2011-12 and 2012–13, before return­ing to 1.25 per cent for 2013–14 and 2014–15.

Reduc­ing the APS work­force growth will be achieved by nat­ur­al attri­tion, not hir­ing new staff and, if required, some lim­it­ed vol­un­tary redundancies. 

Sav­ings from these reduc­tions to fore­cast APS growth will be returned to the Budget. 

There will be no reduc­tions to the Aus­tralian Defence Force mil­i­tary work­force as a result of these changes. 

Giv­en pri­or­i­ty accord­ed to main­tain­ing sup­port to oper­a­tions, improv­ing Navy sus­tain­ment and enhanc­ing capa­bil­i­ty devel­op­ment, the Joint Oper­a­tions Com­mand (JOC), the Navy and the Capa­bil­i­ty Devel­op­ment Group (CDG) will be exempt from these addi­tion­al reduc­tions to their fore­cast APS workforce. 

These reforms will be incor­po­rat­ed into the Strate­gic Reform Pro­gram, includ­ing over­sight by the Defence Strate­gic Reform Advi­so­ry Board chaired by Mr George Pappas. 

For more infor­ma­tion and access to the Port­fo­lio Bud­get State­ment go to http://www.defence.gov.au/budget/11–12/index.htm

Mr Smith’s Office: Andrew Porter (02) 6277 7800 or 0419 474 392
Depart­ment of Defence: (02) 6127 1999

Press release
Min­is­te­r­i­al Sup­port and Pub­lic Affairs,
Depart­ment of Defence,
Can­ber­ra, Australia 

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