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Dylan Welch

May 1, 2012 
SEVERAL billion dollars could be cut from Defence – including scrapping a plan to buy a dozen high-tech artillery pieces and delaying the acquisition of next-generation fighter jets – as part of a government drive to create a budget surplus next week.

While the detail of cuts to defence are a secret, there is almost no doubt that the $26 billion-a-year Defence budget will face a significant cut, with expectations it will have to deal with a reduction in funds over the next four years between $4 billion to $7 billion.

With such a large chunk taken from the Defence budget it is expected several big-ticket hardware projects will have to be delayed, scaled back or cut entirely.

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Defence Minister Stephen Smith comments on the Defence Cultural Reviews, the Kirkham Inquiry and the DLA Piper Review, during a news conference at Parliament House Canberra on Wednesday 7 March 2012.
Photo: Alex EllinghausenDefence Minister Stephen Smith. Photo: Alex Ellinghausen

”Over the four years you’re talking billions of dollars [in cuts],” said Australian Strategic Policy Institute defence analyst, Mark Thomson.

Defence Minister Stephen Smith has acknowledged the cuts but not outlined their exact size or shape.

”We are going through a very tight fiscal period. I’ve made it clear that Defence has to expect to make a contribution to the return of the budget to surplus, as it should,” Mr Smith said on Friday.

He was careful to note, however, that there would be no cuts to overseas military operations or to military staff, meaning all savings would come from hardware or civilian personnel.

Among the expected cuts is a project to purchase as many as 12 self-propelled artillery pieces – which look like tanks but are 155mm guns mounted on tracks. The guns are expected to cost somewhere between $500 million and $1.5 billion and are planned to be operational from 2015.

Another big-ticket item is the project to upgrade a dozen of Australia’s current top-tier fighter jets, the F-18 Super Hornet, to an electronic warfare variant called the Growler. The government could potentially save hundreds of millions by delaying that acquisition.

A third possibility is delaying the acquisition of the Joint Strike Fighters. Australia has set aside as much as $16 billion to buy 100 of the fighters but the purchase is under a cloud after problems with the program.

Design faults with the JSF have meant the projected cost per aircraft has risen from $US50 million in 2002 to more than $US120 million last year, leading Mr Smith to say last year that Australia may re-evaluate its position unless technical difficulties are solved.

In an opinion piece in The Age today, Professor Hugh White also reveals the nervousness within Defence over the budget.

”Next week’s federal budget will be very tough on Defence, and each of the three armed services fear the axe will fall on them,” he writes.

Another Australian Strategic Policy Institute analyst, Andrew Davies, cautioned that the government should avoid a return to the 1990s when Defence was hollowed by a series of Hawke, Keating and Howard government cuts.

”They shouldn’t start regarding Defence as an endless cash cow because sooner or later cuts are going to start biting into capability,” Mr Davies said.

Professor Ross Babbage of the Kokoda Foundation, said ongoing cuts are increasingly suggesting that the 2009 Defence white paper – which sought to transform Defence into a more agile and amphibious force – has failed.

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