This past Wednesday, the Australian government published a new white paper on defense and national strategy. The 2020 Defense Strategic Update is notable for a variety of reasons, but perhaps the one that sticks out most is the approximately 40 percent increase in defense spending over the next decade. Conventional wisdom has been that the economic cost of dealing with the pandemic will drive countries to cut defense expenditures and to do so steeply. That may still be the case for many of America’s allies, even for the United States. But facing what Prime Minister Scott Morrison called “a post-COVID world that is poorer, that is more dangerous and that is more disorderly,” the Australian government’s intent is to deal with the security environment as it is, not as it hopes it might be.
For 2020-21, the Australian defense budget will be AU$42.2 billion (US$29.25 billion). By the end of the decade, the spending goal is AU$73.7 billion (US$51.1 billion), a 75 percent increase in nominal dollars. In the coming year, Canberra will meet its target of spending 2 percent of its GDP on defense and intelligence and, with the updated budget, will be boosting its procurement and investment defense portfolios by AU$75 billion over planned investments from the previous (2016) defense white paper. In addition to procurements already on the books, including a dozen new submarines and 72 F-35 fighters, the new monies will go towards buying longer-range anti-ship missiles from the United States, increasing undersea capabilities, adding combat drones and longer-range rocket systems, boosting space capabilities, and investing in development programs for hypersonic weapons. Taken in total, Australia’s new defense plans are obviously designed to give it greater reach to meet the expanding capabilities of the Chinese military into Australia’s Indo-Pacific neighborhood.
Of course, plans are one thing and a change in government is another. Under Prime Minister John Howard (1996-2007), Australia began a defense rebuild that was intended to give Aussie forces the capability to fight alongside the United States, which they have done in both Iraq and Afghanistan and against ISIS. Howard’s conservative government was able to increase defense spending by almost 50 percent in real terms. The Labor government of Kevin Rudd that followed Howard pledged to keep a slow but steady 3 percent annual increase in defense spending. But his ouster in 2010 by fellow Labor politician Julia Gillard, combined with the fiscal fallout from the 2008 recession, led that government to slash military spending, with a resulting defense burden of 1.56 percent of GDP—the lowest level for Australia since before World War II.
With the release of the 2016 defense white paper and the return to power of successive Liberal-led governments, Australia has maintained a defense investment plan designed principally to bolster its conventional capabilities to defend the country and its approaches. To the plan’s critics, however, it lacked a sense of urgency, with many of the investments not coming to fruition until the end of the decade or even later. With the 2020 Update, it appears China’s aggressive behavior in the region (and, more recently, toward Australia itself) has given the government new motivation to get its act together. Or, as the white paper more formally notes, “Previous Defence planning has assumed a ten-year strategic warning time for a major conventional attack against Australia. This is no longer an appropriate basis for defense planning. Coercion, competition, and grey-zone activities directly or indirectly targeting Australian interests are occurring now.”
What is particularly noteworthy is the white paper’s view that the consequences of the pandemic will not be felt equally by all countries. “The trend towards a more competitive and contested region will not be fundamentally altered by the effects of the pandemic. . . . Some countries are using the situation to seek greater influence, while countries that were expected to become more prosperous and stable may experience economic hardship and instability.” In this respect, the Update reflects the experience following the 2008 Great Recession, in which instead of drawing back, both China and Russia took advantage of the general trend in the Western democracies to focus on domestic affairs to be more, not less, assertive on the international stage.
Prime Minister Morrison, in an address tied to the white paper’s release, set an even more ominous tone. “[W]e have not seen the conflation of global, economic, and strategic uncertainty, now being experienced here in Australia, in our region, since the existential threat we face when the global and regional order collapsed in the 1930s and 1940s. . . . And when you connect both the economic challenges and global uncertainty, it can be very haunting.”
If the situation Morrison suggests is haunting, it also presents a daunting task for Australia to address. One shouldn’t forget that while Australia is a continent-sized nation, its population is just 25.5 million, with vast areas of little population and a vast neighboring geostrategic space to be concerned about. And although prosperous, a good portion of that prosperity is tied to exports, with the leading trade partner being China. And while the 2020 Update reiterates the need to “continue deepening our alliance with the United States,” the Prime Minister obliquely notes that Australia has entered a period in which “the institutions . . . of cooperation that have benefited our prosperity and security for decades are now under increasing, and I would suggest almost irreversible, strain.”
The challenge Australia faces is coming principally from China, but it is not made any easier to address by an American ally that is less committed to the forms of multilateralism that allow the slightly-less-than Great Powers to punch above their weight.