There is, essentially, just one question the Abbott government has to answer to demonstrate its commitment to defence. This has nothing to do with the forthcoming white paper, although that will undoubtedly unveil new grand plans for the future. But the future is a long way away. The crucial issue now is both simple and urgent: how much money is the government going to allocate to defence?
Spending on the armed forces is languishing at the lowest proportion of gross domestic product since 1938. And it's worth noting that this point was, until this year, its lowest share of government expenditure allocated to defence ever. The Labor government began tightening the screws on the defence budget back in 2008. At that time it made the point that this was a temporary reduction that would be redressed once the economic conditions changed. But since then, and despite supplementation for operations, procurement and other long-term spending priorities have been delayed and pushed back. The backlog of demands is so large that all three services can (and are) producing perfectly justifiable claims for significant expenditure increases.
Theoretically, the answer is simple. All Defence Minister David Johnson has to do is persuade his colleagues of the urgent requirement to devote more money to the forces. After all, the services have been drained of money for some time. But convincing politicians that defence hardware is more important than more electorally palatable spending options - such as hospitals or urgently needed infrastructure - won't be easy.
Air Warfare Destroyer.
Take the navy, for example. The way Johnson allocates money to this service will not only be indicative of just who has the ear of the minister; it will also tell us a great deal about the strategy of the government - and whether it is prepared to back up rhetoric about expeditionary forces with money. The relative size of Australia's economy, particularly when contrasted to that of our Asian neighbours, means that decisions will have to be taken. If the country wants to retain its degree of conventional weapons superiority in the neighbourhood, a commitment will need to be made to spend at least 3 per cent of GDP. At 2 per cent, the forces can just be sustained. Any further reduction in spending will require an urgent rethink about how we're going to go about defending Australia.
Theoretically, of course, purchasing decisions are made simply to provide the appropriate equipment to accomplish the mission, but the reality is somewhat more complex. This is where politics enters into the process.
Business would like to see the government commit to building a fourth Air Warfare Destroyer. That way the shipyards could be kept open until the replacement submarine project gets under way. Skills would be retained and, perhaps more importantly as far as the corporations are concerned, there'd be jobs for the executives. But the admirals themselves aren't nearly as enthusiastic about this project for a couple of reasons. Some of these are tactical (the new Air Warfare Destroyer would be an ''orphan'', with a different weapons system); others are structural (unless overall resources were boosted, there mightn't be enough sailors to go around). Some politicians, of course, would simply like to concentrate on just getting the budget "into the black''. It would be wrong to assume that everybody on the conservative side of politics is enthusiastic about spending more money on the forces.
Joint Strike Fighter.
The way the minister jumps will provide a good indication of the government's future priorities, and which lobby groups have the ear of the Prime Minister.
The difficulty is that the demands on limited resources are simply going to increase. The patrol boats have been worked exhaustively with no let-up in sight. There will have to be a program to replace these and the other big issue, even though it's slightly down the track, is the replacement submarine. Neither of these vessels is discretionary, nor can purchases be put off indefinitely.
In a tight fiscal situation it seems likely that the government may choose to abandon the Air Warfare Destroyer.
That will particularly be the case when the enormous cost of the new air combat capability is factored into the picture. The first couple of Joint Strike Fighters are likely to cost something like $120 million each. After these the price will reduce because of economies of scale - but not by that much. The hope is that the cost of each plane will have come down to $80 million by the time the government announces its decision in March, but that's far from certain.
The difficulty is that a number of other countries have cancelled or reduced their orders for the aircraft and every time this happens, the price per plane rises. The plan is to buy at least another 72 aircraft, because that's the right number to defend the top of the continent. And that's the key to this particular decision. We could, if necessary, defend the country without ships. Defending it without control of the skies would be impossible.
But there has been considerable slippage in the production timetable since the original decision to purchase the Joint Strike Fighters was announced in 2002. This meant it was necessary to buy another 36 Super Hornets and Growlers (the electronic warfare variant of the F18). Although no decision has been made, it seems highly likely that the minister might choose to postpone the purchase of 24 Joint Strike Fighters, instead opting to buy just 54 or so aircraft in this batch.
If this happens, Lockheed Martin won't be happy. Neither will the air force.
The army also has expectations of receiving more money. It has been restructured so that it supposedly consists of three equal brigades: the only trouble is, it doesn't. There are only two squadrons of tanks, for example, and the decision to buy self-propelled artillery has also been shunted into the future. A number of the battalions are understrength, as are the supporting arms. The army is also committed to shifting more resources into establishing its amphibious capacity. Starved of funds, the army reserve has also been allowed to wither. There are certainly no obvious savings to be achieved by cutting here. Finally, don't forget the expensive recurrent demands of the special forces and the requirement to develop other capacities to meet irregular threats such as terrorism and cyber security.
Although some money will be saved because of the withdrawal from Afghanistan, there's no guarantee that any of this will be redirected towards defence. The funds will simply go back into consolidated revenue. There are any number of other ways the government might justifiably choose to spend its money. To understand what this means it is necessary to look at the early years of the Howard government.
At that time military spending was slashed. Dramatically. It only recovered after the East Timor crisis and once the economy had turned the corner. It seems unlikely that the Abbott government will act differently.
It seems as if the military as a whole will remain trapped in fiscally straitened times.
Even with the best will in the world, Johnson's going to find it difficult to meet the competing demands of the different services and his PM. Tony Abbott is committed to reducing the budget deficit. He insists there's no need to raise taxes. Keeping everyone happy will be impossible. Something has to give.
Nicholas Stuart is a Canberra writer.