In Australia’s Defence and Deterrence, long-time analyst of global defence issues and frequent commentator on Australian defence Robbin Laird has written another timely book. He provides a constructively critical and expansive update on the Australian Defence Force.

He does so by asking important questions and drawing on presentations delivered at the April 2024 Sir Richard Williams Foundation seminar and related interviews capturing the essence of Australia’s current and anticipated defence challenges. Laird has a sharp eye for detail and for flawed arguments, concepts and resource allocation priorities. He carefully captures the essence of the arguments made about a wide range of presenters and offers compelling insights drawn from his conclusions.

A key concern raised in the opening chapter (with John Blackburn and Anne Borzycki) is that:

Despite the aspirational phrasing and free use of the terms ‘soon’ and ‘sooner’ in numerous political statements, there is no significant new financing for [Defence Strategic Review] implementation this decade …. The failure to resource the DSR adequately could mean that our deployable military operational capability will be less at the end of this decade that it is today and this right when the threat envisaged by the review could appear.

Citing Colonel David Beaumont, a logistics expert, Laird says ‘The challenge now is to prepare for a different scale and intensity of conflict which simply does not comply with limited sustainability and just-in-time logistics.’

Working more with the neighbourhood is identified as critical as well, as is the ability to leverage Australian geography for strategic purposes, as Chief of Army Lieutenant General Simon Stuart observed.

Air Commodore Mick Dorant tells us the ability of air power to deliver impactful projection within our maritime approaches ‘requires a combination of effective defence, combined with a series of highly integrated multi-domain offensive counters as part of the integrated force and in conjunction with allies and partners. This is how air power will deliver a strategy of denial in our key maritime approaches.’

This view is complemented by that from former secretary of home affairs and Defence deputy secretary for strategy Mike Pezzullo, who says:

21st century defence is not narrowly focused on the ADF and long-range investments in a future force. All one has to do is to look around you and find the activity of the multi-polar authoritarian world and the end of the American-led ‘rules-based order’ to understand the future is now.

Laird says that, in his view, ‘this is a key measure of the credibility of Australian deterrence by denial or whatever other term you might use.’

Drawing on the insights from Major General Anna Duncan, commander of Cyber Command, Laird says:

Grey zone conflict, in my view, goes hand-in-hand with information warfare …. We’re in a long-term competition with authoritarian powers, but it’s like it was 1949 in terms of how for managing this rivalry to our advantage …. Taiwan and Ukraine are not sideshows to global conflict: they are the early test cases of competition in a second nuclear age …. Limited War …. That is what is going on today in cyber and outer space.

On AUKUS, Laird says ‘it can too easily be used as a Rorschach image where one can see what one wants. It is not an end in itself. If meaningful, it is a gateway to solving a strategic challenge.’

Laird discerned that to make AUKUS work, the Australian Government ‘is shifting resources from the Air Force and the Army and from the surface fleet to pay for a new fleet of eight SSNs …. How then to ensure that the ADF is effective in the next five years?’ Making matters worse, he argues, ‘war in Ukraine has exposed the Achilles heel of Western defense, namely the lack of magazine depth. Munitions and weapons have been in perilously short supply.’

He says the presentation by James Lawless on autonomous systems in the maritime domain ‘raises the specter of how a pathway could be shaped to carve a way ahead.’ Laird sees this as only a partial panacea, though, as ‘cuts in capability such as the fourth F-35 squadron are really and decisive reductions in the current force, the only one which adversaries see and take account of.’ He also doubts the effectiveness of future-oriented defence planning, asking rhetorically ‘How well did we forecast 2020 when we were living in 2019?’

Laird also draws on Vice Admiral (retired) Tim Barret, who highlighted that ‘the surface combatant review took an eye to considering autonomous systems but considered them a generation away. But the reality is that we are already down the autonomous systems path now.’ Laird makes the point: ‘The technology has arrived, but our organisational culture and structures are not changing to be able to use it. It is, he argues, a form of structural disarmament.’ Nonetheless, he sees hope with the arrival of the Triton remotely piloted aircraft:

This is much more than a simple additive to the ADF in pursuit of advanced ASW capabilities …. It can operate outside of the primary weapons engagement zone, it can function as a quarterback to deliver ISR throughout a very large swathe of the battlespace.

