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Australia should spend less on defence and more on countering immediate threats

Posted By on May 5, 2020 @ 06:00

When the renowned British economist John Maynard Keynes was asked what he did when the facts changed, he replied: ‘I change my mind. What do you do?’ I’m not sure whether Prime Minister Scott Morrison and Treasurer Josh Frydenberg have been swotting up on The general theory of employment, interest and money [1], but they have certainly shown an admirable willingness to dump the ruling economic orthodoxy when it no longer makes sense.

The scale of the shock to the economy, not to mention to the national psyche, of the coronavirus crisis has been immense, and so has the response from government. Ideas that would have been literally unthinkable only a few weeks ago are now the conventional wisdom [2]. Even Keynes might have been astounded at the scale and speed of the rethinking that has occurred within government ranks and the commentariat. We’re all Keynesians now, it seems.

Academics often refer to these sorts of moments as paradigm shifts or critical junctures. A more fashionable way of describing them of late has been as ‘black swans [3]’. Financial crises are a classic example, although their increased frequency may mean they’re not quite as surprising as they once were. The real surprise, perhaps, is that we repeatedly fail to learn the lessons they offer and use them to prepare for the next one.

The Covid-19 pandemic is an illustration of that possibility. To be fair, earlier pandemics such as SARS and Ebola left the affluent Western world largely untouched, so a degree of complacency is understandable, if clearly regrettable. We really should have known better; many people were warning that it was only a question of time before globalisation facilitated a truly global health crisis [4].

While the crisis may have been predictable, its impact is still shocking, and not just because of the rapidly growing global death toll. Even a geographically isolated country with a world-class health system is plainly not immune. Although the death rate in Australia has been gratifyingly low, the damage to the economy and the ‘Australian way of life’ has been profound and its impact will be long-lasting.

Indeed, it’s hard to imagine a more dramatic, direct and immediate threat to the basic economic, physical and even psychological security of Australians. Apparently rational and reasonable assumptions about economic welfare and even life expectancy have been upended. People are entitled to ask why we were so unprepared for what has arguably been the greatest threat to national security since World War II.

Part of the answer can be found in the way we think about security and the sorts of people who shape strategic policy [5] in places such as Australia and the US. The overwhelming focus of the defence establishment remains on preparing to defend Australia from potentially hostile states or terrorists, not from the much more plausible and immediate danger posed by infectious diseases. This is not a uniquely Australian problem, of course. All over the world, governments are spending money they can’t spare on threats they are unlikely to face.

The US spends US$180 billion on counterterrorism and US$2 billion on pandemic and emerging infectious–disease programs per year, a ratio that is indefensible and that requires a ‘redefinition of national security’, according to [6] the former US ambassador to the United Nations, Samantha Power. Closer to home, Indonesia’s limited resources would clearly be better spent [7] on shoring up its rickety and inadequate health system than it would on upgrading its military hardware.

Much the same criticisms could be made about Australia’s defence priorities, of course. Given that Australia is about to spend more than A$80 billion on 12 new submarines, which even security specialists fear will be out of date before they’re even delivered, the long-suffering Australian taxpayer might reasonably ask, is this a sensible use of scarce resources when there are more immediate and compelling threats to our security?

That would be a good question even if there weren’t an enormous and growing black hole in the nation’s finances from Covid-19-related stimulus measures. But when there is such a black hole, one might expect that defence spending and priorities would be subject to much more rigorous scrutiny than they currently are. At the very least, advocates of increased spending to counter conventional threats ought to be expected to provide much more plausible and detailed explanations about why the usual defence priorities should prevail in rapidly changing times.

China may, indeed, seek to intimidate [8] its neighbours, but middle powers such as Australia have little capacity to independently influence the outcome of regional, much less global, security challenges. We shouldn’t try to. Part of the justification of being in an alliance with the United States is, after all, the possibility that it will be cheaper than going it alone.

And yet, even in the US, prominent scholars are calling for a fundamental rethink of American ‘grand strategy [9]’. Lesser geopolitical lights like Australia have even more compelling reasons to focus on mundane domestic issues rather than possible international challenges that they have little independent capacity to influence.

The pandemic is a dramatic reminder of just how exposed we remain to all kinds of security threats in a global environment. The challenge for policymakers is to ensure that we’re defending ourselves against the most important, likely and immediate.



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URLs in this post:

[1] The general theory of employment, interest and money: https://www.palgrave.com/gp/book/9783319703435

[2] wisdom: https://www.lowyinstitute.org/the-interpreter/we-re-all-socialists-now

[3] black swans: https://www.penguinrandomhouse.com/books/176226/the-black-swan-second-edition-by-nassim-nicholas-taleb/

[4] health crisis: https://www.theguardian.com/world/2020/apr/03/trump-scrapped-pandemic-early-warning-program-system-before-coronavirus

[5] shape strategic policy: https://www.mitpressjournals.org/doi/pdf/10.1162/isec_a_00311

[6] according to: https://time.com/5820625/national-security-coronavirus-samantha-power/

[7] better spent: https://www.aspistrategist.org.au/the-military-and-strategic-implications-of-indonesias-new-capital/

[8] seek to intimidate: https://www.vox.com/2020/4/28/21234598/coronavirus-china-xi-jinping-foreign-policy

[9] grand strategy: https://www.aspistrategist.org.au/the-deadly-urgency-of-now/

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