Vol. 5, No. 5
SUMMARY AND INTRODUCTION
It is six years since the last major policy statement on defence was issued. Although the 1987 Defence White Paper provided a solid planning base for the Australian Defence Force (ADF), the intervening years have eroded the document's relevance -- to the point that it no longer accurately reflects Australian defence policy and interests. The end of the Cold War and changes in regional security have outdated the paper's strategic assessment, while cuts to projected defence spending and changes in ADF structure mean that much of the document is simply no longer relevant.
Not before time, the Federal Government has committed itself to a new defence White Paper to be issued in 1994. It is badly needed to give policy direction and momentum to a drifting ADF and Defence Department. The extent of the drift may be gauged from the May 1991 Force Structure Review (FSR), a document designed mainly to cut costs. Far from outlining policy as most ministerial statements do, the FSR was a curious hybrid, canvassing policies which may -- or may not -- be implemented depending on which of three options for defence spending was adopted. These were for one per cent annual growth, or a cut of one per cent, or no growth at all. The FSR gave the impression that Defence was trying to guess Government intentions (as indeed they were), rather than detailing initiatives.
The absence of an up-to-date statement about goals and priorities has hampered Defence's ability to respond to changes in international security, or to set funding priorities for equipment and operations. How much emphasis, for example, should the ADF put on regional co-operation, on peacekeeping, and on maintaining alliance relationships? How should these priorities be balanced against requirements for the direct defence of Australia? All these issues involve making trade-offs in dividing up a limited (and shrinking) defence budget.
A defence force unclear about the roles it may be expected to perform and unsure about the resources it will have to meet them is not in a good position to decide how best to defend the country. In this Backgrounder, I propose ten steps which must be taken to re-establish coherence and direction in defence policy by outlining the areas which should take planning and funding priority. The first three priorities are essential. These are the need to refocus the ADF's attention back on combat capability; getting the balance right in dealing with Asia; and last, surprisingly some will think, not increasing the defence budget. The last seven steps flow from implementing the first three.
1 WE MUST EMPHASISE COMBAT CAPABILITY
It may seem ingenuous to begin by saying that the ADF must put more emphasis on combat capability. Surely this is the very raison d'être of all defence forces? This of course is true, but there is plenty of evidence to show that the ADF has expanded too far into support activities, which take up an ever-larger proportion of its budget without materially contributing to combat capability. The ADF has an unacceptably high ratio of non-combat and combat support elements compared to its fighting forces -- the "teeth-to-tail" ratio as it is called.
In his 1990 report, The Defence Force and the Community, Alan Wrigley points out that the number of major combat units in the ADF remained largely static from the early 1960s to the early 1990s. (The main exception has been the Navy's loss of an aircraft carrier and fixed-wing aviation.) Thus in 1960, the Army operated the equivalent of six battalions of regular infantry, with armour and artillery support arms; the Air Force three to four squadrons of fighters, and two of maritime patrol aircraft; and the Navy around a dozen major surface combatants. In 1990, the ADF had similar numbers of major equipment types, albeit much more capable and technically sophisticated. The most noticeable difference between the 1960s and 1990 was an approximately 45 per cent increase in the number of ADF personnel with no equivalent increase in the size of ADF combat elements. (1)
The table below shows the teeth-to-tail composition for the regular forces in 1991 and 1992. It makes for unhappy reading. In each of the Services, around half of all military personnel are in roles which would not involve them in direct support of military operations, even if Australia were at war. In the Army, only around one soldier in four has a combat role. For every soldier whose job might possibly involve being in combat in northern Australia, there are two others whose job will (in most cases) never take them out of Sydney, Melbourne or Canberra.
Australian Defence Force Teeth-to-Tall Composition
| 1991 | 1992 | |||
| Number | (%) | Number | (%) | |
| Army Combat forces Combat support Non-combat support | 8,165 4.634 15.923 | 28 16 55 | 8,066 4,501 15,663 | 29 16 55 |
| Navy Combat forces Combat support Non-combat support | 4,695 2,587 6,633 | 34 19 46 | 4,759 2,567 6,665 | 34 13 43 |
| Air Force Combat forces Combat support Non-combat support | 1,645 9,064 8,847 | 8 46 45 | 1,868 7.866 9,072 | 10 40 50 |
Sources: 1991 Data: Army; Hansard (Senate) 6 March 1991, p. 1352; Navy and Air Force; Hansard (Senate) 10 April 1991, p. 2259. 1992 Data: Hansard (Senate) 28 April 1992, pp. 1738-9. Due to rounding, percentage totals may not equal 100.
What do people actually do in non-combat support roles? In any modern defence force, large numbers of people will be engaged in support tasks to maintain equipment; feed troops; order, control and distribute stocks; provide medical services; operate bases and manage equipment purchases. The list of legitimate non-combat positions needed to sustain a modern fighting force is very long indeed.