Laird looks to Defence Connect’s Stephen Kuper, whose suggestion for strategic re-design, builds ‘on the ability to directly defend Australia out to its first island chain and to become a more credible strategic reserve for its allies in the region’—in effect, ‘building a mini-arsenal of democracy in the region.’

A key consideration to make such a strategy work, Laird argues, ‘is to engage society in the defence of Australia, rather than relying on the ADF to be the sole segment of society responsible for defence.

Drawing on the thoughts of Jennifer Parker, Laird pointed out that ‘the importance of involving society and the economy in a broader conversation about defense and security, and the need for expedited capability acquisition to address existing gaps and emerging threats …. Any consideration of national security strategy must start with assessing Australia’s critical vulnerabilities across various domains, including political warfare, cyber warfare, and space, which affects its maritime interests.’

Laird also notes the view of my ANU colleague at the Strategic and Defence Studies Centre (SDSC), Andrew Carr. Informed by his historical research on Australian Defence policy, Carr observes that ‘The ADF was tasked with providing a variety of forces for a variety of missions without a real focus on the region. That has now shifted to re-orienting the ADF on the region and the most likely scenarios of conflict.’ Carr describes the strategy required as being

archipelagic deterrence, [which], with its creation of a secure southern bastion around Australia, deeply integrated with US power projection into the region, is likely to be better suited to the realities of distinct interests and capacities and ultimately will be more valuable to the management of major power strategic competition in the Indo-Pacific.

On the one hand, Carr argues, ‘the ADF now is being given a clear focus on what it is to prepare to do. At the same time, the government is facing the challenge of giving them the means to do so.’

In essence, Robbin Laird’s Australian Defence and Deterrence: A 2024 Update serves as a handy summation of the Defence challenges faced by Australia in a more contested world. It is also a clarion call to look beyond the tyranny of the politically urgent and let the rhetoric of the recent defence policy documents be matched with the reality, for the words to be matched with deeds, for the strategy to be resourced and acted upon with haste.

India’s military is likely to establish several new joint commands this year in one of the most significant restructures in its history. The country is one of Australia’s closest partners, with one of the world’s biggest militaries, so how it approaches its defence priorities matters deeply to us, and to the Indo-Pacific.

But India’s proposed commands are just one part of a broader suite of reforms, including changes in its defence ministry. The reforms are designed to be mutually reinforcing and are best judged for their cumulative effects over decades.

In the interim, two implications for Australia are clear. First, the reforms could substantially heighten Indian defence capabilities—if implemented thoughtfully and with sustained political backing. Second, they are paving the way for deeper defence cooperation with Australia.

India established a new military position, the chief of defence staff (CDS), in late 2019. Before then, the navy, army and air force operated in parallel. Their chiefs coordinated with each other but reported separately to the defence minister (often through a tri-service committee, but not an overarching commander).

The CDS changed things. He doesn’t command the service chiefs, who share the same rank as he. But he’s a very experienced professional who drives policy and acts as a single point of military advice to government.

He’s also politically appointed. Current CDS General Anil Chauhan initially retired as a lieutenant general and was serving as a civilian defence adviser to the highly influential national security advisor before re-entering military service to take the CDS position on promotion in 2022.

Chauhan carries the implied weight of Prime Minister Narendra Modi’s government to reform a complex system with many conflicting, if legitimate, priorities. In turn, he can probably shape the political discussion on national security better as CDS than he could if he were one of several service chiefs.

For Australia, the CDS represents a positional counterpart with which our chief of defence force to engage. This goes a long way to foster rapport and sustain momentum between two armed forces that operate differently to one another, and don’t always have direct equivalents.

