Budget 2022-23 delivers record investment in ASD capability

The Defence budget for 2022-23, announced on 29 March, will be $48.6 billion, including $1.6 billion for the Australian Signals Directorate (ASD). The budget will rise in the out years, according to the Defence Portfolio Budget Statement, to $51.6, $53.5 and $55.5 billion in 2025-26.

These figures keep the budget at slightly over 2.0% of GDP, but we’re unlikely to see the proportion of GDP grow significantly in the out years. The only big winner for this year’s budget is the Australian Signals Directorate which receives a further $9.9 billion over the coming decade, though much of this increased expenditure was announced previously.

The Capability Acquisition budget will rise in 2022-23 to $16.3 billion, climbing in successive years to $18.0, $18.25 and $19.4 billion in 2025-26. The Sustainment Budget will rise from $14.9 billion 2022-23 to $15.3, $16.25 and $17.1 billion in 2025-25.

Interestingly, the budget for Operations is expected to fall significantly from $516 million in 2021-22, to $193 million this year and then to $1.3 million by 2025-26.

Defence announced in early March that Defence’s personnel headcount would rise by some 18,500 over the period until 2039-40; in 2021-22 the ADF was at 59,862 personnel; this year its numbers will rise to 16,991 and then to 64,532 in 2025-26; the civilian APS workforce will remain roughly static over this period.

Minister for Defence Peter Dutton said the Government remained committed to building a strong, sustainable and secure Australia through Defence’s 10-year funding model. He added, “This growth in workforce will enable us to deliver our nuclear-powered submarines, ships, aircraft and advanced weapons. It will mean we can build warfighting capabilities in the domains of space, information and cyber,” Minister Dutton said.

From 2023-24 a new National Naval Shipbuilding Program will be created and accounted for in the PBS; in the meantime, the biggest winner in this year’s budget is ASD, as previously noted, through what is now called Project REDSPICE.

“The 2022-23 Budget continues this Government’s strong investment in Defence and the Australian Signals Directorate (ASD),” said Minister Dutton. “This includes a $9.9 billion investment over the next decade in new national cyber and intelligence capabilities.

“Project REDSPICE – Resilience, Effects, Defence, Space, Intelligence, Cyber, and Enablers – is the largest ever investment in the capabilities of the ASD,” he added. “REDSPICE will substantially increase ASD’s offensive cyber capabilities, its ability to detect and respond to cyber-attacks, and introduce new intelligence capabilities. It will also create over 1,900 new jobs, almost doubling the ASD’s size.

“This investment in ASD recognises the deteriorating strategic circumstances in our region, characterised by rapid military expansion, growing coercive behaviour and increased cyber-attacks. It acknowledges the nature of conflict has changed, with cyber-attacks now commonly preceding other forms of military intervention – most recently demonstrated by offensive cyber activity against Ukraine.

“REDSPICE ensures Australia keeps pace with the rapid growth of cyber capabilities of potential adversaries. It provides new intelligence capabilities, new cyber defences to protect our most critical systems, and is a real increase in the potency of ASD’s ability to strike back in cyberspace.”