Australia’s force posture review is a much bigger deal than the name suggests

The Labor government’s election platform contained a commitment to conduct a ‘defence force posture review’. Historically, Australia’s defence posture reviews have mainly considered where Australian Defence Force assets are based. Different stakeholders have inconsistent goals: the Department of Defence wants to consolidate in fewer, larger bases to save money; regional towns want to hang on to what they have; and boosters in the north and west push for more ADF assets to be at the ‘pointy end’ in—no prizes for guessing—the north and west.

The result is generally only a slow change in posture, although occasionally there are large-muscle movements, such as the relocation of the heaviest of the army’s three combat brigades from Holsworthy near Sydney to Darwin or moving the submarine force from Sydney Harbour to Garden Island near Perth.

But in defence terminology, force posture reviews are not about what capabilities should be in the ADF; that’s the role of force structure reviews. In recent decades, capability reviews have been conducted as part of a white paper process to work out what the ADF needs and how much of that it can reasonably afford.

Labor started off with talking about a force posture review. Its election policy stated that ‘force posture is about adapting to the evolving security and strategic environment, its impact on where the ADF is based and on facilities, and how the ADF is affected by domestic and demographic issues’.

But it also stated that the review needed to consider ‘whether Australian defence units, assets and facilities are prepared for the military to take action in a timely way amid a deteriorating strategic situation’. And that takes us down the path of a force structure review—namely, determining what should be in the ADF. It also hints at the really big, difficult issue of mobilisation—how you quickly create a wartime military out of a peacetime one.

As the new government finds its feet, its force posture review is looking increasingly like a force structure review, or even a white paper—with potential big policy, structure and budget challenges to consider. Deputy Prime Minister and Defence Minister Richard Marles said in India last month:

I come to the position conscious of a profound responsibility: to ensure Australia has the capability necessary to defend itself in the toughest strategic environment we’ve encountered in over 70 years. It will involve a generational reinvestment in the size, capability and structure of the Australian Defence Force. In service of this goal, I have instructed my Department to commence a new Force Posture Review to inform decisions I expect to make in the months ahead.

In short, the review’s remit will be about a lot more than deciding whether to move more ships up north.

In one sense, a lot of the underpinning work has been done already; the government has endorsed the key assessments of its predecessor’s 2020 defence strategic update. That includes the focus on our (very large) near region, the need for capabilities to impose costs on an adversary at greater range from Australia, and the pressing requirement to do more faster since we can no longer rely on a decade of warning time before a major conflict.

But there is still much to do—including how to make any of this a reality rather than a policy aspiration given Defence’s current timelines. Quite properly, the new government has said it isn’t assuming that the previous investment plan is perfect. There will of course be stakeholders suggesting there’s no need for major changes, and that, even if the government might for some reason have some new ideas, there’s no sensible alternative to what it has inherited. That would be the wrong approach. The government needs to make the investment plan its own.

Of course, that won’t be easy, for several reasons.

Defence always plans on spending every cent of the budget the government has said it can, in this case the 10-year funding line set out in the 2020 update. Putting anything new in means that something already in the plan has to be delayed (which just moves the problem down the line), shrunk or cancelled. That means unhappiness for some stakeholders. We saw that recently with the previous government’s cancellation of the SkyGuardian armed drone to free up cash for the REDSPICE cyber program.

But the growing defence budget is already under strain. The new AUKUS agenda that’s about bringing new digital and high-technology capabilities into the military fast (cyber, artificial intelligence, uncrewed underwater systems, hypersonic missiles—and, of course, the eye-wateringly expensive nuclear submarines) is bringing funding pressure. Add to the mix the growth already planned for the ADF of 18,500 personnel by 2040, and it’s looking like more money will be needed to afford it all. That’s all without any new ideas to deal with our worsening security environment—like ways to deter China from its clear ambition to have its military operate in and around the South Pacific, and close to Australia.

The government has said it supports the 10-year funding model set out in the 2016 defence white paper and reconfirmed in the 2020 update, including the $270 billion in funding for new capability, but it isn’t just facing the kinds of internal defence budget pressures discussed above. It’s also dealing with a broader range of pressures, including deficits extending well into the future and the threat of economic recession. Given this, it may be tempting for the folk in the Finance Department and Treasury to advise their ministers to give Defence a straight 2% of GDP, which has become a sort of benchmark for credible levels of spending. But that would actually represent a cut of many billions of dollars compared to the funding line in the 2020 update, inevitably resulting in reductions to defence capability and delays to programs.

Even if the government adheres to the update’s funding line, inflation is eating away at its buying power. When actual inflation is running nearly 5% higher than the rate built into the 2020 update’s assumptions, Defence is likely losing billions in buying power per year. And those losses compound. The defence budget needs more money just to tread water.

And then there’s the additional cost of nuclear-powered submarines. In the long term, they will cost a lot more than the now-cancelled Attack-class program. In the short term, the cash freed up by the cancellation has already been put to other purposes such as missiles, helicopters and cyber, further tying the new government’s hands.

That doesn’t mean it’s hopeless; there is $270 billion to put to use, after all. But it will require active prioritisation and decision-making. The sunk-cost fallacy has to be rigorously exposed. And everything truly has to be on the table. How the new government handles the $25-billion infantry fighting vehicle decision, which is scheduled to be made in the third quarter of this year, will say a lot about its thinking. Will it simply press on with the previous government’s plan? Or will it reconsider the scale of opportunity cost and invest a chunk of that funding in capabilities suited for a maritime theatre?

Finding the money for big, new acquisitions in the short to medium term will be hard. With no cash sitting around, freeing up the resources needed for things such as a new conventional submarine to fill the capability gap will create tsunami-sized ripples across the investment program.

To perfectly align capability with funding, Defence would normally aim to conduct a white-paper-scale exercise that spends 18 months considering every aspect of expenditure and resourcing over the next two or three decades and sets a capability target sometime off in the 2040s. That would be a mistake. We don’t have the time for that.

Distant targets allow people to admire problems at leisure and plan for ultimate yet unachievable perfection. Consider our sorry history of submarines since the 2009 white paper that has left us even further away from having any new ones than we were 13 years ago. Fortunately, the government looks like setting a tight deadline, with the review to report back at the same time as the nuclear submarine taskforce in March next year.

Whatever the government calls its review, it needs it to deliver a plan quickly that can provide capability quickly. That means a focus on priorities and implementation, not just crisp policy statements and ambitions. And that almost certainly means breaking with some of Defence’s long-cherished capability ambitions and forging a different path from the previous government. Marles’s approach of appointing external figures to lead the review already signals a break with precedent. But they and the teams supporting them in Defence, Finance and Treasury have got their work cut out for them if the ‘force posture review’ is to do what Australia’s security demands.