There’s a definite air of unreality about the Defence White Paper, the sort of sense that comes from looking at numbers so big they give you a nosebleed. And you don’t have to wait until the 2020s for it. For example, the defence budget will grow by 40% between now and 2020, rising to over $40 billion annually. It will reach over $60b by 2030.

That’s just with the indexation and annual increases to which the Government has committed. An extra $69b between now and 2020.

That increase is fiscally affordable. You just have to cut other programs by $69b, or hope that the resources boom returns with a vengeance and boosts company tax revenue back to the levels we saw until last year.

That naturally assumes China returns to its high levels of growth. Ironically, the increased defence expenditure is aimed at China. So we’ll be relying on the rise of China to fund our defence against the, erm, rise of China.

There’s also the fiction that $20b worth of savings will be found within Defence. It is commendable that Defence now sufficiently understands its own financial position and what assets it controls that it can make such a claim — it wasn’t in a position to even do that five years ago. But that’s for Governments of another generation to grapple with.

More serious, arguably, is who is going to do the defending. Despite the ambitious expansion of the Navy planned for the 2020s, the White Paper envisages a total ADF force of 57,800 – only a few thousand more than its current level. The big increase will be a jump of between one-quarter and one-third in the number of bureaucrats to 21,800.

While the ADF will take advantage of growing unemployment now to fill a number of gaps in its services — especially in crewing its submarine fleet — Australia has a long-term ageing workforce and, if strong economic growth returns, the ADF will again struggle to recruit and retain personnel, especially in high-skill and technical areas. The Paper discusses the importance of better remuneration, support for Defence families and the need to recruit more women, indigenous and “multicultural” people (perhaps Defence is more comfortable calling them “ethnics”?), but offers no breakthroughs in fixing the problem of attracting quality personnel when a tight labour market returns. Perhaps it can recruit bikies.

The doctrine behind the Paper represents a substantial shift toward greater self-reliance – on the basis that the US may be too stretched in other parts of the globe to guarantee Australian security. This has significant foreign policy implications, given it removes the imperative to blindly follow the US into military expeditions far afield. The Paper therefore provides a neat counterpoint to John Howard’s admission last week that the primary reason for Australia participating in the illegal attack on Iraq by the Bush Administration was because of the US’s guarantor role for Australian security. Indeed, in ruling out Middle East adventurism, the Paper appears to draw a line under the era of the outsourcing of Australian foreign policy to the White House, even as the Government ramps up its commitment to Afghanistan.

Malcolm Turnbull’s “show me the money” reaction — to the extent that anyone seems interested — has provided the ironic sight of the Coalition now looking softer on both defence and the threat from Communist China than Labor. The days of subtly Sinophobic wisecracks from the Opposition about “Mandarin-speaking Kevin Rudd” would appear to be over. The argument that China is no threat to Australia, however, doesn’t hold water in a risk-management sense — and defence planning is the ultimate risk-management exercise. There’s only one country in the region that has an official policy of armed aggression against another state, and that’s China’s approach to Taiwan. There’s only one country that continues to occupy another, and that’s China in Tibet. And there’s only one country that sponsors a rogue, nuclear-armed state, and that’s China and North Korea.

More to the point for Australian defence planners, we have no real idea what level of resources China is devoting to defence. To assume that its build-up is no threat to Australia without being able to assess that build-up is an unacceptable risk for long-term defence planning. The White Paper is correct to target it.

If the Chinese really think the White Paper will presage an arms race in the region, then they should be a lot more forthcoming about their defence spending. Then their complaints about the White Paper might have some substance.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey