Why Australia Needs a Radically New Defence Policy

September 11, 2019 posted by

Welcome to “Why Australia Needs
Some Radically New Defense Policy.” My name is Toni Erskine. And I’m still relatively new
Director of the Coral Bell School of Asia Pacific affairs. Now, to begin, I would like
to acknowledge and celebrate the first Australians on
whose traditional lands we meet and pay my
respects to the elders of the Ngunnawal people
past and present. I’d also like to note that
this event, including the Q&A session, will be
recorded and available online in the coming days. We have three very distinguished
speakers here tonight– Emeritus Professor Paul Dibb,
Honorary Professor Richard Brabin-Smith, and Honorary
Professor Brendan Sargeant. I want to say a few
words about our speakers tonight, although I realize
that, for most of you, they require very little
in the way of introduction. Paul Dibb, who will speak
first, is Emeritus Professor of Strategic Studies in the Bell
School’s Strategic & Defence Studies Center here at ANU. He was head of the Strategic
& Defence Studies Center from 1991 until 2003. His previous positions include
Deputy Secretary for strategy and Intelligence in the
Department of Defense, Director of the Defense
Intelligence Organization, and Head of the
National Assessment Staff in the National
Intelligence Committee. Tonight, he will talk to us
about Australia’s deteriorating strategic outlook, how
China is threatening our strategic space,
why the US is becoming a less reliable
ally, and why we need to become more self-reliant. Richard Brabin-Smith is an
Honorary Professor at the Bell School’s Strategic &
Defence Studies Center, where he follows his interest
in Australian and regional security. Previously, he
held a wide variety of senior policy and
corporate management positions in the Department of Defense. These included Deputy Secretary
for Strategic Policy and Chief Defense Scientist. He will focus on why
defense warning time has now dramatically shortened because
of the potential threat from China’s military
capabilities. And he will examine the
consequent implications for the ADF. Brendan Sargeant is also an
Honorary Professor in the Bell School’s Strategic &
Defence Studies Center. He’s held many senior positions
in defense and other government departments. From 2013 until 2017, he was the
Associate Secretary of Defense. And from May to
September of last year, he was Acting
Secretary of Defense. He will explain the crucial
need for a much more imaginative strategic policy that
strengthens Australia’s ability to handle defense crises. And he will argue for a
significantly increased defense budget. Now, Paul Dibb told me yesterday
that together, these three speakers have worked in
defense for more than 70 years. And I thought I should check
that claim before repeating it tonight. Based on my own calculations,
these three gentlemen have worked in
defense for a combined total of 80 years, 8, 0. So tonight, we have
the opportunity to listen to analyses with 80
years’ experience behind them. Each of our
distinguished speakers will speak for about 15
minutes, leaving ample time for questions, so please do
have your questions ready. Let’s begin. I’d like to invite Emeritus
Professor Dibb to the lectern, please. [APPLAUSE] Thank you. Well, thank you,
Professor Erskine. So you’ve now got the
aging tri-co of professors. And I didn’t serve the
longest in defense– Brab, 33 years, Brendan,
29, me, only 18. OK, Australia’s international
security outlook is starting to look very
unpredictable and potentially threatening. Australian Defense
planners must now deal with a world which
is very different from any they have known before. America is undermining
the international order. It has started what
looks like a trade war. And it is threatening
the unity of NATO. At the same time,
China and Russia are becoming increasingly
assertive, militarily, and aligned in their West–
anti-Western attitudes. All this is taking
place at the same time as a crisis of
democracy in the West is distracting it from
wielding national power. America’s new national
defense strategy, launched by Defense Secretary
Mattis in January this year, proclaims that interstate
strategic competition and not terrorism is now
the primary concern for US national security. The central challenge to
US prosperity and security, he says, is the reemergence of
long-term strategic competition by the revisionist powers
of China and Russia, which want to shape the
world consistent with their authoritarian models. Long-term strategic competition
with China and Russia is now the principal
priority for the US, and requires increased
military investment because of the
magnitude of the threat they pose to US security. Mattis identifies the
Indo-Pacific, Europe, and the Middle East as the three
key regions prioritized for US preparedness for war. We should note here that he
recs the Indo-Pacific first, before Europe. These key US judgments should be
a wake-up call for Australia’s defense planners. We now live in a
threatening world. And it is no good pretending
that China and Russia are not becoming serious
military threats to the West and its
values, as Julie Bishop did on one occasion
a few weeks ago. The former Director-General
at the Office of National Assessments,
Allan Gyngell, has recently stated that
the international order we have known for the past
