Australia’s best defence is a good offence as China flexes muscles in region

Scott Morrison is moving to ensure Australia can stand up for itself.

Scott Morrison has warned Australia of imminent threats. Picture: Adam Taylor

Scott Morrison has warned the Australian people the deepest recession for decades now runs in parallel with a heightening risk of military conflict as the sinews of regional prosperity face “almost irreversible strain” — demanding a revamped defence posture and strategy.

Drawing parallels with the 1930s and resorting to rhetoric not heard from an Australian prime minister for several decades, Morrison is determined to avoid the grand folly of the 30s — sacrificing defence capability to the economic depression and leaving Australia unprepared when war came.

Interviewed by Inquirer, Morrison said: “There are no leave passes for national security. You must defend and protect it. That’s what we are doing in a transparent and determined way. Many others in a crisis like this might have looked for an excuse to step back (on defence). Not us.”

Morrison pivoted this week to a defence policy revamp based on funding expansion, force projection and capability enhancement to meet the waves of regional disruption caused by China’s alarming muscle flexing.

He called the abandoned 2 per cent of GDP target for defence spending now a “floor” and no longer a “goal”. “We’ve crashed through that,” Morrison said. “And we intend to stay above it. We’re not going to be constrained by 2 per cent, it’s now about what we’re doing and what we’re building.” He said the defence budget “has reached momentum again”.

Former Defence Department head Dennis Richardson told Inquirer: “What is really significant is the Prime Minister has made this announcement now knowing the economy will take some years to recover from COVID-19, the national debt is increasing and there will be enormous budgetary pressures over the next three to five years.

“That the Prime Minister has made this announcement in advance of the budget demonstrates serious intent and purpose.”

The 2020 Defence Strategic Update launched this week by Morrison has several critical meanings for the Australian people. Morrison says Australia faces its most dangerous situation since the prelude to World War II. He embraces a new strategic agenda based on hi-tech force projection for Australia and the ability to meet adversaries at distance from Australia’s shore. The further reality is social spending must adjust to the pressing imperative for the defence budget.

These decisions will accentuate the strategic tension between Australia and China, our largest trading partner that underwrites significant levels of our national income. Defence Minister Linda Reynolds gave Sky News the official line that the update “is not about any one particular nation”, but then alluded to the reality, saying the region “is increasingly marked by contestation and the deterioration of the relationship between China and the United States”.

“The world we all grew up in is no more,” Reynolds said on Thursday. She said it was “not just” Australia that was “worried” because China’s behaviour was “making our region even more anxious”.

Richardson said: “China is the obvious backdrop. That doesn’t need to be explicitly stated. It is fully understood.”

The defence changes are significant. But the rhetoric accentuates the content. The defence update remains anchored in the 2016 white paper while discarding some of its strategic obsolescence by recognising the impact of technological change on warfare and China’s sustained lurch to disruptive assertion in its quest to set new regional norms.

“Our region will not only shape our future, increasingly though, it is the focus of the dominant global contest of our age,” Morrison said.

“The risk of miscalculation and even conflict is heightening. Regional military modernisation is occurring at an unprecedented rate. Previous assumptions of enduring advantage and technological edge are no longer constraints and cannot be relied upon.

“The 1930s is something I have been revisiting on a very regular basis, and when you connect both the economic challenge and the global uncertainty it can be very haunting. But not overwhelming. It requires a response.”

The government believes, given the evolution of warfare, that Australia is already involved in “grey zone” conflict where China’s coercion is deployed short of outright military conflict. The update says the “grey zone” involves “using paramilitary forces, militarisation of disputed features, exploiting influence, interference operations and the coercive use of trade and economic levers”.

Australia’s response is a new doctrine based on three principles. First, the deployment of military power “to shape Australia’s strategic environment”, with Morrison saying the aim is a “sovereign Indo-Pacific, free from coercion and hegemony” — an aspiration in huge tension with China.

Second, the capacity to deter action against our interests by, in Morrison’s words, holding adversaries “at much greater distance” thereby “helping to prevent war”. This means investment in long-range strike weapons and missiles, offensive cyber capabilities and area denial.

Third, when required, responding with credible military force that Morrison says means strengthening capability, support systems, fuel holdings, technology enhancement and innovation. These three objectives are amb­itious in scope and cost implications.

