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Defence expenditure and capability has been sufficient up until now

Australia’s defence expenditure has long set it apart from its regional neighbours, guaranteeing a technological advantage, backed by the strategic deterrence of larger powers – not only is that changing as the region evolves, but if the nation found itself in a different part of the world, its expenditure and capability would already be significantly greater.

With Australia edging ever closer to the elusive 2 per cent of GDP on defence expenditure amid the largest peacetime rearmament program in the nation’s history, much concern has been placed on the nation’s capacity to finance the next-generation capabilities and often costly, complex and delayed mega projects over the long term.


The nation's comparative wealth when measured against that of its Indo-Pacific neighbours has long supported a technological and platform advantage over potential adversaries, maintaining a tactical and strategic advantage. 

Meanwhile, the lack of true peer or near-peer threat to Australia since the end of the Second World War prompted the nation to respond accordingly, whittling away at the nation's capabilities and funding to leave the Australian Defence Force as little more than a regional constabulary force that struggled to quickly respond to the East Timor crisis or to adequately respond to the presence of a great power's strategic coercion during the 2014 G20 summit. 

An important question needs to be answered when considering the future make up of the nation's defence expenditure and capability as we prepare for the next Defence White Paper and Force Posture Review, which will seek to identify, outline and structure the nation's defence posture at a period of increased great power competition. 

That key question is: If Australia was in a different part of the world, wouldn't we already be spending more on defence, with a significantly more capable defence posture?



It is critical to ask this question as public debate continues to grow and calls for a 'reset' of the nation's defence posture and capability gain traction – particularly as the Australian public will need to act as an informed partner on the road ahead. 

The Indo-Pacific is Europe circa 1914 or 1938

Across the Indo-Pacific, competing economic, political and strategic interests, designs and ambitions are beginning to clash – driven by an unprecedented economic transformation, propelling once developing nations onto the world stage; the region, the globe and its established powers are having to adjust to a dramatically different global power paradigm.

From the South China Sea to the increasing hostilities between India, Pakistan and China in the Kashmir region of the Himalayas, the Indo-Pacific’s changing paradigm, combined with the growing economic, political and strategic competition between the US and China.

The continued sabre rattling and challenges to regional and global energy supplies travelling via the Persian Gulf and an increasingly resurgent Russia all serve to challenge the global and regional order.   

This period of increasing traditional state-based competition is rapidly serving to combine in the shape of the perfect powder keg as nations like Australia, the US and traditional western European allies fail to truly understand, or in some cases comprehend, the ancient enmities that characterise and define the relationships throughout the region. 

Dr Malcolm Davis, senior analyst at the Australian Strategic Policy Institute, expanded on this new reality Australia finds itself in, telling Defence Connect, "We must assume that we are going into a more dangerous and contested future that will have a higher operational tempo than in the past, with dramatically reduced warning times – and I think Dibb is correct – we are in ’strategic warning’. I’d go so far as to say it’s possibly a ‘pre-war period’."

This was further expanded upon by Dr Andrew Davies, who has long called for Australia to recognise the limitations of US power and its influence on the nation's long-term defence and strategic postures: "The assumption of continued US primacy that permeated DWP 2016 looked heroic at the time. It seems almost foolishly misplaced now."  

Australia has long sought to balance the paradigms of strategic independence and strategic dependence – dependent on strategic relationships with global great powers, beginning with the British Empire and now the US – and a rising economic dependence on the developing nations of the Indo-Pacific who are now emerging as some of the world’s largest economic, political and strategic powers.

Former South Australian governor and retired Rear Admiral Kevin Scarce recently hit out at the status quo during a speech in Adelaide, describing the whirlpool of geopolitical, strategic and economic competition: "These issues are fast-moving and complex ... Yet, our leaders both political and military seem outwardly reluctant to engage in fulsome public debate."

Scarce is clear in articulating his concerns about the rising global and regional powerhouse, China, believing that while it does not pose a territorial threat to Australia, its growing influence, ambitions and increasing assertiveness, which can be expanded to coercion, are key factors that need to be included in the nation’s broader public debate and policy calculations.  

2 per cent in an era of great power competition

Chinas rise is but part of the new regional and global paradigm Australia finds itself increasingly dependent upon – the relative instability of the US, the cornerstone of the post-Second World War economic, political and strategic order, leads to troubling results for Australia. 

“It will simply not be sufficient to assume that US diplomatic and military strength will always come to our aid,” Scarce said – this echoes growing concern about both the capacity and the intention of the US to serve as the strategic linchpin for the Indo-Pacific. 

Andrew Davies of ASPI highlighted the importance of recognising the limitation of US power in a recent piece, saying, “The assumption of continued US primacy that permeated DWP 2016 looked heroic at the time. It seems almost foolishly misplaced now.”

This is reinforced by executive director of ASPI, Peter Jennings, posing the critical question in late 2018: “What’s the plan for Australia’s defence if it turns out that Trump’s America First approach is here to stay and alliances fall into mistrustful neglect?” 

It is becoming abundantly clear that Australias dogmatic insistence of sticking to the sacred 2 per cent of GDP expenditure on the nations defence is rapidly becoming woefully insufficient, particularly in a period of increased great power competition. 

Standing up capability now before it’s needed

Nevertheless, many within the political, strategic and public policy communities continue to dally around the edges of the debate, largely referring any meaningful conversation, debate or broader discussion to the same basket they forward all challenges Australia faces: the too hard basket. 

It is time for Australias policy leaders and public to be reminded that developing Defence capability, particularly in the era of high technology, cannot be done overnight, particularly in the event of conflict with a peer or near-peer competitor – standing up capability now, before it is needed, is far cheaper and safer then being backed into a corner.

By way of reference, Australia at the end of the Second World War had a population of approximately 7.5 million and yet was able to contribute 724,000 Army personnel, 400,000 of which served outside of Australia, 39,650 Naval personnel serving on nearly 350 vessels, including 150 major surface and submarine combatants – supported by nearly 200 auxiliary craft – and nearly 152,000 Air Force personnel operating nearly 6,000 aircraft (then the fourth-largest air force in the world).

It is clear that Australia doesnt have a money or a population issue, we have a political will issue, one that distinguished commentators like Scarce, Peter Jennings and Dr Davis have some way sought to bring to the public forum. 

Your thoughts 

Australia’s security and prosperity are directly influenced by the stability and prosperity of the Indo-Pacific, meaning Australia must be directly engaged as both a benefactor and leader in all matters related to strategic, economic and political security, serving as a complementary force to the role played by the US.  

Australia cannot simply rely on the US, or Japan, or the UK, or France to guarantee the economic, political and strategic interests of the nation. China is already actively undermining the regional order through its provocative actions in the South China Sea and its rapid military build-up.

To assume that Australia will remain immune to any hostilities that break out in the region is naive at best and criminally negligent at worst. As a nation, Australia cannot turn a blind eye to its own geopolitical, economic and strategic backyard, both at a traditional and asymmetric level, lest we see a repeat of Imperial Japan or the Iranian Revolution arrive on our doorstep.

It is clear from history that appeasement does not work, so it is time to avoid repeating the mistakes of our past and be fully prepared to meet any challenge.  

There is an old Latin adage that perfectly describes Australia’s predicament and should serve as sage advice: “Si vis pacem, para bellum”  – “If you want peace, prepare for war”. 

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Defence expenditure and capability has been sufficient up until now
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