For some time, the Morrison government has indicated that investment in and commitment to strengthening Australian’s defence industry and national security will be a cornerstone of its election pitch. And after the 2022/23 Budget announcement on March 29, it seems there’s a lot to support this. However, some argue there are critical gaps in promised investment. 

Here, we look at where the Federal Government is spending big on defence, and the areas that might be feeling the pinch. 

Cyber security at the forefront of Budget 

Perhaps the cornerstone of the government’s defence spending is its steep investment in boosting Australia’s cyber security and resilience. An additional A$9.9 billion over ten years will be funnelled into the county’s spy agency, the Australian Signals Directorate (ASD), for offensive and defensive cyber capabilities. 

Known as Project “REDSPICE” – Resilience, Effects, Defence, Space, Intelligence, Cyber, and Enablers – this package will double ASD’s size and claims it will create 1,900 new jobs over the next decade. 

The announcement comes as Australia faces a worsening international cyber security environment, which has only been exacerbated by the Russian-Ukrainian conflict, for which Australia has provided cyber security assistance to international allies. 

In his budget speech, Treasurer Josh Frydenberg said the funding would lead to “more data analysts, computer programmers, and software engineers to boost our capacity to prevent and respond to cyber threats”. 

“REDSPICE will triple ASD’s offensive cyber capabilities and double its cyber hunt and response activities, preserving ASD’s capability edge and delivering strategic advantage for Australia over the coming decade and beyond,” budget papers state. 

The focus on cyber comes off the back of the launch of ASD’s new cyber and foreign intelligence facility on March 22, and Prime Minister Scott Morrison’s announcement of a cyber and critical technology centre inside Australia’s peak intelligence assessment agency, the Office of National Intelligence. 

Have veterans missed out? 

In contrast to the ASD’s big budget, many are lamenting the government’s lack of financial assistance for veterans, including the government’s own Veterans’ Affairs Minister, Andrew Gee. In a very public outcry, Mr Gee revealed he had been on the verge of resigning because he was being refused funding for his department. 

Mr Gee labelled the backlog of 60,000 unprocessed claims within his department a "national disgrace" and said he had asked for $96 million to clear the waiting list by the middle of next year. While he has been afforded an initial $22.8 million to fund 90 additional Department of Veterans’ Affairs staff to reduce the backlog of unprocessed claims, it’s unclear when he will receive the other $73.2 million for additional staff and other measures to further improve the veteran claims processing system and reduce waiting times. 

Veteran support has long been a concern for the defence community, which has only exacerbated off the back of the Royal Commission into Defence and Veterans Suicide. 

Underfunding of diplomacy and foreign aid 

Australia’s spending on foreign aid and diplomacy will fall in real terms over the next four years, despite fears of a potential Chinese base in the Pacific, increasingly common foreign disputes and natural disasters caused by climate change. 

The total expenses for foreign affairs and economic aid will decrease by 19 percent over the following three years, while spending on diplomacy will decline from $1.33 billion this year to $1.25 billion in 2025-26. 

Some experts claim this demonstrates the government’s large injections of funds into “hard power” through defence, while “soft power, aid, diplomacy, education, climate policy and a host of other key areas are bled of funds or stagnate.” 

There is, however, a silver lining for some. The government will increase infrastructure spending in the Pacific by $3.5 billion, including improvements to Papua New Guinea’s road network and electricity distribution grid, and will dedicate $324 million over the next two years to help Pacific nations and Timor-Leste recover from the COVID-19 pandemic. 

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