In the ADF, however, there are obvious excesses. In 1991, for example, almost 500 ADF officers and other ranks were full-time musicians. This makes the Defence Force as big in the music business as Australian Broadcasting Corporation, which runs six State symphony orchestras involving 490 people. (2) The 1987 White Paper acknowledged the "inadequate" state of Navy mine countermeasures and the "high priority" that should be given to improving this. Four years later, the Navy had fewer mine warfare personnel (86) than musicians (93). Each Service maintains separate police, police investigation and base security units (the RAAF, for example, maintaining 242 police dog handlers), separate fire-fighting services and so on. The numbers of Service people performing wholly civilian tasks are staggering. Some examples: From the 1 Army: bricklayers, 17; butchers, 11; carpenters and joiners, 126; plumbers, 49; from the Air Force: cinema operators, 11; telephone operators 103; carpenters, 73; electricians, 44; plumbers, 25. In 1991, the largest single professional category for other ranks in the Air Force was clerks (2,462 people); in the Army the largest category was riflemen (3,102), then clerks (2,487), then storemen (1,728). Defence pays a significant premium to have uniformed personnel perform these civilian tasks -- comparing wages plus on-costs, the cost of defence labour is about 25 per cent greater than the civilian alternative.
What these figures show is that the Defence establishment has allowed support elements to grow unacceptably large relative to the size of the combat force. Defence has slowly accepted the need to develop a commercial support program (CSP) to put out to the private sector a range of support tasks currently done in-house. The major problem with the CSP is the slowness of implementation -- the program is not scheduled to be completed until the end of the decade. In the meantime, the 1991 decision to scrap two regular Army infantry battalions in favour of the Ready Reserve scheme ensures that the Army's teeth-to-tail ratio will get worse before it gets better.
The decision to scrap two battalions now means that the Army, with a total strength of over 28,000, can field only four regular infantry battalions at relatively short notice. New Zealand, with an Army of 4,700 in 1992, can field the equivalent of two regular battalions. (3) Being a larger force with a larger country to defend the ADF has a genuine requirement for more substantial logistic support. Even making allowances for that, the contrast is not flattering to Australia.
The conclusion is obvious: the ADF badly needs to redirect its focus back to developing and maintaining stronger combat forces. This is the only acceptable basis on which one can justify the enormous annual investment of taxpayers' money. Achieving this will require a reallocation of resources within Defence, and a drastic cutting of non-essential areas such as bands. This may raise some community and internal defence opposition. But governments should be courageous. In the long term, the community will be more inclined to support an ADF focused on combat capabilities than one regarded as just a source of free music nights and safe clerical jobs.
2 GET THE BALANCE RIGHT IN APPROACHING ASIA
The ADF can play a very important role in establishing closer relations between Australia and Asia. The military has a long history of substantial co-operation with the countries of South East Asia. During the recent slight chill in relations between Australia and Malaysia, for example, relations between the defence forces remained unharmed. Defence contacts have tended to remain insulated from the ebb and flow of political ties.
Australia's defence approach to the region, however, must be refined. The 1987 White Paper emphasises the defence of the mainland against potential attackers who, to use Paul Dibb's language, can only come "from or through" the island archipelago to our north. It has not escaped our Asian neighbours that much of Australia's existing policy amounts to a defence "from" the region rather than a defence "in" or "of" the region. The White Paper is remarkable, too, for the comparative lack of attention it pays to defence co-operation with the region. Existing links -- such as the Five Power Defence Arrangements -- are supported. But the Paper did not propose a widening of these ties.
Against this must be set the current enthusiasm in Defence, as well as other areas of public life, to develop closer relations with Asia. There is no indication that the Government intends to increase its limited spending on defence co-operation (at $76.6 million this financial year, around the size of Defence's annual phone bill), but efforts are being made to increase consultation, training and exercise opportunities. These initiatives are to be applauded and have received bipartisan political support. In the currently approved language, such contact helps to build confidence and enhance security between countries, and to develop a sense of regional cohesion in which countries reinforce each other's security rather than just their own.
There are signs, however, that in its enthusiasm the ADF is beginning to get carried away with the push into Asia. In April this year, for example, the Army announced a new requirement that all officers at the rank of Lieutenant-Colonel and above must speak one of eight Asian languages by the year 2002. (4) All officers? Well, actually Defence admits that fifteen per cent may not have the aptitude, so the goal is for 85 per cent of officers to be fluent. Putting aside the enormous training cost involved, one must ask if this is a necessary or even desirable goal. In 1992, the Department of Foreign Affairs and Trade (DFAT), with a total staff of 2,352, claimed to have 427 people with either "minimum or advanced" proficiency in foreign languages; that is, 18 per cent of the total. These figures count all languages: only 6.8 per cent of DFAT officers could speak one of the eight Asian languages specified by the Army. (5)
The comparison speaks for itself. It is absurd that the Army should aspire to such high levels of language proficiency when, for the vast majority of officers, only a small part of their careers will involve contact with Asian countries. The issue is about the emphasis in intellectual and financial resources which Defence should place on co-operation with Asia. Developing closer relations with the region is important. But no less important is maintaining the health of existing alliance relationships and of ensuring that at least some officers maintain professional interests in countries and issues outside Asia. Most fundamental of all, the ADF's first professional obligation is to maintain the skills needed to operate in the defence of Australia, training for which will still occupy the bulk of an officer's career.
