Australia’s defence budget: sign of a power shift in East Asia?

Nestling alongside the detailed strategic narrative, geopolitical analysis and discussions of future military capabilities contained in the 190 pages of Australia’s latest Defence White Paper (DWP) are clear signs that developments in the Asia-Pacific region are not going the way Canberra had hoped. The continuing rise of China in particular has deviated significantly from the script, as Dr Gareth Evans finds out.


35A lightning

By 2021, the Australian military budget is set to grow by more than $10bn to reach $42.4bn - 2% of national GDP according to current projections - and ultimately $58.7bn in 2025-26. It all adds up to an additional $29.9bn over and above the previous planned funding being made available over the ten year period to 2026.

Admittedly, previous DWPs have also been big on funding promises, often only to prove rather less effective at delivering actual cash in the end. This time, however, it seems things are going to be different, with the government having introduced a new, fully-costed and externally validated ten year defence budget model, expressly to remove the long-term funding uncertainties of the past.

Just how seriously Canberra views the evolving threats to national and regional security, and how determined it is to be ready to address them, becomes apparent if you view these figures within the context of Australia's broader public finances. After years of boom in the mining sector, the current era of severely weakened commodities prices have hit the country's revenue hard, and contributed towards a growing national debt that already stands at over $400bn. Although Australian treasury models plot a course to recovery by around 2021 - some 13 years after the last budget surplus - such predictions have been made before, and found wanting.

If bolstering defence spending in this kind of financial climate, and achieving the long-heralded 2% of GDP three years earlier than previous administrations had promised smacks of serious intent, then the military's proposed shopping list reeks of new strategic priorities.

Air, land and sea

Modernising maritime capabilities comes high on the agenda, with significant investments to be made in a continuous naval shipbuilding programme to provide future frigates and offshore patrol ships. The submarine force is also to be beefed up, doubling to a total of 12 "regionally superior" vessels capable of "a high degree of interoperability with the United States."

On the surface, the fleet will include three Hobart-class Air Warfare Destroyers and a novel class of nine future frigates, to be supported by new replenishment vessels. Littoral security is to be further bolstered by the addition of a number of unmanned aircraft and more capable patrol ships, including the Ocean Protector, a large-hulled multi-purpose vessel.

"The submarine force is also to be beefed up, doubling to a total of 12 "regionally superior" vessels."

In the air, enhanced combat and strike capability is to be based around the combination of F-35A Lightning II and the E/A-18G Growler acquisitions, and builds on the current fleet of F/A-18 Super Hornets, Wedgetail AWACs and air-to-air refuelling aircraft. In addition, air-lift capacity is set to grow to total eight heavy-lift C-17A Globemasters, 12 upgraded C-130J Hercules, 10 C-27J Spartans and 10 CH-47F Chinook helicopters, with further heavy lift aircraft and air-to-air refuellers being likely buys in the longer term.

The changing face of Australian defence is also to be reflected on the ground too. As well as getting new personal and combat engineering equipment, and the next generation of armoured reconnaissance and infantry fighting vehicles, land forces will have a new long-range rocket system and armed medium-altitude unmanned aerial vehicles (UAVs). New weapons and equipment will also be obtained to strengthen amphibious operational capability, and light helicopters acquired for Special Forces.

Other developments include enhancing intelligence and communications, improving electronic and cyber warfare measures, a range of personnel support initiatives and a country-wide programme of defence infrastructure upgrades.

Strategic narrative

It all adds up to a deliberate move to strengthen Australia's defence capabilities to meet the likely challenges of the future with a strong, capable and responsive force, as the Indo-Pacific region undergoes a period of significant economic and geopolitical transformation. As the DWP points out, with half the world's economic output expected to be coming from the region by the middle of the century, there are huge opportunities for greater prosperity and development, but they can only be realised if peace and stability are also maintained.

Against that backdrop, the strategic narrative of the paper offers a well-reasoned and compelling argument for greater readiness in the wake of broadly growing regional and global uncertainties. It sets out a range of threats which could affect Australia in the years to come, including terrorism, the growing likelihood of cyber attacks, an increasingly "coercive and aggressive" Russia, and perhaps most significantly, the growing "points of friction" between China and the US, and the tension between China and her regional neighbours over the South China Sea.

End of an illusion

Four years on from the previous DWP, which largely played down Chinese military modernisation as simply part-and-parcel of the growth of an emerging global power, it has become increasingly clear that Beijing has a quite different vision for maritime East Asia. Writing in the Australian Strategic Policy Institute's 'The Strategist', senior analyst Benjamin Schreer described it as "the end of the illusion in Canberra that somehow China will continue to accept the (predominantly) Western rules-based maritime order."

That concept is a fundamental precept of the Australian views of regional stability and security, and any potential threat to it is perceived as deeply troubling. References to rules recur throughout the white paper; the phrase "rules-based global order" alone appears in its entirety no fewer than 41 times, amid discussions of the increasing fragility and growing signs of fracture in the existing status quo.

"The balance of military and economic power between countries is changing and newly powerful countries want greater influence."

"The balance of military and economic power between countries is changing and newly powerful countries want greater influence and to challenge some of the rules in the global architecture established some 70 years ago," the document warns. Diplomatic phrasing aside, there can be few doubts as to which of these "newly powerful countries" this caveat chiefly applies - and elsewhere concerns over China's activities are spelled out quite explicitly.

It is not hard to see why. Since the 2013 DWP was published, Beijing has unilaterally declared an air defence identification zone in the East China Sea, created militarised artificial islands in the South China Sea, and ramped up its territorial claims to a number of disputed islands and waters in the region. The unfolding new reality for South East Asia is a China that is openly willing to move to change the rules of the game to suit its own interests.

Regional optimism

While Canberra's assessment of Chinese intent has become somewhat less optimistic, the outlook for Australia's other regional and global relationships are, however, seen as much better.

Within the Asia Pacific region itself, Indonesia in particular is singled out for potential increased cooperation, especially in areas such as counter-terrorism, intelligence sharing and maritime operations, with Indonesian military modernisation seen as a positive step for regional security. Japan too, now stepping out of its long years of constitutional restriction on military action is increasingly seen as a valuable bilateral ally, and presumably also as a counter-balance to Chinese expansionism.

On the wider stage, links to India, Nato and the British Commonwealth are set to strengthen, but it is inevitably to the US that Australia seems to be looking most closely to ally itself, aiming to help support America's strategic rebalance in the Indo-Pacific. However, while the US will remain a stabilising force, and almost certainly the dominant power in the region through to 2035 - the window of the current DWP - just how far beyond that the largely occidental-leaning rule-book will hold sway remains to be seen.

Power is shifting in East Asia, and Australia is readying itself to ride the wave.