Ireland - Military Spending

Compared to peers in western and northern Europe, it is very clear that Ireland is an outlier in relation to defence funding. Tánaiste and Minister for Foreign Affairs and Defence, Micheál Martin TD on 18 May 2023 stated "The Government has already committed to increasing investment in the Defence Forces to €1.5 billion, in 2022 prices, by 2028. No one doubts that this is necessary and urgent.... We have committed to multi-annual funding increases, commencing already this year, to reach a defence budget of some €1.5 billion by 2028, index linked to inflation. This will amount to a 50% increase in defence funding since the establishment of the Independent Commission in 2020.

Irish voters have a particular aversion to spending on defence, which in part is a hangover from the extended membership in the United Kingdom. Defence is simply London’s job, not Dublin's. NATO membership requires a country to spend 2% of its GDP on defence. In Ireland’s case, the country currently spends €1.1billion annually on the army, navy, and air corps. If Ireland were to join NATO and increase defence spending to 2% of GDP, that figure would have to rise to between €9 and €10billion annually. If Ireland were spending at that level, Ireland could quite easily match the Finns and the Danes both in the air, and on sea.

Long-term underfunding of the military combined with serious recruitment and retention problems resulted in a crisis in the Defence Forces, calling into question the military’s ability to fulfil the roles required of it (for example, in terms of being able to put vessels to sea). In response, in December 2020 the government established a special Commission on the Defence Forces to make recommendations on the future of the Irish military.

The Commission on the Defence Forces published its report on 9 February 2022. The Report by the Commission on the Defence Forces is the most comprehensive review of the DF undertaken in decades. It was clear to the Commission that the current level of financial commitment (LOA 1) delivers military capabilities which are inadequate for the Defence of Ireland and its people from the threats identified in this report and staying at this level will also severely constrain the capacity of the Defence Forces to maintain its overseas commitments.

The High Level Action Plan sets out a pathway for modernisation of the Defence Forces over the coming years. Based on the Commission’s own estimate of the cost of a step up to LOA 2, an annual increase of some 50%, bringing the funding up to approximately €1,500m4 per year, would be required. For a further step up to LOA 3, which is based on the 2020 average GDP % of comparator countries applied to Ireland’s estimated 2020 GNI, the Commission estimates that an annual budget of almost €3,000m would be required.

The Government were presented with three Levels of Ambition (LOA) and approved the decision to move to LOA 2 by 2028. This decision will positively transform the development of military capability across the three Services and modernise the strategic HR and culture within the Defence Forces. “LOA 2 enhanced capability” = Building on current capability to address specific priority gaps in the ability to deal with an assault on Irish sovereignty and to serve in higher intensity Peace Support Operations” This includes an increase in the Defence Budget to 1.5bn per annum by 2028 and to increase the permanent Defence Force establishment from 9,500 to 11,500 by 2030.

The economic downturn and its associated impact on the public finances required firm and decisive action by Government. The Programme for Government sets out the objective of reaching the 3% of GDP target for the General Government Deficit by the target date of 2015. Achieving the 3% of GDP deficit target will be seen as an intermediate step in the process of restoring the public finances, and further reductions in the General Government Deficit as a share of national income will be required thereafter. This will require a flexible and adaptive approach from all public organisations including transformation in the delivery of public services.

The achievement and maintenance of a 70: 30 pay to non-pay ratio in the expenditure on defence was identified by the 2000 White Paper as critical to ensuring a sustainable defence capability. The reallocation of payroll savings from the reduction in strength of the PDF and the reinvestment of the proceeds of the sale of Defence property have contributed to the achievement of the results set out in the table below. This rebalancing has allowed the development of a significant planned programme of infrastructural improvement and defence equipment procurement. Approximately Û200 million in pay savings and Û95 million from sales of properties have accrued between 2000 and 2006.

The report of the Special Group on Public Sector Numbers and Expenditure Programmes (July 2009) clearly highlighted the fact that the Defence Organisation was unique in the public sector, having reduced in size over the period from 2001. In their report, the Group acknowledged the ongoing reform in the Defence Organisation. That report recommended a further reduction in numbers of 20 Departmental staff and 500 Permanent Defence Force personnel, over a period of two to three years. This recommended reduction was achieved.