A bleak outlook: Australia’s Defence Strategic Update

In early July, Australian Prime Minister Scott Morrison and Defence Minister Linda Reynolds released the 2020 Defence Strategic Update and Force Structure Plan. The Update, the first major defence policy document since the 2016 Defence White Paper, outlines the strategic direction and necessary investments in Australian defence and security policy for the next decade.

The Update marks what many are calling a watershed moment in Australian strategic policy as the document points to a need for more rapid and decisive changes to Australia’s military preparedness and capability. Through the allocation of AU$270 billion over the next ten years for defence procurement and increasing engagement with Indo-Pacific neighbours, the Update outlines the levers through which Australia seeks to better control a strategic environment that is deteriorating in the face of increasing great power competition and military expansionism.

A ‘CONSEQUENTIAL STRATEGIC ALIGNMENT’

Speaking at the Update’s launch in Canberra, Prime Minister Morrison provided a bleak assessment of the strategic environment surrounding the release of the document, foreseeing “a post-COVID world that is poorer, that is more dangerous, and that is more disorderly.” The Update signals a markedly different and increasingly hostile strategic environment to that outlined in the 2016 Defence White Paper, with major powers becoming more assertive in the region and their assertiveness and engagement in coercive activities undermining the rules-based order in the Indo-Pacific. Non-traditional and ‘grey zone’ security threats are increasingly common drivers of conflict and tension. This has meant that the ten-year strategic warning time for a conventional attack against Australia, a central tenet of policy for decades, is now “no longer an appropriate basis for defence planning.”

The Update signals what some have suggested is a return to the so-called ‘defence of Australia’ doctrine of the mid-1970s, prioritising strategic planning in the Indo-Pacific and Pacific Islands or what the Update deems as Australia’s “immediate region”. Within this region, Canberra has replaced the strategic objectives of the 2016 Defence White Paper with three new ones: shaping Australia’s strategic environment by deepening engagement with other Indo-Pacific nations, deterring actions against Australian interests, and responding to threats with ‘credible military force’.

As in almost all White Papers and policy documents dating back to the mid-1970s, the Update reinforces the importance of Australia’s alliance with the US and the protection provided by its nuclear arsenal. However, it parts from the military over-reliance on Washington by indicating that Australia will take “greater responsibility for our own security” and “grow its self-reliant ability to deliver deterrent effects.” The election of Donald Trump in late 2016 and his administration’s increasingly illiberal and transactional foreign policy have caused concern even in Canberra, one of Washington’s most steadfast partners; policymakers have recognised the dangers of overreliance in a rapidly deteriorating strategic environment.

BUYING UP THE BIG GUNS

To build Australia’s deterrence capabilities, the Update and Force Restructure Plan — released alongside the Update — provides a significant boost to defence spending, which sits at 2% of Australia’s GDP. By 2030, the Update signals that total defence funding, including to the Australian Signals Directorate, will total AU$575 billion. This includes the AU$270 billion committed in the Update to boosting defence capability, with investment in new capabilities growing from 34% of the Defence budget to 40% by 2030.

Modernising Australia’s outdated conventional weaponry features heavily in the Update. One of the most prominent upgrades is the purchase of AGM 158C long-range anti-ship missiles to be equipped on Australia’s fleet of F/A-18F Super Hornet aircraft. The missiles replace the ageing Harpoon missile system introduced almost four decades ago; these missiles only have a range of 124 kilometres compared to the AGM’s much longer 370km. Investment in other areas of ‘long-range lethality’ are also highlighted, including in long-range rocket and mobile artillery systems, as well as in future technologies such as hypersonic missiles.

The Update also makes provisions outside of conventional weapons, especially in emerging technologies and surveillance. It indicates investment in areas such as space  — the document outlines an estimated AU$7 billion towards advancing Australia’s underdeveloped space capabilities. Other investment allocations include AU$15 billion in cybersecurity and electronic warfare systems and investments to upgrade the Jindalee over-the-horizon radar network to provide greater surveillance across Australia’s eastern approaches.

DOLLARS, DECOUPLING AND DIPLOMATS

The Update has been met with both bipartisan domestic political support and a broad welcome from many of Australia’s Indo-Pacific partners. However, the Update has been met with suspicion from Beijing, the implicit subject of the Defence Update. Australia’s relationship with China is at its lowest point in years, and Canberra’s push for an international inquiry into the handling of the COVID-19 pandemic set off a hostile spat between the two nations. The Update suggests that Canberra has now discarded its careful economic and strategic balancing act with Beijing and is more willing to oppose Chinese activity that may contravene international laws and norms, a point that was reinforced by leaders at the recent ministerial summit in Washington. This more assertive approach may cause the already shaky bilateral relationship to deteriorate even further, which will have a major short-term knock-on effect to Australian industries dependent on China, such as tourism and education. Future tension would likely escalate to the imposition of punitive economic measures, along the lines of the tariffs placed by China onto Australian barley exports in May. Such action would, given Australia’s dependence on China, result in significant short-term economic impacts.

However, Canberra has recognised its vulnerability and there are moves to begin partially decoupling from China and diversify its economic and trading relationships, including a recently-signed free trade agreement with Indonesia. Policymakers are also seeking deeper strategic and military engagement with Indo-Pacific nations such as India, which is beginning to voice concerns over Chinese territorial expansionism and aggression. While in the short-term Australia will remain vulnerable to punitive action from China, in the long-term the impact of such actions may be lessened.

Yet the Update faces limitations from a financial perspective. Faced with the economic aftermath of the Black Summer bushfires and the ongoing COVID-19 pandemic, Australia is now set for its first recession in 30 years. Despite this, the Defence budget is slated to expand significantly within the next decade to AU$74 billion. Other departments with an important role in delivering the Update’s goals, most notably the Department of Foreign Affairs and Trade, have seen their already stretched operating budgets reduced and have been forced to slash up to 60 positions. This has led to the concern among policymakers and politicians that Australia’s international engagement has taken on a so-called ‘khaki tinge’ and is becoming increasingly securitised. With one of the smallest diplomatic networks in the G20, Australia may struggle to achieve its objective of playing a greater role in shaping its strategic environment without a concurrent diplomatic expansion. This may be most evident in the Pacific Islands, a key area of interest for the Update: Australia has regularly militarised the region, often overlooking other issues of concern to Pacific leaders such as climate change and human security, much to their frustration. While the Update suggests that Australia seeks to play a greater role in shaping its strategic environment, these significant budgetary and diplomatic constraints may limit the extent to which it can do so effectively.