New govt faces tough choices on defence THE party that wins federal government on September 7 may have to tell defence there's not enough money for their big plans. Australian Strategic Policy institute (ASPI) executive director Peter Jennings says reconciling defence's ambitious equipment proposals with the budget reality will be a big task. "The only way to avoid being locked into unsustainable long-term spending commitments is for the new government to make the unpalatable choice between increasing defence spending and cutting future capability plans," he says in a new study. The plans for Australia's defence force was outlined in Labor's 2009 and 2013 Defence White Papers. They commit to 12 new submarines, new warships and patrol boats and advanced Joint Strike Fighter and Super Hornet combat aircraft. ASPI analysts Mark Thomson and Andrew Davies say there isn't enough money to cover that and not enough to sustain capabilities already on the books or about to be delivered. "In fact, based on past experience, the situation is likely to get worse," they said. The budget is not yet in surplus, implying that a new round of fiscal tightening is likely sometime in the next three years. Add to this the acknowledged uncertainty over revenues and competing expenditure options, and the result is future downside risk to defence spending. Taking into account promises on defence equipment and funding in its two white papers, a re-elected Labor government would face the choice of increasing spending or shutting future capability plans. However, Prime Minister Kevin Rudd could distance himself from Julia Gillard's White Paper and commission his own. The coalition has already promised to produce a new Defence White Paper within 18 months of taking office. "Presumably this will be the vehicle for its voyage of defence policy discovery," Mr Jennings said. The ASPI study offers some strategic guidance to the new government, suggesting there be a new Foreign Policy White Paper with a global rather than an Asia-centric focus. As well, the Department of Foreign Affairs needs $100 million a year more funds which could come from the AusAID budget.