Issues in Australian defence: Andrew Davies discusses the future of the Australian Defence Force.

• Author: Davies, Andrew
• Position: Report

After a decade of continuous operations, Australia's armed forces are fraying around the edges. A major recapitalisation began after the 1999 East Timor operation, but is only partly complete. There is a real risk that the mismatch between aspiration and resources that became obvious after the 2009 Defence white paper funding model collapsed just two weeks after its release will come home to roost in the next few years. The ADF is now looking at a situation a bit like the NZDF has faced before them--more top-end capabilities to support than money to do it with. Australian governments over the next decade will have the choice between finding more money for defence or finding a new ADF 'business model'.

Retired Australian Army Major General Jim Molan wrote recently that the Australian Defence Force is 'being pushed into a state where its capabilities are at, or will soon be at, a state from which they will not be able to be revived in any reasonable period of time--a situation of terminal decline'. That might be a little overstated, but it is true that there are some force elements currently under-performing, and any credible estimate of the cost of future force structure plans is greater than the projected funding. For the amount the government spends, I do not think we get much of a return in terms of military options available.

It is not too hard to find examples that support Molan's contention. The Royal Australian Navy has managed to keep a frigate on station in the Gulf for over a decade, but has conspicuously failed to maintain an acceptable level of capability in its amphibious and submarine fleets. The Army and Royal Australian Air Force have both managed to do the jobs they have been called upon to do, although the former has had to dip deeply into its Reserves for specialised personnel like engineers and medical. Looking forward, recapitalisation of the air combat fleet (A$15 billion) and protected mobility for land forces (over A$10 billion) at the same time as a new submarine fleet (potentially A$30-40 billion) and replacement frigates (over A$10 billion) is going to be a very big ask in the fiscal environment we are likely to see.

It is not too hard to see how we got to this point. Defence spending has rarely increased at a rate that will allow the quantity and quality of capability to be maintained. As my colleague Mark Thomson's budget analysis has shown, maintaining military capabilities requires annual funding increases of about 2.5 per cent above inflation. The 2009 Defence white paper promised to do that (for a while) but never delivered on it.

Inevitable decline

A decline in capability, capacity, or both is inevitable if the funding is not there. And the rising unit cost of military platforms does not help. It has meant that the numbers able to be fielded have steadily fallen over the years. For example, the Army had 143 Centurion tanks, which were replaced by 103 Leopards, which in turn gave way to 59 Abrams. The RAAF and RAN operated over 400 combat aircraft between them in 1960. Today the RAN's fast jets are a distant memory and the RAAF is down to 71 'classic'

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Hornets and 24 Super Hornets.

The overarching challenge in defence planning is always to align strategy and resources and shape the force structure accordingly. One possible policy prescription is to maintain Australia's stated military strategy options of long-range high-end platforms and increase spending to first arrest the decline and then expand the forces. (Molan suggests around 2 per cent of GDP would do the job--a long way from where we are today.) That is certainly a workable solution--if the government and its successors in perpetuity are willing to provide the required funds. But it is not the only way, which is just as well, as neither side of Australian politics is showing much inclination to shovel more...