How much will the next war cost us?

By Daniel Cotterill

When Australia went to war in 1914 the Prime Minister, Andrew Fisher, promised Britain our support “to the last man and the last shilling” – and he meant it!

Over 300,000 Australian soldiers saw active service during World War One. When it ended 60,000 of them were dead.

Debt and Taxes

Australia spent more than 350 million pounds on that war, with the money coming from increased local taxes and loans from Britain.

The federal government introduced income tax and amassed a debt of almost 100 million pounds. The British gave us a deal on the interest and 40 years to pay it off.

They were still paying their own debts 100 years later and we are still paying income tax.

War is Expensive

War was expensive then and it will be expensive now. Fighting in the Ukraine confirms that trench warfare still exacts a frightful human toll, while modern weapons cost more than ever.

The forthcoming defence strategic review will hopefully consist of wise thinking and clear priorities, but how much money is budgeted to pay for them will be the key to its effectiveness.

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Australia’s defence budget for the 2022 financial year is $48.7 billion, or 1.96% of GDP. Some make the case for an increase to 3% of GDP which would be just over $73 billion.

But such an increase is not easy for any government to do, and even if that extra money was allocated to defence it would take years to develop the capacity to spend it effectively.

End Game

At stake is how much freedom, territory and trade are we willing to cede by not standing up for ourselves, and how many soldiers are we willing to lose needlessly because they aren’t properly equipped.

Let’s hope that the defence strategic review has figured out precisely what we need to win the next war, and that the federal government is willing to pay the bill.

Ends

Daniel Cotterill is a Melbourne based corporate communications specialist and a former Chief-of-Staff to an Australian Defence Minister.