Budget gives an insight into how war and global uncertainty might affect Australia

If the last two budgets were delivered under the spectre of COVID, this year’s budget has a different bogeyman – the outbreak of war in Europe and growing unrest in the Asia-Pacific region.

While Russia and China weren’t name-checked once in Treasurer Josh Frydenberg’s budget speech, how Australia reacts to the “uncertain times” afoot was a main theme.

Much of the focus was on responding to the rise in the cost of living brought on by the global uncertainty.

But with increases in funding for defence, cyber security and intelligence and strategic partnerships, Australians got a glimpse of where the government thinks the world is headed in coming years.

Play Video. Duration: 34 minutes 59 seconds
Josh Frydenberg hands down the Federal Budget.

What did the Treasurer say last night?

Mr Frydenberg said Australia must be “realistic about the growing threats we face”.

“The lesson of history is that weakness invites aggression,” he said.

“It leaves nations vulnerable to coercion. This is the reality we must confront.

“The world is less stable. We must invest more in the defence of our nation.”

Beyond direct defence spending, the Treasurer called out “boosting our sovereign manufacturing capability” as an important initiative for Australia’s security.

“COVID and events in Ukraine have been a powerful reminder that we must increase our self-reliance,” he said, announcing new funding to “solve for vulnerabilities in our supply chains”.

What about the budget papers themselves?

They go even further, describing “a deteriorating geostrategic environment and economic disruption”.

Under the heading of “protecting our interests in an uncertain world” in the budget priorities, three main areas were outlined:

  • Investing in our strategic partnerships, including the establishment of AUKUS and support for Ukraine.
  • Expanding and equipping the Australian Defence Force
  • Keeping Australians safe, with investment in our cyber capability, Operation Sovereign Borders and the prevention of terror threats and serious crimes.

So what does that mean for the defence force?

Well, it’s going to be a lot bigger.

The government has increased the share of funding for defence to more than 2 per cent of GDP, with $48 billion in funding in 2022-23.

It plans to spend at least $38 billion to add 18,500 personnel to the total defence workforce by 2040.

A new east coast submarine port, a large-vessel dry berth in Western Australia and a nuclear-powered submarine construction yard in Adelaide are all on the cards as well.

Australia’s intelligence sector gets a boost, too

The Defence Force isn’t growing alone. Australia’s intelligence and cyber capabilities will receive a sizeable investment through the curiously named REDSPICE program.

Will you be better off after the budget? Maybe

Josh Frydenberg can rightly celebrate the way the economy has roared back into life, but it is hard to think of a recent federal budget where the largesse has been so transitory and the outlook so full of potentially bad news.

Scott Morrison
Scott Morrison

Australian Signals Directorate will double in size thanks to $9.9 billion over 10 years — the largest ever investment in Australia’s intelligence and cyber capabilities.

Under REDSPICE — its full name is a mouthful, the Resilience, Effects, Defence, Space, Intelligence, Cyber and Enablers package — 1,900 new jobs will be added to the ASD over the next decade, while helping the directorate to keep pace with developments in technology.

The budget papers claim the package will triple ASD’s offensive cyber capabilities and double its cyber hunt and response activities

“The package will help ASD to keep pace with the rapid growth of cyber capabilities of potential adversaries, as well as being able to counterattack and protect our most critical systems,” it read.

Play Video. Duration: 1 minute 51 seconds
Solomon Islands Prime Minister defends his country’s security deal with China.

What about our neighbours?

With an “increasingly assertive” China cementing its footprint in neighbouring countries, the budget reconfirms Australia’s “Pacific Step-Up” and the government’s faith in the “rules-based international order”.

While cementing the AUKUS partnership is a key focus, there are a few items in the budget for our regional relationships:

  • $324.4 million over the next two years to support Pacific Island countries and Timor-Leste to recover from the impacts of COVID-19.
  • A new High Commission in Malé in the Maldives and a new chancery for the High Commission in Honiara in the Solomon Islands.
  • Funding for the Comprehensive Strategic Partnership with India

Is there more support for Ukraine?

There were no new announcements in the budget for Ukraine, but $156.5 million in initial support was announced for the besieged country earlier this month, including:

• $91 million in lethal and non-lethal military assistance, including missiles, weapons and medical supplies

• $65 million in humanitarian assistance to deliver urgent services and supplies

• $500,000 to establish the Ukrainian Community and Settlement Support Program to provide additional support to those arriving in Australia after fleeing Ukraine

In addition, the government will buy at least 70,000 tonnes of thermal coal to support the Ukrainian energy supply, with the price not disclosed due to commercial-in-confidence sensitivities.

The government will also allocate a three-year Temporary Humanitarian Concern Visa (subclass 786) to Ukrainians in this financial year and next.

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