Defence

Spending. It's most bizarre.

Can you spot the Gold-plated taps?

Cuts everywhere . . . except the military.

This column for the Canberra Times asked, 'why'?

TWO PERCENT OF WHAT?

The year-on-year boost to Defence that’s been scheduled in the budget isn’t, perhaps surprisingly, unprecedented. It’s not even necessary to go back to periods when we were at war to find equivalent surges in military spending. Similar sprees occurred under John Howard in the mid-2000’s and, before that, even under Labor.

However this is the very point that should induce scepticism – not about Tony Abbott’s rhetoric or intentions – but rather about our ability to ever match the much-hyped commitment to significantly develop the forces with the necessary dollars. Perhaps unusually, this will have nothing to do with a failure of political will. Defence’s internal structural problems militate against ever reaching this commitment; while developments overseas are likely to render it irrelevant. Let’s examine these issues in turn.

Here my work is greatly simplified, thanks to that doyen of defence financial commentators, the Australian Strategic Policy Institute’s Dr Mark Thomson (his doctorate’s in theoretical physics). He’s examined the numbers in detail and with a sceptical eye and declared, “yes, it can be done”. Now I’ve never, myself, found spending money a problem and I’d always assumed that giving the military more money would be just the same as when my wife gives some to me . . . it quickly, yet inevitably, disappears. Apparently, however, and despite casual appearances, the same process isn’t at work in the military.

Although the armoured corps may be well aware of the vital necessity of bolting on a gold plated tap to dispense chilled wine from our Abrams tanks, the infantry can’t quite see the need. And while it’s a huge exaggeration to say the system always works, the processes in place to place checks and balances on spending do prevent the rapid disbursement of money unless there’s some political ‘push’ providing focus to the urge.

That’s how the really big spending decisions are made. Our biggest financial commitment ever (to the F-35 Joint Strike Fighter) was pushed through (outside the normal restraints) by former Minister Robert Hill. Brendan Nelson later snapped his fingers and gave us huge transport aircraft and more F-18’s to fill in until the F-35’s arrived. John Howard wanted air warfare destroyers (perhaps better not to go there) and Kim Beasley submarines (ditto). The point is, however, that it’s not just the troops who want equipment – the politicians have their own desire to shape their environment in a way they think is appropriate. This doesn’t mean, of course, that the money will be well spent.

Currently, our processes focus on equipment and units. Take the new submarines, for example. We already have six, large, conventional, Australian-built submarines. And, as ASPI’s Dr Andrew Davies (also a theoretical physicist – why do you never meet a practical one?) has previously pointed out, the truly radical decision would be to go back to the drawing board and examine if the strategic rationale for a straight replacement of these vessels still exists. I’d argue it doesn’t – the world is changing too quickly. If you think that the answer to a problem set in 2014 will still be the same in 2035 (when the submarines will be in operation), well, you’re dreaming. The problem is that our ponderous and politicised process of choosing equipment solutions doesn’t mesh with future strategic requirements.

This mismatch is inevitable – it’s part and parcel of the way things are done. The system works well on paper, but that’s because the arrows always push decisions through and the complicating ‘stuff’ of life never arises to block the process. Thomson isn’t naive enough to believe that we will necessarily get back to spending two percent of GDP on defence; he just states that we can. Doing this will require political courage.

Howard spent up big – but not at the beginning of his Prime Ministership. That’s what’s so surprising about Tony Abbott’s binge and. I suspect, why he’s having such difficulty selling it. Back in 1997 Howard’s priorities were simple: he just cut. Today, Abbott’s cutting in some places yet spending up big on his favourite projects, one of which is, apparently, defence. This commitment is all very well and good, however I wonder if he realised quite how “courageous” it actually is?

We tell pollsters more money should be spent on the forces but it’s a different matter when the time comes to hand over the readies. To gauge how our ambitions have changed, take a look at the 1989 Defence White Paper. Back then the objective was to return defence spending to three percent of GDP . . . anything less would, we were told, invite disaster. More to the point, perhaps, our GDP at that time was the same as ASEAN’s. Today we’re aiming to spend a lesser amount while we’ll soon be overtaken by Indonesia. This is a big problem: our ambitions require a reality check.

The key element that’s missing from the new strategic framework is a vision of the future, economically as well as militarily. We still have some analysts, for example, who seriously postulate that a key mission for the navy is to protect our trade. From whom, exactly? Will China really want to sink the ships chugging steadily through the ocean choke points to provide it with raw materials? Will Japan? And what, exactly, is the immanent stake we have in the boundaries of the East China Sea. Of course we want the current disputes resolved peacefully in accordance with international law – but do we really want to line up alongside a right-wing Japanese PM who’s asserting an extreme nationalistic vision and alienating Seoul and Taipei as well as Beijing?

If we want to genuinely be a real strategic player, we’ll need to stump up the ante. My guess is we’d rather buy something else.