Hammers, nails, and travails

In recent weeks there have been several blogs and op-eds published considering the impact of the pandemic on Defence’s budget and capability acquisitions, whether arguing against any reductions in funding – given the challenging geopolitical circumstances – or in favour of focusing on other challenges, such as improving healthcare systems to respond to large-scale crises.

I sought to tread a middle line (of sorts) between these camps, but it seems to have been perhaps too narrow a path. In some contributions over the past month my piece has been characterised as arguing for cutting defence funding (not to mention some far less flattering remarks by others). I believe this is a misreading of my arguments (I fear the headline may have cause some confusion), but the responses have given me a chance to think over my positions, and I wanted to put down some thoughts down to help me work through the ideas but also set the record straight in a few areas.

Firstly, my main point was that the impact of the dramatically diminished financial resources available to government post-COVID needs to be factored into the ongoing review of the 2016 Defence White Paper, in order to produce a coherent and realistic strategic update. Given the (then projected) $200+ billion of government stimulus spending, anticipated years of budget deficits, and the forecast of economic recession, the available means were no longer aligned with the strategy’s existing ends.

My second, and related, point was to make clear that Defence cannot simply assume that the pre-COVID plans will continue as anticipated. The facts on the ground, as it were, have changed, and so the strategy must account for them if it is to be credible. Though the wider geopolitical challenges haven’t gone away – and indeed may well have been exacerbated by the pandemic – the nature and scale of the domestic challenges are likely to dominate the government’s frame of mind for the immediate future.

In that environment, I think that it’s entirely realistic to expect that there may be cuts and savings measures instituted across the federal budget. However, I don’t believe I advocated for them, nor do I ultimately want them – especially amidst the deteriorating strategic environment.

I did make the point that if there is a sizeable adjustment in the available means, Defence may have to prioritise particular capabilities and make trade-offs against others. For example, the government has made it clear that the Attack-class submarines and Hunter-class frigates will not be impacted. Where then might there be room for savings, consolidation, or compromise to ensure that these projects of highest importance can continue, and the overall process of capability upgrades continue? One example that came up over the weekend is an unsolicited proposal from Airbus Helicopters to upgrade the existing Tiger ARHs in parallel with their work on the French and German fleets, instead of a replacement program. They argue that this will save up to $2 billion.

Thirdly, in general I have a fairly broad view of government roles and responsibilities, along with which, naturally, comes funding. I certainly don’t support austerity-driven approaches to economic recovery, but I can accept that some adjustments may have to be made, especially to those areas in the budget that have been particularly well-supported of late.

I accept the point that governments of both persuasions have, from time to time, tapped the defence (and aid) budgets for money to fill in funding shortfalls without adjusting their strategic expectations, thereby leading to incoherence as well as reduced capability. I also accept that this is far from ideal and clearly impacts on the viability of force structure plans.

That said, particularly under current circumstances, I do object to the assertion that any consideration of such measures should be rejected out of hand. By not at least acknowledging the extraordinary nature of the times we are living in, and the significance of seeking additional funding increases during a recession, does a disservice to our fellow citizens; millions of whose livelihoods have been lost or are under threat. At the end of the day, Defence is a part of our society, not apart from it.

I think that balance of perspectives was well-kept over the past few days in a op-ed from The Australia Institute’s Allan Behm, and a blog post from ASPI’s Marcus Hellyer (expanding on his weekend op-ed on the same topic). If we are to improve the quality of advocacy for Defence in these especially trying times, it would help for us all to better understand this vital public policy issue. These pieces are valuable contributions to that effect.

I certainly don’t claim that what I wrote was perfect, and maybe I was trying to walk too fine a line, but in any case, evidently I wasn’t sufficiently clear in just what I was recommending. Perhaps I’ve even missed the point entirely and have just dug myself in further. At any rate, I hope that this may have put a bit more explanatory meat on the bones of my argument. To that end, I’ve also put together a list of some key principles that, for me, ought to guide public administration and strategy-making in the foreign policy realm.

Strategy should always be clear and coherent: the ends, ways, and means should be aligned.

• However, the desired ends may have to be adjusted to account for diminished means. Coherence is not determined purely by the ends, but by an alignment of the three elements.
• This may require greater prioritisation of certain strategic interests, objectives, and capabilities, and thereby accepting a compromise of ‘good’ rather than ‘perfect’ outcomes.

To meet Australia’s strategic objectives requires a properly funded and equipped ‘foreign policy triad’: defence, diplomacy, foreign aid.

• Emphasising one at the expense of the others leaves us at risk of an approach that will see every problem as a nail because we’ll only have a hammer.
• Defence has been well-supported by successive budget increases over recent years, whereas DFAT has been comparatively underfunded over the same period.

In the past, the Defence and foreign aid budgets have regularly been used as quick sources of money to enact budget repair. This is not a sustainable approach to capability acquisition or maintaining an effective diplomatic presence.

• However, this does not mean that there is no situation where their budgets may be reduced.
• Defence is a part of society, not apart from it. As such, broad pain may also need to be broadly shared.
• Changes should be conducted in a systematic, coherent, and realistic manner that may require a re-alignment of ends, ways, and means.

Given the scale of the geopolitical challenge facing Australia, there is a legitimate justification for Defence to maintain or exceed current funding levels, but the case needs to be made – it can’t just be assumed.

• Given the anticipated scale of the pandemic’s impact, there is a moral imperative to justify why Defence should be exempt from any government-wide savings measures, let alone receive additional funding.
• It will be more difficult to justify potential budget increases at present, but that makes it all the more important to have a frank public conversation about what these decisions may mean.