Setting the right defence priorities for Asia would be easier if the Government rectified the current imbalance between the "declaratory" policy (the 1987 White Paper), which downplays regional co-operation, and a de facto policy which actively pursues it. Countries in the region would find this useful as well.
3 DON'T SPEND MORE MONEY ON DEFENCE (YET)
The argument that Defence would benefit by not having more money spent on it will be regarded as heresy in some circles, particularly lobby groups like the Returned and Services League which has habitually argued that defence spending should be pegged at around 3 percent of Gross Domestic Product. At $9.88 billion in 1992-93, spending was 2.4 per cent of GDP. In rough terms, this is $2.5 billion lower than if spending were pegged at the 3 per cent mark.
Why 3 per cent of GDP? Like all other such figures, this is an arbitrary one, elevated to benchmark status by the 1987 White Paper, which said that spending in the order of 2.6 to 3 per cent of GDP would be needed to implement its proposals. The requirement to maintain spending at this level has never been met. Despite optimistic projections for substantial growth, since 1986-87 spending has been kept at around zero real growth and has declined as a percentage of GDP. This has certainly slowed down the implementation of the 1987 reforms. The Force Structure Review noted that with no real growth in spending only "about three quarters of the White Paper program could be funded" by the end of the decade.
The shortfall has been taken by some as "proving" that there is an urgent need to increase defence spending. But this is not the case. The White Paper's spending projections were unrealistic, and have proved unsustainable given the state of the economy since that time. Equally, there is no iron necessity that the whole program be completed by 2000. Defence equipment modernisation and structural reform are continuous processes, subject to delays and slippages. In view of Australia's largely benign strategic environment, it will not matter if the White Paper goals (or some variant of them) take a little longer to implement than previously planned.
Far more important is the need to ensure that the present ten billion dollar annual defence outlay is spent to maximum effect. As the preceding section on combat forces shows, this is not happening. For too many years, defence spending was not subject to the same rigorous scrutiny -- both publicly and within government itself -- as other Commonwealth departments. As the then Minister for Defence Science and Personnel, Gordon Bilney, explained it:
One area where Defence is truly unique is the treatment it receives from the Government in relation to the budget. Other departments have their budget gone through line by line in the budget process, with Cabinet's expenditure review committee looking for savings. When they find them, they are taken. In Defence we get a global allocation. It might go up or down by one half, or one per cent in real terms in any year but as a portfolio we are able to determine how we spend it. (6)
This absence of fiscal oversight undoubtedly permitted unwise spending in areas which made little or no contribution to maintaining highly capable combat forces.
It should be said that Defence has gone some way to improving the situation by cutting costs and reviewing its own activities. The Force Structure Review, and programs to commercialise a range of Defence support activities, identified areas where significant savings could be made without damaging (indeed, by freeing up resources, actually improving) combat capability. This process can and should be taken much further. There is no doubt that further substantial savings and efficiencies can be made from within the existing budget.
Until all avenues for greater savings have been explored, there is no realistic case to be argued for increasing the budget. This is not just a matter of chasing savings for their own sake. The overriding aim should be to re-establish in defence a clear-cut sense of purpose and direction by cutting away those superfluous activities that do not directly contribute to maintaining a highly capable military force.
No matter how cleverly one cuts it, however, the cake will not grow any larger. In the medium term there will be a need to increase defence spending to cover the costs of essential equipment projects, and what should be higher levels of training and operational activity. Exactly when this should happen is difficult to say. Perhaps about financial year 1996-97, when the present commercialisation program has been substantially implemented.
Setting the right priorities -- by emphasising combat capability, getting the right balance in approaching Asia and accepting the need for continued spending restraint -- would put Defence on the right track to developing a coherent policy. Of course, many other policy areas need rethinking too. The following seven areas show where important policy revisions must be made once the "big three" issues are settled.
4 WE NEED MORE "JOINTERY"
"Jointery" is the word used to describe co-operation between the three separate services. Since 1975, when the services were brought together to form a single department with the civilian Defence establishment, the history of Australian defence policy has been the history of mandating closer co-operation between the military arms.
The logic of jointery is unassailable. The three services will fight together in support of common objectives. It is only reasonable that they should train and be structured with that end in mind. In the early 1980s, Headquarters ADF was formed to give a stronger joint emphasis in defence force policy, and in the late 1980s functional commands for Land, Air and Maritime warfare were created. A functional commander would command elements from all three services used to fight in that particular theatre. The Land Commander, for example, would command not only Army units, but also those Navy and Air Force assets required to support the troops. The roles of the professional heads of each service, the Chiefs, have been limited to raising, training and maintaining their forces. Thus Chiefs play no formal command role in war-fighting.
Not surprisingly, these achievements have been bought at the price of some major bureaucratic "turf" battles. Even more jointery, however, should be pursued; for two reasons. The first is that we should organise our forces as we intend to use them in combat. When notions of single service exclusivity get in the way of this goal, it is the single service notions which should be dumped. Over time, the functional commanders (now a two-star or Major-General-equivalent position) are likely to have more authority and responsibility devolved to them. With this will come a greater need for these commanders to be able to influence equipment acquisition and other policy development areas.
