Topic of discussion that took off in the RAN thread, Have decided I will post my replies in the general ADF thread as the topic in question (budget) is more broad ranging to the entire ADF rather then the RAN alone.
Yes and no. GDP rising to cover costs of good and wage increases (inflation) is important however under such circumstances our forces wont ever truly increase in size in any meaningful way but rather keep to the same standard size that we have had for a long time.
While a justification for spending 10% of government expenditures is there there is also plenty of justification for other programs them selves to also get the extra spending as while they may not aid in the defence of the nation they would aid in other aspects just as vital such as infrastructure, health, education etc which are just as if not more important then defence. Its like when the debates come up on here for getting X assets, the response generally from those with experience, involvement, knowledge or a realistic outlook is what will you give up to gain that and would doing so be of a benefit or if not how badly would it hurt to gain. The same applies to defence and other agency/program funding at the federal level.
What will we give up to increase the defence budget because going to 10% of government outlays would require sacrifices else where, Cut back in health and the population becomes sicker and less productive thus effecting the economy, Cut back in education and the population for lack of a better description becomes dumber effecting future productivity thus the economy and by extension defence funding. Cut back on infrastructure and that too effects productivity and thus the economy.
To get an increased defence budget requires more money going back into the government coffers which means a larger tax to GDP ratio for which Australia while being more socially aligned in her domestic policies with say Europe has a tax system closer to that of the US.
I would also caution against comparing the defence outlay as a proportion of government spending to that of the past to today. Cost of goods back then as a proportion of expenditure was far lower back then to say today. A good example would be the Tribal class destroyers, 520,000 pounds back in the day, Today just utilizing inflation they would only be 28,594,851.49 pounds yet the River class OPV's would cost at least 3 time as much for a ship that would realistically have no chance against a Tribal. Cost of military goods has far outstripped the rate of inflation so using past examples has little to no use in the present day circumstances.
Yeah, that's fair and accurate, was just leaving myself a loophole. I agree that a fairly straightforward way to raise defence spending is to index it to inflation, although I did present the idea at first in a rather convoluted way. But any one with even a cursory knowledge of the problem would see straight through that convoluted argument as you did.
I do disagree with the austerity argument of making trade offs as if a government budget operates as a household budget would operate. Not to bore any one with the budget process to much, but both sides of the house selects there priorities with which to create a budget, that gets sent to the senate to sign off on which finances Australia.
So the money is literally signed into existence using the Australian Dollar. A household budget can not do that.
What the Nation has been forced to deliver on is a balanced budget, rather than a budget that can deliver prosperity.
The missing element in all this is realizing that the government can finance itself on things that are vital to the way the system operates like public transport, housing and defence and other budget priorities. So long as the Australian Dollar is accepted as payment which it does, the government can be financed through the normal process.
So IF (that's a big if) the government is injecting money into the economy through the normal budget process then there is no obligation to pay. There is an obligation to pay tax but there is no obligation to pay it all back.
So there is too distinct money factories which is, the government creating money - the government destroying money, and then telling the economy and the ADF to grow at the same time.
To relate this back to the ADF. The ADF was given $200 billion which destroyed more money than the government was taking in. Y'know and all of a sudden the budget deficit doubled to over 200 billion and people are coming to the conclusion that everything is unaffordable and it's something that has to be actively managed by cutting spending and making trade offs and this and that, with out even realizing that you're essentially crushing the ADF under the share weight of it by claiming a government budget is similar to a household budget.
This stuff isn't a magic money tree that you shake, it is just the nature of the monetary system that we have today. The system is one that is not tied to gold or a commodity. In Australia's case it has a floating sovereign currency and the government can authorise those payments to be made and there is no risk of running out of that currency or defaulting.
So the budget isn't like a household budget. The danger comes when the budget is treated as if it is a household budget. As if to say the budget has to plays by the same rulz as the rest of us, that's when the ADF gets wrecked along with the rest of the economy.