Pay Your Money & Take Your Pick: Defence Spending Choices for Australia

Release of an Australian Strategic Policy Institute (ASPI) Policy Report on Defence Spending.

The Hon. Alexander Downer, MP, Minister for Foreign Affairs, today launched the ASPI report “Pay Your Money & Take Your Pick: Defence Spending Choices for Australia”.

The report looks at what sort of defence force Australia can afford at differing levels of defence spending.

The author of the report Dr Mark Thomson said: 

“All too often the defence spending debate gets hung up on how much is being spent on defence without looking at what is being delivered for the money. This report aims to remedy this by examining five alternative options for future defence spending.” 

“Our approach has been to look at the military capabilities and tasks that can be afforded at various levels of defence spending – from a modest 1.3% of GDP up to a robust 2.5%.”

” At the lower end of the spectrum we looked at what cutting real defence spending back to levels we would have been at without the White Paper funding increase. We found you get a defence force that is less capable than today’s but still able to undertake a credible range of tasks. Its Achilles heel is that our relative military strength would erode as regional countries continued the modernisation of their forces.”

“At the top end of the options we found that 2.5% of GDP would allow us to develop a power projection capability built around two aircraft carriers and a much expanded Army and more capable Air Force and Navy. This would significantly boost our standing as an ally and enhance our ability to play a role in the region.” 

“There is no ‘right’ answer to how much to spend of defence, instead we have choice to make between difference military capabilities, and between defence spending and other alternatives.”

“We have stopped short of identifying a preferred option – our goal has been to provide an information resource to promote a more focused debate on defence spending. In doing so we have developed options that highlight the trade-offs and choices that can be made.”

The report was prepared by Dr Mark Thomson, ASPI Budget and Management Program Director.

To find a copy of the report go to ASPI’s web site: http://www.aspi.org.au

Pakistan’s Musharraf: Playing a balancing act

Release of Australian Strategic Policy Institute (ASPI) Strategic Insight No. 21/2005

The Australian Strategic Policy Institute has today released a new ASPI Strategic Insight publication titled ‘Pakistan’s Musharraf: Playing a balancing act’ , reviewing the key domestic and foreign policy issues confronting Pakistan’s President Pervez Musharraf. The report also investigates what the Australian Government’s interests and options are in supporting the president as he tries to handle his country’s challenging domestic and external environment.

The report was authored by Dr Claude Rakisits, who heads independent consultancy Geopolitical Assessments, focusing on developments in South Asia, the Middle East and Africa. 

He states that ‘The Australian Government’s interest in Pakistan first increased significantly after 9/11, and particularly following Musharraf’s crucial decision to join the West in the War on Terror. As a result of this, Australia re-established in late September 2001 bilateral defence relations, which had previously been suspended following Pakistan’s May 1998 nuclear tests.’

‘Pakistan’s important role in the War on Terror was recognised during Musharraf’s visit to Australia, in June 2005, with the signing of a Memorandum of Understanding (MOU) on Counter-Terrorism, setting up the framework for the exchange of information and intelligence, joint training activities and capacity building initiatives.

‘President Pervez Musharraf’s state visit to Australia-the first by Pakistan’s head of state-highlights Australia’s increasing interest in Pakistan, an interest demonstrated even more so by Canberra’s response to the devastating earthquake in Pakistan last month. The Australian Government’s quick response in providing over $14 million in assistance has further consolidated this deepening relationship.’

‘The US also provided US$50 million in humanitarian assistance, which it has made clear, was to thank Pakistan for its contribution to the War on Terror.’ Dr Rakisits says. 

The Insight offers several policy recommendations designed to promote Australia’s interests in Pakistan and to support President Musharraf, particularly in this time of crisis.

Shared Interests: Australia-India relations into the twenty-first century

The Australian Strategic Policy Institute (ASPI) has today released its report, titled Shared Interests: Australia-India relations into the twenty-first century on the proceedings of the fourth Australia-India Security Roundtable, held in Canberra on 11-12 April 2005.

The first Security Roundtable took place in July 2001 in New Delhi, the second in May 2002 in Sydney, and the third was held in October 2003 in Chandigarh. This fourth meeting built on the success of previous dialogues: fourteen strategic analysts from both countries discussed a range of important issues vital to each country’s defence and security planning.