The second reason for more jointery is that it saves money. Where non-combat support activities cannot be contracted out to the private sector, running them along tri-service lines (rather than maintaining three separate service institutions) will reduce administration and duplication (or, really, triplication). Candidates for reduction in these areas include the Service music, clerical, legal, medical, dental, military police, base security, fire-brigades and chaplaincy establishments.
This is not to suggest that Australia should follow the Canadian pattern of abolishing the services as separate entities. But keeping the services distinct does not mean that they should be given a blank cheque to build up their own establishments at the cost of more logical joint structures in the support areas. The point of such rationalisations, it must be remembered, is to free resources from within the budget to be spent on the combat end.
5 DEVELOP PLANS FOR A CREDIBLE STRIKE REPLACEMENT
The ADF is structured to defend Australia and has only a limited capability to project power far beyond its shores. Maintaining forces capable of long-distance strike operations, however, is an essential part of any credible defence policy. Strike forces give Australia a flexible capacity to respond to attacks against our interests by threatening enemy forces at their source. The prime strike component in the ADF inventory today is 21 ageing F-111 fighter-bombers which have a long range and a capacity to deliver precision-guided munitions. Apart from its age (it was designed in the 1960s), the main problem with the F-111 is that it is being phased out of service in the United States. In a few years, Australia could be the last country flying the aircraft. Support and maintenance costs for the F-111 are already very high, and will get higher still towards the end of the decade.
In an attempt to keep the aircraft flying longer, the Government announced in October 1992 its intention to purchase up to 18 additional F-111s from the US. These would be used as "attrition" aircraft to spread the number of flying hours over more airframes, and in this way keep the aircraft operational to 2020. The Government has not specified what the full cost of the purchase will be, other than to say that the airframe price will be low. (7) The full price will have to take into account modernisation costs (which Senator Ray said "... would cost a couple of hundred million to bring the 18 up to scratch at least"), (8) and maintenance costs. The latter is likely to be enormous because it has recently been revealed that the F-111s under purchase are a slightly different model -- the "G" rather than the "C" in RAAF service. Many parts will not be interchangeable. So two maintenance programs will have to be put in place. (9)
There is a distinct possibility that the ADF is about to embark on a very costly project which may (but then again may not) squeeze a few more years of effective life out of the F-111. At best the proposal is nothing more than a stop-gap measure before the more important work of defining an F-111 strike replacement is begun. There is nothing to suggest that Defence has started this difficult task to date. One problem is that there is no strike aircraft available now, or under design, likely to fit Australia's budget. There are, however, other options such as stand-off strike missiles like the cruise missile or its variants. What is needed is for Defence to initiate a joint study looking at all the potential options for strike replacements and the different ways in which such weapons can be deployed. Acquisition would not take place until well into the next decade.
Regional sensitivities must be taken into account in discussing strike replacements. But it is absurd to suggest, as some do, that Australia should forgo a strike replacement altogether because of these sensitivities: it is doubtful that other countries in our region would accept that Canberra had a right of veto over their acquisition plans. Clearly, though, these are matters which call for dialogue and explanation with our neighbours. Ideally, a future strike replacement will not be announced as the F-111 augmentation was; the casual answer to a Dorothy-Dix question in the Senate. That sort of pre-empting the region can do without.
6 SCRAP THE READY RESERVE
The Ready Reserve was introduced as a cost-saving exercise. Two regular Army battalions were scrapped at 6 Brigade in Brisbane, to be replaced by the supposedly lower-cost Ready Reserve scheme, whereby people receive full-time training for a year and then serve fifty days a year for the next five years. The best that can be said about the Ready Reserve is that it represents the level of effort which should have been put into the existing ADF reserve, now known as the General Reserve. The Ready Reserve, however, is not an adequate replacement for two regular battalions.
A force which operates together for only fifty days a year will not be as cohesive or well-trained as one which works together all year round. Yet the claim is that the Ready Reserve does not diminish our defence capability in the slightest. This might be true in a situation where many regular battalions were available for military operations before the Ready Reserve was called up. As we have seen this is not the case. With only four regular Army battalions remaining, the Ready Reserve will be one of the first formations committed to a military operation. This reverses the more usual practice of initially using regular forces to meet defence emergencies. More importantly, it raises as yet unresolved questions about the flexibility of reserve forces in low-level contingencies. Governments must decide when Ready Reserve personnel will be called away from their civilian occupations and how long they will stay on alert. In the context of what would be a highly-charged international political environment, a call-out could well be taken to be a hostile and provocative act, thus making the business of mobilising forces a difficult political matter in its own right. Low-level contingencies tend to involve small clashes drawn out over a lengthy period -- regular forces are better suited to this type of warfare.
In sum, the Ready Reserve is not the solution to Australia's defence problems. Even as a cost-saver, the scheme is turning out to be less than successful. In May 1991, the cost of a Ready Reservist over a year was estimated to be around 42 per cent of a regular. More recently, the cost appears to be closer to 70 per cent or even higher. (10) Seventy per cent of the cost of a regular for less than one-sixth of a regular's time is not good value for money. The scheme should be scrapped and the two regular battalions re-formed in Brisbane where they were originally based.