70 years has now ended. He says, it’s not
being challenged. It’s not changing. It’s over. That statement effectively
undermines important judgments of the 2016 Defence White Paper
with its utterances on more than 50 occasions of the
importance of the rules-based international order to
Australia’s security. Gyngell observes that the two
previous international systems ended in war. This one, he says, seems
to be draining away as its core components,
led by the US, lose confidence in its
purpose, and emerging powers see opportunities to
assert their interests. An American belief in the West’s
international security system and willingness to invest in
it with an effective network of alliances are now in doubt. Each of the three elements
that have characterized Australian foreign policy since
1945, the alliance, the region, and the rules-based order,
now look very different. The Trump Administration is
pursuing interests and values in a number of
areas which differ more clearly from Australia’s
than any we have seen before. At the same time, we
are dealing with a China which is more confident, more
powerful, and more assertive. The speed and
direction of change are challenging all previous
comfortable assumptions about stability and
peace in our region. The 2017 Foreign
Policy White Paper argues that without American
political, economic, and security engagement,
power in our region is likely to shift
even more quickly. The central question now is,
where will the leadership come from, if it is not
to come from America, to sustain a stable
new international order without conflict? And it certainly will
not come from China. And we all know how a
unstable international order ended in the interwar years
as rising new powers were appeased. Russia wants to
see the end of NATO and a weak and divided
Europe, which in my view, is increasing in prospect,
given Trump’s undermining of the alliance. Trump sees Russia as
merely a competitor, not a potential enemy. That is not the view of key
European members of NATO. In contrast, Trump
describes the EU as a foe that he claims was invented
to take advantage of the US economically. Trump’s meeting in Helsinki
with Putin on 16 July was an utter
disaster, in my view. He described Putin as,
I quote, “extremely strong and powerful,” unquote,
and accepted Putin’s advice over that to the US
intelligence community that Russia had not
interfered with US elections. Trump’s meeting with Putin
has boosted Russia’s image of itself as a great power, or
in Russian, [SPEAKING RUSSIAN].. China wants to be acknowledged
as an actual hegemon of Asia and to see an end to America’s
alliance system in the region, including ANZUS. On current trajectories,
it would not be surprising if much of the
Indo-Pacific region in 2030 is substantially
shaped by China. The status quo is not
likely to continue. These, I put it to you, are
central strategic challenges for Australia, as China
increasingly asserts power into our strategic space,
not only in Southeast Asia, but also in the South Pacific. At the same time,
we are experiencing an increasingly unpredictable
President of the United States. He’s boasted of
having a trade war, not only with China, but
also the EU and Canada. If a fully trade– fully-blown trade war
results, the world will stumble into a moment of
great political uncertainty. When this happened in
the world in the 1930s, the results were disastrous. Only this week, France’s
President Macron has warned that the rise
of nationalist forces is plunging the system of
international cooperation into crisis. By comparison, in his speech
yesterday at the United Nations, President Trump
asserted that, and I quote, “we reject the
ideology of globalism and we embrace the doctrine
of patriotism,” end of quote. And so we are witnessing
a potentially dangerous global shift away
from internationalism towards extreme nationalism. And we can take no
joy in supposing that Trump will be gone in
a little over two years. In my view, there are enduring
popular grievances in America about the impact
of globalization and foreign trade
on employment that support his populist
stance of America first. We are thus in a period
of unpredictable strategic transition, in which the
comfortable assumptions of the past are over. I’m not one of those
who believe that America is about to pull
out of Asia, but I do think we need to give serious
thought to what Australia should do if the
US made it clear that it expects us to do a
lot more for our own defense. I suggest we need to focus on
the following key challenges to deliberately develop a more
self-reliant Australian defense policy. First, we need to focus
more on our own region of primary strategic concern,
which includes Southeast Asia, including the South
China Sea, the Eastern Indian Ocean, and the South Pacific. We should get out of
Afghanistan and the Middle East and reassert our influence
in our own region, as China moves increasingly to
challenge our strategic space and constrain the projection
of our national power. Second, while aiming for
greater defense self-reliance, it is vital that we
continue to have access to highly advanced American
military equipment, combat systems and weapons, defense
science, intelligence, and surveillance
to ensure that we maintain a clear margin
of military advantage in our own region. The simple fact is that we
have no credible defense future without access to the
