Defence white paper seeks to address shortfalls
The figure is $450 billion. It’s a sum so colossal it almost defies understanding: nearly a third of Australia’s annual gross domestic product. It’s also how much the government plans to spend on defence in the next decade. The current defence budget of $32 billion – the 13th largest in the world – will rise to $59 billion in 2025-26. The 2016 defence white paper outlines how much of this will be spent on new equipment and unveils a military shopping list heavy with ships, submarines, drones, jets and weapons.
With so much spending flying around, the numbers start to get a little fuzzy. An imprecise comment by Chief of the Defence Force Air Chief Marshal Mark Binskin at the paper’s launch last week led one journalist to immediately escalate the cost of Australia’s future submarine program from the conventional estimate of $50 billion to a truly astronomical $150 billion. In what other business, one commentator asked, would it be permissible to assess costs for new spending within a margin of error of a lazy billion dollars or so? And the federal treasury isn’t looking flush, so it’s certain that all of the new money for defence will come at some cost to other areas of government spending. The question we all should be asking is just why this is all necessary.
First, a little context. At current levels, defence spending accounts for about 6 per cent of Commonwealth expenditure. In the last federal budget, all categories of Commonwealth spending with the exception of “general public services” outstripped spending on defence: education was $31.9 billion, health was $69.4 billion, and welfare $154 billion. Extrapolated over the next decade, that means Australia will spend five times more on these areas than it will on defence. And there’s an important difference between those pools of government spending and the defence budget, too. State governments and the private sector both contribute to education, health, and welfare. But it falls to the federal government alone to make provision for our national defence effort.
Governments over the past decade have been remarkably poor at this. Analysis of the Commonwealth budget by the Grattan Institute shows that for the period 2003-14 federal government spending generally rose faster than GDP growth across the budget with the exception of two areas: government operations and finance, and defence.
The previous two white papers, in 2009 and 2013, were produced by the Rudd and Gillard governments. Rudd’s white paper was in many ways like Oscar Wilde’s depiction of a first marriage: a triumph of imagination over intelligence. It envisioned a muscled-up Australian Defence Force with 12 new submarines and squadrons of Joint Strike Fighters that could be deployed in concert with the United States to counter any Chinese belligerence, should efforts to bring China into the international rules-based global order fail. While in retrospect it largely got the prognosis for Australia’s strategic environment right, the prescriptions didn’t survive the global financial crisis, as many defence projects were deferred or cancelled. The 2013 defence white paper had little to say and took 129 pages to say it. While it talked of adapting Australia for a new and more complex regional security environment, it delivered very little new capability. At the same time the Gillard government was harvesting all the funding it could from defence: at one point defence chiefs were given five hours to strip $1 billion from their annual capital investment program. It was, as Wilde’s depiction of a second marriage goes, a triumph of hope over experience.
Australia has been fudging the figures on defence for quite some time. Sure, we’ve been able to deploy small, sophisticated military forces to conflicts and disasters for the past decade. But defence planners and experts have known that, for all the investment in the Australian Defence Force to date, it would have been hard-pressed to sustain combat operations of much scale in our region for any reasonable amount of time. Or for that matter, to maintain an efficient peacekeeping force if requested by the United Nations to stabilise the collapse of a near neighbour such as Papua New Guinea.
Fudging on defence involved ignoring reports such as the 2008 review of the defence estate – the 374 properties and 3.4 million hectares of land owned or leased by defence around the country. It concluded that defence’s properties were often laid out on principles dating back to the major world wars, deteriorating due to underinvestment, and required billions to be moved, consolidated, and upgraded in order to support current strategic objectives. This domestic political disaster, requiring contentious closures of local bases in electorates across the country for efficiencies only realised decades hence, has been kicked down the road for the better part of a decade.
Fudging on defence in the past decade also involved ignoring reports such as the 2012 ADF Posture Review, which found defence’s logistics networks in northern Australia to be lacking. Australia invested billions in the ’90s to move military units to northern Australia and build remote airfields across Queensland, Western Australia and the Northern Territory. But we never funded the logistics facilities or networks necessary to move fuel and equipment across northern Australia. Part of the reason defence funding must increase so rapidly now is to catch up on deferred expenditure from the past decade.
But for what reason do we actually need a modernised, fully efficient and bigger defence force? Some needs are obvious and growing. This week, the navy’s new amphibious ship HMAS Canberra deployed to Fiji filled with engineers, aid officials and humanitarian stores to assist with the aftermath of tropical cyclone Winston. The economies of our near neighbours, as well as the impact of rising sea levels, are likely to mean the pace of the ADF’s disaster relief operations will not abate in the coming decades. As a responsible international citizen, we have a role to play in security emergencies, too, whether at our own initiative or when requested by the UN. And as Australians come to operate and live in greater numbers across the globe, they have come to expect that the ADF will be able to deliver them to safety at a moment’s notice if required. That’s one of the reasons our special forces are ordering new light armed reconnaissance helicopters that can be bundled in a transport plane and dispatched most places on the planet.
But the major purchases in this new defence plan are coming because the government and defence planners have concluded that Australia needs a stronger insurance policy for a more uncertain and potentially troubled world. On this, there is a growing international consensus. Last year, Britain’s Strategic Defence and Security Review outlined: “We are seeing long-term shifts in the balance of global economic and military power, increasing competition between states, and the emergence of more powerful non-state actors … the threats faced by the UK, including our Overseas Territories and our overseas interests, have increased in scale, diversity and complexity since 2010.”
There is a growing domestic consensus on the strategic complexities ahead for Australia, too. Writing in their expansive book Two Futures, Labor MPs Clare O’Neil and Tim Watts conclude: “The end of stable and benign American military hegemony in our region will significantly increase the strategic demands on our defence forces. The escalating strategic risks in our region demand a commensurate increase in our defence capabilities: both in raw funding and in our intellectual capacity to debate defence questions as a nation.” Too often, they argue, “defence policy has been left to ideologues and technocrats, and the broad centre that gives good policymaking ballast is empty. This leaves our defence policy dangerously unmoored.”
The public seems to agree. In a companion public consultation to the 2016 defence white paper, called Guarding Against Uncertainty: Australian Attitudes to Defence, an expert panel made the recommendation to “increase defence’s engagement with the community as a way to deepen public understanding of the modern defence organisation and how it contributes to Australia’s security”. Public submissions to the report called for more straightforward information about defence and better explanations. “We need to be given a national interest explanation of what we are doing with the ADF and why,” said one participant in a series of national town hall-style meetings.
This defence white paper is investing billions in what it terms “decision-making superiority”. New sensors and systems that will boost our intelligence capabilities to see any future conflict coming a long way before it impacts on Australian interests. Enhancements to the Jindalee over-the-horizon radar system, a potential new sovereign reconnaissance and surveillance satellite constellation, a massive increase of 1200 personnel to the Defence Intelligence Organisation. But an oft poorly regarded part of the defence decision-making process is the public and the parliament, and reforms to improve the engagement of both in national security are long overdue.
The plan in the defence white paper is a good one, rigorously assessed through independent evaluation and an unprecedented number of hours of analysis in the national security committee of cabinet. But a good plan is still just a plan; it will need close scrutiny to ensure it is managed properly and remains the best way to protect Australia’s national security interests. That is a job for all of us.
This article was first published in the print edition of The Saturday Paper on Mar 5, 2016 as "Mending defences". Subscribe here.