The best of times …
23 Feb 2018|

For the past 16 years, I’ve had the pleasure and privilege of working at ASPI. But the time has come to say goodbye. To mark my retirement, the editors of The Strategist have invited me to comment on the state of Australia’s defences. Here goes.

In one sense, it’s the best of times. The ADF is larger, better equipped and more combat-experienced than at any point since the Vietnam conflict. Defence is better managed (in many but not all respects) than it was in the past. And decisive action has finally been taken to protect ADF members from sexual harassment and bullying.

Despite such progress, problems remain. For example, the handling of toxic contamination from RAAF fire-fighting foam has been imperfect at best, and questions continue to be raised about how efficiently Defence spends its prodigious budget. On past experience, these and other problems will only be rectified if the government itself acts. For whatever reason—learned helplessness or otherwise—Defence remains a passive participant in the ongoing cycle of debacle–review–reform.

Following the 2016 Defence White Paper, we have an ambitious (and hopefully funded) program to modernise and further expand the ADF. Regrettably, however, we can’t tell how things are going. After reaching a high point of disclosure under the Howard government in 2000, there’s been a steady growth in obfuscation and secrecy surrounding the investment program. It’s been almost two years since we were promised a ‘periodically updated’ online version of the Integrated Investment Program. Yet we’re still waiting.

Setting aside incompetence, the most likely explanation is that emerging problems are being hidden. With $195 billion of taxpayers’ money on the table—not to mention the long-term fighting strength of the ADF—the public has a right to know if projects have been delayed or have increased in cost.

Whatever problems exist now are likely to be eclipsed by those of the future. Under the so-called ‘smart buyer’ approach, acquisition decisions are being made with far less information and analysis than in the past. In a classic case of the bureaucratic pendulum swinging back, the risk-adverse Kinnaird reforms of 2004 have been jettisoned in favour of quick decisions. That might be justified in current circumstances (for reasons I outline below), but the risk is that today’s hasty decisions will translate into substantial delays and budget pressures downstream.

Even if the investment program runs like clockwork, the government’s 2016 plan will only slowly reshape the ADF. In part, that reflects the time needed for major defence acquisitions. But, at least in equal measure, the pace is constrained by an emphasis on mobilising local industry rather than buying proven off-the-shelf weapons systems from overseas.

By embracing a ‘buy Australian’ policy, the government has unleashed a heightened sense of regional entitlement and exposed itself to special pleading by defence firms. As a result, multi-billion dollar defence projects are being contorted to serve the needs of parochial politics rather than to deliver value for money. Who needs a business case if the only goal is dodging unfavourable coverage in the Adelaide Advertiser or the West Australian?

In normal times, the creation of a boutique defence industrial complex in Australia would simply be wasteful. But these aren’t normal times. The strategic environment is deteriorating much more rapidly than current plans are strengthening the ADF. While the government focuses on the economically dubious goal of ‘creating jobs’ in defence industry, the gap between what the ADF can do and what it might be called upon to do grows by the day.

Australian strategic policy has long rested on two assumptions about the future, one explicit and one implicit. The explicit assumption has been that the United States would continue its benign hegemony of our region. The implicit assumption has been that the West’s economic engagement would lead China to liberal governance and peaceful integration into the international community. Neither assumption is safe today. The United States is in disarray if not retreat, and China’s rulers are becoming increasingly repressive at home and worryingly aggressive abroad.

We risk being caught flat-footed. Our strategic environment is changing more quickly than we anticipated, and moving in a direction inimical to our interests.

A strong defence force is an essential part of hedging against the risks inherent in our deteriorating strategic situation. Yet our planned force structure remains little changed (apart from delays) to that set out almost a decade ago in the 2009 Defence White Paper. At that time, the future looked far less threatening.

Nonetheless, absent a major strategic shock, there’s little likelihood of Australia changing course. The government has invested too much political capital in its ‘jobs and growth’ defence industry plan to turn back, and a generation of senior ADF officers can now look forward to lucrative sinecures in an expanding defence industry sector.

For better or worse, a sizable share of the defence investment budget is locked into the costly, slow motion delivery of locally built equipment. Consider this: it will be mid-century before the aptly named ‘future submarine’ program delivers its 12th and final boat.

There are steps that could be taken to more quickly strengthen the ADF and bolster the nation against strategic disruption. First and foremost would be to squeeze every last drop of combat capability from our existing assets. However, the decision to sell some of our still-capable 1980s-vintage F-18 fighters to Canada shows that neither the government nor Defence has any interest in doing so.

The tragic events of 9/11 are often blamed on a failure of imagination. No such excuse will hold if our defence plans prove inadequate. For years, it has been all but impossible to pick up a newspaper without finding mention of the strategic risks attending China’s rise. We’ve been warned repeatedly, yet our response is shaping up to be too little, too late and too self-serving.

Goodbye and good luck.