military advantages the US alliance provides in this way. Increased defense
self-reliance for Australia can never mean defense
self-sufficiency. Third, we need to undertake
a fundamental review of our relationship with
Beijing and determine where its limits should be. We have become far
too dependent on China for our economic well-being. We need to consciously diversify
our trade, investment, tourism, and international
student businesses with other countries. These should include Japan,
South Korea, India, Vietnam, and Indonesia, as well as
Europe, which is experiencing our problems with China. Fourth, the time has come for
some serious long-term defense planning for Australia’s
strategic future. It should include considering
crisis situations in which the US may look to
Australia to join it in military contingencies
such as the South China Sea, the Korean Peninsula, the
Indian Ocean, and the South Pacific, and
perhaps even Taiwan. Ministers and
defense planners must avoid being caught by
surprise by such events and seriously consider what our
responses might or might not be. Fifth, we need to re-examine our
core assumptions and messages about the alliance
and how it may function during future
crises in the Indo-Pacific. In emerging conditions
of uncertainty, allies need to focus
harder on understanding each other’s interests
and calculations of risk. Allies cannot take each other
for granted or make assumptions about one another’s
future decisions, including mutual expectations
about future contingencies and the use of military force. American actions
and signaling will have a decisive effect on the
choices we face as a US ally. We need to be alert to the gaps
between promise and delivery in today’s American defense
and foreign policies. Six, the ANZUS Alliance has its
best and most realistic shape– most realistic chance to
shape the long-term future regional order over
the next few years. It will be much harder
to influence and limit Chinese defense decision making
and the strategic mindsets of other regional countries
like India and Indonesia in subsequent decades. Passivity on the part
of the US and its allies will give China the initiative
and increase the prospect that future crises will lead
either to overcorrection or are backed down
by the United States. Chinese expansion in
the South China Sea is a good example
of Western passivity in the face of China’s political
system, which can rapidly mobilize a coordinated effort
to singlemindedly pursue its strategic interests. We may be seeing such Chinese
behavior being replicated now in the Indian Ocean
and the South Pacific. Canberra and Washington need to
be more direct with one another and our policies about this
looming strategic challenge. Profound and
corrosive change could occur because of the
US and its allies being passive or destructive
as China expands its dominance. In this regard,
Southeast Asia is likely to be a focus of
Chinese power and coercion and become a zone
for incremental steps towards Chinese hegemony
and a sphere of influence. This would have severe strategic
implications for Australia. China’s projection of military
power in the South China Sea is already threatening
to constrain our ability to defend our
maritime approaches. So the next few years
are critical to shape the perception of the
willingness of US allies to incur risks and costs
in limiting China’s ability to dominate the region. The United States and
Australia amongst others should clearly
identify what aspects of Chinese strategic behavior
they find unacceptable. This will require
greater willingness to signal to China where its
behavior will be resisted. Finally, and let me
stress, above all else, we must recognize
that we now face the prospect for the first
time since the Second World War of a potential major power
adversary with whom we do not share fundamental values
operating in our neighborhood and capable of threatening us
with high-intensity conflict. To counter this eventuality, we
must develop a stronger Defence Force capable of denying our
approaches to a well-armed adversary. The key issue here
is whether we are now entering strategic warning
time regarding future conflict and whether our capabilities
are sufficient to sustain a credible defense
posture in a deteriorating strategic environment. Events could now become more
serious much more quickly, therefore, more
thought should be given to planning for
the expansion of the ADF and its capacity to engage
in sustained, high-intensity conflict in our own
defense in a way that we haven’t
previously had to consider for several generations. Thank you. [APPLAUSE] As this is a university,
let me start by saying, [NON-ENGLISH SPEECH]. For the few of you who need
a translation, let me offer. The strategic bus
is leaving town. And if we don’t get on board,
it will be all too late. And it will all end in tears. It is difficult to
overstate the significance of these strategic changes
we are now experiencing. Specifically, increases
in the capacity of armed forces in
the Indo-Pacific serve to undermine one of the
critical foundations of what has been defense
policy since the 1970s. For one nation to
contemplate the use of force, military force,
against another, it needs to have the motive,
the intent, and importantly, the capability to
conduct operations. So what is it that
we are changing from? In the 1970s and for the
