Australia Faces A$6bn Defence Budget Shortfall

18 March 2008 (Last Updated March 18th, 2008 09:00)

Australian Defence Minister Joel Fitzgibbon says the cost of sustaining defence capability has been alarmingly underestimated and underfunded by the previous Howard government. Fitzgibbon, whose Labor Party came to power in November, says a defence budget of two percent of GDP may not b

Australian Defence Minister Joel Fitzgibbon says the cost of sustaining defence capability has been alarmingly underestimated and underfunded by the previous Howard government.

Fitzgibbon, whose Labor Party came to power in November, says a defence budget of two percent of GDP may not be enough, according to local media reports.

"There are costs involved in manning and sustaining our ships, tanks and aircraft and I'm advised by my department that the shortfall may be up to A$6bn over the coming decade," he says.

Fitzgibbons accused the former government of committing to fund new equipment projects without taking into account their on going costs.

"It's like factoring the cost of a new car into the family budget, without making any provision for fuel, insurance, rego or maintenance."

Earlier this year Fitzgibbon said he was considering dropping several expensive and "risky" defence projects, including a A$6.5bn purchase of Super Hornet fighter planes, a A$1.5bn fleet of naval Seasprite helicopters and a A$1.4bn upgrade of guided missile frigates.

By Elizabeth Clifford-Marsh