One of the CDS’s primary responsibilities is to better integrate navy, army and air force capabilities to ensure their collective power is greater than the sum of their parts—to foster a joint approach to military affairs. Implied in that task is eliminating financial inefficiencies across the services.

India’s forthcoming joint commands are at the heart of this process. They will be staffed by personnel from multiple services organised to fulfil core functions, such as defending India’s contested borders with China and Pakistan, and to leverage resources across all services to consolidate India’s maritime power.

This is welcome. India’s three services already collaborate, particularly at the tactical level. But the strategic process of forming shared objectives, culture and approaches to military operations is endless, as are the potential capability dividends.

The modestly sized Australian Defence Force is well placed to collaborate on this. It relies heavily on leveraging all three services, and its international partners, to achieve its objectives. Some of its approaches won’t be relevant to India. But they offer useful test cases for what worked, and didn’t work, for us.

Once established, India’s joint commands could facilitate more defence cooperation with Australia. Amphibious exercises or cooperative humanitarian assistance missions, which depend on inter-service collaboration, should be easier to plan if the need to liaise with multiple siloes on either side is eliminated.

But India’s journey to a joint approach is about more than integrating military capabilities. Civil-military cooperation is also key. New Delhi’s creation of a new government department within its defence ministry deserves as much attention as military commands do.

Led by the CDS, the Department of Military Affairs (DMA) is primarily staffed by military officers seconded to the ministry.  It exists to better integrate military and civilian perspectives within the defence bureaucracy.

This is significant. The military has been instrumental in shaping India’s national security conversation at times. But its early political leaders were cautious about becoming too reliant on military advice, lest serving officers exert undue influence. Simultaneously, conventional appraisals of Indian military capabilities emphasised the need for civilian leaders to respect military expertise.

According to this logic, the military would perform best when given space to conceive and execute operations without unhelpful meddling from above. Strategic policy, senior appointments and defence budgets were a civilian domain; operations were for military personnel.

This approach arguably helped consolidate civilian supremacy over India’s armed forces while preserving space for the military to achieve its missions. But it also created siloes between civilian defence officials and their uniformed counterparts, in a dynamic that Anit Mukherjee calls an ‘absent dialogue’ in his excellent book.

Military and civilian officers collaborate daily in Delhi. But, when frustrated, a civilian ministry official might complain that military officers lack political or strategic nuance. Their uniformed peers might retort that civilians, who are often assigned to the defence ministry from unrelated portfolios, don’t have the expertise required to wield their enormous power over priorities and budgets. These perspectives are likely familiar the world over.

Establishing the DMA hasn’t been India’s first attempt to better integrate military and civilian voices within the military, and its impact will take time to judge. But any progress matters. Military operations work best when they incorporate civilian perspectives, from within government and among civil society. And no national security strategy can be taken seriously if it isn’t underpinned by robust military advice.

The CDS’s success will hinge on his ability to translate India’s political appetite for change into tangible results—and in turn, leverage the military’s heightened profile to consolidate itself as a source of robust, apolitical advice to government.

The decision to permanently ground the Australian Defence Force’s fleet of MRH-90 Taipan helicopters was the final chapter in the saga that was Project Air 9000 Phases 2, 4 and 6.

At the time, both contenders (the MRH-90 and the S-70M version of the Blackhawk) were new and somewhat immature and untried designs without many data points on which to base a long-term ownership decision. But rather than conduct a rigorous ‘fly off’ to inform a decision, a less than ideal paper comparison was used to select a preferred option.

The Air 9000 acquisition was meant to be the crowning achievement of the 2002 ADF ‘helicopter strategic master plan’, which was intended to achieve efficiencies in sustainment costs by reducing the number of helicopter types in ADF service. That was good policy but poorly executed, it would seem.

Due to the paper-based appreciation of the two contenders, in 2014 the Australian National Audit Office concluded: ‘Defence was not positioned to readily identify areas in need of developmental work for the respective aircraft, and to confidently inform ministers on the respective strengths and weaknesses of the proposals.’

