2019 Federal Budget Defence and National Security Review
April 8, 2019
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Federal Budget week saw a recommitment from both major parties to the Defence spending goal of 2% of GDP by 2020-21, signalling that for Defence, it’s “steady as she goes”, but with some potential challenges requiring careful navigation ahead. Additionally, the Government’s Budget sees a renewed focus on foreign interference and cyber security, and significant boosts to intelligence and security agencies.

Our team of experts within Synergy’s Defence and National Security practice have put together key insights into the 2019-20 Federal Budget where it affects the defence and national security portfolios.

If you would like more information or further advice on what that might mean for your business or agency, please get in touch with us.

A PDF version of the full review is available for download here.

 

 

STEADY AS SHE GOES?

The two major parties have used the 2019-20 Federal Budget week as an opportunity to launch their respective campaigns ahead of a May Federal election. For Defence, it’s ‘steady as she goes’, with no surprises and continued investment in key projects identified in the 2016 Defence White Paper, and both sides recommitting to achieve the Defence spending goal of 2% of GDP by 2020-21.

Both parties recognise the radically shifting regional security environment that Australia’s defence forces and intelligence and security agencies now operate in, with relevant policies largely bipartisan. With the recent renewed focus on foreign interference and cyber security, the Government has also announced significant boosts to the AFP and ASIO.

 

KEY DEFENCE & NATIONAL SECURITY BUDGET IMPLICATIONS

The Government is on track to achieve its goal of investing 2% of GDP on Defence. There will be around a $3b increase in spending over financial year 2020-21 as Defence looks to commence several projects aimed at the regeneration of key capabilities. This spending will come with the ongoing scrutiny of Defence to spend efficiently and effectively. The growing security threats and heightened geostrategic ompetition in our region underpins a shift in focus from the Middle East to regional security that will require strategic policy planning and targeted funding across the defence, intelligence and national security sectors to ensure government objectives are met.

The Government’s additional focus on cyber security and countering foreign interference and terrorism sees significant boosts to intelligence and security services in recognition of the increasingly complex national security environment. To deliver against this, Australia’s intelligence and security agencies have received a $571m funding boost in the Government’s Budget, with a strong focus on counter-terrorism and cyber security. The creation of a Cyber Security Response Fund, as well as an increased budget focus on cyber security future workforce skills and training, reinforces the Government’s commitment to building Australia’s cyber resilience capabilities.

 

WHAT WE CAN EXPECT

The Coalition Government’s continued focus on bolstering Australia’s sovereign defence industry and infrastructure, and the forecasted increase in the Defence budget presents an opportunity to industry partners who can deliver good value, clearly defined Defence projects and programs. However, it also presents some challenges to the public sector. Reaching the stated 2% of GDP target by financial year 2020-21 will attract greater levels of public scrutiny of Defence spending. Strategic planning and efficacy in decision-making across multiple projects, programs and portfolios will be critical to defence and national security leaders to achieve Government spending objectives.

As both parties’ election campaigns unfold, we are likely to see more detail in key policies in the defence and national security portfolios, including immigration, border protection, defence industry spending and potential machinery of government changes.