Defence Matters of Public Interest

Abraham Lincoln has been credited with the statement comparing a politician to a statesman, saying the difference is that a politician has an eye on the next election, whereas a statesman has an eye on the next generation. If there is one area in public policy where we should have that long-term view, where we need statesmen in this institution of the parliament and public life, it is in the area of national security and defence. I have a good basis to start from. Section 51 of the Constitution provides the Commonwealth with powers that leaders of both major political parties have over the years, in their own words, referred to as the first and most important task of government—that is, the defence of the nation. So you would think on that basis and with those strong comments that there would be a broadly agreed plan that the nation would stick to. It is perhaps then with some surprise that we saw the current secretary of Defence give a speech last month where he said that as a consequence of cost-savings measures and budgets, the goalposts for Defence, had not only been moved but had been cut down and used for firewood.

It was perhaps surprising to see the headlines in the paper last month: ‘Decisions of government and budget cuts weakened our forces’. Greater details were provided in the blue book for the incoming government brief on just how severe those decisions by government have been. Perhaps the description by Greg Sheridan, foreign affairs writer in The Australian, was a little more graphic, who said:

… defence … is an incoherent mess, to mix the metaphors, an approaching train wreck of colossal proportions.

The public is entitled to ask why. For something that is the first and most important task of government, why can that occur? It is fairly clear that Lincoln got it right; it is because of politics. It is because of that short-term cycle. We have only to look back a couple of months to the last election campaign where one of the contenders to become the Prime Minister of this country was racing around making decisions that, in some cases, were clearly thought bubbles. One of those cases involved shifting the fleet base of the Australian Navy from Garden Island, where it has been since the inception of the Australian Navy, to Queensland. Let us consider the consequences if the election had turned out the other way: a thought bubble could have caused a major disruption and therefore major costs and driven major inefficiencies to our Defence Force. So, clearly, that political cycle kicks in in the area of budgets.

During estimates, when asking questions about the cancellation of a project for self-propelled artillery, it became clear that that was the decision that Defence felt they had to make. Despite the fact that this was a more effective and safer capability, a more cost-efficient capability over time, it was a short-term savings measure they had to make because there was a political imperative to reach a surplus. In an article published earlier this year, I wrote:

The arbitrary cancellation or deferral by Government of major capability projects has caused significant waste and disruption to both Defence and defence industry. Disruption on this scale has a large price tag and if Defence were a publically listed company, the shareholders would be sacking the Board.

What are those costs? One thing we have now been able to quantify through the estimates process is what some of those costs of short-term political decision making have been on the long-term enterprise that is Defence. Since 2009—and I am taking that as a benchmark because there was, largely, bipartisan support for the 2009 white paper—the absorbed measures that Defence has had to take on board have been over $4 billion. For people who are not familiar with that term and for the public listening to this debate, an absorbed measure is where a government makes an announcement and says, ‘We’re going to do A, B or C in Defence and we’re going to spend $1 billion on it.’ But, rather than allocating new money, they say to the defence department, ‘Oh, by the way, find that out of your existing budget; just absorb that.’

The problem with that is that Defence is a large and complex organisation. It makes its plans ahead of time for the things that any organisation needs. It needs maintenance for its facilities and maintenance for its equipment. It sometimes needs remediation of facilities that perhaps have asbestos in them. It needs training; it needs to operate. It has contracts. So every time there is an absorbed measure—and, as I said, since 2009 there have been over $4 billion worth of absorbed measures—it has a direct cost on things such as changes to contracts. Every time you defer maintenance it is more expensive. It is more expensive to do it in two years time than it is to do it now. And, at the most recent estimates, Defence identified that the cost of that short-term political disruption to a long-term program, between 2009 and the end of the forward estimates, is a staggering $16.1 billion.

So we are not only talking about trying to catch up to the deferred projects that were pushed out to the right; there is now a $16.1 billion hole that taxpayers and the government of whichever persuasion is in office will have to catch up on in order to actually put Defence on a sustainable footing. And, bear in mind, this is the first and most important task of government. So there is a significant challenge for the government now as we look to rebuild in a very tight financial climate.

