I expected major spending on COVID-19 by the Australian Government will cause major payment delays in some naval defense projects, eg. submarines (see my April 7, 2020 comment.)
Commentators are beginning predict reductions in US defense spending. Meanwhile South Korea has actually announced a cut to its 2020 defence budget.
See RAND Corporation, https://www.rand.org/blog/2020/04/defense-budget-implications-of-the-covid-19-pandemic.html April 7/8, 2020:
"We anticipate that [US Govenment spending on COVID-19] could have significant medium-term implications for the defense budget and that there will be a need for the U.S. Department of Defense (DoD) to find efficiencies that are of at least the same magnitude as the recent sequestration."
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Also South Korean cuts - see Janes https://www.janes.com/article/95556/covid-19-south-korea-cuts-defence-budget-in-response-to-pandemic April 16, 2020 :
"South Korea has announced a cut to its 2020 defence budget in response to Covid-19. The move means the country is one of the first in the world to officially reduce military spending due to the impact of the pandemic.
This is just the beginning of defense budget cut announcements from major Indo-Pacific countries. Large contractors should not be surprised.
Pete
Commentators are beginning predict reductions in US defense spending. Meanwhile South Korea has actually announced a cut to its 2020 defence budget.
See RAND Corporation, https://www.rand.org/blog/2020/04/defense-budget-implications-of-the-covid-19-pandemic.html April 7/8, 2020:
"We anticipate that [US Govenment spending on COVID-19] could have significant medium-term implications for the defense budget and that there will be a need for the U.S. Department of Defense (DoD) to find efficiencies that are of at least the same magnitude as the recent sequestration."
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Also South Korean cuts - see Janes https://www.janes.com/article/95556/covid-19-south-korea-cuts-defence-budget-in-response-to-pandemic April 16, 2020 :
"South Korea has announced a cut to its 2020 defence budget in response to Covid-19. The move means the country is one of the first in the world to officially reduce military spending due to the impact of the pandemic.
The Ministry of Economy and Finance (MOEF) in Seoul said in a statement on 16 April that the 2020 defence budget will be cut by KRW904.7 billion (USD738 million).
The MOEF added that defence budget reduction removes KRW192.7 billion from operating expenses, with the remaining KRW712 billion sourced from military modernisation, which includes procurement and research and development (R&D).
...In comments reported by the Yonhap news agency, Kim Il-dong, the director general of the MND's Military Force Policy Bureau, said, "Regarding new business, the contract schedules - including those for overseas tests and evaluations - have already been postponed due to the coronavirus situation, so we cut the budget taking into consideration such delays."...”
This is just the beginning of defense budget cut announcements from major Indo-Pacific countries. Large contractors should not be surprised.
Pete