Defence 2025: Dollars and Decisions

On Thursday, 17 April, Strategic Analysis Australia published Defence 2025: Dollars and Decisions. 

This report unpacks the Australian defence budget and analyses whether it is adequate for Australia’s current strategic circumstances.

The report reaches several conclusions that highlight the parlous state of defence funding.

First, despite the serious decline in Australia’s strategic environment, there has been no meaningful increase to Defence’s funding line for 2025-26 beyond the funding line set out in the 2016 Defence White Paper a decade ago. Any significant increases are still several years away.

Second, Defence has missed its acquisition spending targets by a total of $26 billion over the past decade, meaning capability has not been delivered. That money has been absorbed by rapidly increasing sustainment costs. That suggests the acquisition plan set out in the 2024 National Defence Strategy is unachievable.

Third, the spend for Australia’s AUKUS submarine program now exceeds the Air Force’s acquisition budget. In essence, SSNs have become a ‘fourth service.’ This will likely continue to distort Defence’s budget for decades to come.

Finally, the report looks at the destination of acquisition and sustainment spending and concludes that the ADF is becoming more American. This suggests that the ADF needs to do more to hedge its risks.

The report also has chapters on the state of the US alliance as well as recommendations for the next government on how to make the Department of Defence relevant for our times.

The report can be read on SAA’s website or below in an ebook format.