Senator Jim Molan and ASPI’s Peter Jennings have thrown their weight behind defence spending boosts, as Canberra ups funding to 2 per cent of GDP over the coming fiscal year.
“We must prepare for a post-COVID world that is poorer, more dangerous and more disorderly,” said Prime Minister Scott Morrison, as he unveiled the 2020 Defence Strategic Update and the 2020 Force Structure Plan.
His comments come at a time when Australian authorities have openly raised concerns about cyber attacks from China and Russia, as well as a shifting regional power balance in the Indo-Pacific. For perhaps the first time in our nation’s history, we are learning to stand on our own two feet – and the associated investment in sovereign capability will see defence spending increased to $270 billion over the next decade (from the $195 billion promised in 2016).
While it has been shown time and time again that defence spending – particularly where it spills over into domestic manufacturing – tends to prove a sound economic decision, a refocus towards internal production also insulates the country against geostrategic risk. As Liberal senator Jim Molan and ASPI director Peter Jenning explain, this boost in defence spending should be properly coupled with a push for industrial self-reliance.
Across the world, it has been said that defence budgets are largely sheltered for the rest of the current fiscal year, having been voted and passed in most countries. Yet GlobalData analyst Nicolas Jouan says that some FY21 budgets could well shrink, as they are generally calculated in line with a percentage of GDP (typically, NATO's 2 per cent guideline).
“If tax revenues go south because of a recession, credit allocations for defence are likely to be impacted. The only countries having officially declared defence budget cuts to face COVID-19 so far are Thailand and South Korea,” he says.
With two of our ASEAN allies already declaring an intent to cut back on defence spending, it’s entirely possible that others could soon follow. As Senator Molan and Jennings would have it, the days of reliance on our Indo-Pacific allies are past.
The ‘new world we live in’
Writing in The Australian, Senator Molan points out the obvious: the boost is tied not just to COVID-19, but also to the rise of China. Putting it with characteristic candour, he says that “Beijing wants to dominate our region and demands compliance from us”.
Hyperbole? Maybe. But Senator Molan continues, adding that he has “been saying for years that we should welcome the rise of China, but only from a position of strength”.
In essence, this means that we should look to draw on the outsized economic, financial and diplomatic strengths we boast as a nation to move towards strategic independence. As the 13th-largest economy in the world by GDP, we should be able to leverage our economic strength towards implementing a self-reliant industrial strategy. While such autarky might have been unthinkable years ago, the effects of both the pandemic and an isolationist US foreign policy have made it a necessity.
Though Australian policy has long been marked by dependency on the US for defence materiel and acquisitions, recent months have seen us break from this mould. One example can be seen in the adoption of the Aegis combat management system across the Hunter and Hobart Class builds; rather than relying purely on US companies to provide a completed solution, the government has insisted on incorporating Australian communication and radar assets through the SAAB tactical interface.
And in recent days, Lockheed Martin unveiled that Australian industry carried out high-tech upgrades to HMA Ships Hobart and Brisbane at Sydney's Garden Island. These upgrades had never been completed outside of the US (or by non-US personnel) before.
Scaling up the ADF
Much like Senator Molan, Jennings believes that the need for increased spending in defence is self-evident. Jennings said that the $270 billion commitment, including the acquisition of longer-range strike capabilities, was going to be “very demanding” and would “almost certainly cost more than what the government is thinking".
“The future is now,” he said. “What this policy statement is doing is really looking to build the deterrent strength of the Defence Force in the here and now.
“It is not concerned with the design of the force we’ll have in 2040, which is what the 2016 white paper is about. This is about the rapid acquisition of new long-range weapons.”
Echoing the PM’s comments about a “new world”, Jennings argues that policymakers can no longer rely on the idea that, should a foreign country turn hostile towards Australia, the government has a window of time to work within. According to Jennings, the boost in defence spending needs to translate through to an ADF that is capable of responding to significant threats overnight.
On his part, Senator Molan makes the case that the ADF is the best that it has been for 50 years. In what we might term the “old world”, it was called on only for limited overseas counterinsurgency operations fought alongside coalition forces – and it was able to fill that role effectively. Yet in a time when many commentators see conflict in our region as not just a possibility, but a probability, this sort of limited capability will not serve its purpose.
As yet, the government has not provided much clarity as to where this money will be directed. ADF personnel numbers have steadily been on the rise, and are expected to swell to 60,090 this year – but it seems much more likely that additional funding will be directed towards the sort of next-gen technology we need to be taken seriously in the Indo-Pacific.
Australia's $800 million purchase of the AGM-158C Long Range Anti-Ship Missile (LRASM) from the US Navy stands out as one example, and will certainly go some way towards strategic self-reliance from a maritime standpoint. It would represent a significant increase from the aged AGM-84 air-launched Harpoon anti-ship missile, bringing strike capability up to 370 kilometres from 124 kilometres.
And while the government also detailed to the ABC that the plan includes roughly $9 billion of funding for research and development into other long-range weaponry, including hypersonic weapons, it has remained tight-lipped these two experts' key point – how Australia plans to move towards national resilience and self-reliance.
In the months and years to come, it will become clear exactly how this boost in defence spending will translate through to capability. Yet for the moment, it seems sufficient to say that this increase in spending dovetails with a shifting geostrategic environment. Both Senator Molan and Jennings feel this money should be put towards increasing the deterrent strength and tangible capability of the ADF – what projects do you think will make this a reality?