The pressure builds even more because we are now starting to look at pulling forces out of Afghanistan. What we see repeated through history is that, where we draw back and scale down from a military conflict and commitment, there is an expectation that the public and many in public life have that there should be a so-called peace dividend—that we should be able to save money. The fallacy in that was really brought home in East Timor. Post Vietnam there was a so-called peace dividend; there was a draw-down in investment in our forces. The current Chief of Army, General Morrison, really hit the nail on the head in a lecture he gave within the last 12 months where he said East Timor was a ‘strategic shock’ for Australia because we suddenly realised that the underinvestment, the hollowing out, that had occurred in our Defence Force meant that we were barely capable of taking on a lightly armed militia in a neighbouring island and bringing security and stability to that region. Who knows how dire the outcome could have been if that conflict had involved a peer adversary as opposed to a lightly armed militia.

The lesson that comes out of that is that we in this place, and the executive in particular, whichever side of politics it is, will commit the young men and women of Australia to conflict tomorrow with what we are prepared to pay for today. How do we overcome this challenge that faces the Australian people, this parliament and this current executive? We do need to overcome it. Events change quickly. We saw that with East Timor. The French found that with Mali. We have seen recent events in our own region and in North Asia where things change very quickly, so we do need to be looking at how we can reform and afford the defence capability we need now.

Reform is a key word and I welcome the fact that the current government have indicated that they will be doing a root-and-branch review of defence. There have been a number of reviews in the past and, in fact, that in itself can be a problem, where Defence has not even had time to bed down the first review before the second and third are rolling through. So I welcome the minister’s comments that he will be seeking to allow Defence to have a large say in that root-and-branch review of how it can do work better. There is undoubtedly work that needs to occur within Defence, but also within the broader government and the central agencies, to refine how information flows from the department through central agencies and how Defence can procure things within the guidelines that are imposed upon it by central agencies. We have seen in the UK and the US that decisions have had to be made around competition policy and value for money considerations that take a far longer term view, and they are reforms we need to consider here in Australia.

Lastly, we also need to reform our political approach, and that is the main point I want to raise today. We desperately need to reform our political approach to national security here in Australia, if it is indeed the first and most important task of government.

I have written a number of op-eds over the last couple of years looking at the impact of the political cycle and political decisions and how that can be improved. One area that I think has significant potential for us is to learn from the Danish. The Danes have a multiparty defence agreement where, of the eight parties in their parliament, every five years seven of those parties come together and form an agreement that binds whichever grouping of those parties formed government to set a agenda in terms of their force structure, their alliances, their procurement programs, which bases they will expand and which they will close, and the funding that is allocated. It can be amended if it needs to be, but it forms a good basis that provides stability and efficiency for both Defence and defence industry in planning and supporting the nation.

Some critics of some of the papers I have put out have indicated that they are concerned that we would lose the political contestability around such an important area. But this is where I think we have the opportunity to learn and take from the best of different nations around the world, just as we have with our parliamentary system, where we have taken the Westminster system for the lower house but we have borrowed from the US when it comes to our understanding of a Senate. Likewise, whilst we look at the concepts that lie behind the Danish defence agreement, we can also take examples from the American quadrennial defence review, where there is a partisan element to it as well as the professional public servants from the administration who develop military strategy and options. There is also an element where both the Democrats and the Republicans can nominate appointees to debate and develop an approach to national security, and so that political contest occurs as part of the system.

There is no reason why Australia cannot bring those two systems together with our current white paper planning process, along with a politically sponsored approach of looking at how we defend mainland Australia, whether we have forward defence and what importance we put on maritime strategy—all of those discussions that occur now within the Australian Strategic Policy Institute, the Lowy Institute for International Policy, the Kokoda Foundation and the Sir Richard Williams Foundation. Those could be brought into a coherent government process so that we can come up with an agreement that both sides of politics can live with and that will provide stability to our Defence Force so that never again will a secretary have to say that the goalposts were not only moved but cut down and used for firewood.

Importantly, in terms of political accountability, once that agreement is in place it actually provides very clear, well-articulated and agreed key performance indicators that the opposition can hold the government to account for. Likewise, there has been much discussion—in fact, even last year in the review of the Defence annual report, the Foreign Affairs, Defence and Trade Committee was considering whether that report and its structure were actually giving the parliament the information that we needed. Having a defence agreement by which Defence knows that there is stability would mean that there would be a much better and clearer framework, which the parliament could hold Defence accountability for. There would be clear and stable goalposts and a stable budget. The parliament could say, ‘This is now what we are expecting you to deliver in terms of military capability for the nation.’

National security is an area in which we need to take heed of Lincoln. We need statesmen. We need to move beyond the political cycle. We need to look at ways in which we can learn from the best practice around the world and have a system such that we can agree on what the strategic needs are and how they translate to practical things in the defence area and agree on a plan and a budget that will give people the capable and sustainable Defence Force that it needs into the future.