Strategic programmes and regional interests to keep Australian defence spending at 2.3% of GDP through 2027

The evolving security situation in the Asia-Pacific region and Australia’s own military recapitalisation efforts will sustain Canberra’s defence spending in the coming years.

Releasing its 2022-2023 budget on 25 October, the Australian Government revealed that defence funding will rise to over 2% of gross domestic product (GDP), the highest level for decades, with AUD$48.699bn to be spent on defence over the next financial year.

According to Akash Pratim Debbarma, defence analyst at GlobalData, the increase military assertiveness of China in the South China Sea has raised concerns for the other countries in the region, forcing them to boost their defence spending.

“Along with its increased presence in the Pacific Islands, China’s growing economic and strategic influence is a major concern to Australia’s strategic interests and the increased defense spending seems to be directed at limiting and reducing China’s influence in the region, Debbarma said.

GlobalData’s report, ‘Australia Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2022-2027,’ forecasts Australia to spend at an average of 2.3% of its GDP on defence throughout the period of 2023-27, primarily driven by the necessity to implement its strategic plans and meet its national interests.

“However, this increased spending for defence is not just a result of the recent geopolitical events of Ukraine or comments on Taiwan by China. The spending is required to carry on the programmes outlined by Australia’s 2016 Defence White Paper and the 2020 Force Structure Plan as strategic requirements to help secure the country against threats. The country has also called for a review of programmes and threats, which will be submitted in 2023,” stated Debbarma.

Besides initiating the Optionally Manned Fighting Vehicle (OMFV) programme to replace the M2 Bradley, the US is seeking to develop a smaller version of the battle tank through its Mobile Protected Firepower programme to enhance mobility and offensive capability.

In Europe, France and Germany are replacing their Leclerc and Leopard 2 tanks through the Main Ground Combat System (MGCS) programme. Similarly, the UK is upgrading its Challenger 2 battle tanks to the Challenger 3 standard. Turkey is manufacturing its indigenous Altay battle tank while Poland is procuring the M1A1 Abrams tank from the US.

Chowdry concludes: “As technological advancements continue rapidly, it is expected that there will be increased efforts to integrate as many of these on to military land vehicles to enhance the lethality and protection of troops through the increased sharing of information from different sources, including teamed unmanned ground and aerial systems.”

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