next three-plus decades, no one in our broad region
had the military capability to do us much harm. Further, while motive and
intent could change relatively quickly, it would
take much longer for a potentially
hostile nation to develop the necessary capability,
doctrine, and proficiency. These were key observations. They led to the observation
that led to the conclusion that, in the context of
the defense of Australia, only lesser contingencies were
credible in the shorter term, and that more serious
contingencies were credible only in the longer term. This in turn gave
rise to the notion of 10 to 15 years
of warning time for such more serious
contingencies. There was also the policy
conclusion that the size and shape of the Defence Force
should be sufficient to handle shorter-term contingencies
and be the basis for expansion during warning time for
more serious conflicts. All this is familiar stuff. In contrast, today,
higher levels of military capability
in the region are changing the basis that
underpin these policies. In particular, China continues
to modernize and expand its arms forces. This means that its ability
to conduct operations at high levels of intensity and
technological sophistication has increased and
will increase further. This is not, I repeat, this is
not to paint China necessarily as our adversary, although,
as Paul has pointed out, China’s values and
strategic ambition are already in some
respects in sharp contrast to our own Australian
values and interests. Rather, it is to say that,
because the capability exists or is planned to
come into service, warning times for more
serious contingencies are now potentially
much shorter. Further, indicators
of warning will come to depend more critically
than in the past on assessments of motive and intent. Such judgments are
inherently more subjective and fluid than
assessments of capability. Strategic risk
management, therefore, becomes much more challenging. What are the consequences
for defense planning? I have five principal points. First, there is a need to
reconsider the spectrum of possible contingencies. And in particular,
contingencies envisaged as credible in the
shorter term will need to embrace higher levels
of technological sophistication and intensity than
in previous years. What would be the nature
of such contingencies? What would be their context? How would our Australian
interests be engaged? What level of intensity and
duration might be expected? How would they be conducted? How would the risk of
escalation be managed? How would they be
drawn to a conclusion? What might we plan to do to
avoid them in the first place? And in the context of
my part of this lecture, what are the implications
for the Force structure and its readiness and
sustainability profile? Such analysis would require
a more sophisticated approach than one based only on national
contingencies in the shorter term, and more serious conflict
put off into the never-never. Second, how should we approach
indicators and warnings for potential conflict? The need for clear
judgment in this area could be compounded
by the likely absence of an obvious warning
threshold as there could be high levels of ambiguity. There could well
be contestability between the intelligence
assessment agencies and between them
and the policy areas within the machinery
of government. Third, and following from the
prospect of shorter warning times is the need to consider
higher levels of readiness and sustainability. And this is manifest in
a wide variety of ways– training levels, stocks
of missiles and torpedoes, holdings of maintenance
spares, the ability to sustain operations for
weeks or months, many months, around the clock, with
particular implications for surveillance, command
control, intelligence staff, cyber operations, combat pilots. What about fuel stocks
and their reliability, and operational bases,
especially in the north? In previous years,
many consumables have been held at
levels not much more than those appropriate to
peacetime rates of effort and low levels of preparedness. Fourth is the matter of the size
of the Defence Force and its potential for expansion. On the one hand,
recent years have seen some important
new capabilities such as the Wedgetail
early warning and control aircraft, the Jindalee
Radar Network, better tanker and transport aircraft,
and much-improved command arrangements. System for system, tomorrow’s
Defence Force will be much more capable than yesterday’s. Further, by 2040, we will
have a few more frigates. And by 2050 or so– this is a long way off– we will have doubled the
size of the submarine force to 12 submarines. On the other hand, in many ways,
the Defence Force now planned for is only modestly expanded
from that of the benign years of the ’70s and the ’80s at
the height of the core force and expansion-based period. In many respects, the
numbers remain modest, especially against the prospect
of more intense conflict. Two issues follow
from this, first, whether the Defence Force
would be large enough to handle the more demanding short-warning
contingencies that are now becoming a real
prospect, and second, what would the modes and
mechanisms for timely expansion of the Defence Force be,
including over a much-reduced expansion period? I suggest that we should,
at the very least, identify the steps that
should be taken now to shorten the time that
future expansion would take. A related issue, as
