Being an editor of this blog, I try to avoid jumping into a stoush with our much valued contributors because it looks a bit uneven. But Jim Molan is big enough and tough enough for me to make an exception. I won’t dwell on the Reserves aspect of his response ^[1] to Nic Stuart’s piece ^[2]—Kath Zeising is taking that flank. And, as it happens, my thoughts on making better use of the Reserve ^[3] are already on the record.

Instead, I’m going to take Jim to task on the notion of Australia’s strategic ‘Need’. The way it’s presented, it sounds like there’s some kind of Platonic Ideal strategy out there in the ether waiting to be summoned, if only we can think hard enough about it for long enough—of course with government, bureaucrats, think tanks and commentators keeping quiet for long enough. Once we have the ‘one true strategy’, then government either has to fund it, or explain to the Australian people why it is going to eschew such a noble pursuit.

Of course, the world doesn’t work that way. Even if there was some kind of Ideal Strategy from which we could deduce our Need, the resulting investment required to implement it necessarily comes with an opportunity cost. Ignoring that cost makes no sense in a planning framework. Like every other area of public policy and budgeting, the funding of defence is an exercise in balancing costs and benefits.

What we really need to accept is that there is no one true path to security. For a given level of expenditure we can provide ourselves with certain options. If we spend more then, generally speaking, we’ll be able to do more and be more flexible in our responses. If we spend less, then we’ll be able to do less. No level of spending will be ideal—ask our American friends if their $700 billion a year has bought them the perfect force structure for all of their problems. The world is such an unpredictable place that there is no level of spending that will cover every contingency. So there’s an inherent degree of arbitrariness in where you decide to draw the line. One planner’s Need could be a woefully inadequate capability in the eyes of someone less sanguine about the future.

Jim has very neatly summed up the ‘top down’ approach of military planning—an approach that I’ve argued elsewhere often leads to outcomes that defy analysis ^[4]. There’s a moral hazard here as well—putting definition of the Need into the hands of those who have a vested interest in maintaining or expanding the size of the armed forces runs an obvious risk of conflict of interest.

Let me finish here with a quick example of ‘top down’ versus ‘costs and benefits’ thinking. One of the options on the table for the future submarine is an off-the-shelf European boat. The top down approach would be to define a set of tasks for the submarine based on some operational scenarios and then test the characteristics of the boat against that—which will almost certainly rule the option out, at least if the Need is anything like the one that led us down the Collins path. ‘Doesn’t meet requirements’ has spelled the doom of many acquisition options. The approach sounds reasonable, but it will mean that one way of doing business will dominate the decision making process. And it’s not the only way to look at the problem.

Alternatively, the government could instruct Defence to look at the characteristics of the European boats—and insist that they be flexible and creative in their thinking—and then to come back to Cabinet with strategies for operating them and a set of tasks that they could perform. If that exercise is repeated for all of the options, then the government would have a table of costs and benefits from which it could choose. In this model there is no Need, there are only options, each of which with its own cost/benefit ratio to be weighed. While not eliminating the conflict of interest I mentioned earlier, it would go a long way to taming it.

Andrew Davies is a senior analyst for defence capability at ASPI and executive editor of The Strategist.