Financial Overview
ADF Operations
The 2002-03 Budget allocations included $539.6m for the net additional costs of current operations. Details of individual operations are shown in Table 1.13. The allocations were subsequently increased in the 2002-03 Additional Estimates and in the 2003-04 Budget (projected result of $875.3m, including $421m in respect of Operation Bastille/Falconer). Details of the total Bastille/Falconer funding commitment were shown in the Portfolio Budget Statements 2003-04 (Table 1.6 on page 25) [PDF].
Explanation of Major Variations
Operation Citadel (-$9.4m)
Operation Citadel was established to replace Operation Tanager following East Timor's independence in May 2002. Its objective is to contribute to the United Nations' support to East Timor. Since September 1999, the Government has funded the net additional costs of the East Timor deployment on a 'no win, no loss' basis with funding arrangements scheduled to continue through to the end of 2003-04. Defence returned an amount of $95.4m to the Government in 2002-03 as a result of a revised operational drawdown strategy including a reduced number of deployed ADF personnel in East Timor compared with the numbers upon which the estimates were based.
The actual result for Operation Citadel was $9.4m less than the projected result due to a reduced requirement for inventory and specialist military equipment purchases.
Operation Slipper (War on Terror) (-$23.0m)
Operation Slipper is the ADF contribution to the war on terror. Forces deployed included a Special Forces task group deployed to Afghanistan, a naval task group and Air Force P-3C Orion detachment supporting the Multinational Interception Force implementing United Nations Security Council resolutions in the Persian Gulf and a detachment of B707 air-to-air refuelling tankers and F/A 18 aircraft in support of coalition operations. Air Force C-130 Hercules aircraft provided air transport for deployed Australian forces.
The actual result for Operation Slipper was $23m less than the projected result due to the purchase of specialist military equipment being less than estimated.
Operation Relex II (+$5.5m)
Operation Relex involves the conduct of air and surface surveillance and interception operations to protect Australia's northern and western borders from unauthorised boat arrivals. The actual result for Operation Relex was $5.5m greater than the projected result due to inventory and specialist military equipment purchases being greater than estimated.
Operation Bel Isi (+$4.5m)
Operation Bel Isi commenced in 1998 with the objective of supporting the regional Peace Monitoring Group which monitored and reported on the maintenance of the cease-fire on Bougainville. The ADF provided medical, logistic, communications, and transport capabilities. The Government extended the Peace Monitoring Group to the end of June 2003 and agreed that Defence should meet the net additional costs of $10.1m by drawing down on its cash reserves in 2002-03, with reimbursement in 2003-04. The actual result in 2002-03 exceeded the projected result by $4.5m due to logistic support costs being higher than anticipated.
Operation Safebase (-$6.6m)
Operation Safebase provides enhanced protective security measures for Defence personnel and facilities. The reduced level of expenditure was due in part to delays relating to the awarding of contracts for facilities upgrades.
Operation Bastille/Falconer (-$135.7m)
Total funding of $421m was provided for operations in Iraq in 2002-03. Of this amount, $123.8m was contained in the 2002-03 Additional Estimates for equipment for contingency planning purposes. In addition, $48.6m was funded in 2002-03 from Defence's cash reserves for the first six months deployment of the P-3 aircraft ($36.1m), which were also involved in the war on terror, and the purchase of further essential items of inventory and specialist military equipment as part of pre-deployment planning activities ($12.5m). A further $248.6m in expenditure was planned to be incurred in 2002-03 from Defence's cash reserves, to be reimbursed in 2003-04.
In the event, only $113m of the $248.6m was needed to meet Defence's commitments in 2002-03 due to the earlier than anticipated return home of assigned forces, the cancellation of some inventory and specialist military equipment purchases and the carryover of expenditure of inventory and specialist military equipment purchases to 2003-04. Unused funds of $135.6m are held in the cash receivable and will be used to meet the cost of these operations and Operation Catalyst in 2003-04.
Summary of Content and Planned Expenditure
Table 1.14 provides a summary of actual and planned expenditure for the net additional costs associated with the main operations covering the period 1999-00 to 2004-05.