The government did not mention the Trump Doctrine — that US allies must do more. Yet this is critical in the transformation of US strategic thinking. Post-election, Donald Trump or Joe Biden — whoever wins — will insist on this stance. Both can be expected to welcome Morrison’s acceptance of greater burden sharing. Australia is leaving behind the 2 per cent of GDP defence funding model to which many European nations aspire but fail to meet.

One misconception should be nailed: it is nonsense to think Australia is now engaged in direct military competition with China.

“This does not assume isolated action by Australia,” Morrison said. “It means integration with other partners. That’s obviously the US but it also means engaging with India, Japan, Indonesia. We are long engaged with Singapore and Malaysia, we are doing peacekeeping partnerships with Vietnam. We have our Pacific step-up. We are acting in concert. The purpose is to achieve a strategic balance within the Indo-Pacific.”

But the critique to which Morrison has exposed himself is the gap between rhetoric and action.

“I think the increased spending, while modest, is to be welcomed,” Richardson said. “Most of the money is about existing programs but the new money is well targeted. Yet there is a yawning gap between the rhetoric and the decisions, it’s a tension between rhetoric and substance.

“If you believed the rhetoric about the 1930s you would do two things — significantly increase the small size of the ADF beyond its current 60,000 level and bring forward some of your capability plans. Neither is happening. If the government genuinely believed we are in a 1930s environment, that is pre-World War II, then we would be growing the ADF by thousands, not by hundreds.”

The strategic update means a shift towards a regional focus and away from the Middle East. The update says “defence planning will focus on our immediate region: ranging from the northeastern Indian Ocean, through maritime and mainland Southeast Asia to Papua New Guinea and the Southwest Pacific”. It will be tied into Morrison’s Pacific step-up. Significantly, the priority zone does not include northeast Asia.

“Our first job is always our first job and it is in our region,” Morrison said. He said Australia would be “prepared” to make military contributions outside the region, including in support of US-led coalitions where it matches our capability and national interest. In such situations “then, of course, we show up” — but Morrison’s shift in priorities was apparent.

While he said the “foundation of our defence policy” is the “ever-closer” US alliance the thrust of the update is more Australian self-reliance. “We must be prepared to invest more in our own security,” Morrison said. Implicit in the new policy is a greater Australian confidence in regional ties: we are running a force projection policy confident our neighbours understand its purpose.

Alluding to this point, Australian Strategic Policy Institute strategic analyst Marcus Hellyer told Inquirer: “In these statements we are being upfront, saying the best defence is a good offence. This reveals a more confident Australia. We are not concealing our thinking from the region. Our aim is to project power further afield and we are putting this on the table before the region.” Explaining the defence budget situation, Hellyer said: “One big deal is that despite COVID the government is not cutting defence — just the reverse. I estimate under these statements the nominal increase in defence funding will be 7.2 per cent, 9.2 per cent and 9 per cent in the three years from 2020-21 inclusive. What other portfolio can boast such largesse? As we go through the next decade defence funding will grow in real terms.”

The update is still anchored in the 2016 white paper with a 10-year funding model that now involves an estimated spend over the decade of $575bn. This includes a $270bn spend on defence capability, an increase of $75bn on the white paper’s $195bn capability projection. Significantly, there are big internal shifts in priorities. Over the decade new capability acquisition rises from 34 per cent to 40 per cent of the budget while investment in personnel falls from 32 per cent to 26 per cent of the budget. State-of-the-art equipment has the priority over ADF numbers.

“I doubt if such a contraction is viable,” Hellyer said.

“There’s no point having excellent equipment if you don’t have the crew to sustain it.” Richardson said: “What is important is that in any conflict personnel can be a limiting factor; for instance, our strike aircraft, to be fully effective, need multiple pilots and ground crew for each aircraft and currently we have nowhere near that.”

Pivotal to the update is the formal abandonment of any peg of total defence spending to 2 per cent of GDP, a separation already built into the 2016 white paper. Of course, if the peg were maintained the defence budget would be cut given the virus-induced contraction in GDP. A feature of this period of Coalition government — in contrast to the previous Labor government — is that it has stuck by the funding model for its post-2016 strategy and is now expanding the funding.

