The Defence Strategic Review is an urgent call for the biggest shift in Australia’s military stance in 80 years, but the government is being criticised  for lack of clarity on spending. By Karen Middleton.

Inside Labor’s Defence strategy

Richard Marles is dressed in a suit as he speaks at a press conference.
Deputy Prime Minister Richard Marles during a press conference following the release of the Defence Strategic Review at Parliament House this week.
Credit: AAP Image / Lukas Coch

On the wall of the office where the nation’s new defence strategic blueprint took shape, a map of the Indo-Pacific illustrated the challenge it seeks to address. Instead of the familiar picture of Australia centrally positioned on a north-south axis, this version presented a different perspective, rotated slightly clockwise. With Australia’s northernmost reaches angled to the right, the map’s most striking features were the vast expanses of ocean that surround the world’s smallest continent, and the size of the country that dominates the land mass directly above it – China.

The map also appears in the pages of the Defence Strategic Review, unveiled this week, in a chapter headed “Our Defence Strategic Environment”. The chapter highlights the decades of prosperity that have enabled “the incredible growth of regional economies, including China”. But the review, written by former Defence Force chief Angus Houston and former Defence minister Stephen Smith, also describes the “radically different” security situation that has emerged in the Indo-Pacific during the past two decades, and especially recently. It is now characterised by strategic competition between major powers, coercive tactics, a non-transparent acceleration and expansion of military capabilities, rapid adaptation of new technology to military purposes, proliferation of nuclear weapons and “the increased risk of miscalculation or misjudgement”, the review says.

This situation has driven what is being described as the most significant repositioning of Australia’s military strategy in more than 80 years.

No longer can Australia afford to craft a best-ever “balanced” force for a range of hypothetical scenarios all in good time, the review warns. Now, it must pursue a best-possible “focused” force, cutting its military cloth according to dramatically shortened time lines and constrained budgets to hold off that looming northern threat.

In response to the review’s alarming picture, the Albanese government is set to adopt what defence analysts describe as a modern-day version of the doctrine that emerged from Australia’s pushback of Japanese Pacific aggression in World War II – that of Forward Defence.

Formally adopted in the 1960s, Forward Defence involved deterring an enemy well away from Australia’s shores, building on the successful thwarting of potential Japanese invaders in Papua New Guinea in 1942. As the strategic circumstances changed, that doctrine gave way to another – Defence of Australia, which was outlined formally in the 1987 Defence White Paper.

Then, in the absence of an obvious nearby aggressor, the strategy focused more on defending Australia’s north from bases onshore and strengthening the navy and air force capability to strike any adversary from close to home, rather than trying to meet it further afield.

In the decades since, Australia’s strategy has prioritised contributing in often far-off conflicts where it served our national interest directly or indirectly, and especially through supporting the United States.

But with China’s posture becoming increasingly aggressive, the situation has changed.

Former chief of army and now director of the University of Canberra’s National Security Institute Peter Leahy argues the doctrine outlined in the Albanese government’s new strategic blueprint – which the government is calling National Defence – is actually an amalgam of both its predecessors.

“Now what we’re seeing is the ‘forward defence of Australia’,” Leahy says.

“This new strategy of projecting a deterrent force is an enhancement of our strategy of the direct defence of Australia as expressed during the ’80s and ’90s. We now have the capability to, rather than directly defend Australia, forward defend Australia. This is starting to amount to the containment of China.”

The new Defence Strategic Review favours a much more integrated defence and diplomatic effort to bolster regional security, and leans hard towards deterrence across what are now five domains: air, sea, land, space and cyberspace. It favours protecting trade routes, military assets and other national interests by equipping Australian forces so heavily that an enemy would not risk taking them on.

“We aim to change the calculus so no potential aggressor can ever conclude that the benefits of conflict outweigh the risks,” the review’s opening statement says. It directly addresses the risk of invasion, calling it “remote” – but not non-existent.

Australian National University professor of international security and intelligence studies John Blaxland argues there are salutary lessons from 1942.

“We weren’t going to be invaded then either,” Blaxland says.

He and other analysts agree on a key point: this new version of old doctrines won’t scare anybody without money attached. Blaxland calls the absence of a quantified funding commitment for defence, as opposed to a partially documented $19 billion cost estimate, a key failing in an otherwise robust, well-written and considered document. He says it correctly identifies a range of issues but doesn’t fully address them.

“The money doesn’t match the rhetoric,” Blaxland says. “There’s a dissonance between the rhetoric and the substance – the financial substance. And the dissonance is jarring.”

He believes the government needs to be willing to have a serious conversation with Australians about the real cost of keeping them safe, and quotes the moderniser of Australia’s defence bureaucracy, the late Arthur Tange.

“He said people talk strategy but you’re not talking strategy until you’re talking money,” Blaxland recounts. “And we’re not talking money. And that’s the great dissonance in this report.”

The author of the 2000 Defence White Paper, ANU emeritus professor of strategic studies Hugh White, also criticises the government’s unwillingness to specify an ongoing financial commitment.

