This ASPI Special Report examines defence funding as of late 2008 taking account of the government’s mid-year budget revisions, the latest Defence Annual Report, and the Global Financial Crisis.

For eight years now, Australia has been pursuing its largest military build-up since the Vietnam conflict. Underpinned by 3% real growth in funding guaranteed to 2017, the poorly prepared and equipped defence force of the 1990s is being modernised and expanded for the 21st century. So far, results have been mixed. While the exemplary performance of the defence force in maintaining far flung concurrent deployments attests to some progress, challenges remain.