Michael Shoebridge of ASPI has pointed out, is the need
to consider attrition reserves, not just for
peace-time accidents, but also for combat
losses on operations. My fifth point is the
matter of capabilities that could prove to
be important additions to the Australian
order of battle. Technology will bring new
possibilities and imperatives, anyway. Hypersonics come to mind. Though some specifics for
consideration improved– include improved
strike capabilities for enhanced levels
of deterrence, a point on which
Brendan will say more, nuclear-powered
submarines, perhaps eventually, and an Australian Maritime
Area Denial weapon, perhaps drawing on the
formidable capabilities of the Jindalee Radar Network. The other great policy
challenge comes from uncertainty concerning the United States. What I’ve said so far
assumes that the US continues with, more or less, its
present levels of commitment towards its friends and
allies in the Indo-Pacific. What might America do that
would be different from this? An obvious possibility
is that America would raise the threshold
for its active involvement in its allies’ security. It would expect its allies to
become more capable to conduct operations in their own
defense, a sort of Guam doctrine mark two. Currently, we get
privileged access to US defense capabilities,
intelligence, science and technology, and doctrine. Providing this access continued,
the consequences for us would be to increase the
emphasis on what I have already mentioned, more readiness and
sustainability, improvements to northern bases, attention
to the expansion base, enhanced strike, and so on. This will cost
more, but would not, in itself, represent a
major redirection of policy. Much more worrying would
be if the United States withdrew into its shell
and significantly reduced its interest in the
Indo-Pacific and its allies, and for that matter, in
the North Atlantic, too. I believe this to be unlikely. But if it were to happen,
the consequences for us and for others would be severe. Alternatives to American
high-tech equipment would not be as capable and
probably just as expensive, probably more expensive. Reduced access to
American intelligence, science, and so on, would
be a severe disadvantage. And further, with
American withdrawal, we could expect a more assertive
China to fill the vacuum. A particular concern
could be the end of extended nuclear
deterrence, not just for us, but for other US allies in the
Pacific, Japan in particular. To say the very least,
such a development and the prospect of nuclear
proliferation in the Pacific could require Australia
to review its own position on nuclear weapons. What I have just outlined
is not a counsel of despair, far from it. In many ways, Australia’s
Defence Force today is in good shape. And the modernization plans
are impressive and reassuring. Our relationships with such
countries as Japan, Indonesia, and India are
already a good basis on which to build and
to advance our shared interests and the security
of the Indo-Pacific. While vast policies cast
a long shadow, defense itself recognizes that changing
times mean that policies themselves must change. Whether the rate
and extent of change are sufficiently recognized,
is, however, a moot point. And as Brendan is
about to argue, a higher level of
strategic imagination could help position us
better for the future. In conclusion, time
is not on our side. We cannot afford complacency. Our future strategic
circumstances will be much more demanding
than those of the past 40 years. And we need to respond
to these changes now. The strategic bus is leaving. And we need now to get on board. Otherwise, it will
be all too late. Thank you. [APPLAUSE] Good evening. It’s a great pleasure
to be here and to see so many familiar faces. We know that the
world we have lived in is changing in profound ways. We do not know what the
future will look like. Any genuine crisis is a
challenge to imagination. Such a crisis will challenge
who we are and who we can be. The challenges to our security
in the emerging strategic order of the Indo-Pacific
are, first, a challenge to our strategic imagination. To respond effectively, we
need to re-imagine our place in this order and work to
shape it to our interests. So we must think radically
about policy and strategy. I say radically, because
thinking must, over time, consider the fundamentals of
our strategic environment, the ways in which it is
changing, our place in it, and the measures we need
to take to ensure security and prosperity. The changes we are
seeing call into question the utility of current
policy frameworks as a guide to action in the future. For decades, Australian
defense strategic policy has been guided by the
overriding goal of maintaining strategic stability
in the Indo-Pacific in ways that support
our national interests. Australia has pursued
this goal in three ways. We have supported
and participated in the creation of regional
communities of interest. We have pursued regional
capability and capacity building through bilateral
and multilateral defense cooperation. We have intervened
to help resolve regional crises, either in the
context of natural disasters, or in relation to
political challenges such as Cambodia, Timor,
and the Solomon Islands, and more recently, Marawi. This has occurred
in an environment that has been stable, and
