1. Sep, 2020

In Defence of Defence Spending

Recent articles on our defence and security postures, and their impact on civil society, have preferred pacifism over a more defensive tone. While pacific sentiment is noble, we should never underestimate, or fail to address, a harsher reality. 

As one who has grown to admire China’s gentle people, I yearn for a closer, more empathetic relationship between our two countries. However, the actions of its present leadership trouble not just Australians, but other international observers. It is naïve to view China’s rapid militarisation as benign or to conflate the importance of Australia’s security alignment with the US with its present political dysfunction. China is not the only chess piece in play. Other, more insidious battle fronts have emerged. For me, the argument is simple, and should not be burdened with sophistry. It turns on the basic obligation of every government to protect its people and their way of life.  

I agree that we should never go to war without the imprimatur of Parliament. The simple exercise of executive privilege by a PM lacks moral authority. And I concede that Australian and other politicians have exploited xenophobia as an electoral lever. We saw this in the ‘White Australia’ policy, in ‘Reds under the Bed’ and in the ‘Yellow Peril’ campaigns, and we see evidence of it in recent hyperbole about China. 

However, pacifist sentiment must never obscure an informed analysis of real or imagined threats. Let me share with you the findings of a ‘Quaffers’ Public Policy Debate, which considered Australia’s defence budget. The opening speaker, former Defence Secretary Paul Barratt, was asked to address three, rarely posed questions: 

- Is defence spending essential?
- What is the appropriate level of spending for us?
- What is the opportunity cost to our nation of our defence budget (i.e. what benefits might taxpayers receive if spending were directed elsewhere)?

Barratt observed that … “Wars are expensive but losing them is much more so. Failing to invest in defence is not an option. A Government’s first responsibility is to preserve national sovereignty and the life, well-being, and identity of its people”. That makes alternative spending options an experiment in futility, though the appropriate level of defence spending must always be a critical part of the national fiscal debate”.

“Spending”, he said, “should be needs-based, not driven by artificial benchmarks, like 2% of GDP”. If that is so, we should begin by deciding what we want our ADF to achieve. For example, if it is to control the sea and air space to our north, one might argue that defence spending should be wholly directed at that outcome.

The Quaffers debate observed that neither military hardware salesmen, with a huge pecuniary interest, nor politicians, with an electoral bias, could be trusted to get the settings right. Defence spending required an independent, impartial assessment.

Spending decisions are complicated by the lead times required to acquire and commission new hardware, and to retrofit aging hardware. Time lags and technical advances can conspire to make that hardware redundant, even before it is delivered and commissioned. 
The decision to buy Infantry Fighting Vehicles (IVFs) at a cost of $15 billion is a case in point. These were designed for Middle Eastern theatres and are vulnerable to modern weapons systems, so their opportunity cost is high. The same budget might have financed other, just-in-time military assets to be deploy closer to home. 

On the question of matching advanced military technology, we noted that Putin had announced a new, super weapon, making conventional weapons redundant (an electro-magnetic pulse weapon?). In response, the US had announced a ‘Space Force’, creating a militarised space frontier and a new, military space-race.

Cyber threats have added another complexity. An attack on US financial and capital markets, for example, could wreak global havoc, making cyber-attacks a new, global battle front. ‘Soft diplomacy’, said to be exploited by China through its funding of smaller states to build economic dependence, is another potential battle front.

Vietnam vet, Col. Jock Burns, observed that, since the time of legendary Chinese General Sun Tzu, alliances have remained central to every nation’s defence strategy. However, sole reliance on the US alliance seems problematic in this age of Asian ascendancy, as it puts Australia uncomfortably at odds with China. Compared with military spending, the cost of negotiating alliances is small, since it is already covered by foreign affairs budgets. Diplomacy must thus be a first line strategy and spending decisions guided by inputs from foreign affairs, defence, and treasury, so that geopolitical and fiscal considerations moderate a purely militaristic assessment. 

The Quaffers debate identified an exquisite tension in Australia’s relationships with China and the USA, which demanded re-appraisal. Perhaps it is time, one member observed, that we were bold enough to ask the US to respect Australia’s new geo-political landscape, which had fundamentally altered the post-war, ANZUS pact. 

In the brave new Asian theatre in which Australia finds itself, it is probably time to buttress ANZUS with a more contemporary treaty. Perhaps one with Japan, India, and Indonesia – a JAPINDA Pact. This would expand our alliances in a way which meets the rise of Chinese military and economic influence in our region. 

Colonel Burns questioned why we use guarded terms, like ‘Defence Ministry’, when we really mean ‘Ministry of War’. He raised the controversial idea of a ‘Ministry of Peace’, mandated to focus first upon non-combative solutions to global problems.

Australia is arguably an Asian nation, at least geopolitically. Indeed, many of its citizens probably see themselves as Asians administered by white colonials. These Australians, along with other ethnic groups, have diluted an outdated colonial view of the world and opened the way for a closer identity with Asia, including China. There is little doubt that a cold war between China and the west will be negative for Australia, so we must choose our rhetoric carefully while meeting the social contract between government and its citizens to defend our people and our national interests. 

Clumsy messaging around recent legislation to control direct agreements between state and foreign governments must be more thoughtful. That messaging has clearly been interpreted by China as a move against it. Had the entirely reasonable national interest provision been quietly added to FIRB provisions, China might not have mis-trusted its purpose. But we will judge China by its actions, not by contrived speech.

The Quaffers debate concluded that, even with ambitious defence spending, Australia would remain a relative minnow in any serious stoush. It also found that ‘those who dance with elephants get trampled’. Australia would clearly prefer to have China as a friend than a foe, but at what cost to its freedom and sovereignty? “To be free … or not to be. That is the question!”

The author, Bruce Nicholls chairs the ‘Quaffers’ public policy debates. He is a former Trade Commissioner, Public Company director & Trustee of the Committee for Economic Development of Australia.