Chapter One - Overview > Financial Overview > page 15 of 16
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Financial Overview

Defence's Cash Position

ADF Operations

Explanation of Major Variations
Operations in Timor-Leste (+$0.3m)

Operation Citadel, the United Nations Mission in Support of East Timor, ceased on 20 May 2004 and was replaced by Operation Spire, the United Nations successor mission in Timor-Leste. The 2004-05 Budget provided $27.1m for operations in Timor-Leste including $11.1m in funding carried forward from 2003-04 in respect of Operation Citadel and $16.0m for Operation Spire.

Actual expenditure for operations in Timor-Leste was $0.3m more that the projected result mainly due to minor additional logistics support costs.

Operations in Iraq (+$12.2m)

Operations Bastille and Falconer were Australia's predeployment to the Middle East and its contribution to the United States-led war in Iraq. In July 2003, the ADF transitioned to Operation Catalyst. Operation Catalyst is the ADF's contribution to developing a secure environment in Iraq, and assisting national rehabilitation and reconstruction. The 2004-05 Budget initially provided $212.5m for the continuation of operations in Iraq to June 2005 including $25.2m of funds carried forward from 2003-04. Subsequent to the budget, the Government agreed to carry forward a further $14.6m from 2003-04 related to timing issues for inventory purchases and equipment remediation programs and this was formalised in the 2004-05 Additional Estimates.

An additional $45.6m was provided in the context of the 2005-06 budget process in respect of 2004-05, comprising:

  • $20.8m for force protection enhancements including the Australian Light Armoured Vehicles and ships; and
  • $24.8m for the deployment of the Al Muthanna Task Group for additional strategic lift costs and personnel allowances.

Actual expenditure for operations in Iraq was $284.9m which was $12.2m more than the projected result and mainly due to higher than estimated costs for strategic lift and personnel allowances.

Operation Anode (-$12.1m)

Operation Anode is the ADF contribution to the Regional Assistance Mission to the Solomon Islands (RAMSI). In addition to the $22.2m of existing funds and $12.8m of funds carried forward from 2003-04, the 2004-05 Additional Estimates provided for a further $4.7m in 2004-05 for the continuation of the deployment for up to two years. This brought the total level of funding for Operation Anode in 2004-05 to $39.7m.

Actual expenditure for Operation Anode was $12.1m less than the projected result. This was due to timing issues with the transition to a primarily Australian Federal Police-led operation, and reduced requirements for the remediation of vehicles and strategic lift.

Operation Relex II (-$4.1m)

Operation Relex II involves the conduct of air and surface surveillance and interception operations to protect Australia's northern and western borders from unauthorised boat arrivals. Actual expenditure for Operation Relex II was $4.1m less that the allocation mainly due to lower than expected costs for inventory and repairable items.

Operation Sumatra Assist (-$13.9m)

Operation Sumatra Assist was the ADF's contribution to the Australian Government effort to provide assistance to the people affected by the tsunami disaster on 26 December 2004. The Government agreed to provide an additional $62.0m over two financial years of which $50.9m was allocated in 2004-05.

Actual expenditure for Operation Sumatra Assist was $13.9m below the allocation due to an earlier extraction timeline than was originally anticipated at the time of the estimates. This led to lower costs in the areas of fuel purchases, in-theatre logistics and engineering support, replacement C-130 hours, personnel allowances, strategic lift and health support.

Operation Acolyte (-$0.5m)

Operation Acolyte is the ADF's contribution to the whole-of-government support of the conduct of the Melbourne 2006 Commonwealth Games in March 2006. The Government provided $13.0m over three financial years for the net additional cost of security support to be provided by Defence, $0.6m of which was allocated in 2004-05.

Defence incurred less administrative costs than originally forecast in 2004-05 mostly due to timing issues. Planning for the operation continues in 2005-06.

Status of Funding from all Operations

Table 1.10 provides a summary of the current actual and planned levels of expenditure on operations announced to date covering the period 1999-2000 to 2007-08. In summary, the net additional cost of these operations to date is about $5.3 billion, excluding the recent commitment to Afghanistan as part of Operation Slipper.

Table 1.10 Cost of Operations 2004-05
1999-2000
Actual
Result

$m
2000-01
Actual
Result

$m
2001-02
Actual
Result

$m
2002-03
Actual
Result

$m
2003-04
Actual
Result

$m
2004-05
Actual
Result

$m
2005-06
Forward
Estimate

$m
2006-07
Forward
Estimate

$m
2007-08
Forward
Estimate

$m
Total



$m
Operations in Timor-Leste 1 598.1 798.5 632.9 579.3 554.0 27.4 4.1 - - 3,194.3
Operation Bel Isi - 20.0 10.1 14.6 3.0 - - - - 47.7
Operation Slipper - - 320.0 176.0 -5.0 - - - - 491.0
Operation Relex and Relex II - - 22.2 27.8 15.9 11.9 16.4 - - 94.2
Operations in Iraq - - - 285.3 240.6 284.9 402.5 37.4 3.9 1,254.6
Operation Anode - - - - 90.4 27.6 10.9 3.4 - 132.3
Operation Sumatra Assist - - - - - 37.0 11.1 - - 48.1
Operation Acolyte - - - - - 0.1 11.4 1.0 - 12.5
Operation Deluge - - - - - - - 8.4 11.3 19.7
Total 598.1 818.5 985.2 1,083.0 898.9 388.9 456.9 50.2 15.2 5,294.4

Note

  1. Includes force generation funding from 1999-00 to 2003-04, with an ongoing amount of $448.9m included in Defence's funding base from 2004-05.
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