7 DON'T GET CARRIED AWAY WITH PEACEKEEPING
In 1992 and early 1993, Australia was in the curious position of having more than a thousand troops deployed in north Africa. This at a time when the Government was telling us on a daily basis how our destiny, indeed our very identity, was in Asia. Why? The answer is that the ADF had become over-extended in support of peacekeeping missions.
Peacekeeping is a good thing. It gives Australia the means to make useful contributions to stability in world trouble-spots, thus promoting our image as a good international citizen. It offers the ADF training opportunities in certain types of defence roles. The downside is that peacekeeping is costly, diverting troops and resources away from their primary task: training and exercising for the defence of Australia. Sending a battalion to Somalia, for example, severely compromised our capacity to respond to a national or regional defence contingency, because it was one of only two regular battalions kept at a high state of readiness to respond at short notice to such crises. Under normal circumstances the two battalions (part of the Operational Deployment Force based at Townsville) take turns being the designated force for immediate call-out. With the absence of the battalion in Somalia, Australia's capacity to respond to a crisis and sustain forces in the field was limited to one battalion of troops.
The Defence Minister has acknowledged for a long time the need to set limits on when, where and in what strength the ADF will undertake peacekeeping. (11) An obvious start would be to make commitments proportional to Australian and regional security interests. That would preclude deployments of the size of the Somalia force (one or two companies of troops would have been more appropriate) and of the duration of the 45-person contingent in the Western Sahara. The latter is a prime example of the type of peacekeeping operation which Australia should avoid. Since April 1991, the ADF has run the communications component of the United Nations Mission for the Referendum in Western Sahara (MINURSO). Very few Australians would know what the referendum was about, fewer still that the likelihood of its ever being held is growing increasingly remote. It doesn't matter either way in terms of Australia's security interests. The troops should be brought home.
Australia should concentrate its peacekeeping efforts in the Asia-Pacific region. This would link peacekeeping with the broader policy of developing regional co-operation, making it more relevant to Australia's direct security interests. Some have argued that peacekeeping should be given such a high level of priority that the ADF should be specifically structured to perform these missions. Such demands should be strenuously resisted because they forget the reason for having a defence force in the first place, which is not to act as an international charity relief organisation.
8 SPEND MORE ON OPERATIONAL TRAINING
Operational training includes aircraft flying hours, ship steaming days at sea and Army exercise and training times. The amount of spending on operational activities will in large part determine the competence and battle-readiness of a military formation. Equally, the operational area can become a huge sink-hole for resources. The problem is finding a balance between training needs and spending limits which satisfies the ADF. At the moment this balance has tipped too far in favour of spending restrictions. Unlike long-term equipment programs, operational activities are planned only a few years ahead at most. They are easier to cut when demands are made of Defence to trim spending.
The cutting has gone too far, particularly in the area of available aircraft flying hours and use of ammunition in training. In the case of the former, Air Force officers have been warning for years that fighter pilots have reached the absolute minimum number of flying hours needed to maintain acceptable safety standards -- around 175 hours a year. In the case of ammunition, particularly some of the more expensive and complex types, usage is very limited. In 1991, for example, only six RBS-70 air defence missiles were allocated to the 111 Air Defence Battery for training -- insufficient to ensure the equipment actually works, let alone meet training requirements. (12) Shortages of this kind undermine the professional competence of ADF personnel, who need to train in as realistic a manner as possible.
9 DEVELOP A STOCKHOLDING POLICY
One problem related to inadequate funding for operational training is that the ADF lacks adequate stocks of spare parts and ammunition to sustain itself for very long during a conflict. A Parliamentary study found two main reasons for this problem. First, a lack of resources to pay for increased stockholdings and, second, a failure on the part of Defence going back to the 1960s to develop a policy on the quantity of stocks needed to meet likely defence contingencies. (13) The study details the failure of more than a generation of officials (military and civilian) to arrive at what should be a fundamental element of Defence planning. It is not clear why there has been such a persistent failure to address this issue. In part it is the outcome of changing strategic perceptions, in part the result of service determination to go their separate stockholding ways, in part the product of an over-comfortable reliance on ready access to US stockpiles. None of these factors has supported the development of a clearly articulated policy.
Yet the need for such a policy is obvious. At present there is no clear guidance on the amount of ammunition and stores needed to deal with a low-level contingency in Australia's north, no policy detailing how the civilian transport infrastructure could be called on to meet Defence needs, no attempt to see what Australia could do were US supply options not available, and nothing addressing stockholding and sustainability needs during periods of more intense conflict. The Parliamentary report presents a picture of the ADF's having less than acceptable minimum levels of stock on hand and no clear idea about how to rectify the situation.
It is not difficult to see how this problem relates to a lack of resources. But of the two difficulties -- money and policy -- the lack of money can be solved as a result of the reforms I have proposed here. The lack of useful policy presents a more fundamental difficulty. In this regard a useful starting point would be to accept that it is impossible to make a definitive assessment of likely ammunition and stockholding usage. Any halfway realistic assessment, however, will surely call for more stocks than the small amounts presently held. If ADF stocks are not sufficient to meet our peacekeeping requirements (as the Parliamentary report shows), then these stocks are insufficient to handle even a very small-scale conflict in the north.
