Hugh White
The most profound shift in defence in two centuries

Our Defence minister, Richard Marles, likes to talk big. When he and Prime Minister Anthony Albanese were handed the final report of the government’s Defence Strategic Review (DSR) this week, he called it the “single most important re-evaluation of Australia’s strategic posture in the last 35 years”.

Is he exaggerating? We won’t know for sure until it is released next month, but, if anything, he may be understating it. From what has been foreshadowed, the DSR marks the biggest and most significant shift in Australian defence policy in almost 50 years, since the 1976 Defence white paper abandoned “Forward Defence” after the Vietnam War.

Even that might not be enough. Quite simply, we face the most profound shift in Australia’s strategic setting since European settlement, because for the first time since then our great and powerful Anglo-Saxon friends are not as powerful as our Asian neighbours. This demands an equally profound shift in the way we think about our defence.

We have seen this coming for a long time. Already in 1994 the Keating government’s Defence white paper explained how the rise of Asia’s great powers – especially China – would transform our defence needs. John Howard’s 2000 white paper began to set out a coherent response. It moved away from the post-Vietnam era’s narrow focus on the defence of the continent from low-level incursions and began to look at how we might fight a more major regional war.

Since then, however, very little has happened. Under both major parties, four successive major defence policy statements have consistently highlighted our growing risks in a more contested region and have just as consistently failed to take any serious steps to adapt our defence plans to meet them. Now, at last, it seems that is changing.

The key development in the new DSR – headed by former Defence minister Stephen Smith and former Defence Force chief Sir Angus Houston – is a decisive shift in priorities from land forces to maritime – air and naval – forces. This is a major step.

It should be obvious that for Australia – an island continent surrounded by island neighbours – the key to our defence is maritime capability. Yet under John Howard we began to respond to Asia’s new strategic risks by preparing once again to send our army to fight alongside the armies of our allies in major continental campaigns.

Since the mid-2000s the primary thrust of Australia’s defence investment has been to build the capacity to deploy heavily armed land forces overseas, just as we have always done before. That has driven the mammoth $30 billion “Land 400” project to equip the army with the armour required for major continental warfare. It also drove the acquisition of two massive Canberra-class amphibious assault ships – the biggest ships the navy has ever had – to carry the army to distant battles. Many billions more was spent on a major expansion of our warship fleet to protect them on the way.

This never made any strategic or operational sense in the new Asia of the 21st century. Despite these massive investments, there was no reason to think our army could be safely transported by sea in the face of the formidable air and naval forces being built by China. Even if they could, Australia’s army would still be too small to have any significant impact on a major Asian war. Most damningly, there was no chance that our allies would try to fight a land war in Asia, so it made no sense at all for us to prepare to fight one.

All this has now apparently been recognised by the DSR. As a result, Land 400’s shopping list for armoured fighting vehicles is to be scaled back. Instead, a lot more money will be spent on new forces designed to fight a very different kind of war. Rather than preparing unrealistically to project power against the homelands of major powers such as China, the priority will swing to forces that can stop a major-power adversary projecting power against us or our neighbours.

To do that, a lot more money will reportedly be spent on more F-35 fighters, more missiles and a major investment in sea mines. Just as importantly, real attention will be paid to the infrastructure and support needed to sustain these forces in a protracted war against a formidable adversary. For the first time in 50 years, after 30 years of procrastination, an Australian government is at last starting to understand what the Asian Century means for our defence.

Still, there is so much more to be done. From all we hear, the new DSR perpetuates a lot of the old mistakes and leaves fundamental issues unaddressed. One major problem is the future of the navy’s surface warship fleet. The DSR reportedly proposes to scale back the plan to spend $35 billion on nine large Hunter-class ships designed to hunt submarines. That makes sense, because ships such as that are much more likely to be sunk by a submarine than to sink one.

Yet in changing our approach, the DSR seems to recommend spending the money on different classes of warships – air warfare destroyers and smaller corvettes. This makes no strategic sense. Surface ships are both extremely expensive and extremely vulnerable in any serious maritime war, so they simply cannot make a cost-effective contribution to the core task of preventing an adversary projecting power against us or our neighbours. We should be scaling back our investment in them much more radically.

Another major problem is the future of our submarine force. The AUKUS plan to replace our Collins subs with nuclear-powered boats was excluded from the DSR, but is central to our future defence because submarines are key to any operational plan to protect our wider approaches from a major-power adversary such as China. The Albanese government has inherited this disaster-in-waiting from the Morrison government and seems unable or unwilling to walk away from it.

The way forward is to be announced next month, in conjunction with America and Britain, and the betting is that we will commit ourselves to buying a British nuclear submarine that has hardly begun to be designed. Every significant factor – how much it will cost, how well it will perform, when it will be delivered, and how we can operate and support it – will be left up in the air.

One thing is certain. Even if all goes according to plan, we will not have a viable new submarine force of at least six boats until well into the 2050s. So, despite assurances from the government and the navy, a massive gap in our submarine capability between the end of the Collins class and the arrival of these boats is a virtual certainty. Marles has categorially ruled out the only credible way to avoid that, which is to start work now on an urgent acquisition of a new class of conventionally powered boats. One wonders how long it will take him to realise that this is simply not a credible position.

This is not his only problem, however. The Albanese government has been quick to criticise its predecessors for the long list of defence projects that were disastrously ill-managed on their watch. It has been suggested that the DSR will have something to say about how Defence’s chronic project management problems can be addressed, but Smith and Houston are unlikely to have had the time or opportunity to come up with any real solutions. These problems have, after all, defied the best efforts over many decades of some of Australia’s most eminent management gurus.

In the end, as Marles may well discover, the essential ingredient missing from Defence’s multiple failed reform programs is strong ministerial leadership. Good project management requires tough decisions, and in Defence, with its multiple warring tribes, the tough decisions must always be made by the minster. One hopes Marles is up to it.

One also hopes that he has the backing of his cabinet colleagues, because in the end our capacity to meet the strategic challenges we face depends on money. Albanese has said that his government is willing to spend whatever is necessary to defend Australia in an increasingly unstable world, but he and his colleagues still seem to assume this will not require much more than the 2 per cent of GDP – the defence budget benchmark for the past 30 years.

This is completely unrealistic. It is worth remembering that in the 1950s and 1960s – decades in which, by the government’s own assessment, our strategic circumstances were more benign than they are today – our defence budget averaged well over 3 per cent of GDP. And that was when our GDP was the second biggest in Asia. Sometime soon, if Australia is to build and sustain the military weight of a middle power in the decades ahead, our leaders must confront the need to spend a lot more on Defence than we have for many decades.

The ultimate reason for that is the big brutal fact that the DSR almost certainly evades: we will face the dangers of the decades ahead alone. The Albanese government doesn’t understand this any better than the Morrison government did. Richard Marles often talks about “self-reliance”, but he doesn’t mean it. On the contrary, as AUKUS shows, he and his colleagues remain enslaved to the old illusion that we can ultimately depend on our allies for our security.

If we could, then 2 per cent of GDP might be enough, and it might make sense to build our forces to fight alongside Americans rather than to defend ourselves independently. But looking three or four decades ahead, as we must, how realistic is it to assume that America will still play the role it used to play in guaranteeing our security, given the way the fundamental distribution of power has already shifted to China, and will soon shift to India and Indonesia? The DSR might prove a welcome and long-overdue start to answering that question, but at best it is just a start.

This article was first published in the print edition of The Saturday Paper on February 18, 2023 as "The most profound shift in defence in two centuries".

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