The budget released by the Australian government earlier in the week allocates 172 billion Australian dollars ($116 billion) for defense over three years until the 2025-2026 fiscal year, which is just 2.5% more than budgeted by the previous government for the same period before the 2022 election, according to the outlet.
At the same time, inflation in Australia has increased since the adoption of the previous budget, hitting 7% in March, with the Australian Reserve Bank hoping to bring it down to 3.25% in 2023-2024. Current and expected inflation rates would result in a drop in the country's real defense spending, while the government seeks to fully implement its commitments on nuclear submarines under the AUKUS partnership, the outlet stated.
As many as 3.7 billion Australian dollars will be allocated for submarines in 2025-2026, whereas other military branches, including the army and the air force, will experience downsizing in financing over the same period.
Spending cuts in some areas of the country's defense will come amid the government's current difficulties in meeting staffing targets, the outlet added.
AUKUS is a trilateral security pact between Australia, the US and the UK signed in 2021 which envisages the US and the UK supplying nuclear-powered submarines to Australia.