The Australian Government is making an investment in the nation’s manufacturing capabilities as part of the 2024 National Defence Strategy, committing $50.3 billion over the next decade to enhance defence industry capability, as revealed in the recently released federal budget.
In the 2024-25 budget, defence funding is set to increase to $764.6 billion over the decade, supporting a more capable and self-reliant Defence Force.
Central to this renewed investment is the allocation of $330 billion over the decade to 2033-34 for the rebuilt Integrated Investment Program (IIP), a significant increase compared to the $270 billion allocated in the 2020 Defence Strategic Update and 2020 Force Structure Plan.
This includes an additional $5.7 billion over the forward estimates – the largest increase to defence spending over a forward estimates period in decades – and an additional $50.3 billion over the next decade.
“This is about ensuring our Australian Defence Force is fit for purpose and equipped with suitable capabilities to meet present and future challenges,” Deputy Prime Minister Richard Marles asserted.
Consequently, the annual Defence budget is projected to grow to an estimated $100 billion by 2033-34, compared to $53 billion this financial year.
This will see Defence funding as a proportion of Gross Domestic Product (GDP) reach over 2.3 per cent by 2033-34, more than 0.2 per cent higher than the spending trajectory set by the former Coalition government.
The 2024 Integrated Investment Program (IIP) supports the government’s funding decisions by prioritizing investments that address our changing strategic environment.
This includes $11.1 billion over the decade to support the government’s response to the Surface Combatant Fleet review, providing a larger and more lethal surface fleet, and an additional $1 billion over the next four years to accelerate ADF preparedness, including long-range strike, targeting, and autonomous systems.
Minister for Defence Industry Pat Conroy highlighted that in the process of rebuilding the IIP, the government is providing the necessary capabilities for the ADF to enhance national safety, while also bolstering the sovereign defence industry to generate employment opportunities and foster a domestically-made future.
“The Albanese Government is spending a record amount on Australian defence industry, at the same time we are ensuring the money contained Defence budget will be spent more wisely to deliver the capabilities we need,” the minister stated.
As outlined in the 2024-25 Budget, the Australian Government is also investing in other crucial areas to strengthen our defence settings.
This includes $81.9 million towards the defence industry for critical jobs, including scholarships, attracting and recruiting apprentices under the Shipbuilding Employment Pathways Initiative, supply chain support, and uplifting the defence industrial workforce.
Additionally, $166.2 million over five years from 2023-24 will be allocated in grants to support small and medium businesses and the local defence industry as part of the Defence Industry Development Strategy.
Furthermore, $28 million will be invested from 2024-25 to 2027-28 to implement reforms under the Defence Trade Controls Amendment Act 2024, including supporting industry engagement and accelerating trade between AUKUS partners.
The budget also includes $232.3 million for international military support and assistance activities between 2023-24 and 2024-25, including $144.3 million in additional military support to Ukraine.
Moreover, $17.5 million will be used to establish a new Parliamentary Joint Committee on Defence to enhance parliamentary oversight and understanding of Defence’s role in responding to Australia’s challenging strategic environment.
The Defence funding confirmed in the 2024-25 Budget advances the implementation of the Government’s six immediate priorities announced in response to the Defence Strategic Review.
It will also deliver the capabilities required to achieve an integrated, focused Defence Force across all domains – maritime, land, air, space, and cyber – in line with the concept of National Defence.
