Fleet review good start, now for Defence
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Fleet review good start, now for Defence

In this article for The Australian, James Brown and Rory Medcalf assess Australia's readiness to face the changing strategic circumstances in the Indo-Pacific.

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Executive Summary

Fleet review good start, now for Defence

James Brown and Rory Medcalf

The Australian

7 October 2013


WITH a glittering international fleet review, the Royal Australian Navy is marking 100 years since it first steamed into Sydney Harbour, reminding the nation we need it more than ever. 

Australians are rightly proud of the century of service their navy has rendered, and the professionalism of all the nation's armed forces.

But beyond the celebrations, there remain serious questions facing the Abbott government about how prepared Australia really is for changing strategic circumstances in its maritime region of Indo-Pacific Asia.

The task of securing the expansive national interests of a small population in an unsettled region is becoming more challenging.

As China rises and other nations anxiously respond, the region's stability is in question. So is the will and capability of the US to keep a clear lead in shaping global order.

The presence of advanced ships from foreign navies in Sydney Harbour may be smart diplomacy but it is also a reminder that some regional powers are modernising their militaries faster than we are.

Despite the best bipartisan intentions to the contrary, the nation's defence capabilities remain underfunded. Defence spending is declining as a percentage of government outlays. At 1.6 per cent of GDP, it remains close to its lowest point since the 1930s. Structural and sustainment issues, such as the paucity of naval engineering capability and underdeveloped infrastructure like airfields, are jeopardising future modernisation plans. For its part, the army has told government that without augmentation it will not be able to sustain multiple major deployments.

Despite its sensible assessments of the security environment, this year's defence white paper failed to match rhetoric and reality: the force we need and the force we are willing to pay for. Australia must either spend enough to raise its levels of capability, or accept the loss of its strategic edge.

The Rudd-Gillard government offered a contradictory defence policy. Grand strategic flourishes, such as the promise of a supersized submarine fleet, were followed by prolonged political inattention, arbitrary budget cuts and project deferrals.

During the five years it took to plan the fleet review, political leadership delayed decisions on the future submarines and deferred several other major choices on capability and strategic infrastructure.

Instead, this year's white paper focused on diplomacy - engagement between militaries to reduce mistrust. And in that spirit, Australia is using the fleet review to convene a training exercise involving rare co-operation from the Chinese, Japanese, Indian, Indonesian and Singapore navies.

But such diplomacy can only go so far, and if Australia cannot keep its capabilities at the leading edge, it will lose credibility with partners and competitors alike. Already it is getting harder to meet the expectations of our ally the US. Neither diplomacy nor an enhanced alliance can substitute for Australia's own strategic weight.

The fleet review provides a platform for the Abbott government to signal what role it sees for Australia in its region and the world. Next the government must begin charting a credible strategy to support those objectives.

It needs to take stock of Australia's national interests and craft its own vision for what the Australian Defence Force must be able to do.

Its promised new defence white paper should approach this question from first principles, critically assessing a force structure that has essentially remained unchanged for 60 years.

Next, the government should set a detailed course to restore defence funding. More important than the Prime Minister's election promise of getting back to 2 per cent within a decade is the need to begin funding increases in the near-term.

If it fails to increase funding, the government will need to consider controversial and risky cuts to defence capability instead.

These might include reducing military personnel or freezing salaries, shrinking the size of the Defence Materiel Organisation, reducing army's future purchase of armoured vehicles, cutting a planned squadron of Joint Strike Fighters, and building fewer submarines or buying cheaper models off the shelf.

Any of these measures would save billions of dollars. Yet all would be politically difficult, and some would be strategically reckless, adding risk to Australian interests and lives. And even if the government were to make these sort of drastic "savings", it would need to shrink the military's mission set, lower alliance expectations and accept damage to Australia's reputation as an international security contributor.

Finally, the Abbott government should get on the front foot in managing the US alliance. Instead of allowing the momentum of military staff planning to drive the alliance or waiting for views from Washington, our new Prime Minister and Defence Minister should take the initiative. The differences within the Obama administration over its Asia "rebalance" offer an opening for a smart ally to play a real role in shaping strategy.

Once the party is over, the Abbott government will need to focus on delivering a defence force that lets Australia hold its own in the century ahead. Investment in future firepower will matter much more than the weekend's fireworks.

James Brown is military fellow and Rory Medcalf is international security program director at the Lowy Institute. This article is based on a research paper to be released later this week.

Areas of expertise: Australian defence, intelligence and security; Asia-Pacific military forces; emerging threats; Afghanistan
Areas of expertise: Indo-Pacific strategy; Australian security and foreign policy; Australia’s key security relationships including the Quad; strategic impacts of the rise of China and India; maritime security; nuclear issues