Annual Report 2004-05

Financial Overview

Defence's Cash Position

Status of White Paper Funding

Defence's departmental funding in 2004-05 and beyond continues to be based primarily on the allocations approved by the Government in the context of the Defence White Paper. This additional funding now totals $28.9 billion over the 13 years commencing in 2001-02, as shown in Table 1.8, and represents the most specific long-term funding commitment for Defence for more than 25 years.

The additional White Paper funding is being applied to:

• the Defence Capability Plan, containing a program of capital investment in addition to the investment program already planned ($20.0 billion);
• provision for the through-life support costs of the capability enhancements in the Defence Capability Plan ($2.9 billion);
• provision for two per cent real growth in personnel costs from 2004-05 onwards, reflecting the cost of maintaining a highly skilled workforce in a sustainable way ($4.9 billion); and
• funding a number of budget baseline cost pressures, including logistics shortfalls, assisted by a programme of administrative savings ($1.0 billion).

After taking account of the reprogramming of the Defence Capability Plan agreed by the Government in the 2005 06 Budget, actual expenditure covering the period 2001-02 to 2004-05 totalled $4.046 billion. The 2005-06 Budget includes a further $2.253 billion in White Paper funding. The remaining funding, totalling $22.575 billion, is to be provided over the remainder of the period to 2013-14.

Table 1.8 provides details of White Paper expenditure to date and future allocations in 2005 06 outturned prices.