This is a collected volume of short written papers or transcripts of presentations from all of the participants in the Roundtable. The papers outline a diverse and constructive range of policy-relevant ideas from which the governments of both countries can draw to help deepen and broaden security ties between Australia and India. 

The volume also includes the address by Professor Varun Sahni of Jawaharlal Nehru University at the ASPI Defence and Security Luncheon in April. 

This ASPI Strategy is illustrated with a series of remarkable photographs sourced from the collection of the Australian War Memorial and the Defence Department. These images record the experiences of almost a century of Australian and Indian military forces working together to promote peace and stability.

Crunch Time: Planning Australia’s future defence forces

Release of Australian Strategic Policy Institute (ASPI) Strategic Insight No. 20/2005

The Australian Strategic Policy Institute has today released a new ASPI Strategic Insight publication titled ‘Crunch Time: Planning Australia’s future defence forces’.

In the coming months the government will make some big decisions about how billions of dollars will be spent in the next stage of Australia’s largest military build up since Vietnam. The result will be two public documents: A revised Defence Capability Plan that sets out the acquisition program for the next decade, and a Strategic Update containing an explanation of why these new investments are needed. 

Crunch Time examines the issues faced by the government in producing these two documents and explores the critical question of long-term Defence funding.

In releasing the document, Dr Thomson said:

‘On past experience, the Strategic Update will provide an overview of recent strategic developments and an assessment of the implications for Australia. Central to this, will be judgements by the government about how and where Australia’s military forces might be employed in the future.’

It is only by clarifying the future role of the defence force that the rationale behind the individual projects in the multi-billion dollar Defence Capability Plan can be made clear. 

‘The government will also have to decide how much it is willing to spend on defence. Five years ago, they made a decade-long funding commitment of average 3% real growth, but that runs out in 2010.’

‘In the absence of increased spending past the end of the decade, either the planned level of capital investment must be cut, or the size of defence force reduced, or both. There are no easy solutions given the looming fiscal impact of Australia’s ageing population.’

‘We can only be sure that the government is developing a sustainable defence force with the right capabilities if we see: 

A Strategic Update that clarifies the outstanding issues in Australia’s strategic policy, including a clear statement of the role of the Army and its amphibious component. 

A Defence Capability Plan that sets out the military capabilities to be developed in the future, which is consistent with the top-down guidance in the Strategic Update.

A decade-long funding commitment out to 2015 that covers the cost of acquiring and operating existing and planned capabilities, balanced against what’s affordable for the nation in the long-term.’

Getting China Right: Australia’s policy options for dealing with China

Release of Australian Strategic Policy Institute (ASPI) Strategic Insight No. 19/2005

The Australian Strategic Policy Institute has today released a new ASPI Strategic Insight publication titled ‘Getting China Right: Australia’s policy options for dealing with China’, which examines Australian policy towards China. 

Authored by Director of Programs Peter Jennings, the Insight argues the case for an Australian policy towards China that balances our long-term interest in having both a sound economic relationship and growing political and strategic contacts with China.

‘Australia’s view of China is caught between two opposing emotions: optimism and fear. We are enthralled with one of the world’s most dynamic economies, whose growth underpins Australia’s prosperity. But we are suspicious of China’s authoritarian political system, and worried about their potential to turn economic power into military and strategic muscle.’ Jennings says.

‘Moreover our links with China need not be a sum-zero game, where Australian gains in Beijing deliver us losses in Washington. In broad terms these are the objectives of Australia’s China policy right now.’

Jennings states that: ‘The test of Australia’s China policy will come over the issues that give rise to serious policy differences. But the growth of the bilateral relationship has led to rapid shifts in Canberra’s attitude to China; political relations have seldom been warmer.’

The ASPI Strategic Insight ooffers several new policy initiatives designed to promote Australia’s interests in China and to balance these interests against other vital national objectives.

Launch of Australian Strategic Policy Institute’s (ASPI’s) Policy Report on radical Islam and terrorism in Indonesia

The Australian Strategic Policy Institute today released its report Local Jihad: Radical Islam and terrorism in Indonesia.