In August 1993, the Government tabled its response to the Parliamentary Committee's report. Although agreeing in principle with many of the Committee's recommendations, it is doubtful that the Government will make any changes in stockholding policy. The response itself was marred by the same level of obfuscation that prevented the development of an adequate stockholding policy over the last generation. The following four statements are drawn from the first page of the response:
Defence policy is to maintain sufficient stock levels for all appropriate force elements to meet credible contingencies -- low and escalated low level conflict which remain our focus in accordance with approved strategic guidance. (Paragraph one.)
Defence preparedness to meet any possible threat in the shorter term needs to be balanced against the need for continuing development of the force structure, specialist skills and infrastructure to meet the uncertainties of the medium to longer term. (Paragraph two.)
The nature, scope and duration of a possible contingency for the defence of Australia are unclear and there is no simple means of determining the stocks of ammunition ... which the ADF might require in these circumstances. (Paragraph three.)
Given the unlikely requirement for the ADF to have to mount operations for the defence of Australia in the shorter term, larger Government outlays on reserve stocks are inappropriate. (Paragraph six.) (14)
When read together, it is difficult to escape the conclusion that current stockholding policy is little more than gibberish. The "approved strategic guidance" is to focus on low-level contingencies and requires the ADF to maintain sufficient stocks to be able to deal with them. But the "nature, scope and duration" of these conflicts are unclear to Defence. Despite the stated policy, Defence argues it would be wrong to spend more money on immediate stockholding requirements because there is no presently credible threat. Rather, Defence wants to spend money building up resources for the "uncertainties of the medium to longer term".
In short, the policy is flexible enough to justify any level of stockholding or any variation in those levels. Until some clear thinking is done, Defence is likely to continue chasing its stockholding tail for the foreseeable future.
10 REASSESS ADF OFFICER TRAINING
The ADF's future, its ability to meet and successfully to resolve the challenges it faces, depends in large part on the quality of its future officers. One cannot, therefore, underestimate the importance of officer education and training. Although the services continue to operate separate officer training institutions, the Australian Defence Force Academy (ADFA) is the most important because of its joint focus and because of the tertiary training function provided by the University College of the University of New South Wales.
There are strong arguments in favour of the University College's maintaining its complete autonomy in curriculum development, because the first and most useful aim of the College is to provide a balanced, liberal university education. This does not allow room for faddish courses with "flavour of the month" status. Equally important, that training must be relevant to the ADF's long-term interests and needs. There are two areas where academic instruction needs to be expanded to support defence interests. The first is strategic studies. Although some ADFA courses touch on this field and there is some (very limited) service instruction, it is possible for an ADFA officer cadet to graduate after three or four years of study without having any rigorous instruction in strategic and defence matters. There is an obvious flaw here, but one which can be overcome by adding to ADFA's teaching strength in areas such as international relations, country studies, and defence and strategic studies proper. A department of strategic studies should be established for undergraduate instruction.
The second area is Asian studies. Again, some ADFA departments offer courses in this area but not enough to make it possible for officer cadets to develop a detailed knowledge of Asia or specific countries in the region. Thought should be given to collocating Defence language training facilities at ADFA and to augmenting these with more courses dealing with the history and politics of the region. The failure to make these areas a very substantial part of officer training is quite remarkable. It is like training would-be surgeons in all aspects of hospital procedure but leaving anatomy out of the course. Expertise in Asian affairs or in strategic and defence issues cannot be picked up casually as some mid-career afterthought. Rather, it requires systematic and detailed training of a type best begun when people are starting their careers.
SUMMING UP: AN AGENDA FOR REFORM
Many fundamental elements of Australian defence policy are long overdue for reform. The 1987 White Paper passed its use-by date some years ago, but until the announcement in late 1992 of an intention to produce a 1994 White Paper, the Government showed no serious intent of reforming the system. Instead of a coherent, focused plan, Defence has been subjected to piecemeal reviews none of which addressed the fundamental need to set clear priorities for ADF activities. It is to be hoped that the new White Paper will put these matters to right. At the outset, one point is clear: there will be no massive spending boost for Defence in the near future. This is actually a good thing. For too long the defence debate in Australia has amounted to not much more than saying that our security problems could be solved by throwing more money at them. That never has been true. More important than money is the need to establish clear goals for the ADF, and then to make the difficult structural changes outlined here so that the forces can better fulfil their primary objective of defending the country.
* * *
1993 BUDGET POSTSCRIPT
As expected, the Budget for 1993-94 cut real defence spending by 0.75 per cent, and projects annual real cuts of 0.5 per cent for the next three years. (15) Two things can be said about this outcome. First, the Budget shows the absurdity of saying that the 1987 Defence White Paper still underlies current policy. Second, nothing in the Budget suggests that Defence has developed a realistic response to its changed financial circumstances. Both these points need to be explained in greater detail.
