October 7th 2000

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Articles from this issue:

Editorial: A lesson from the Olympics

Cover Story: Oil: who is blackmailing whom?

Canberra Observed: Freedom of religion or freedom from religion?

The Economy: John Stone's reflections on the declining dollar

Straws in the Wind: Long day's journey into night

The Media

Family: Long-term legacy of divorce


Defence: Regional crises require lift in defence spending

Comment: Globalism and democracy: the challenge ahead

International Affairs: West papua, the next East Timor?

Drugs: Compulsory treatment: Sweden shows the way

Britain: Whitewash over East German espionage in UK

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Defence: Regional crises require lift in defence spending

by Major-General Peter Phillips

News Weekly, October 7, 2000
National President of the RSL, Major-General Peter Phillips, has urged the Federal Government to lift defence spending in the next budget.

Since the end of the Cold War, rather than an outbreak of peace we have witnessed an outbreak of suppressed regional tensions. This is nowhere more evident than in the "arc of instability" to the north of Australia where nationalist, separatist, religious and ethnic tensions have replaced political and ideological tensions.

Rather than walk through the trouble spots in our region, let me offer a simple thesis. By 2050, the experts tell us, the world's population will peak at 9.3 billion, up by 50% from the present 6 billion. That increase will occur in the less developed regions of Africa, Asia and Latin America.

Human nature being what it is, that increase will fuel discontents, insurrections, coups, refugee crises, smuggling, droughts, famines, plagues and pestilence that will make the last 50 years look blissfully peaceful.

Australia must now guard one-tenth of the earth's surface with a one-three hundredth of the earth's people. Our prosperity and peace make us even more attractive to refugees from around the world.

Our interests as a trading nation extend well beyond the archipelago and islands to our north.

The next 50 years must surely bring far greater challenges to those charged with Australia's defence than the last 50 years, but before looking at what must be done in the future we should examine the past and why Defence is now in a budgetary crisis.

Little is gained from trawling through the years from World War II to the end of the Vietnam War. Then our policies were shaped by compliance with "great and powerful allies".

President Nixon's Guam Doctrine changed all that: Australia had to accept more responsibility for its own defence.

The seminal 1976 White Paper addressed self-reliance. We were to have a "core force" to deal with short term contingencies, while warning time would allow the force to expand in response to emerging threats.

In hindsight, it sounds naive, though it did recognise the need to invest in modern technologies, such as the FA18s and FFGs.

The funds for investment were found largely by reducing personnel numbers and curtailing operational training. Restrictions on flying hours, track mileage for armoured vehicles, ship days and ammunition usage became institutionalised.

The 1987 White Paper, still in "Fortress Australia" mode, shifted the focus to how well the objectives of self-reliance were being met. The then Minister for Defence, Kim Beazley, claimed that "DoA87" would move the politics of defence away from "who can spend the most".

This it certainly did. Even though it forecast a need for expenditure on Defence of 2.6% to 3% of Gross Domestic Product, that level was never to be met. By the end of the 1980s, spending had dropped from 2.5% to 2.3% of GDP and declined thereafter. This year's figure of 1.8% is the lowest since the "appeasement year" of 1938 in the Great Depression.

Regional commitments

Since 1989, regional and international commitments have greatly increased. This has brought the readiness and sustainability of the Australian Defence Force (ADF) into focus. The inadequacy of our war stocks of precision guided missiles and ammunition become all too apparent. Organisations were "hollow" and manning levels inadequate.

Labour costs have been increasing at around 4% per year. With the Government meeting only 1.5%, this left 2.5% to be found through efficiencies.

The ADF discovered that it was now regarded as a business! Retention and recruiting have become more difficult as the economy buoys and as the ADF competes at the top end of the market to man its new technologies.

The Services have acquiesced to social engineering pressures and skill shortages by introducing women into combat positions.

In this climate and, particularly under the Coalition Government, cost cutting and business efficiencies have been much trumpeted. In the last 20 years, the number of full time ADF personnel has been reduced from 72,500 to some 50,000 with a similar decline in reservists. The ADF has been reduced to a relatively small force, albeit still with some edge in our region.