The report is authored by Dr Greg Fealy, research fellow and lecturer in Indonesian politics at the Research School of Pacific and Asian Studies and the Faculty of Asian Studies at the Australian National University (ANU) and Aldo Borgu, Program Director Operations and Capability.

‘The events of the past six years have prompted a dramatic reassessment of Indonesian Islam. What was once widely seen as one of the most tolerant and benign expressions of Islam in the Muslim world has recently come to be regarded as having more malign qualities. Recent violent radicalism in Indonesia is seen by many as a relatively recent phenomenon. But a closer look at modern Indonesian history reveals the inaccuracy of this view.’ Dr Fealy says.

‘The September 2004 bombing of the Australian Embassy in Jakarta demonstrated that Jemaah Islamiyah (JI) is still a force to be reckoned with. However, given that the blast came more than a year after JI’s last major operation, it raises questions about the organisation’s capabilities, strategic objectives and tactics. Answering these questions becomes more important in determining what our policy choices should be.’ Aldo Borgu states.

Terrorism might be a global issue but for Australia the threat is inexplicably tied up with the problems of the future stability of our neighbours, particularly Indonesia. This ASPI report reveals that while groups like JI might have global links, their motivations, recruiting and operations are inextricably caught up in regional issues. So in addition to our global efforts we also require a regional strategy tailored to regional solutions. 

The report makes a number of recommendations as to what such a regional strategy might involve including ongoing measurements of Indonesian public attitudes towards Australia; development of a public diplomacy strategy; improving our knowledge base on the terrorists themselves; widening our capacity building efforts with Indonesian agencies; expanding maritime cooperation and improving the coordination of intelligence and exchange of information within Indonesia.

APPOINTMENT OF NEW CHAIR OF ASPI

Mark R G JOHNSON, LLB(HONS)(MELB), MBA(HARV)

Mark Johnson is currently Deputy Chairman and one of the founders of successful global banking company Macquarie Bank as well as Chairman of the Australian Gaslight Company (AGL).

Senator Hill said Mr Johnson has had a distinguished career in banking and senior levels of business in Australia, serving as one of the Prime Minister’s three business representative on the Business Advisory Council for APEC. 

‘Mark Johnson has wide knowledge of Australia’s commercial and strategic interests, public policy and global business experience. He understands Australia and its position in the region and the world,’ Senator Hill said. ‘He also has strong leadership skills and private sector expertise with particular knowledge of energy requirements of the region and the importance of energy within the strategic environment.

‘Mr Johnson is also a member of the Board of Governors of the Institute for International Business, Economics & Law at the University of Adelaide and a Director of the Victor Chang Cardiac Research Institute Limited. ‘ASPI serves to inform the Government and the public on strategic policy issues, to encourage debate and stimulate a broader community interest and involvement.

‘The appointment of Mr Johnson reflects the Government desire to meet that charter and extend the geographical influence of ASPI. With business and the economy critical components of the strategic debate, it is also intended to further encourage a wider business participation.’

The appointment follows the announcement earlier this year that Retired Major General Peter Abigail was appointed Director of ASPI. Professor Bob O’Neill as the inaugural Chair of ASPI provided the organization with a great start.

With the appointment of Mr Johnson I’m sure it will continue to grow as an important Australian institution.

Your Defence Dollar: The 2005-06 Defence Budget

The Australian Strategic Policy Institute today released its report Your Defence Dollar: The 2005-06 Defence Budget.

Your Defence Dollar is a concise summary of ASPI’s Cost of Defence budget brief released in May, taking into account additional information that has arisen since then. 

In releasing the document, Dr Thomson said:

Next financial year Defence will spend around $17.5 billion of taxpayer’s money. This is an increase of $880 million compared with the funding for this year, and represents just on 1.9% of GDP.

In the budget, Defence was given $1.2 billion in new initiatives to deliver over four years. This included $421 million for our expanded and continuing role in Iraq and $300 million extra for capital investment.

But the budget also included some belt tightening for Defence. They have to achieve around $440 million in reduced overheads and other efficiencies over the next four years. This should be achievable.

One worrying issue revealed by the budget was that full-time military personnel numbers have fallen for the second year in a row – at a time when the ADF is trying to grow. This is despite $400 million having been spent over the past four years to improve recruitment, retention and conditions of service.

