Interview: Joel Fitzgibbon, Australian Minister of Defence

Assuming the post of Australian defence minister in December 2007 after nearly 12 years in opposition, Joel Fitzgibbon was shocked to discover what he described as the "dysfunctional" AUD22 billion (USD20 billion) defence budget he had inherited

Australia's exclusion from the strategic planning process in Afghanistan, notwithstanding the country's status as the largest non-NATO contributor of troops to the International Security Assistance Force (ISAF), was another unpleasant surprise.

"When every new minister arrives there's an incoming brief, and the biggest shock to me - the biggest scare - was the dysfunctional nature of the defence budget and the enormous number of black holes," Fitzgibbon told Jane's.

"Net personnel and operating costs: a shortfall of up to AUD7 billion over the course of the decade. Two new battalions for the Enhanced Land Force: AUD700 million underfunded. The failed Seasprite helicopter project: AUD1 billion down the drain and we've got to find the money for the replacement capability.

"The independent remuneration tribunal recently decided to grant pay increases to certain ranks costing AUD800 million over four years and again these were not budgeted for."

After the Rudd government produced its first budget on 13 May, Fitzgibbon said defence had received enough funding to support present requirements and to lay the groundwork for the next decade.

"We promised 3 per cent annual increases in real terms out to 2016 and we'll deliver 3 per cent out to 2018. It's 0.8 per cent this year because Defence handed back AUD1 billion we don't need at the moment, but we'll get that back and more. In three years' time we'll be spending AUD6 billion more on defence than we did in 2007/08."

Fitzgibbon said that fiscal planning in defence required realism about what could be achieved over a certain period. "If you're going to be ambitious on the funding front, you've also got to be ambitious in terms of ensuring you expand industry's capacity."