“They’re not committing themselves to anything on dollars,” White says. “The use of the concept of deterrence is just completely empty. The only forces that deter are the ones the other side are convinced will win … Without money behind it, it’s nothing. It’s absolutely nothing.”

The opposition is also questioning the lack of a firm, ongoing and specified financial commitment.

On Perth radio station 6PR, the shadow Defence minister, Andrew Hastie, made similar criticisms, questioning Labor’s proposed cuts to army resources, and what he called the “tricky politics” of releasing the review on the eve of Anzac Day. “We’re in the most radically challenging strategic circumstances and there’s no actual new money,” Hastie said following the review’s release. “They’re just cannibalising other programs within Defence. That’s the reality.”

Defence Minister Richard Marles rejects the criticism that hard financial commitment is lacking.

“That’s money and they’re real numbers,” he says of the figures he has revealed. “What we’ve made clear is that we are going to spend beyond the existing growth trajectory that we inherited as a government.”

Marles insists that the necessary heavy investment in new technologies makes it impossible to quantify at this point exactly how much will be needed beyond the four years of the budget’s forward estimates period.

“What you know is, it’s going to be more – but how much more is impossible to say at this point,” Marles tells The Saturday Paper. “What we’ve had under the former government is a practice of heroic announcements with big numbers which actually have no money allocated to them, which has created a real problem for Defence. It’s as if the Coalition thought that the way we would engage in battle is to walk onto the battlefield and wave the budget papers in our adversary’s face.”

Marles vows Labor will spend more than the Coalition did. “And those are unequivocal commitments. So that’s much more than rhetoric. That is in hard numbers, describing what we’re doing, relative to what we’ve inherited.”

Prime Minister Anthony Albanese also declined to be more specific at a news conference after the review’s release on Monday.

“Over a period of time, we see that there will be a need for Defence expenditure to increase above that which had previously been budgeted for,” Albanese said. “We make no apologies for that. But what we don’t do, what you shouldn’t do with any project, with any expenditure, is just have a target and then try and spend to meet your target. What we’re about is, ‘what are the defence assets we need?’ And we will do whatever is necessary to make sure that that’s provided for our country.”

In the days since the review was unveiled, the government has trickled out a few numbers. On Wednesday, it said its proposed investment in long-range missiles would cost $4 billion. On Thursday, it put a $3.8 billion price tag on upgrading the northern bases that the review identifies as crucial.

And it puts the total savings from downgrading, delaying or cancelling projects at $7.8 billion – money to be redeployed under the new strategy.

The strategy involves bolstering the resources of the navy and air force at the expense of the army, which will see at least 21 procurement projects scaled back, deemed less relevant to this new circumstance. These include reducing the number of planned purchases of infantry fighting vehicles from 450 to 129. At least six more projects will be delayed and another six cancelled altogether. Other unspecified classified projects will also not proceed as planned.

Instead, the strategy shifts from “balanced” to “focused” defence, based on acquiring longer-range missiles and more agile vessels and vehicles that can operate in a “littoral” environment – in other words, near the shore.

It recommends increasing the range of the munitions Australia can deploy from 40 kilometres to, ultimately, 500 kilometres, and developing a local manufacturing industry.

“The strategic rationale in the Defence Strategic Review is projection – the ability to hold an adversary at risk further from our shores,” Marles said on Wednesday.

Hugh White asks why the review is not more specific about exactly what “focused” defence is about.

“We really do need to smarten up our act, but in order to do that, the first thing to do is to define as clearly as we can what our forces are supposed to do,” White says. The move to a more focused force is “absolutely right,” he says. “But the point is, what are they going to be focused on?”

Marles presents the reprioritisations as not only a military and strategic necessity but also a political virtue.

“The government is also committed to fiscal discipline and will make the hard decisions to cancel or reprioritise Defence projects or activities that are no longer suited to our strategic circumstances,” the minister declares in his Defence Statement, attached as a foreword to the public version of the review document.

John Blaxland believes both the reluctance to quantify Defence spending as a percentage of gross domestic product and the move to commission another raft of reports, delaying some decisions further, reflects the internal political pressure the Labor government faces from a left-wing constituency already alarmed at its embrace of the AUKUS nuclear submarine program. Those same critics are judging Labor’s financial priorities harshly in a punishing economic environment that most hurts those on the lowest incomes, for whom it traditionally advocates.

“They’re afraid to have that conversation now because they’re about to hand down a budget that is not very generous on health, welfare and education,” Blaxland says. “You need to have a conversation with the electorate that 2 per cent [of GDP] is not enough. And we need to suck it up.”

Peter Leahy also believes Labor is in a tricky political position.

“We’re seeing the early stages of a guns versus butter dilemma for the government,” Leahy says. “And without doubt, there’ll be an increased demand for more money for Defence and our national security agencies including [the Department of Foreign Affairs and Trade] in the years to come. The government’s going to have to find the money for it.”

Marles says the government welcomes scrutiny of its defence spending.

“I think given all that we’ve announced in the Defence space in the course of the first few months of this year, it’s pretty hard to make an argument that we’re avoiding difficult conversations,” he tells The Saturday Paper. “We’re actually stepping right into the field and embracing those conversations which we think are really important in terms of making sure that, in the context of a growing Defence budget, that budget provides value for money.”