underpinned by US power, and broadly-agreed assumptions,
now under challenge, about the nature of
the strategic order and how it should work. Our strategic goals may
not change that much. But we’re going to have to work
a lot harder to achieve it. Strong defense capability
signals both the willingness and the capacity to defend our
national interests with force, if necessary. It ensures that we are taken
seriously in our region. Australia’s strong defense
capability has, for decades, been one of the foundations
of Australia’s ability to build community, build
regional capability, and ensure Australia’s influence
in regional decision making. How we build capability
in the future will be the key to our
capacity to continue to exercise influence and
support regional security. Policy is important. It is much more than words. Policy establishes how we
understand the reality we are in and guides our decisions. The question for
policy is, not only what does it enable us to see
so that we might make decisions with confidence, but what does
it prevent us from seeing? What does current policy suggest
are our current blind spots? The DFAT White Paper, the
central foreign policy document of the government,
argues that the world is changing, that
we have an abiding interest in the continuation of
the current rules-based order. The question that lies on the
other side of the White Paper is, how might we
operate in a world where the rules-based order
we are comfortable with is being supplanted by
something with which we are less comfortable such as
a different conception of what the rules might be, or
a world where we seek coercion as a policy instrument
used more frequently? The DFAT White Paper speaks
to this with its focus on strengthening our
regional relationships. But the pace of and
extent of change in our strategic environment
raises the question of whether we are putting
sufficient resources into implementation. The border has
emerged as a major, indeed, perhaps essential
organizing idea for much of national security thinking. Central to this is
the idea of the border and the necessity
of border integrity. This goes with our
trend in thinking that suggests that the
border embraces and mediates every aspect of our relations
with the rest of the world. This gives policy and
strategy development an operational focus, because
most threats to border integrity, real or
imagined, demand a short-term
operational response. Strengthened policing and
a hardening of the border, in the context of the challenge
of the changing strategic order in the Indo-Pacific,
is insufficient as a conceptual framework to
guide policy and decisions about future engagement
in that strategic system. More profoundly, it
suggests a failure of strategic
imagination, because it turns us inwards, embodies
the fear of the world, and either narrows or takes
us away from engagement. The 2016 Defence White Paper
was in many ways a landmark document, because it established
a funded investment program that will guide development of
the ADF for the next decade, particularly, the rebuilding
the Australian Navy. The White Paper does
not establish priorities for Force structure
planning, but focuses on Australia’s strategic
defense interest and consequential strategic
defense objectives. These strategic
defense interests are a secure,
resilient Australia, with secure northern approaches
and approximate sea lines of communication, and
securing their region, encompassing maritime South-East
Asia and the South Pacific, stable Indo-Pacific Region,
and a rules-based global order. Each of these strategic
defense interests has allocated to them
corresponding strategic defense objectives. The conceptual problem that
the White Paper presents is, that it gives
each equal priority to each of these interests,
and by extension, the defense strategic objectives. The problem of having
strategic defense interests of equal priority
is that priorities for capability building and
strategic decision making are then conditioned by
whatever the current crisis is. Short-term crises,
which are visible, will often take precedence
over longer-term crises, which are not so visible. We are in a period
of transition. A characteristic of
periods of transition is that the strategic
environment will be ambiguous. We see experiments and hedging. We will see countries
large and small across the Indo-Pacific
behaving in unexpected ways as they seek to position
themselves in a potentially different strategic order. Because we don’t know what
the future will bring, the past can become
very seductive, because it is what we know. Policy therefore
becomes very important, because the task
of policy must be to help us see the reality
of our strategic environment and to guide
decisions to respond. So what should we do? I have four suggestions,
another list. We need to increase presence
and build integration with regional countries
at the Force level. In times of transition,
presence matters. Presence means
that you are there and that you can respond,
both operationally and strategically, to events,
both to solve problems now and to create the
decision-making structures of the future. We should increase our
presence in the region, both in diplomacy
and in defense. For defense, the
guiding policy framework should be on capability
building to create the capacity for
forces to integrate to deal with both strategic
and operational challenges. Forces should be
