Imports surge as armed forces upgrade their fleets but analysts voice doubts as to whether weapons upgrades can proceed without more cash or scrapping projects

Australian arms imports and spending on military equipment have surged in line with ambitious targets to update the armed forces’ fleet of fighter jets, submarines, frigates and armoured vehicles.

But defence analysts remain sceptical the weapons updates outlined in the 2009 defence white paper can be paid for, suggesting at least one of the projects will need to be scaled back or scrapped.

Data published by the Stockholm Institute for Peace Research last month revealed that Australia is now the sixth-largest arms importer in the world, increasing its acquisitions by 65% between 2010 and 2014, compared with the four previous years.

The institute publishes an annual database of international arms sales, measured in terms of the military capability being transferred rather than price.

Australia’s transfers in the period included two of the troubled F-35 Joint Strike Fighters, of which a further 58 were ordered last year at a cost of $12.4bn. The first jets will arrive in Australia in 2018, with the fleet expected to total 72 by 2022.

About 68% of Australia’s arms imports were from the US, with 19% from Spain, from which Australia is sourcing two new amphibious assault ships.

Spending on military equipment and material contracts has surged in the past financial year, with contracts listed by the Defence Materiel Organisation worth $13.8bn in the 2013-14 financial year. This is the highest in the seven years since 2007-08, which is the oldest date of contracts listed on the government’s AusTender website.

The top 20 defence contracts by value from the Defence Materiel Organisation in the same period are listed below, with the addition of the contract for F/A-18F Super Hornet aircraft, which is listed under the defence department:



The largest contracts include the Super Hornet acquisition in 2007, the air warfare destroyer contract from the same year, and a newer 2013 contract for tank fleet servicing.

This increase in contract value is in line with the Abbott government’s commitment to increase defence spending to 2% of GDP within a decade, with projected defence spending in the 2014 budget the largest since at least 2000.

Professor Alan Dupont, from the University of New South Wales, said there were always “peaks and troughs” in arms imports, reflecting the fact that Australia had a small domestic defence industry.

He said the surge in imports probably reflected an increase in spending that began after the Australian-led intervention in Timor-Leste. “Some of this would be the result of decisions made 10 or even 15 years ago,” he said. “It takes a while for that money to show up in the system.”

He said the Rudd government made large spending commitments after the 2009 white paper but then “started to cut back on the money you would need to acquire all the capability discussed in that paper”.

Apart from the new Joint Strike Fighters, successive governments have also committed to building 12 new submarines, replacing the navy’s eight Anzac-class frigates and rolling out new armoured protection vehicles.

“If we don’t have enough money to fund them, something’s going to have to go in those systems,” Dupont said. “[Tony] Abbott’s been making all sorts of positive noises, but there’s still questions over whether we can afford this stuff.”

The Stockholm institute’s data showed that China had become one of the world’s major arms dealers, increasing its exports by 143% in the past four years compared to the years 2005-09.



India has also embarked on a spending spree, its 140% increase in imports between 2010-14 accounting for 15% of the world’s total transfers.