Rudd’s big concern is that China is increasing its military spending as it gets wealthier. That is true of many countries. But even if the official figures the understate China’s spending, it still has a long way to go before it catching the US. According to Jane’s, the $US800 billion US defence budget is far ahead of the second biggest spender, the UK, with $79 billion. China is fourth with $58 billion, Japan fifth with $48 billion, Russia eight at $37 billion and Australia thirteenth at $20 billion.

Perversely, massive US military spending, which includes funding for more than 700 overseas bases, is a key reason it can’t afford to go to war with China which has no overseas bases. China finances a large part of the blow-out in the US budget deficit resulting from President Bush’s big increase in military spending. Although China would lose a lot of money, it could wreck the US economy by withdrawing its financial support if under serious military pressure.

Rudd said on Wednesday that Australia's huge export trade meant it must be able to defend its “sea lines of communication”. This would require new “subsurface and surface ships”. Rudd privately nominates China as the biggest threat to Australia. But there is no reason for China to start sinking Australia’s merchant shipping, let alone mount an invasion, while we are willing to sell it the raw materials it wants. Presumably, it won’t sink ships carrying iron ore, coal, natural gas and other commodities to its own ports.

Assuming Australia or its allies do not attack China, there is no reason for it to sink Australian ships going to countries such as Japan. Apart from Japan’s impressive ability to defend itself, China would know that such an attack would quickly lead to a ban on the imports it needs from Australia.

Australia is due to build three air warfare destroyers (AWDs) at a likely cost of $10 billion. Some military analysts favour buying more. But the Defence Minister Joel Fitzgibbon wants cabinet approval to spend $25 billion on new submarines. This would make it would be extremely difficult to justify more spending on AWDs. White — a former deputy head of the defence department — would like to see the existing order scrapped and the money go into submarines.

The AWDs are vulnerable to hypersonic cruise missiles available to countries such as China. Even if the AWDs survived, White says they would still be at risk from torpedoes fired by submarines. He says it is easier to sink a ship by letting water into the bottom than air into the top.

But it's no use spending a fortune on new submarines unless the navy can crew its existing boats. Each Collins class submarine needs a crew of 45. The navy has over 13,000 personnel but not enough crews for more than three, or even two, of its six submarines.

It is difficult to think of a period in recent decades when the Australia’s strategic outlook was more favorable than today. When Asia was much poorer, Australian politicians were greatly agitated by the alleged dangers posed by civil wars in Korea and Vietnam, communist uprisings in Malaya and the Philippines, and Indonesia's takeover of Dutch New Guinea and its “confrontation” with the new formed Malaysia. Australia would almost certainly have been attacked during a full scale nuclear war between the US and the former Soviet Union.

Rudd should calm down. If well spent, the money already committed to defence will be more than enough to keep the country safe without a huge expansion of the navy.

ends