capable of integration to respond to contingencies
at every level of potential threat. Integration must embody
partnership, including acceptance of leadership
from other countries when that is appropriate. With Indonesia, the country of
most importance to Australia and our long-term
security, we should build integrated
capability to a level where we can create and operate
a combined task force that can be led by either
Indonesia or Australia, and be capable of dealing
with a major regional security challenge. The operational test
for capability building should be the capacity
to integrate forces. The strategic test
should be the capacity to operate as an
integrated force in high-intensity
contingencies to either resist coercion or signal willingness
and capacity to do so. Increased presence that
reflects a genuine partnership and a building integration
requires a profound change in strategic and
operational culture, both for Australia and
for our regional partners. We need to understand, build,
and use defense capability strategically. We’re building this
defense capability to strengthen our position
in our strategic environment to make us more powerful. An ADF that possesses
major strategic capability increases Australia’s
ability to act independently or in coalition. The primary lens for future
capability development should be on the extent to which
it contributes to this goal. Emerging capabilities, such
as a Joint Strike Fighter, the future frigate, and
the future submarine will change our
strategic environment, increase Australia’s
military power, and will create
new opportunities for engagement and capability
building in the Indo-Pacific. We need to understand what
these capabilities represent strategically, how and where
they can increase Australia’s power, and the ways in
which we must continue to develop and use them
to increase our ability to act independently in support
of our national interests. One of the major implications
of these capabilities is that, in giving
Australia more power, they will give Australia more
capacity and opportunities for leadership. I make a point
that our experience of leading in response to
a major security crisis in our region is limited. In recent history, it
is only the independence of East Timor-Leste that I
would consider a major security crisis that directly
engaged our interest and where Australia had
to exercise leadership. We should build
deterrence capability that is independent
of alliance systems. The alliance enhances
our deterrence, because our deterrence
capabilities are integrated into larger alliance systems. Policy should focus on
strengthening our capacity to exercise deterrence
without necessarily drawing on these systems. It may mean a greater
focus on developing indigenous capabilities
that have deterrent effect. It may also
condition how we went to think about and use
some of the emerging strategic capabilities, such as
a future frigate and the Joint Strike Fighter. We should understand that
budgets drive capability, which in turn determines our
capacity to operate effectively in our region. We are getting
smaller in relation to other economies
in the Indo-Pacific. This means that,
if nothing changes, we will, over time, have
less power, including military power. To offset this, we will
need to increase our defense capability. This means that we
will need to put more resources into defense. The defense budget,
$31.2 billion in 2018– ’19 budget papers,
is significant, but it is by no means the
largest item of projected commonwealth expenditure. It is less than the expenditures
on health, $78 billion, education, $34 billion,
social security and welfare, $176 billion. The measure of the adequacy
of the defense budget does not lie in how
much a proportion of GDP it represents, nor does it lie
in the share of annual budget allocations across
commonwealth expenditures. The only meaningful measure
of whether the defense budget is adequate lies in
how much capability it allows us to
acquire or develop. It is the level
of capability that determines the
contribution of defense to our ability to support
our national interests in the Indo-Pacific. Ultimately, how
much is enough rests on a judgment about the level
and nature of strategic risk and the extent to which we
went to try and mitigate it through capability building. As each of us tonight has argued
from different perspectives, our strategic risk
is increasing. In summary, the
changes to how we participate in the
Indo-Pacific will be profound. We will not only have to
re-imagine what we do, but in some ways, who we are. We need to build much
greater defense integration with countries of
the Indo-Pacific, particularly Indonesia. We need to build
capabilities that give us more deterrence with
less reliance on alliance systems. Priority for
capability development should focus on
increasing our capacity to support our strategic
interests in the region where we live. We need to be ready
for leadership in the event of a major
security crisis that engages our national interests. In summary, we need
a defense capability that can support our
participation in a world where the rules are likely
to be negotiated continually, and where the capacity
to exercise force will be an essential foundation
of our ability to live in this world as we want. Thank you. [APPLAUSE]

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