COMPETITION FOR FUNDS

The biggest question faced by the military is always money. 

The initial challenge is getting enough from the government, then fighting for a greater proportion of that pie. 

This analytical piece appeared in a Canberra Times Defence Supplement . . . 

FINDING MONEY FOR DEFENCE

A slight, rueful, smile crept over the Chief of Army's face. Lieutenant General David Morrison was at the University of Canberra – he was presenting a National Security Lecture – and the Vice Chancellor was introducing him. Professor Stephen Parker noted the talk had “already achieved a fair degree of publicity", a fact borne out by the presence of television cameras at the back of the hall. The media was clearly aroused and expecting controversy.

Last Friday a journalist, Brendan Nicholson, had written an accurate, well-informed account of what Morrison was about to say. A sub-editor slapped a vigorous, well-chosen headline on the report; placed it on the front page; and added a photo of Morrison under the banner – "Army Chief's dire warning: [budget] cuts risk soldiers' lives". Had the military finally decided to draw a line in the sand and tell the politicians there was no more fat to trim?

Morrison addressed the issue head-on. Yes, he said, the report was correct. But the headline (with its implicit warning shot at the government) was taking his words out of context. He emphasized that no one, certainly not the Minister, had warned him to soften his criticism or back off. Instead Morrison insisted the headline was incorrect and that that the military was not, absolutely not, challenging the government’s right to allocate money as it saw fit. With that clarification out of the way, the Army commander went ahead and delivered his speech.

The caveats Morrison added were correct, but his point had been made. The military faces critical choices and the politicians will have to make some decisions. The central issue is matching ambitions (what we want and expect from the military) with resources (what we’re prepared to fund the forces to achieve).

Money is the single biggest imperative that shapes the military. The cuts to the Defence budget are proportionally greater than any time since the 1930’s; the size of the allocation to the military has now fallen to its lowest level since before the Second World War. Finally, and perhaps most tragically for the services, there is no sign this is about to be reversed, no matter which side of politics sits on the Treasury benches after the next election. This new fiscal environment is slowly creating one of the biggest crises the military has ever faced.

This is the crux of the issue Morrison addressed. The forces can only achieve what they’re funded for: the question is what do the politicians require?

When Kevin Rudd took over as Prime Minister at the end of 2007, the forces had every reason to be confident the salad days of (relatively) free-flowing money would continue. Rudd himself was fully committed to a strong Defence Force and it was every indication that the new White Paper he commissioned was going to recommend continuing funding. That's what happened when the Paper was released. As well as deciding on the capabilities that were required and agreeing to fund them, the politicians guaranteed extra funding (year-on-year increases of 3 percent) and the military were allowed to decide on the force structure the services could afford.

But then everything changed. The Global Financial Crisis derailed Rudd's assumptions. He never admitted that a new harsh, fiscal reality had engulfed his own grand projects and turned them into empty dreams. Yet the budget was cut significantly; nonetheless, Rudd offered guarantees that funding would recover “soon". However another dynamic was at work. His personal arrogance towards colleagues meant that when the time came there would be no friends left to support him, and the demise of Rudd changed the political mood. The forces would now be expected to bear their share of the new régime of fiscal austerity. Today other political imperatives are perceived as being just as important than maintaining the military.

Yet this is only half the background to the current fiscal crisis in Defence. The other factor accentuating the problem is that the economies of our neighbours have continued to grow unchecked. It wasn’t long ago that Australia produced as much as the rest of ASEAN combined; soon, possibly even within a decade, we will be overtaken by Indonesia. Inevitably, this has a flow-on effect for the military. Maintaining the current margin of superiority demands increased effort just at the time the budget is already under stress.

It’s no longer possible to have ‘one of these and two of those’; instead, choices need to be made. This was the point of Morrison’s speech. He began by outlining what might be called Australia’s ‘grand strategy’. This has always required sheltering under the umbrella of a great power: initially Britain, later America. But this policy requires an insurance premium, and that’s the soldiers who are sent overseas to fight with our allies. This is the ‘maritime strategy’, requiring expeditionary forces including a surface navy and army. Morrison insists it’s the way we’ve fought from the time of federation and the Boer War until today, in Afghanistan. The problem is it requires manpower, or soldiers and, in times of fiscal stringency, these are one of the easiest force structure elements to dispense with. There is, however, another strategic option. This is to depend on air and naval forces to prevent any enemy crossing the sea/air gap to our North. It’s based on denial, or stopping the invasion of the continent, rather than attempting to intervene and shape the region. Unsurprisingly, it depends on a very different force structure – aircraft and submarines – for its effectiveness.

So while Morrison’s speech can be read as a simple organisational plea for more money and resources, it was actually far more sophisticated. He simply emphasised that, time after time, it’s been necessary to deploy the tactical effect of ‘boots on the ground’ in order to achieve broader strategic objectives. It’s a persuasive argument based on the historical experience.  

Unfortunately the Chief of the Air Force, Air Marshal Geoff Brown made an equally persuasive counter-argument at a Australian Strategic Policy Institute dinner a couple of months ago. He emphasised, correctly, that our soldiers couldn’t do anything without air cover. This is the sine qua non of strategy. Developments within the region now mean Australia is loosing the margin of superiority the RAAF has, until now, enjoyed over its neighbours. Indonesia, for example, is purchasing the modern Russian built Sukhoi 30 jet fighter. Fortunately that country’s friendly – but Brown made the point that recent exercises had shown how thinly spread his aircraft would be in the case of a major conflict. At one point everything was deployed. He’d run out of planes to defend the country.

Money’s tight. There is, perhaps, an instinctive feeling that a change of government might rectify this – but it won’t. If anything the Liberal opposition has even more demands on what its promised and will possess a smaller purse. It simply won’t be possible to meet the aspirations of all the services without increasing taxes or cutting elsewhere. But these are dreams. There’s absolutely no indication that either political party is prepared to slash spending they perceive as being electorally necessary. Anyone who thinks Defence’s fiscal situation is about to change just hasn’t been paying attention.

Morrison is right: choices need to be made. It’s just that the people wearing uniforms might not like the answers.