This report gives interested readers greater access to the complex workings of the Defence budget and promotes informed debate on Defence budget issues.

Introduction

And so it begins. Not with a bang but with a whimper. Despite the fanfare accompanying the release of the 2016 Defence White Paper, defence spending will decline by 0.5% in real terms next year and the GDP share will drop from 1.94% to 1.88%.

It’s not that the government has abandoned its commitment to increase defence spending to 2% of GDP—far from it. In this year’s budget, the Turnbull government delivered every cent it promised in the White Paper. Instead, funding growth has had to be deferred because Defence is unable to accommodate the boost.