Australian Prime Minister Tony Abbott during a visit to the RAAF Base Pearce last month.
We know one thing so far about the new defence white paper: that it will recommend spending 2 per cent of Australia’s gross domestic product on defence. Whatever the rest of the paper says, this will be by far its worst decision.
A famous maxim in Australian defence circles is that "strategy without funding is not strategy". Rightly, many applied this criticism to the white papers produced under Kevin Rudd and Julia Gillard, neither of whom adequately discussed nor provided the funding required to implement their defence policies.
A reversal of the same maxim also applies to Tony Abbott’s new white paper. Funding without strategy is still not strategy.
The 2 per cent GDP target emerged from a pre-election sound bite that noted the similarity between Australian defence spending in 1938, just before World War II, and what we spent in 2012.
For the Coalition, what started out as one more weapon in their armoury to assault the credibility of the Labor government quickly morphed into policy ambition. With Stephen Smith and Labor soon onside, GDP became one of the few features of Australia’s defence debate. Instead of questions of strategic interests, force structure, national objectives and capability requirements, we have had a facile discussion about the "magic number" for security, with a bipartisan consensus emerging at 2 per cent of GDP.
The problem with this bit of bipartisanship is that the use of GDP to organise defence spending has numerous flaws. Simply spending more on defence does not always make you more secure. The USSR wrecked their economy trying to do so in the 1980s, while the USA spent billions in 2001 and yet was looking the other way when al-Qaeda struck.
GDP is also a highly variable measurement. As your economy changes, so does your spending target. So while the Howard government doubled defence spending during its time in office, the rapid growth in the Australian economy meant by the end of this period, as a percentage of GDP, we had gone backwards. We now hear regular concerns that defence spending has collapsed. Perversely, the closest we have come to the mythical 2 per cent figure in recent times was during the financial crisis. Our economy slowed, meaning that just keeping spending levels constant created a rise in the percentage of Australia’s total economic size.
Another problem when GDP dominates your analysis is that it’s a poor way to compare countries, and historical periods. China’s much touted rise in military spending has come without any real change in the share of GDP it devotes to it. Closer to home, Singapore spends nearly twice what Australia does in terms of GDP, but still buys less than half what Australia can in real dollars.
Finally, take the much invoked comparison between Australia in 2012-13 and 1938. While the percentage of GDP spent on defence was the same in 1938 and 2013, back then we had only 10,885 full-time service personnel while today the ADF has over 58,000. In terms of defence civilians, the picture is even starker with 21,000 people in the Defence Department today compared to 1938 when we had just 57.
The real problem with GDP is it doesn’t tell us anything about the actual world we face. Not the threats we need to counter, nor the strategies we can use or the capabilities we need. The more sophisticated, less sound-bite friendly and more practical task of projecting these realities will make up the vast bulk of the work undertaken over the next year for the 2015 defence white paper.
The problem will be if the government continues to try and subvert this work to ensure it matches its 2 per cent target. What if the analysts recommend a funding level that is beyond the 2 per cent prediction? What if they think we should spend less on defence but more on civilian agencies to counter cyber-security or regional economic instability?
When the Coalition came to power last year, it promised the adults would be in charge. That sometimes means hard choices. Rejecting the pledge to spend an arbitrary amount of money on defence should be one of them. Abbott and Defence Minister David Johnston should insist their white paper represents the best strategic analysis possible of Australia’s place in the world, and how to ensure its security, and then dedicating the funding to achieve their strategy.
It is likely that any such analysis will call for more spending. But the public can only have confidence this is the path to security, and worthy of cuts in other areas of government spending, if they know it was based on a clear strategic logic and not a subjective figure which has, in turn, distorted the rest of the white paper’s judgments.
Andrew Carr and Peter Dean are researchers at the Strategic and Defence Studies Centre, ANU. This article is drawn from the authors’ recent Centre of Gravity policy paper.