Call it the austerity dividend. After years of reflexive increases in military spending in the cause of prosecuting the War on Terror, the military-industrial complex has finally met its match, in the shape of fiscal discipline. The government has delayed spending on the ever more ridiculous JSF program and dumped plans to purchase self-propelled artillery. It’s also brought the next Defence white paper forward. The last one, released in 2009, was delayed by months by military and bureaucratic intransigence.
Australia isn’t the only country cutting or delaying big military acquisitions — it’s happening right around the world. The global military spend in 2011, $US1.74 trillion, increased by its smallest amount since 1998, just 0.3%. The US, the UK, Brazil, India, France and Germany all cut spending because of budget pressures. Only the kleptocratic dictatorships of Russia and China lifted spending.
The most amusing coverage of the government’s decisions came from a froth-mouthed Greg “I never met a dictator I didn’t like” Sheridan, who declared it “the worst day for Australia’s national security since the fall of Saigon in 1975”. Why Sheridan (“George W. Bush may well be judged, ultimately, a great president”) stopped at Saigon isn’t clear; what prevented him from declaring it our blackest day since Gallipoli?
More sensible coverage in The Australian was to be obtained from Brendan Nicholson, the paper’s well-respected defence editor, who thought the delay of the long-delayed and wildly over budget JSF and the bring-forward of the white paper sensible ideas.
Recall that there was a time when Defence was immune from budget pressures. It was the only portfolio protected from budget cuts in the early Howard years. And Kevin Rudd committed to increase defence spending by 3% a year until 2018. In the post-GFC era of low-revenue growth, that’s no longer the case, at least for major acquisitions.
In considering all this, it’s worthwhile remember that Defence spending is only partly about defending Australia (or as is more often the case, launching unprovoked invasions of poorer countries at the behest of our imperial overlords). Like everywhere else in the world, Defence spending is also a critical tool of industry policy, designed to pump billions of dollars into manufacturing and generate, where possible, precious export dollars. That’s one of the reasons the War on Terror, as originally conceived, was intended never to be won, as that would remove a justification for permanently higher defence and security spending — and thus why policymakers throughout the West were never particularly concerned that the primary impact of the War on Terror was simply to produce entirely new generations of enemies from communities terrorised by Western military forces.
Now, austerity is driving cutbacks in military spending across the West, to the chagrin of the defence and security commentariat, many of whom made their livings within the industry or continue to do so. Their standard argument, predictably, is that lower defence spending will make us all less secure. That of course depends on accepting the assumption that increased military and security spending has made us more secure — and there is no evidence that that is the case.
The JSF is a US project — well, debacle, more accurately — and the self-propelled artillery were likely to have been purchased from an offshore supplier, though the possibility of modifications being undertaken here by a company such as Tenix. The cutbacks, therefore, won’t have a massive effect from an industry point of view.
The biggest industry policy aspect of our current defence planning is the new submarine project, to which the government will devote more than $200 million to studying. There is intense pressure from local industry for the submarines to be built here, when they will be far cheaper to purchase offshore. Australia can produce high-quality smaller defence projects, such as the successful Bushmaster vehicles produces by Thales, but we know what happens when we try defence mega projects — look no further than the Collins class submarine. The best fiscal outcome for Australia would be to take advantage of the extensive assistance other governments afford their defence industries and obtain a new fleet from an overseas manufacturer.