THE BUDGET AND THE 1987 WHITE PAPER
Defence policy since 1987 has been a story of declining expectations. The year the White Paper was released, defence spending was projected to grow in real terms by three per cent annually between 1987 and 1992. This growth never eventuated. From 1987 to now, spending has been at or slightly below zero real growth. The disparity created between the expectation and the reality of defence spending became too great, and in May 1991, the Force Structure Review repackaged the White Paper policy. The FSR acknowledged that Defence would be doing well to maintain spending at zero real growth. It laid out the Government's options in remarkably blunt terms:
Over a ten year period at current Government financial guidance of +l per cent real growth, expenditure on the defence program would total some $98 billion. Such funding levels would enable the White Paper program to be largely completed by the end of the decade. At a lower funding level, where no growth was provided, about three quarters of the White paper program could be funded. If there were real reductions of -1 per cent per year continued through the decade, less than half the White paper program could be funded. (16)
The Government picked the middle course. Defence Minister Senator Ray told his Departmental senior managers:
Over the last few years we have had growth put into the Forward Estimates. One and two per cent. And even though I suppose CDF [the Chief of Defence Force] and others always knew that it would get cut out, I am sure that in the deep recesses of defence minds there was always the hope that you would get it. I take the attitude, and it is not probably shared by my predecessor [Mr Kim Beazley], that it was best to knock all that guff out of the Forward Estimates now and face the realistic world. (17)
Ray was sanguine about achieving only three-quarters of the White Paper goals: "I think that is not a bad achievement overall", he told the same gathering.
In reducing defence spending from zero growth to real decreases, the crucial question is how close does the 1993-94 Budget go to the FSR's description of achieving "less than half" of the White Paper goals by the end of the decade? The answer is, very close indeed. Not only are there real spending cuts, but the consequences of other policy decisions also reduce the pool of funds available to be devoted to White Paper goals. The most significant of these decisions include the costs of redundancy payments and the requirement to pay for wage rises from within budget resources rather than supplementation. Defence is using redundancy payments to maintain the schedule of personnel cuts planned in the FSR. In 1991, it was thought that these reductions would be achieved through natural attrition; the recession, however, has almost halved the number of people annually leaving the Defence establishment.
It is difficult to determine the precise cost to Defence of redundancies and pay rises, but in a very candid assessment, the Vice-Chief of Defence Force, Lieutenant-General John Baker, said this in November 1992:
The effect over the FYDP [Five Year Defence Program] of productivity pay is a cost to the department of the remuneration outcomes of about $750 million a year, for which we had portfolio provisions for about $250 million, consistent with the $35 million a year put aside plus the gains from superannuation, leaving a net shortfall of about $585 million to be gained somehow over the FYDP. That's too large a sum to absorb without any significant loss of capability. (18)
General Baker is, of course, referring to military capability.
On top of the costs of productivity pay, Defence plans to shed a further 3,300 military and civilian personnel this year, at an average redundancy cost of $42,000. Redundancies in 1993-94 will therefore cost something in the vicinity of $138 million. (19) At the Senate Estimates Committee hearings into the Budget, Defence Minister Ray agreed that "... there will be some hurt, I suspect, come onto the department over the five year period. Estimating that is not easy, but it is nowhere near the quantum of $750 million [mentioned by General Baker]". (20)
Whatever the exact figure, it is abundantly clear that planned reductions in spending, and additional pay and redundancy costs, reduce the amount of funds available to be spent on White Paper projects. Two years after the FSR, defence funding must be very close to the point where "less than half" of the White Paper's plan can be implemented by the end of the decade. These financial realities have so clearly undermined the 1987 White Paper, that there seems little point in maintaining the fiction that it is the basis of current policy.
RESPONDING TO CHANGED FINANCIAL CIRCUMSTANCES
The second feature of the Budget was its failure to show how Defence will develop a new policy responding to changed financial circumstances. It is disappointing that the Government did not take the enforced opportunity to look more thoroughly at reducing support areas which do not contribute to the combat capabilities of the Defence Force. The piecemeal savings measures put in place mostly involve deferring projects to later years. This just delays the more difficult task of revising spending priorities and reducing non-combat elements. Post Budget, the Minister recognises that the effect of reduced spending will be "... that some projects in the pink book may be delayed by one or two years". (21) The "pink book" is Defence's rolling five-year plan for investment in new equipment. We simply do not know what any of these projects will be because they were not designated in the Budget.
As such, some of the Budget's proposed savings measures are short-sighted and logically inconsistent, while other areas which should be cut have actually been allowed to grow. For example, it has been decided to defer the acquisition of light armoured vehicles intended to give greater mobility to forces based in Darwin. This undercuts the whole rationale of the $700 million program to relocate one battalion of regular troops to Darwin by 1997. More than 2,000 troops from the Army's First Division will be moved to the Northern Territory by the year 2000. This decision leaves unbuilt the vehicles essential for their mobility in the north. While this cut has been made, the Budget proposes to continue providing mechanised transport for Army Ready Reserve forces in Brisbane. According to this decision then, our reserve forces will have greater mobility than the first-to-fight troops they are designed to relieve.
