Pamphlets, papers and policy
4 Dec 2012|

Kazimir Marevich's 'White on White', 1918.

Dear Minister

In some quarters, your promised 2013 Defence White Paper is already being ridiculed as ‘the white pamphlet’. Others take an even more pessimistic view, with Hugh White doubting that a document will be delivered at all. I really do hope that’s not the case.

The ADF is struggling to handle deep near-term budget cuts, and neither you nor the opposition is willing to say how much they plan to spend on defence in the medium or long term. What was a mess is now becoming a crisis. Coherent planning is impossible, our allies are confused, and morale is declining in the ranks. We need a new Defence White Paper and we need it soon.

The good news is that there is no reason why a credible White Paper cannot be produced. Defence has a well-documented strategy framework with literally hundreds of people working full time on intelligence assessments, strategic policy, capability plans and the like. If you can’t readily access the information you need on the costs, benefits and risks associated with options for Australia’s defence, heads should roll.

Even if your mandarins and generals have been sitting on their hands in a stupor of learned helpless for the past six months, which is doubtful, there’s still time to pull together a White Paper in the first half of next year. Here’s how to do it.

On the basis of speeches you delivered to ASPI and the Lowy Institute, you’ve already decided how you see Australia’s strategic environment and your broad policy response in terms of interests, alliances, priorities etc. It’s not how I see the world, but it will have to do. What matters is that you’ve effectively got what you need to write the first three or four chapters of the White Paper.

In doing so, be absolutely forthright about China. There is no surer way to undermine your credibility than by mincing words about the risks associated with China’s rise. Sometimes it seems that everybody knows that China’s rise presents a challenge except the government. Muster the courage and be blunt. Our 2009 White Paper said that China should be transparent about their defence plans; the same should apply to us.

Next comes the hard part. Work out how much you are willing to spend and what you are going to spend it on. There are many sensible analytic approaches to doing this—for example, here’s mine. Regrettably, there’s no time for such niceties. But don’t despair; the following pragmatic approach will yield a workable outcome in the time available. It won’t be perfect, but it will undoubtedly be better than the current situation.

Step 1. Tell Treasury to develop a range of plausible long-term (20 year) funding envelopes that you might be willing to allocate to Defence. Don’t take Treasury’s fiscal doomsaying too seriously; if Australia needs to spend more on defence it most certainly can (see also here). Indicative options could usefully be based on the current budget plus forwards estimates with subsequent real growth of 0%, 1%, 2%, 3% and 4% out to 2035. Be aware that anything less than 2% real growth will almost certainly result in the long-term contraction, obsolescence or hollowing out of the ADF. So if you are not willing to fund at least 2% growth in the budget, you’ll need to shrink the size of the force.

Step 2. Tell Defence to develop the best force structure and activity profile they can for each of the funding envelopes, and stress that each must be consistent with your overarching strategic policy. Get Finance and Treasury to closely check the cost calculations. Demand from Defence a quantified estimate of the cost risk associated with each option. If you don’t get what you ask for promptly, see my earlier comment about rolling heads. At the same time, get your Ministerial advisory panel to confirm the credibility of the capability options; make sure that there are no tricks being played with gold watches and the like.

Step 3: Take the options to the National Security Committee of Cabinet and make a decision.

At this stage, you can write the next two sections of White Paper dealing with capability and funding.

The capability chapter is straightforward; say how you plan to develop the ADF in the years ahead and explain how that fits in with your declared defence strategy. Don’t be too prescriptive when describing specific capabilities. You can leave flexibility to adapt to new information—strategic, technical and financial—that will inevitably become available in the future. The detailed specification of the submarine in the 2009 White Paper is an example of what not to do.

The funding chapter might seem daunting. There’s no escaping the fact that you massively reneged on the financial promises made back in 2009. Moreover, you reneged in the face of an improving rather than worsening economic situation. As a result, you face a yawning credibility gap. You have a task ahead to turn perceptions around.

Here’s how to start. First, explicitly say how much you plan to spend on defence. Provide concrete dollar figures for the first decade (see the graph on page 122 of the 2000 White Paper if you are unsure of how to do this). For the subsequent decade, say how much you plan to increase spending by per annum in real terms.

Second, be honest about what you’ve done. Explain that Defence has been given a funding envelope for planning purposes, but stress that it’s subject to revision over the longer term as political, strategic and financial circumstances change. In reality, it is not within your gift to commit future governments to anything.

At this point in the process, Defence will come forward with a handful of chapters on such things as personnel, industry, science and technology. Gather them up and throw them in the bin. They are an unnecessary diversion from the main game. You already have policies in these areas that are largely sound, so there’s no point filling pages with platitudes about ‘people are our most important resource’ or ‘partnerships with industry’. Instead, include a chapter outlining your plans for the geographic force posture of the ADF, and another on international engagement. These are both important areas where policy refinement is needed.

So what will you have achieved by writing a White Paper in the proposed manner? The good news is that you will have brought plans and funding into alignment with the laws of arithmetic—which is no mean feat. The bad news is that you will not have taken the time to fully consider the strategic issues facing Australia in the years ahead; that will have to remain a task for another day. That’s a pity, but I don’t sense an appetite in Government or Defence for doing so at this time anyway. In any case, it’s not an excuse for inactivity. Defence planning is a mess and it needs immediate attention. Think of the 2013 White Paper as an exercise in first aid.

Anyway, here are some things to keep in mind through the process:

  1. Don’t plan on balancing the books through efficiency and reform. The Strategic Reform Program made laughable claims that failed basic credibility checks—it brought discredit to both Defence and the government. Get the White Paper out of the way and then commission an independent review of Defence’s efficiency for the end of next year. If you manage to achieve some savings, consider it a windfall and build a hospital.
  2. Don’t be afraid to consider more modest visions of the future ADF; the logic for doing so is explained here. Conversely, give the argument for a much stronger defence force a fair hearing.
  3. Ignore lobbying by vested interests. There are at most 19,000 people employed in local defence industry, which makes up a less than 0.2% of Australia’s national workforce of over ten million. Industry issues should be considered solely on the basis of their strategic relevance to the ADF. Be very skeptical of anything you are told about ‘creating jobs’. In most circumstances, you will just be exacerbating skills shortages by bidding people away from efficient activities in other sectors.
  4. Be alert to the individual agendas of the Army, Navy and Air Force. They each aspire to professional mastery across as wide a range of technologies and warfare types as you are willing to pay for. While this is laudable in a way, their aspirations are not always consistent with Australia’s strategic needs. For example, find out how much money you can save by (1) abandoning the F-35 JSF and buying more Super Hornets, and (2) buying off-the-shelf submarines. Get independent advice on everything you are told on these and other big-ticket purchases.

And here’s a thought, it would be great if you would admit that you’ve cut defence funding too deeply in the near term and provide a financial top-up for the next couple of years. It’s really needed, and it would help dispel the perception that you are not serious about defence.

Finally a warning—and this is critical—don’t fudge the issue of funding. If you fail to provide an explicit long-term funding profile, the White Paper will be dismissed as a worthless pamphlet and its credibility won’t be worth the cost of the glossy paper it’s printed on. It’s far better to have a consistent plan for a modest defence force than an incoherent list of unfunded promises that nobody believes—which is a charitable depiction of the present situation.

Good luck.

Mark Thomson is senior analyst for defence economics at ASPI. Image courtesy of Wikimedia Commons.