Construction of a fleet of frigates for the Royal Australian Navy has been plagued by cost blowouts and delays.

Construction of a fleet of frigates for the Royal Australian Navy has been plagued by cost blowouts and delays.

Defence spending is set to hit $80 billion a year by the end of the decade,up significantly from the current annual figure of $50 billion.

That figure will grow even larger when the cost of nuclear-powered submarines acquired under the AUKUS agreement is included,as well as an increase in military personnel.

Support for Ukraine’s war against Russia is also adding to budget pressures,with the government set to announce a substantial new package of support for Ukraine on top of the $388 million in military assistance already provided this year.

Loading

The government will seek to blame the Coalition for the problem,arguing its predecessor boasted about increasing defence spending while allowing the cost and timing of crucial projects to spiral out of control.

The opposition is likely to strongly reject these arguments,countering that defence spending fell to its lowest amount in GDP terms since 1938 during the Rudd-Gillard years.

The Australian Defence Force (ADF) currently has 28 major projects running behind schedule,with cumulative delays of 97 years.

Advertisement

The troubled projects – costing a total of $70 billion – include the Hunter Class Frigates,offshore patrol vessels,battlefield airlifters and P-8A Poseidon aircraft.

“We face the most challenging circumstances since the Second World War,compounded by the fact that the economy is facing serious pressures – and reaching record spending within Defence as a per cent of GDP means we need to be more responsible about the way in which we manage,” Defence Minister Richard Marles said.

Defence Minister Richard Marles said defence spending needs to be handled more responsibly.

Defence Minister Richard Marles said defence spending needs to be handled more responsibly.Credit:James Brickwood

“It’s not as though we can go onto the battlefield and overwhelm our adversary by running up to them and waving a copy of the budget papers in their face.

“Given the current strategic circumstances we face,we need to be better focused on the quality of the spend within defence to ensure we are providing our ADF personnel with the best capability.”

The government will on Monday announce the creation of an independent projects and portfolio management office within the Department of Defence to provide more oversight of major spending initiatives.

Loading

It will also establish formal processes and “early warning” criteria for projects to be placed on the Projects of Concern and Projects of Interest lists.

Defence will be required to deliver monthly reports on projects of concern and projects of interest to the relevant ministers.

“Our Government is dealing with big budget pressures in critical areas like national security and defence,compounded by the bungled projects and cost blowouts that the former government didn’t account for in the budget,” Treasurer Jim Chalmers said.

“Our investments in defence and our steps to improve project management are a down-payment on the stability of our region,and the security and safety of Australians.”

Defence Industry Minister Pat Conroy accused the Coalition of “bungling” the portfolio,pointing out the previous government had six defence ministers in nine years.

Cut through the noise of federal politics with news,views and expert analysis from Jacqueline Maley.Subscribers can sign up to our weekly Inside Politics newsletter here.

License this article

Most Viewed in Politics

Loading