Australia’s defence spending is to be reviewed amid the global financial crisis, the federal government says.

Defence minister Joel Fitzgibbon has ordered the Defence Materiel Organisation
(DMO) to review the government’s 10-year $100 billion purchasing and
maintenance program, The Australian Financial Review reported today.

Fitzgibbon said the defence budget was under pressure from a number of factors.

said falling government revenue meant greater competition for taxpayer
funds and potential cuts to foreign military programs because of the
meltdown could increase the unit cost of foreign-sourced weapons, also
made more expensive by the falling Australian dollar.

thinking is we’ve got a $20 billion infrastructure fund and the prime
minister (Kevin Rudd) is bringing it forward and we’ve also got a $10
billion annual defence capability fund,” he told Fairfax.

may be some opportunity to reprioritise or bring projects forward (in
that $10 billion fund), for example there may be greater justification
to do some things in-country.

“Any technical risk involved in that would be somewhat ameliorated by the exchange rate change.”

Areas including weapons systems and base and facility upgrades were likely to be targeted.

review comes as documents obtained by Fairfax under Freedom of
Information laws show the finance department has warned defence
spending will outstrip funding.

The department also questioned whether existing levels of preparedness needed to be maintained.