Boston, MA -- (SBWIRE) -- 01/30/2014 -- The election of Tony Abbott's coalition in September 2013 should spell a welcome increase in defence spending from the perspective of the struggling local defence industry. Abbott has pledged to increase spending from 1.59% of GDP now to 2% by 2023-24. That could result in the defence budget doubling over the coming decade, though that depends on the strength of Australia's GDP growth rate. But the pledge will be a challenging one to deliver, even if the national economy grows strongly, since Abbott has effectively committed himself to growing the defence budget by 5-6% annually for the next ten years. Even so, defence now looks set for healthy funding increases, even if Abbott struggles to meet his 2% target.
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Abbott's election may now bring some much-needed clarity to defence after an uncertain period under the Rudd and Gillard governments. Gillard's 2013 Defence White Paper did little to address the flaws of its 2009 predecessor, setting out ambitious procurement targets without explaining how they could be achieved or paid for. Abbott and his new Defence Minister David Johnston are now expected to prepare yet another White Paper for publication in 2014-15, in which they will explain the new government's position on some major procurement programmes. The most important of these are procurement of the F-35 Lightning II Joint Strike Fighter, and the development of a next-generation submarine. Johnston has already stated that the future submarine is his number-one priority, and he has refused to countenance a capability gap when Australia's current submarine fleet begins to retire in the second half of the next decade.
In terms of international relations, Australia now appears to be in a good place. Relations with Indonesia are extremely good, the partnership with the US appears strong (and Washington will have welcomed Abbott's call for large defence budget increases), and Canberra has begun reassuring China about its security policy.
This process of reassurance started in 2012 with a government publication entitled 'Australia in the Asian Century', which set out a much more conciliatory platform for future Sino-Australian relations than the 2009 Defence White Paper. Julia Gillard also undertook an important visit to China in April 2013, during which she unveiled a 10-year plan for improving Sino-Australian ties - including boosting defence relations and trilateral military exercises involving American, Australian and Chinese forces. Abbott had a cordial first meeting with Chinese President Xi Jinping in October, and is now likely to visit China at Xi's invitation in 2014.
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