He accused his predecessors of seeking to “ring-fence Defence, apply a growth coefficient to it and then kind of set and forget”.

“And what that meant is, you didn’t get a very sophisticated discussion about Defence and nor did you get value for money.”

The review rebukes Defence for wasting time and money pursuing procurement perfectionism it says Australia cannot afford. It demands a mindset change and says Defence can no longer work away for years, at great expense, designing and procuring an ideal, most-bespoke version of whatever equipment it deems necessary.

“Capability managers have too much latitude to make design changes, tinker with capability outcomes, and indulge in the quest for perfectionism,” the review says of the current arrangements. “These behaviours result in delay and strategically significant capability outcomes not being achieved in a timely manner, if at all.”

The blunt message is that time and money are not so abundant anymore. The word “urgent” appears in the document 13 times.

The document says deterrence must be accompanied by resilience – the ability to persist despite whatever disruptive activities threaten to undermine the strategy.

Among the elements critical to resilience, the reviewers list “an informed public” at the top. Yet some analysts argue the review does not do enough to achieve that, either.

It mentions China’s military build-up but does not directly address its ambitions to reclaim Taiwan or its advances in the South China Sea – or what should be done about them.

Hugh White challenges what he suggests is “the idea that moving from the language of Defence of Australia to the language of National Defence” was enough. “I don’t know what it means,” he says. “They don’t explain it.”

He dismisses others’ reasoning that the classified version of the report, which likely addresses specific scenarios out of public view, may do a better job.

“I just don’t buy that for a minute,” White says. “There’s no reason why this stuff can’t be spelled out in an unclassified document.”

The review defers decisions on key aspects of the strategy, including reprioritising the navy’s surface fleet. This will form the subject of a separate report, due in four months.

Based on the review’s recommendation that the navy must be reconfigured in light of the acquisition of nuclear-powered submarines under the AUKUS agreement, and its suggestion that smaller vessels are better for the new strategic environment, it appears the massive Future Frigate program may face downsizing at the very least.

Marles declines to comment. He defends putting off that decision for a bit longer, saying it’s about the government having time to think specifically about the navy in the wake of the strategic review’s broad findings.

“We’re not talking about thinking about it over the next five years, we’re talking about thinking about it over the next four months,” he says. “I get that people will do what they’ve done and say ‘a review recommending a review’. I’m happy to wear the discomfort of that, if what that means is we get the questions right.”

The review recommends engaging even more closely with the US as well as building self-reliance. Marles insists these are not contradictory.

“Capability is an inherent part of sovereignty,” he says. “And we talk about this giving rise to a greater, much more self-reliant country in the future – because we’re talking about increasing our capability.”

And the increase, as described in the review, will be substantial. It recommends a hardened network of bases across northern Australia, more sophisticated drones, a boosted land- and sea-strike capability, equipping existing fighter aircraft with more powerful missiles, upgraded intelligence, surveillance and reconnaissance systems, and a new domestic missile manufacturing industry.

The review identifies the greatest challenge as boosting the workforce to meet these needs, especially in the navy.

Former Defence Force chief, retired Admiral Chris Barrie, fears the government is underestimating that recruitment task.

“The people aren’t there,” he says. “I don’t know what box they think they’re going to open to find all these people. I don’t see it.”

However, Barrie welcomes the move to jettison the old process of regular white papers in favour of biennial strategic Defence updates, and the review’s specific mention of climate change as a threat to national security, for the first time. Barrie is part of the Australian Security Leaders Climate Group, comprising members of the security community who have campaigned for such acknowledgment.

“It’s good to see the words ‘climate change’ in the report, and that’s a serious departure from past practice,” Barrie says. He is among those who advocated for standing up a new civilian force to address its impact, instead of using Defence personnel for disaster management tasks.

But he says the government must still release the climate-change risk assessment that is with the Office of National Intelligence.

Greens leader Adam Bandt is calling for the same. He criticised the climate crisis reference as inadequate.

“The climate crisis risks societal collapse,” Bandt told the National Press Club on Wednesday. “Yet Monday’s Defence Strategic Review only gave a nod to climate, and mainly through the narrow lens of disaster response.”

Bandt accused Prime Minister Albanese of “dressing himself in khaki” and prioritising Defence spending over alleviating poverty.

“I want to hear less talk from the prime minister about missiles and more about funding a rent freeze and lifting people out of poverty,” Bandt said.

Professor John Blaxland welcomes the mention of climate change, though he says this and some Defence governance issues are underdone in the review.

Nevertheless, he praises the document as a serious attempt to address more directly the very real threat he says Australia now faces, especially from China.

“It gets back to the question of capability versus intent,” Blaxland says. “And if we look at capability, the capability exists today for a stoush in our neighbourhood to occur pretty darn quickly. I don’t want to be overly alarmist but … we have to be realistic.”

This article was first published in the print edition of The Saturday Paper on April 29, 2023 as "Inside Labor’s Defence strategy ".

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