Morrison alluded to this contrast, saying that in 2012-13 just before it lost office Labor, facing financial pressure, chose to reduce the defence budget to 1.56 per cent of GDP, the lowest since the 1938 appeasement era. This is the choice Morrison repudiates.

The irony is the PM, criticised last year for the paucity of his agenda, is now overloaded with ambition. The ultimate question raised by the new defence strategy is: does this agenda work? Can Morrison do it all, fight COVID, rekindle economic growth to combat unemployment and meet the vast strategic dangers he identifies? Many analysts doubt it. The combined challenge is without precedent for a PM in several decades. Asked this question, Morrison said there was no alternative to success on the three fronts — medical, economic and strategic. “When it comes to defence, a strong economy and the essential services Australians rely on, we are pursuing a no-surrender policy,” he said. He affirmed his goal of returning economic growth to a full percentage point above the previous trend that he identified as 2.75 per cent; a daunting goal.

The update rejects previous defence planning that Australia would have a 10-year warning time for a major conventional attack. “This is no longer an appropriate basis for defence planning,” it says. “Coercion, competition and grey-zone activities directly or indirectly targeting Australian interests are occurring now.”

In short, time is no longer the asset Australia once enjoyed.

Affirming the urgency of an offensive Australian response, Chief of the Defence Force Angus Campbell said: “We have to think grey if we are to effectively respond to grey.” In a technologically transformed world, the conclusion is blunt: “Australia can no longer rely on a timely warning ahead of conflict occurring,” the update says. This ruthless logic means capability and preparedness is needed now — not years into the future.

Once again, the gap arises between assessment and actual results. This is probably unfair to Morrison — in a recession he can do only so much with the defence budget and having a viable 10-year plan is the crucial step. But Hellyer said: “The critical question is whether funding can finance the capabilities as outlined. Defence is confident. But experience says real life upsets the best-laid plans. I am sceptical. The cost of some projects seems to have increased.

“The 2016 plan was crammed full even before these 2020 capability additions. The 10-year warning time means we need to get our capability faster but this isn’t addressed. We still have much of the defence budget locked up in mega projects with decade-long delivery timeframes.”

The problem is the long lead time for the big maritime assets exemplified by the construction in partnership with the French of 12 Attack-class submarines with the first unlikely to break the water before the mid-2030s. The capabilities being delivered with priority are those relating to information, communications and technology requirements to deal with “grey zone” combat. Cyber attack can disable military capability and comes with no warning time.

Replying to this criticism, Morrison said: “We are matching our capability with the physical and economic capacity of our country. You’ve got to get this in balance. There will always be those who want more — in everything. But it is a mistake to consider our contribution in isolation from how we connect up with our regional partners.”

The government has directed defence to develop capability across five domains: maritime, land, air, information, cyber and space, a distinct widening of technological basis of Australia’s defence structure.

Australia has enjoyed, courtesy of US acquisitions, a technological edge over much of the immediate region. But in her speech to ASPI, Reynolds described the strategic transformation Australia faced: “New weapons and technologies — including hypersonic glide and long-range missiles, autonomous systems, space capabilities, AI and cyber — these have increased the range, the speed, the precision and the lethality. Quite simply, they are transforming the characteristics of warfare.”

The idea of a sovereign defence capacity is now inexorably tied to Australian industrial capacity (even though that adds to costs). Fundamental in removing the “stop-go” process from funding is the need to underpin the industrial base and the continuous shipbuilding agenda. The plan envis­ages the acquisition and upgrade of up to 23 classes of navy and army vessels with investments of $50bn over the coming decade. The long-range missiles Australia is acquiring are not to defend our cities. They are to target opposing forces and protect the ADF from incoming missiles.

Morrison said: “While COVID has changed many things there are some things it has not changed — our resolve and commitment. It doesn’t lessen the threats; in fact, it accelerates them. This underlines the need to avoid delay and follow through on the path to which we were committed. This highlights how serious we are.”

Seeking to strike a balance on China, Reynolds said: “Australia has watched closely as China has actively sought greater influence in the Indo-Pacific. We have supported China where that pursuit advances mutual interests. And where such actions have unsettled the stability of our region, we have joined with others in clearly expressing our concerns. We do so from a very steadfast position — that our values are what define us as a nation.”