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Australian Government Coat of Arms

Budget | 2015-16

Budget 2015-16
Australian Government Coat of Arms, Budget 2015-16

Part 2: Expense Measures (continued)

Defence

Operation Accordion — extension

Expense ($m)
2014‑15 2015‑16 2016‑17 2017‑18 2018‑19
Department of Defence 192.4 1.4 0.6
Australian Taxation Office
Total — Expense 192.4 1.4 0.6
Department of Defence 3.1
Australian Taxation Office ‑8.1 ‑4.3
Total — Revenue ‑5.0 ‑4.3

The Government will provide $191.3 million over three years for the net additional cost (including remediation costs) to extend Operation Accordion in 2015‑16. The cost will be reduced by the recovery of $3.1 million from other Coalition forces for logistic support provided by the Australian Defence Force (ADF).

Operation Accordion undertakes a range of activities to support the ADF's broader activities in the Middle East Region and Australia's continuing military contribution to international stabilisation and counter‑terrorism efforts, including Operation Okra, Operation Highroad and Operation Manitou.

This measure is also expected to lead to a reduction in revenue of $12.4 million over two years as a result of the tax treatment of the income and benefits received by ADF personnel deployed overseas.

Operation Highroad

Expense ($m)
2014‑15 2015‑16 2016‑17 2017‑18 2018‑19
Department of Defence 4.5 115.7 11.3 7.9
Department of Defence 0.6
Australian Taxation Office ‑0.4 ‑8.1 ‑4.2
Total — Revenue ‑0.4 ‑7.5 ‑4.2

The Government will provide $216.8 million over four years for the net additional cost (including remediation costs) of Operation Highroad. The cost will be reduced by the recovery of $0.6 million from other Coalition forces for logistic support provided by the Australian Defence Force (ADF).

Operation Highroad is the ADF contribution to the North Atlantic Treaty Organisation‑led 'train, advise and assist' Resolute Support mission in Afghanistan, which commenced on 1 January 2015 following the conclusion of the International Security Assistance Force campaign (of which Operation Slipper was the Australian contribution) on 31 December 2014.

Total funding for this measure in 2014‑15 is $82.4 million, which was provided for in the Mid‑Year Economic and Fiscal Outlook 2014‑15.

Operation Highroad will be extended in 2015‑16 at a net additional cost of $134.3 million over three years.

This measure is also expected to lead to a reduction in revenue of $12.7 million over two years as a result of the tax treatment of the income and benefits received by ADF personnel deployed overseas.

Operation Manitou

Expense ($m)
2014‑15 2015‑16 2016‑17 2017‑18 2018‑19
Department of Defence 40.3 0.5 0.5
Australian Taxation Office
Total — Expense 40.3 0.5 0.5
Australian Taxation Office ‑6.9 ‑3.6

The Government will provide $41.3 million over three years for the net additional cost (including remediation costs) to extend Operation Manitou in 2015‑16. Operation Manitou is the Australian Defence Force (ADF) contribution to the international Combined Maritime Forces' operations to counter terrorism, piracy and related illegal activities in the maritime Middle East Region.

This measure is also expected to lead to a reduction in revenue of $10.5 million over two years as a result of the tax treatment of the income and benefits received by ADF personnel deployed overseas.

Operation Okra — continued support

Expense ($m)
2014‑15 2015‑16 2016‑17 2017‑18 2018‑19
Department of Defence 370.8 11.8 10.0
Australian Taxation Office
Total — Expense 370.8 11.8 10.0
Department of Defence 11.0
Australian Taxation Office ‑2.5 ‑22.8 ‑10.7
Total — Revenue ‑2.5 ‑11.9 ‑10.7

The Government will provide $403.2 million over four years for the net additional cost (including remediation costs) of Australia's contribution to the international coalition against ISIL, or Daesh, in Iraq in 2015‑16. The cost will be reduced by the recovery of $11.0 million from other Coalition forces for logistic support provided by the Australian Defence Force (ADF).

Operation Okra is the ADF contribution to the international effort to disrupt and degrade the ISIL threat in Iraq. Under this operation, an Air Task Group conducts air combat and support operations in Iraq and a Special Operations Task Group advises and assists Iraq's security forces in their operations against ISIL in Iraq.

The cost of this measure includes funding of $141.2 million over four years to support Australia's commitment to the international Building Partner Capacity (BPC) training mission in Iraq in 2014‑15, 2015‑16 and 2016‑17. The ADF will contribute to this mission as part of an Australia‑New Zealand combined Task Group to build the capacity of units of the Iraqi army.

This measure includes $10.7 million in 2014‑15 which will be met from within funding already provided for Operation Okra. Funding for the conduct of the BPC mission in 2016‑17 will be considered in the 2016‑17 Budget process in accordance with the established practice for funding major Defence Operations on an annual basis and in conjunction with a review of the mission.

This measure is also expected to lead to a reduction in revenue of $36.0 million over three years as a result of the tax treatment of the income and benefits received by ADF personnel deployed overseas.

Operation Resolute — extension

Expense ($m)
2014‑15 2015‑16 2016‑17 2017‑18 2018‑19
Department of Defence 48.1 5.7

The Government will provide $53.8 million over two years for the net additional cost (including remediation costs) to extend Operation Resolute in 2015‑16. Operation Resolute is the Australian Defence Force contribution to the whole‑of‑government effort to protect Australia's borders and offshore maritime interests.

Smaller Government — Defence Materiel Organisation — reintegration into the Department of Defence

Expense ($m)
2014‑15 2015‑16 2016‑17 2017‑18 2018‑19
Department of Defence

As part of its implementation of recommendations arising from the First Principles Review of Defence, the Government has agreed to disband the Defence Materiel Organisation (DMO) and to transfer its core responsibilities and funding to the Department of Defence (Defence).

As a consequence, arrangements will be made for the DMO to cease as a separate agency with effect from 1 July 2015, with its ongoing annual funding—$805 million in 2015‑16—transferred to Defence. The disbanding of the DMO is part of a broader set of recommendations involved in the establishment of an end‑to‑end approach to capability development, including more robust and tailored investment approval processes and improved arrangements for the acquisition and sustainment of Defence capability.

The extent of savings from this measure will be identified later in 2015, and reinvested in Defence capability, resulting in no impact on overall Defence funding.

This measure forms part of the fourth phase of the Government's Smaller Government reforms.

The Smaller Government reforms are eliminating duplication and waste, streamlining services and reducing the cost of government administration.