The "general administration" budget is set to rise by a nominal seven per cent to take account of "price increases for a broad range of general administrative items" including "office requisites, postage and telephones, fuel (but not for Service operational activities)". Excluding additional funds rightly set aside for compensating victims of the Voyager disaster, spending in this area will increase by around $56 million for a total general administration budget of $1.2 billion. At this level, administration accounts for almost 12.5 per cent of total defence spending. Yet the Budget makes no proposals to cut or defer spending in this area. This contrasts with a nominal increase of 1.4 per cent in operational costs, the area which supports Defence training and exercise activities. In real terms, this translates into a net cut in operational spending, which means that there will be an even greater squeeze on the available aircraft flying hours, Navy days at sea and Army exercises. Training of this sort is at the core of maintaining the military's professional capabilities. It seems likely that the operations budget will again bear a disproportionate burden of the cuts.
It is surprising that the Government is continuing to relocate the Navy Hydrographic Office to Wollongong, at a cost this year of $6.9 million and over $19 million in total. The move should have been postponed at least until after a decision had been taken on the $150 million plan to build three new hydrographic vessels. It is highly likely that this project will never go ahead. There is no room in the Budget for the ships and there are more attractive options involving the private sector. In short, the Budget offers the worst possible outcome: a $19 million hydrographic headquarters along with the near certainty that there will be no money for hydrographic ships.
Collectively, the absence of detailed proposals to cut rather than simply defer programs shows that this Budget just delays the task of reconciling Defence plans to financial reality. This only reinforces the need for the projected 1994 Defence White Paper to map out a financially realistic strategy. The Budget does not generate much confidence that this redefinition will take place quickly or even that it will be a feature of the new White Paper's thinking.
ENDNOTES
1. Alan Wrigley, The Defence Force and the Community: A Partnership in Australia's Defence (Report to the Minister for Defence, AGPS, Canberra, June 1990) pp. 65 ff, 488.
2. Figures on defence professions come from Hansard (Senate), 7 May 1991, pp. 2586-2860. ABC figures from the ABC, Annual Report 1986-87.
3. New Zealand Defence Force, Annual Report for Year Ended 30 June 1992, (Government Printer, Wellington, 1992).
4. "Multilingual Army for 2002", Defence, Industry and Aerospace Report, 23 April 1993, p. 15. Officers without language aptitude will be encouraged to study courses in "Asian culture".
5. Department of Foreign Affairs and Trade, Annual Report 1991-1992, pp. 363, 392.
6. Gordon Bilney, The Wrigley IDC ["Text of a speech given recently to a number of groups of military officers."] (Typescript, March 1991).
7. On 29 June 1993, Senator Ray announced that Cabinet had agreed to the purchase of 15 F111G aircraft for $146 million, of which the cost of the aircraft was $78 million and spares $68 million. The aircraft cost will reportedly be covered by a supplement to the defence budget, but not the spares which will be paid for by cutting other defence programs. The Government's announcement will hardly be the last word on the issue given what can only be very conservative assumptions about maintenance and operating costs. "Ray under attack on F-111 funding", The Australian, 30 June 1993.
8. Senator Ray speaking on the SBS television program "Dateline", 15 October 1992. (Transcript).
9. For details, see Hansard (Senate) Estimates Committee B, 10 May 1993, pp. B53-B55.
10. The 42 per cent figure was presented in Department of Defence, Force Structure Review: Report to the Minister for Defence, (AGPS, Canberra, May 1991), p. 46. For reports of the 70 per cent figure, see "Costs soar on reserve force plan" Sunday Age, 12 July 1992, p. 5.
11. Most recently in, Senator R. Ray, "Self-reliance a guiding light to the future", The Australian, 28 May 1993, pp. 15, 18.
12. Parliament of the Commonwealth of Australia Joint Committee on Foreign Affairs, Defence and Trade, Stockholding and Sustainability in the Australian Defence Force, (AGPS, Canberra, December 1992), p. 74.
13. Ibid., p. 65.
14. "Response by the Minister for Defence to the Parliamentary Joint Committee report on Stockholding and Sustainability in the Australian Defence Force" (Transcript, p. 1. The response was tabled in the Senate on 19 August 1993.)
15. Budget data is taken from: Commonwealth of Australia, Budget Statements 1993-94; Budget Paper Number One, pp. 3.30-3.45; and Minister for Defence, "Defence Investment Plans and Efficiency Initiatives Remain on Track", News Release No. 92/93, 17 August 1993.
16. Department of Defence, Force Structure Review ... op. cit. p. 3.
17. Senator Robert Ray, "Speech by Senator the Hon Robert Ray, Minister for Defence", Compendium of SES [Senior Executive Service] Recall Day Speeches, (Department of Defence, Training and Development Branch, Canberra, September 1991), pp. 3-4.
18. Speech by Lieutenant-General John Baker, Vice-Chief of Defence Force, Compendium of Division Heads' Forum 2/92 Speeches, (Department of Defence, Canberra, 27 November 1992), pp. 9-10.
19. Parliament of Australia, Hansard (Senate) Estimates Committee B, 31 August 1993, p. B 7.
20. Senator Ray, ibid., p. B 18.
21. Ibid.
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