After the MRH-90 was chosen for its on-paper performance, Defence started to uncover a range of issues and deficiencies as it tested the aircraft. These included (initially):

• difficulties installing the blade pins when folding blades at sea
• incompatibility of the cargo hook for vertical replenishment operations with US and other coalition navies
• failure of the transmission oil cooler fan
• slow alignment of the navigation system
• blade-sail issues while on the deck of a landing helicopter dock
• fragility of the cabin floor
• ingestion of foreign object debris into engines
• cracking of windscreens from debris kicked up on landing in the field.

An obvious lesson is that paper-based appreciations have limitations.

A similar situation of relying on a paper assessment occurred with Land 121 Phase 3B to acquire 2,536 medium and heavy trucks, modules and trailers for the ADF.

As part of the tender process, Defence conducted a tabletop evaluation in 2005–2007 with the assumption that buying trucks would be easy. This approach proved to be flawed, resulting in a second acquisition process being required and contributing to long delays in the replacement of the medium and heavy fleet.

On its second attempt, in 2008, Defence conducted a more effective assessment process using a dedicated test and evaluation (T&E) methodology. This resulted in a completely different vehicle being selected through a rigorous ‘drive off’ of all the contenders.

Had that been done originally, a seven-year delay in the introduction of the capability to service could have been avoided, along with the associated cost and resource implications.

While both of these projects met the then Defence Materiel Organisation’s capability development processes of the day, they have since proved to be inadequate.

A rigorous preacquisition T&E approach would have more than likely uncovered issues and placed the risk of rectification on the equipment manufacturer. Or, it might have driven a different decision.

For some time, Defence practised the acquisition strategy of ‘design, acquire, test’. The problem with this approach is that Defence would recommend to government a preferred option without adequate or real-world information to make a risk-based decision. It also meant that Defence owned the risk when in-service testing would reveal a capability’s inevitable flaws, as with MRH-90.

A better acquisition approach to identify risk and inform decision making is ‘design, test, acquire’. This also enables a better understanding of the capability’s ability to meet the ADF’s configuration, role and environment requirements through acquiring objective quality evidence.

One of the best examples of a recent acquisition using the ‘design, test, acquire’ approach is the successful Anzac anti-ship missile defence upgrade. HMAS Perth was fitted with an entire ship set of this new and very developmental system. It then underwent rigorous testing in Australia and Hawaii to ensure it worked, before the other seven ship sets were purchased and fitted.

Other projects that could have benefited significantly from such an approach include the MU90 torpedo, the G-Wagon, the JP 2008 satellite dishes and the six LCM2000-class landing watercraft. The LCM2000s never entered service because they failed their acceptance and operational T&E and were handed back to the DMO after considerable expense, and after the warranty had expired.

To ensure the government’s defence ‘projects of concern’ list is kept to a minimum, and the taxpayer is receiving value for money, any project proceeding to government without a ‘design, test, acquire’ approach should require an explanation of why.

I should note that this approach isn’t always possible, as with equipment sourced through US foreign military sales (which in any event has usually already been developed and acquired under a US ‘design, test, acquire’ strategy). It is also true that this approach won’t solve or avoid every issue once a capability is in service, but it will reduce the likelihood of unforeseen issues, delays and capability failure.

The technical requirements of AUKUS, and the time strictures and innovation challenges laid out in the defence strategic review, all implicitly increase the demands on Australia’s defence industry. How can the government most effectively support industry in meeting those demands?

In my previous article, I noted that defence industry policymaking has fallen to the Department of Defence because Australia’s broader industry policy apparatus has withered over decades. Industry policy has been subsumed by Ricardian theories of comparative advantage, and technical industries have declined, outcompeted by better supported counterparts in other countries.

Even limited attempts to lean on the existing policy apparatus (such as situating the Centre for Defence Industry Capability in the Department of Industry, Science and Resources) have failed. And so, in the past five years, Defence has produced policies to support the growth of defence industry. Those policies have met with mixed success.