Programs to make the ADF "business-like" have caused considerable difficulties for the Services and are likely to be compounded in the future as the loss of skilled support area personnel manifests itself. Events in East Timor have highlighted deficiencies in the ADF logistic system that can be sheeted home in part to over-enthusiastic contracting out.

The Defence Reform Program was touted as a means of averting the current budgetary crisis in Defence. It is clear that it will not, because it relied ultimately on reducing the ADF's strength to 42,500, a figure that is simply beyond the pale.

Indeed, I suspect that an objective look at all the reform measures of the last 25 years will show that savings were, for the most part, found by reductions in personnel numbers and operational training.


To be fair, it must be acknowledged that the last 25 years have seen a major shift in capital investment in Defence from some 10% to 30% of budget outlays. Australia has maintained a technological edge in the region and there has been increased Australian industry sourcing.

At long last, the men and women of the ADF and their families are properly housed and quartered. Above all, the ADF has maintained a high level of operational skill and professionalism that was demonstrated so well in East Timor.

But Defence faces a grave funding crisis. Already it has unmet approved equipment needs of about $20 billion.

Over the next 20 years, Defence Secretary Alan Hawke tells us, there will be bills of a further $82 to $106 billion of which less than half would be met from the present funding levels provided for Defence.

Block obsolescence is already apparent and will create a huge 'blip' in investment needs in 2015-2020, as major equipment like the F111s, FA18s, Leopard tanks and FFGs need to be replaced.

Defence's need for some extra $50 billion plus over the next 20 years will be in competition for similar amount to meet the aged care needs of the "baby boom" generation and also to solve the salinity problems in our agricultural lands. Yet with prudent management it seems that these bills can be met without serious impost on taxpayers.

The defence of our island continent must remain the most important but least likely defence contingency. Our national interests are best served by maintaining a stable world order.

Hence the ADF is most likely to be involved in regional engagements in our area of strategic interest and beyond. This could range from peacekeeping up to medium level conflict and all these contingencies must be catered for. Peacekeeping and humanitarian aid will always be a lesser priority and cannot be allowed to dictate our force structure.

Above all we must maintain a balanced force structured for medium level conflict, in Australia or offshore. Of course, the size of the force will be determined by how much the government of the day judges it can afford. But we must not abandon our war fighting skills or capability.

Comparisons with other countries are not helpful - we need an Australian solution for Australia's problems.

The failures of the Defence Acquisition Organisation should not be used as an excuse for radical change in our defence force. Rather its management needs to be improved.

Nor should we be blinded by the difficulties in some Australian defence industry projects, like the Collins Class submarines, to the very real benefits that accrue from them to Australia at large.

The RSL welcomed the public discussion paper on the Defence White Paper as a constructive bipartisan approach. This discussion should demonstrate the need for increased spending on Defence. This should start with an immediate increase of at least $1 billion in the 2001 Budget with further increases to follow.

The force structure we have now is not far off the mark in terms of organisational balance. What we need to ensure is that it keeps its edge and is equipped, sustainable and at appropriate readiness levels.

We in the RSL are concerned that drastic change to our very professional ADF not be introduced. Any changes in organisation and equipment that are necessary need to be drawn on the dispassionate advice of professionals and not of a Canberra bureaucratic-academic clique.


Sadly recruiting and retention for the ADF have been poor. The prospects for improvement are not impressive when one looks at the recent attitude surveys of potential recruits.

More than 27% say they would never serve in the military and some 30% are neutral. And fewer than 7% say they would even consider a military career.

Further probing by Focus Research's Dr James Cowley suggests that prevailing cultural mores in the target market reveal a very strong "what's in it for me" streak and almost complete lack of respect for authority figures.

Young people are said to want to "hang loose" and not commit to periods of engagement or obligations.

This gives a discouraging picture for the ADF's prospects and I hope that it is wrong!

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