Recent commitments to dramatically increase Australian defence spending should be placed under as much scrutiny as any other roles or programs subsidised by the cash-strapped federal government.
Belatedly meeting a commitment that former prime minister Tony Abbott made three years ago, and in the process clearing the decks for a fresh election campaign, the Turnbull government last month released its blueprint for enhancing our national defence capabilities in the long term.
Hinting at building tensions in our region, and outlining potential non-conventional threats such as terrorism and cyber disruption against Australia and her interests, the 2016 Defence white paper outlines a shopping list of arsenal and other equipment for defending the realm.
The repertoire of proposed acquisitions, no doubt designed to shock and awe, includes 12 new submarines, nine new anti-submarine warfare frigates, 12 offshore patrol vessels, seven additional maritime surveillance and response aircraft, new electronic warfare support systems, and bringing 72 Joint Strike Fighters into service from 2020.
If one gathers from the white paper's bulging shopping catalogue of proposed acquisitions of new and upgraded defence materiel, that the call upon taxpayers by the federal government seems at least a touch exorbitant, that would be entirely correct.
Over the last few years the absurd notion that defence expenditure ought to be targeted as a certain share of GDP (that being two per cent), implying a significant reallocation of financial resources to weapons and defence personnel at the expense of everything else, came to dominate the defence policy headlines.
The current government, when in opposition, promulgated the notion that Australia's defence GDP spending share had fallen during the Rudd-Gillard years to its lowest level since 1938, the year in which the infamous Munich Agreement enabled a hostile Nazi Germany to annex parts of then Czechoslovakia.
Abbott and colleagues might have been effective in pressuring the former Labor government to a defence spending equivalent to two per cent of GDP at least at a future date but, as ANU academic Andrew Carr has pointed out, pegging defence to such a target is problematic on several levels.
One of the key problems, according to Carr and Peter Dean, is that "there can never be a 'magic number' of spending which ensures security."
They went on to say, in a paper published in 2013, that "a nation needs to spend on its defence to ensure its security is a function of the threats it faces, and the interests and objectives it seeks in order to develop a sufficiently flexible planning capability and dynamic military posture."
Having pushed for the arbitrarily higher GDP share of defence spending, the new white paper under the current Coalition government proudly pronounces a program of defence expenditure inflation, enabling the magic two per cent target to be reached earlier than previously announced, in 2020-21.
But in the white paper it is made clear that the funding model for defence in the longer term, that is, over the next 10 years, will not be tied to GDP, so this enables spending to potentially run away from $32.4 billion next financial year to $42.4 billion in 2021-21 and to $58.7 billion in 2025-26.
Across the 10-year budget model, which has been externally costed, defence will be allocated almost $30 billion more than previously planned, further entrenching it as one of the largest functional spending categories on the government's budget books.
In these times of deep structural deficits and ballooning debts, it is entirely fair and reasonable for the average taxpayer to ask: where will the money come from?
Another issue is whether the additional spending is justified beyond reasonable doubt.
The top brass of defence would doubtless argue a favourable budgetary posture for defence is justified to repel envisioned, but often unforeseen, threats against Australia, or to join war efforts elsewhere. It is admitted in the white paper that "there is no more than a remote prospect of a military attack by another country."
To a certain extent this admission of reality implies the government perceives a host of other benefits associated with expanding Australian defence capacities. One of these, as noted in the white paper, is the ability of defence promotion to "create economic opportunity for Australians."
Similar to this generic stimulus-type argument are industry development and even innovation rationales for additional defence resourcing; those prerogatives are deeply interwoven into the white paper's central themes which, as an aside, play well to local shipbuilders heavily reliant upon government works programs.
But the idea that expanding defence is good for an economy is a highly controversial one, a point compellingly made by American economist Christopher Coyne. He explains that a growing defence apparatus draws more scarce resources from the private economy into a politicised process with a long-established reputation for being unable to discover the best use of those resources.
In this context one need not be reminded of the litany of Australian audits and reviews uncovering defence procurement bungles, ineffective project outcomes and wasteful bureaucracy, to concur with Coyne's basic point that the government-dominated defence complex simply lacks mechanisms for proper economic feedback and correction.
The empirical evidence doesn't fully capture the process-oriented approach adopted by Coyne. Nonetheless, even it shows, at best, little or no evidence of a positive correlation between defence spending and growth and, at worst, some studies point to robust negative effects of defence expansionism and economic activity.
It is frequently stated that defence is a core function of government that the citizenry cannot do without and, more to the point, cannot profitably be supplied through the market sphere.
Most people would agree with this proposition, but such agreement does not imply that defence ought to be treated as a financial special case impervious to the disciplines of efficiency that every other part of the economy responds to on a daily basis.
The 2016 Defence white paper may have been greeted with audacious praise by those who stand to benefit most directly from an even larger permanent war economy, but taxpayers are well within their rights to ask if they will be getting the best value for the extra money to be taken from them.
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