There was mixed news for the Government’s decade-long $50 billion Defence Capability Plan of investment in new military equipment. 

On the positive side, the reforms to Defence’s acquisition agency – the Defence Materiel Organisation – appear to be gaining traction. Not only are they on track to exceed their goals for this year, but $300 million of previously deferred spending has been reinstated into next year’s budget. This is an encouraging sign. 

However, at the same time, the approval of new projects by the Government has fallen significantly behind schedule. The main reason for this appears to be the new and more-rigorous project approval process that has been put in place. In the long run this should lead to better project outcomes. However, the fact remains that unless projects are approved on schedule they are unlikely to be delivered on schedule.

Punching above our weight? Australia as a middle power

The Australian Strategic Policy Institute today released Strategic Insight 18 Punching above our weight? Australia as a middle power.

Punching above our weight? presents a short comparative analysis of the personnel and economic resources that Australia, other developed nations, allies and our neighbours devote to national defence. 

In releasing the document, Dr Thomson said:

On the economic side, our defence spending is largely in line with our economic weight. We have the thirteenth largest economy in the world and rank fourteenth in terms of defence spending. However, as a percentage of GDP, we spend a greater proportion than most developed western nations with the notable exceptions being the US, UK and France – all nuclear armed permanent members of the US Security Council.

Over the last six years, the Australian Defence Force (ADF) has been busier with offshore deployments than at any time since the Vietnam conflict, while defence spending has undergone sustained and substantial growth. So does this ] amount to Australia punching above its weight?

In terms of human resources we have a tiny population – representing less than one-third of one-percent of the world’s total – and we devote a smaller proportion of our population to defence than many western countries. This is not surprising for a country with an avowed ‘maritime strategy’ which does not demand a large standing army. 

As for our efforts in international operations like Iraq and Afghanistan, we tend to make carefully calibrated ‘niche’ contributions that are proportionately smaller than our key US and UK partners but proportionately larger than most other contributing nations. This makes sense for a nation like Australia on the southern periphery of Asia. As operations in East Timor showed in 1999, we must retain adequate forces close to home as a hedge against unforeseen developments.

None of this is likely to change soon. The government has shown little inclination to boost defence spending beyond that currently planned for the modernisation of the ADF. Chances are that we’ll continue to play the role of middle-power as we have in recent years: By carefully marshalling our resources to maximum effect in support of global security interests and the alliance, while developing and maintaining the self-reliant capability for operations closer to home where our interests can be vitally and uniquely engaged.

Alliance Unleashed: Australia and the US in a new strategic age

The Australian Strategic Policy Institute has today released its latest report, which examines what the strategic future holds for Australia’s relationship with the United States. 

The Strategy is authored by Dr Rod Lyon, Senior Lecturer, School of Political Science & International Studies at the University of Queensland, and titled ‘Alliance Unleashed: Australia and the US in a new strategic age’.

The report concentrates on the reinvigorated Australia-US security partnership through the ANZUS alliance, which has been given new purpose and energy following the events of September 11 2001 and the subsequent War on Terror. 

Lyon argues that Australia must begin thinking now about what our future security partnership should look like, how much of the new partnership we wish to place under the formal auspices of the ANZUS alliance, and how the emerging pattern of closer cooperation can best serve Australia’s interests.

Professor Curson advises that: “If left unchecked, epidemics of infectious disease can substantially undermine public confidence, jeopardise law and order, severely threaten a state’s social, economic and political viability and become a major agent of social and political change.”

‘Lyon argues that we need to shape ANZUS to reflect the reality that security partnerships are becoming more like full-time enterprises and less like insurance policies for a rainy day.’ ASPI Director, Peter Abigail says. 

The reinvention of the bilateral security partnership has already begun. Australia is now engaged in much closer security cooperation with the US than are many other Western allies with the security connection between Canberra and Washington being broadened and strengthened.

‘For over a century, the notion of partnership has been a key feature of Australia’s approach to security we have never gone to war alone…security partnerships have been, and remain today, the foundation stone of Australian security policy.’ Dr Lyon states.

Dr Lyon says we can expect to see the Bush Administration showing greater interest in the value of alliances, pressing for a new agenda of change. For alliances to be effective security partnerships in the new security environment, they will have to take on a set of characteristics different from those of the past fifty years.