Dithering on Defence

By Nico Louw

First published in the MRC’s Watercooler newsletter. Sign up to our mailing list to receive Watercooler directly in your inbox.

It’s easy to despair about the quality of policy debate in Australia compared to other advanced economies.

Further evidence of this trend was on display this week with the Prime Minister’s non-meeting with President Trump at the G7 where he’d hoped to advance the case for the AUKUS agreement.

Australia is probably lucky the meeting didn’t happen, given our defence policy position simply isn’t credible.

Anthony Albanese and his Ministers are fond of saying that we face the most challenging strategic circumstances since the Second World War. Which is precisely why the US is demanding that NATO countries and allies like Australia increase defence spending to 3.5% of GDP. 

The PM’s response has been to say that percentage targets don’t matter, and assert that Australia’s defence Budget — which is barely 2% of GDP — is based on funding everything we need. This is despite the recommendations of the 2023 Defence Strategic Review, which former Defence department secretary Dennis Richardson says would require at least 3% of GDP.

The cognitive dissonance required to say this while parroting lines about challenging strategic circumstances is quite extraordinary. It’s difficult to understand how the PM can read his G7 briefs and meet his international counterparts, and not think we might be doing something wrong.

Albanese can’t even bring himself to be honest and explain what strategic competition in our region means. His appearance at the National Press Club last week saw an absurd exchange where he was repeatedly asked whether this meant China, and refused to answer. This is despite Defence Minister Richard Marles all but confirming this week that the Chinese flotilla that circumnavigated Australia earlier this year was practising targeting Australian targets.

Compare this to the rhetoric of UK Labour PM Keir Starmer, who earlier this year promised to lift defence spending to 2.5% of GDP by 2027, with a target of 3% by the next term of Government. In responding to his own Defence Strategic Review, Starmer declared that “we have to recognise things have changed” and the UK would be “moving to warfighting readiness as the central purpose of our armed forces”, because the most effective way to deter threats is “to show them that we’re ready to deliver peace through strength.”

Can you imagine Anthony Albanese being this forthright with the Australian people?

Starmer paid for this increase by cutting foreign aid, despite increasing foreign aid being a Labour commitment. He said this had to be done, because “the realities of our dangerous new era mean that the defence and national security of our country must always come first”. When asked this week whether Australia would consider making a similar decision, Jim Chalmers immediately ruled it out.

There was brief speculation that Anthony Albanese might travel to the NATO summit next week to attempt another meeting with Donald Trump. 

NATO Secretary General (and former Dutch PM) Mark Rutte has said he is expecting NATO leaders to agree to spend 5% of GDP on defence — 3.5% on core spending and another 1.5% on related investment in infrastructure and industry. Rutte says the 3.5% figure has broad political support and is based on actual capability targets that NATO Ministers have agreed to, which means Albanese can’t dismiss it as a made up number.

Rutte has specifically called out the need to counter China, Russia, North Korea and Iran, stating that “to preserve peace, we must prepare for war”. 

It’s a good thing Albanese decided not to attend — imagine trying to defend the Australian defence budget in that environment.

The attitude of the PM and his Government to the strategic competition we face is deeply concerning. They seem determined to simply pay lip service to this challenge, while pretending it doesn’t exist so they can focus on domestic politics and how to deliver Labor priorities such as universal childcare.

Keeping AUKUS on track is vital for our security — not least because submarines are the most important defence platform we have. Pillar two of AUKUS brings additional benefits, keeping us involved in the cutting edge of technological development and benefitting our defence industry. And this cannot come at the cost of other platforms we might need. This week our screens have been filled with footage of ballistic missile interceptions and armed drones, both areas where Australia has very limited capabilities. 

The Government cannot continue to shirk the hard choices needed to address the challenges we face and how to pay for the defence force we need to meet the expectations of our allies. This includes addressing spending growth in other areas of the Budget such as the NDIS, which is already approaching the size of the defence budget. Without this, it is impossible to consider other challenges such as tax reform.

Unfortunately, this term is off to a bad start there too. Despite describing the world as being in a state of “permanent churn and change” we have to adapt to, Jim Chalmers expects his upcoming reform roundtable in August to solve all our problems via “consensus”. This all but guarantees no hard decisions will be made. In the week since the roundtable was announced, it’s already gone from being a productivity and economic reform roundtable to a reform roundtable — presumably because addressing declining productivity would be too hard.

When asked how politicians would be able to explain the need to spend more on defence, NATO Secretary General Mark Rutte said this:

This is why you have politicians: to present the facts to your people and say, hey, we have rich societies, we can do this, but if we don't act now, the next three years, we are fine, but we have to start now, because otherwise, from three, four or five years from now, we are really under threat.

Our politicians would do well to take note and be upfront with the Australian people. The Prime Minister could start by using the words “China” and “strategic competition” in the same sentence, and admit that the Chinese CCP Government is aligned with Russia, Iran and North Korea, all countries he has no problem naming.

He could then begin to actually outline what this challenge means and how it can be countered.

The longer he waits, the more difficult it will be to explain when we are eventually dragged in line with the commitments of other democracies.