Given that limited success, the eye-popping demands on defence industry implicit in AUKUS and the review require a fundamentally new approach to industry policy. We must plan for the industry we need and design and deliver coherent strategies to stimulate its rapid and sustained growth.

Defence’s industry policy development capabilities are limited, which is fair enough—industry policy is not its core concern. As I advocated in the first article in this series, ideally government would create a powerful industry and trade department and cultivate strong and scalable policymaking capabilities within it, with economic planning powers and resources to back it up. But, if that cannot be, Defence will again forge its own path on industry development. How can it do that?

There are many ways to botch industry planning and policy. The objective may be a competitive and advanced industry, to be relied upon in the hour of need. But economic history is littered with poor outcomes and client industries and firms more expert at rent-seeking than innovating. There’s a high risk of wasting time and resources. But history also points to a consistently successful pathway.

Other countries, starting from a position of relative weakness, have attained greater technological advances and productivity gains than Australia through careful economic planning and well-designed and consistently delivered industry policies. South Korea is a signal example. In the 1970s, it had an economic profile akin to Guatemala’s. Today Korea, in the shape of Hanwha, is leading the development of Australian capability in Land 400 Phase 3 and is rumoured to be a potential acquirer of Austal. We should study how it got to where it is now.

Countries that have successfully transformed their technical capabilities have a common policy history. They have all:

• defined target capabilities (as in the defence strategic review and other reviews underway).
• established a web of preferment policies to grow firms in those target areas, such as concessional financing, tax concessions and preferred procurement
• shaped financial services to encourage the development of those sectors, moving the focus away from short-term profitability and excessive financial risk-aversion
• required supported firms to demonstrate efficiency and market awareness via exports
• allowed firms that fall short on exports to fail or compelled them to merge with better firms
• embraced selective public-sector co-investment with the private sector in producing assets.

There are two explicit Australian strengths, visible in other sectors, that Defence can harness when pursuing these policy prescriptions: exports and financing.

All countries that build highly capable technological economies from a modest base do so by supporting industries and firms that demonstrate export success. This allows firms to scale up past small domestic markets, and governments to validate the product development and financial and marketing capabilities of the supported firms. Defence and Austrade produced a defence export strategy in which I played a part. The idea was sound: to use our robust export culture and trade promotion infrastructure to grow defence exports. Yet the strategy lacks the focus and resources that truly reflect the centrality of exports to the rapid and sustained development of a nascent industry.

The alternative approach is to make all defence industry policy export-led—with lavish industry support available only to firms that are exporting, are scaling into export opportunities, or have an export-led business model. In other words, support fewer firms, but more generously. Back those with a chance of scaling up and rely on them to slot into Defence’s preferred capability areas when they are at scale and demonstrably efficient in the export market. That doesn’t preclude defence procurement from other firms that are incapable of exporting or unwilling to export.

Scaling up, whether organically or through mergers, requires finance. The economic history of successful rapid industrial development in other countries suggests that the financial services sector should be made the slave of industry via credit controls, widespread concessional lending, and the suppression of consumer welfare. That’s not appropriate here and now. Australia’s financial sector is larger and more sophisticated than Japan’s in 1950 or Korea’s in 1970, so that pathway is both inappropriate and politically unfeasible. But, given the strength of our $4 trillion private investment sector and our mighty domestic banks (themselves the products of active regulation and industry policy), it’s high time for Defence to develop a well-funded strategy to attract private financial investors into the defence industry sector.

For instance, Defence can capitalise private equity funds to build and shape manufacturing to its needs. Those funds can be mandated to deliver on required industry structures and scale through capability building within firms, organic growth financing, and consolidation through the financing of mergers and acquisitions. Likewise, Defence can empower venture capital funds to produce dual-use capabilities in a commercially sustainable way. Finally, it can partner with superannuation funds and infrastructure investors to extract better value from the defence estate. All of this requires the creation of a financial model that balances investor-return hurdles with Defence’s strategic objectives, which is achievable.

