The most interesting question relating to the cuts in defence spending announced in the budget is whether they signify the early stages of rethinking security strategy.
Of course they should, because there has been widespread recognition that the 2009 Defence White Paper was both confused and misjudged. Naturally this was not universal: many single-minded defence commentators were delighted with the unprecedented plan to increase real Australian military spending by 2% or 3% each year for the next decade.
No other area of Commonwealth outlays had ever been given such a ludicrously large promise for so long. The plan was irresponsible, both because of its size and also because it took no account of changing circumstances, strategic or fiscal.
The right cuts
The first budget after the White Paper increased outlays on the Defence Department by $1.5 billion, more than 50% more than the total outlays on diplomacy through the Department of Foreign Affairs and Trade.
Last year’s budget recognised that Defence had to accept fiscal restraints also being imposed on other departments and there were small cuts. Graeme Dobell wrote shortly after that announcement that “The implicit reason for the demise of the 3% rule is that Defence is so bloated it can’t eat fast enough to get through all the cash it is being fed.”
The cuts for next year are more substantial, at $970m. More in the following three years total $5.5 billion over the four years. These sound like large amounts but the cut next year is only 3.4% of total defence resourcing. The forward estimates show military spending is expected to resume rising by over $2 billion a year in 2014-15 and afterwards. It seems present plans are that Defence will not suffer from much austerity.
More than half the cuts in 2012-13 are in capital works. Other substantial cuts are through reducing the number of civilian employees by 1000 during the next two years, in administration costs and reduced use of consultants. These are entirely sensible as the civilian component of Australia’s defence establishment is often criticised for being excessively large when compared to similar countries.
Rethinking Joint Strike Fighters
On 3 May this year, Julia Gillard and Stephen Smith announced a two-year delay in committing to order 12 Joint Strike Fighters (JSF), saving a total of about $1.6 billion. Two are already ordered for testing and training purposes.
Smith said this delay is about the same as that of the US Government. Neither the PM nor the Minister hinted at any reconsideration of the commitment to purchasing the Fighters. Still, the initial plan to purchase a total of 100 was not reiterated. This at least leaves room for reconsideration of the number to be purchased, but the whole program should be questioned.
The Joint Strike Fighter, the Lockheed Martin F-35, is the most expensive military-industrial project in history. The initial plan was to develop a radar-dodging stealth plane which could replace four types of fighters and bombers. The US planned to buy 2400; it was expected to be the principal fighter for 50 years; and to generate major sales to allies starting in 2010.
In 2010, then US Secretary of Defense Robert Gates said that “the JSF program has not fully demonstrated that the aircraft design is stable, manufacturing processes are mature and the system is reliable”. Senator John McCain calls the project “a train wreck”.
The average price of each plane has doubled and is still growing. None is expected in service until 2016. Program costs had risen to $380 billion by the middle of last year. The F-35 is likely to cost a third more to operate than existing fighters. Yet it only has a range of about 1000 km.
At a time when all US government spending has to be cut, some analysts suggest the program should be abandoned. This possibility is made even more attractive by recognition that the technology of pilotless drones is already sufficiently sophisticated to replace all piloted fighter planes at a fraction of the cost.
The debate continues in the US and so it should in Australia. Continued commitment to purchasing large numbers of still unproven, hugely costly and probably outdated JSFs just because the Australian Air Force wants to retain interoperability with the US might well involve squandering tens of billions of dollars. A rigorous, comprehensive and impartial study is required.
How many submarines does Australia need?
Every aspect of the other huge military investment project announced in 2009, the plan to design and build 12 new submarines in Australia, should also be sceptically reviewed. Are foreseeable threats to Australia seriously likely to require this type of defence? Or is this an example of worst-case fantasy among defence planners whose predisposition is to imagine the most threatening possibilities imaginable?
If acquisition of a few new submarines is considered to be justified, are 12 needed? Why do they have to be built to an Australian design, which would probably maximise the cost? Could an existing design from Japan or a European country be adopted or adapted for conditions in Australian waters? What are the lessons from the difficulties in crewing the existing Collins class submarines?
It is unlikely that the $214 million announced by Julia Gillard to prepare for the decision on submarine design and workforce requirements will lead to consideration of some of these difficult questions. But the taskforce working on a new defence White Paper must do so if they are going to prepare a persuasive document.
Peacetime thinking
Preparation of a new defence White Paper is fully justified by the inadequacies of the 2009 version, by the evolution of the strategic situation, of technology and of the fiscal constraints.
Defence does not have a paramount claim on public funds in a time of relative peace. Community preferences are for improvements in health and education services, infrastructure and opportunities for employment.
It is therefore necessary for defence to be considered in the context of financial constraints and of over-riding foreign policy priorities. Australian’s security will be best served by more effectively balancing diplomatic and military spending.