Commentary | 08 March 2016

Regardless of Defence White Paper, we are being out-spent and out-built by China

This piece was originally published in The Australian Financial Review.

  • Euan Graham

This piece was originally published in The Australian Financial Review.

  • Euan Graham

Executive Summary

The purpose of a government white paper is to inform the public about a complex policy issue and to outline a set of policy responses as clearly and convincingly as possible. In short, it should answer the "why", "how" and "when".

A defence white paper (DWP) is different to most in that the strategic risk assessment on which policy is predicated is very broad in scope. Australia's external security environment has local, regional and global dimensions.

Judgments about the desired level of defence capability that Australia needs are made over a longer timeframe (2050 and beyond) and involve larger sums of money – $195 billion for investment in improved defence capabilities – than government departments normally deal with.

The intended audience extends beyond Australia. The white paper is an exercise in transparency to communicate Canberra's strategic intentions and concerns to other countries.

For all that, it's not the Ten Commandments. It remains in essence a statement of intention about future defence capability, susceptible to strategic and economic fluctuations, and domestic political change. No government white paper, no matter how well crafted, can bind future administrations determined to alter course.

This is important background before commenting on the particularities of last week's DWP.

Answering the "how" has traditionally been the hardest challenge for those tasked with drafting the white paper. The inclusion of a fully costed capability pathway to 2025 is the most significant advance from previous editions, in 2013 and 2009. They lost credibility because ends were not linked to means.

Last week's headline commitment to 12 submarines is not new: it restates an ambition first trailed, under Labor, in the 2009 white paper. The difference, this time, is that the government has put money – $30 billion committed in additional spending to 2025 – where its mouth is

Rigour restores credibility to white paper

It would be unrealistic to assume that every facet of the DWP will be implemented. Some items, like new land-based anti-ship missiles or light helicopters for special forces, seem a bit hopeful. But across the big-ticket acquisitions and, critically, the less glamorous and essential enablers to defence capability, there is sufficient rigour in the DWP2016 to restore credibility to a key policy document too easily dismissed in the past as unfunded ambition. "Strategy wears a dollar sign", to quote the US military thinker Bernard Brodie.

This is important, not only for reassuring the domestic constituencies that dominate the defence debate in Australia, but for sending out a message of continuity and seriousness, about defence, to external audiences. They have observed the chop-and-change of federal politics in recent years with increasing bemusement.

Australia's commitment to significantly boost its defence budget at a time of growing economic uncertainty makes it a rare stand-out among Western nations. Strategy doesn't pick up many votes in elections, and the Turnbull administration deserves credit for its political courage.

"Why", then, this unprecedented peacetime investment in bolstering of Australia's defence capabilities? This is probably the easiest question for the DWP to answer. The strategic outlook notes that "the framework of the rules-based global order is under increasing pressure and has shown signs of fragility".

The challenge from "newly powerful countries", a paper-thin reference to China, is perceived to be primarily regional. China's military modernisation, already sporting Asia's largest navy and 70 submarines, is the backdrop for particular concerns about "points of friction" in the East and South China Seas, where Beijing's reclamation project is singled out.

The DWP considers other threats from terrorism and the cyber realm, but the direction of travel towards a more geopolitically troubled, better-armed region is the dominant theme. The white paper is candid in saying that the future ADF will have a "more regular surface and airborne Australian maritime presence in the South Pacific, Southeast Asia, North Asia and Indian Ocean". Exercises, capacity building and training spots for foreign officers in Australia are earmarked as part of a commitment to increased defence engagement and a "more active role in shaping regional affairs". Between the lines, there is a harder edge to this than some of the fuzzy assumptions that have underpinned Australia's defence diplomacy in the past.

Basing infrastructure to be strengthened

The onus on forward deployment and monitoring Australia's maritime approaches is highlighted by the upgrading of Australia's basing infrastructure as far afield as Cocos Island in the Indian Ocean, from where P-8A aircraft and MQ-4C Triton surveillance drones will have the range to patrol into the South China Sea.

Not everyone will be reassured by the white paper's reference to "independent combat operations in our region". But I doubt omni-reassurance was the intention here. This is a considered document, designed to signal a degree of deliberate muscularity and resolve.

Such is the interval between committing to new acquisitions, and the contractual risks in delivering them, that the white paper is predictably weakest about answering the "when" about future capability. The introduction of a 10-year costed capability investment plan is a welcome step towards taking the defence budget out of the election cycle. The commitment to maritime acquisitions is obvious.

But the revelation that Australia's next submarine won't be in the water before 2030, and the last boat in the "rolling acquisition" not until 2050, is chastening. Hence when the DWP flags the need to invest in the existing Collins fleet, this is no footnote. Collins will have to be the backbone of Australia's submarine capability for the next 20 years.

If major war is avoided until then, Australia's "capability edge" by which such canonical stock is placed in the DWP2016, will have been eroded significantly further by the modernisation enhancements of China and other in Australia's region with cash to spend. That, ironically, may be price of preserving the peace and defending the rules-based order in the interim.