Percent of GDP spent on Defence is a straw man
18 Apr 2013|

Surely the discussion (see yesterday’s posts from Andrew Davies and Graeme Dobell) about average percentage of GDP allocated to defence investment is a straw man floated by the Minister for Defence. Somewhat successfully it seems.

Defence spending as a percentage of GDP is OK for comparing expenditure between countries, especially over time. But it has always been much less useful for comparisons within the one country, not least because GDP depends on the size and strength of our economy at any one time. Defence investment in Australia is also quite inelastic in political and economic absorption terms no matter how healthy the economy has been. Moreover, such GDP comparisons ignore any differing strategic circumstances involved, and internal political factors.

A better trend-line comparison is the percentage of the federal budget allocated to defence over time, including trend-line comparisons with the other major sectors of government spending, such as social security, health and education.

These other areas are also truly national comparisons, because unlike defence they are constitutional responsibilities shared with the States and Territories. Truly national comparisons, rather than just respective federal budgetary figures, are more illuminating. All these areas are larger than defence (in orders of magnitude), and increasing at greater rates.

Social security, health and education are also the traditional arenas for vote buying by any government—above and beyond the actual spending needed.

Defence is a long-game in terms of public expenditure. Particularly because major defence capabilities require platforms and organisations (bases, trained units, ships, aircraft, armoured vehicles, reserve forces, etc.) which are national infrastructure with a long working life—and which must be flexible and adaptable over that long life because we cannot predict the long-term future in detail. Few governments are also willing to invest more in this infrastructure now to save future governments, and future taxpayers, money—even when it would also increase Australia’s strategic security and flexibility over the long term.

There are also few (or no) votes in meeting these kinds of defence responsibilities. First of all because few Australians change their vote on a defence or strategic security issue alone.

Second, because most of the future Australians affected by any governmental neglect don’t get to vote now. Some are not even born yet.

Third, because most Australians tend to neglect their civic obligation to concern themselves with national defence matters. The long period of security from existential threats after the Battle of Midway has given rise to a sense of strategic complacency.

Fourth, because many Australians, even if they think about defence issues, tend to base their thinking on the well-failed model of demanding highly defined threats as they perceive them at any one time as a supposed basis for justifying expenditure defence capability development. Even though they purchase home contents insurance for themselves based only on very general threats of crime or disaster over a largely unpredictable future that they concede is unpredictable in detail. And even though real strategic threats and other crises have always tended to arise faster than our ability to recognise, agree and respond effectively to them, either by deterrence and other shaping activities, or by actual commitment of our defence forces to situations requiring the use of force.

Finally, we now fight our modern wars with a very small, professional, all-volunteer defence force and not the community-based mass forces of the world wars and (because of conscription) perhaps even Vietnam. Most Australians do not regard themselves as involved in our current wars. Even if they manage to think about defence matters on one day of the year, Anzac Day, it’s generally only in historical terms, not contemporary or future ones.

No doubt the minister intended this to deflect robust analysis of many aspects of his portfolio.

Neil James is the Executive Director of the Australia Defence Association.