World

Wed Apr 23

Australia needs bold ideas on defence. The Coalition’s increased spending plan falls disappointingly short

Written by: Peter Layton, Visiting Fellow, Strategic Studies, Griffith University

Just as voting has begun in this year’s federal election, the Coalition has released its long-awaited defence policy platform ^[1]. The main focus, as expected, is a boost in defence spending to 3% of Australia’s GDP within the next decade.

If elected, Opposition Leader Peter Dutton says a Coalition government will spend A$21 billion over the next five years to bring defence spending to 2.5% of GDP. It would aim to reach 3% five years after that.

This sounds impressive, but as shadow Defence Minister Andrew Hastie notes, this isn’t a huge increase, given it’s over many years.

In dry fiscal planning terms, Labor’s defence spending plan would amount to 2.23%^[2] of GDP in budget year 2028–29, while the Coalition’s plan would be expected to reach around 2.4%^[3] by that time.

While the Coalition’s costings are yet to come, its plan is arguably affordable – if need be through deficit financing.

What’s in the Coalition plan?

The Coalition’s extra money would ^[4] go to numerous capabilities:

purchasing 28 extra F-35 joint strike fighter jets from the United States
accelerating the infrastructure and shipyard building capacity in Western Australia (some in Hastie’s electorate) to support the AUKUS submarine plan
improving Australian Defence Force (ADF) recruitment and retention
and boosting “sustainment” (that is, maintenance of military equipment, weaponry and systems and personnel training).

Hastie is particularly enthusiastic about improving the Australian defence industrial base, which he says involves ramping up purchases of defence equipment from small and medium-size enterprises.

There is some logic to this. In the past few years, some spending on new acquisitions has been shifted to sustainment ^[5]. This was necessary, as the long-term defence plan when Labor came to power in 2022 did not accurately estimate how much money would be needed for the new equipment then entering service.

This is not unusual. There is always optimism within the Department of Defence that new equipment will be cheaper to operate than it actually turns out to be.

Given significant money has already been moved to sustainment under Labor defence budgets over the past few years, it’s plausible we don’t actually need as much money for this as the Coalition asserts.

This might be fortunate as the F-35 purchase is likely to be considerably more than the $3 billion the Coalition touted ^[6] last month, given inflation and issues with the program ^[7] in the US.

Problems with the plan

The biggest problem with Dutton’s plan is the same one faced by both the Morrison and Albanese governments. Strong rhetoric is consistently at odds with slow progress on defence force modernisation. The Coalition policy continues this bipartisan tradition.

Hastie repeated several times at his news conference with Dutton in Perth that the country faces the “most dangerous strategic circumstances since the second world war”.

Yet, this sense of urgency is not reflected in the extra $21 billion in spending the Coalition is proposing. The F-35 fighter jets, the major centrepiece of the plan, are unlikely to be in service until the first half of the 2030s.

Similarly, the naval shipbuilding (which is necessary and already in train) also won’t begin to deliver greater capacity until well into the next decade.

The only high-priority item outlined by the Coalition appears to be accelerating spending on the infrastructure needed to base ^[8] US and UK nuclear attack submarines in Western Australia from 2027.

Hastie said on Radio National Breakfast ^[9] that a drive through the area where this infrastructure is being built would reveal few signs of any progress, particularly when it comes to housing.

This comment highlights a policy incoherence problem for both parties. Accelerating the construction of defence infrastructure will drag tradies away from building homes for other Australians – and contribute to construction cost increases.

The Coalition’s planned cuts in skilled worker migration ^[10] will further exacerbate this problem.

This throws up another issue. The Coalition has criticised Labor ^[11] for cutting or delaying defence equipment projects costing some $80 billion while in government, yet it has offered no plans to return these specific projects to the defence budget.

As Hastie observed, these cuts and delays were, in part, to land-force capabilities, such as the infantry fighting vehicle program. A shift to a more maritime focus and away from equipment better suited to wars in the Middle East is reasonable, given the stress both parties have placed on China’s naval buildup.

Little to feel inspired about

Interestingly, Hastie said on Radio National Breakfast ^[12] that AUKUS is “a structural imposition” the current defence budget can’t meet.

This suggests that when the AUKUS deal was agreed to under former Prime Minster Scott Morrison, there was inadequate funding for the program and it is now consuming other defence acquisition plans.

Given this, the Coalition’s plans to grow defence spending to 3% of GDP in ten years may be prudent – and necessary – mainly to meet the looming AUKUS funding shortfalls. This again may be problem for both parties, given their strident support for AUKUS at seemingly any cost.

Britain’s Prime Minister Rishi Sunak, right, meets with US President Joe Biden and Prime Minister of Australia Anthony Albanese, left, at a naval base in San Diego in March 2023 as part of the AUKUS deal. Leon Neal/Getty/AP

Hastie is keen to increase Australian self-reliance, in part, through building up the Australian defence industry.

However, the Coalition plan doesn’t offer many specifics on how Australian industry will benefit. Instead of buying yet more American-built F-35s, for instance, the Coalition could have given thought to buying the innovative Ghost Bat uncrewed air vehicles ^[13] made in Queensland.

This shortcoming highlights the biggest disappointment with the Coalition plan. It is “steady as she goes” approach in a world of increasing volatility.

There really needs to be some fresh thinking on defence, particularly given the growing doubts about the Trump administration’s stance on its security alliances. Australia may need to be more self-reliant as Hastie claims, but this policy platform – as well as Labor’s – won’t achieve this possibility.

The reason the Coalition is emphasising the 3% of GDP figure is that there are no new ideas. A great opportunity for an imaginative recasting of Australian defence has been missed.

This piece is part of a series on the future of defence in Australia. Read the other stories here ^[14].