But, first, Defence will need to build out its own policy formation and delivery capabilities, with a focus on industry planning and direct investment both alongside and via private investors. That’s the subject of my next article.

The strategic importance of northern Australia was highlighted in the defence strategic review, with $3.8 billion committed to upgrade military installations across the north over the next four years. Defence Minister Richard Marles, who travelled to Darwin in April for the announcement, said the funding was an ‘immediate investment’ in northern Australia’s defence infrastructure.

While these bases and facilities are primarily for the use of the Australian Defence Force and the defence of Australia, they are also critical enablers for our allies and partners in the Indo-Pacific. This is especially true for the US military, whose presence in the north dates back almost a century.

The north occupies a geographical sweet spot in the Indo-Pacific, offering easy access and rapid force deployment to the western Pacific and eastern Indian Oceans. Darwin, for example, is close to potential conflict hot spots in the Malacca Strait and contested South China Sea. The US bases in Guam and Hawaii are much further away.

This provides Australia and its partners with a launching point for an inside force that can react to aggression and not have to fight its way into the conflict. With ample strategic depth, northern Australia is a much safer place to operate from than small island bases where dispersal of defence assets is virtually impossible. The Top End is beyond the range of most Chinese missiles and strike aircraft but close enough to have an influence on Chinese actions in the region.

In addition to providing a strategic buffer for the nation, Western Australia, the Northern Territory and Queensland derive obvious economic benefits from defence investment.

Western Australia’s defence industry is estimated to contribute around $3 billion a year to the state’s economy. That figure is expected to double within the next decade. Queensland’s defence industries employ more than 6,500 people, generated an estimated $6.3 billion in revenue in 2015–16 and secured $4.3 billion in Australian defence contract payments in 2016–17. Defence spending in the Northern Territory reached $2.2 billion in 2021–22.

However, the amount of infrastructure needed in the north is finite, so this large investment ‘sugar hit’ will eventually taper off. All three jurisdictions need to start planning for that now and building an industrial base that will help avoid a ‘valley of death’.

The US has a crucial role to play in fostering defence industrial cooperation among allied nations, particularly in the Indo-Pacific region. Such collaboration is essential for several reasons, including cost-effectiveness, interoperability, technological advancement and collective security.

This theme was the subject of a groundbreaking report by George Mason University’s Jerry McGinn and Michael T. Roche titled A ‘build allied’ approach to increase industrial base capacity. The authors argue that developing an effective ‘build allied’ approach will help the US military create surge capacity, with both speed and scale, and develop industrial resilience in support of the US national defence strategy’s objectives.

A defence industry accelerator is a program or organisation that supports the growth of early-stage companies that are developing innovative technologies for defence and national security applications. They typically provide funding, mentorship, resources and networking opportunities to help start-ups grow and succeed. By bringing these parties together, an accelerator can help to facilitate collaboration and information-sharing, which can lead to the development of more effective solutions to complex security challenges.

But that is no easy task.

For some time now, the International Security Industry Council of Japan, the Pacific Impact Zone and the Technology Accelerator have been working to develop an ‘allied nations defence industrial base accelerator’ platform, or DIBX. They are all non-for-profit organisations composed of former senior government, industry and civil-society members from the US, Japan, the UK, Australia, India and NATO countries.

The DIBX will be supported by US defence funding and engage allied nations with a shared strategic interest in promoting a free and open Indo-Pacific. The US–Australia–Japan trilateral strategic relationship is a logical one to explore, especially in the areas of hypersonic and long-range strike capabilities, artificial intelligence, quantum computing, and other critical and emerging technologies—all of which will be exercised, tested, evaluated and (could be) built and maintained in the north.

The DIBX can provide valuable benefits to northern Australian governments’ defence industrial build-up plans and support elements of the second pillar of AUKUS, which focuses on advanced capabilities. The DIBX is finalising an industry guide with a dedicated northern Australia section. It will be outlined at the Developing Northern Australia conference in Darwin next week.