Free Riding: Australian Defence Cuts Imperil US Alliance

September 3, 2012 by Nicholas Bishop in International Affairs with 0 Comments

In May the embattled Labour government announced a new budget which included a 10.5% spending cut to national defense equivalent to $5.5billion over four years. The cuts lower military spending as a percentage of GDP from 1.8% to 1.56%, the smallest since 1938, just pre-dating WWII. It is the largest one time reduction since the end of the Korean War and has drawn into question Australia’s commitment to the ANZUS Security Treaty Alliance with the US and its continued capability to defend itself.

A return to budget surplus had been cited as the motivation behind the cuts, but they come in stark contrast to the 2009 Defense White Paper which was tellingly titled ‘Defending Australia in the Asia-Pacific Century: Force 2030’. The White Paper denoted the plan to modernise and streamline the Australian forces and their hardware as a result of emerging or perceived security challenges from Asian neighbours (read ‘China’).

A case in point is Australia’s beleaguered submarine fleet. Currently, Australia maintains six Collins Class vessels but due to both mechanical and crewing issues the navy is only able to deploy one sub at a time. Force 2030 had provided for 12 new diesel electric fast-attack submarines to replace the all but defunct Collins Class vessels. However according to the Australian Strategic Policy Institute, since 2009, the same Labour government has overseen roughly $25billion in defense spending cuts or one entire annual budget and the new subs have been postponed indefinitely as other spending priorities have outstripped those at defense.

Other cuts involved a two year delay in payment for 12 US Joint Strike Fighters as the project has met with considerable developmental issues; a scenario all too familiar to many US allies, the Canadian government included. Security at defense bases across the country has also developed into a major headache after criminal gangs were able to enter and remove military grade hardware from various facilities.

Entering the public arena in what many in the Obama administration have privately been imploring the Australians to take on board, former deputy secretary of state during the Bush II administration, Richard Armitage stated in July that: ”Australia’s defence budget is inadequate.” Continuing in the same vein he noted, “It’s about Australia’s ability to work as an ally of the US. A large island nation like Australia, rich in resources, needs a robust military capability.”

Choosing Sides: Economics versus Security

In November 2011 President Obama announced the deployment of 2500 marines to Darwin, in northern Australia, in what amounted to the first significant realignment of American troops since the Vietnam War. Peter Hartcher, International Editor of the Sydney Morning Herald, has suggested the move was necessitated by the increasing projection power of Chinese missile forces into the Pacific. Consequently, should a conflict ever emerge between China and the US the deployment may bring the fight to Australian soil.

While the US intentioned the move to strengthen the ANZUS Alliance, and no doubt by default the two countries are now more tied at the hip than ever before, it may have had the reverse effect, reassuring Australia that it need not fight its’ own battles and thus the spending cuts to defense. Think Japan throughout the post-war period when defense spending averaged less than 1% of GDP (due to perceived constitutional limitations) and allowed that country to focus entirely on economic growth and regional investment.

Australia’s current resource boom spurred on by massive demand from China has largely kept the country solvent during the course of the global financial crisis. It has also led some commentators to challenge Australia’s traditional alliances and regional partnerships. Hugh White, former head of strategy and intelligence at Australia’s Department of Defense has argued that it is time for the US to cede some hegemony in the Pacific to China to preserve peace and avoid conflict between the established power and its rising competitor.

While this might be a rational and diplomatic course should perceived threats to Australia be languishing but this is simply not the case. Chinese defense spending is skyrocketing, up 11% from last year and crossing $100billion for the first time (with unreported figures potentially far higher). And these factors do not even deal with Australia’s ability or inability to police its immense coastline both from foreign powers and asylum seekers. A highly controversial issue in Australia, recent legislation has again moved processing of asylum seekers arriving by boat (Irregular Maritime Arrivals) to offshore facilities as the debate rages back and forth between humanitarian concerns versus state security.

Dissimilarly, US defense spending, while still accounting for 3.5% of GDP and coming in at the enormous sum of $750billion this year, will suffer cuts of $500billion over the next decade in an effort to curb the soaring debt load. However, President Obama has reassured skeptics that ‘any spending cuts would not come at the expense of the Asia Pacific.’

In light of China’s aggressive stance in both the East and South China Seas towards just about all of its maritime neighbours over territorial claims motivated by a race for undersea oil and gas (some estimates put the total regional reserves above the proven reserves of Saudi Arabia) and a historical legacy of warfare, is it right for the US to give up power at such a contentious time? Or does American ‘war fatigue’ and a struggling economy make it an inevitability for the superpower?

Opinions are varied but it is paramount for Australia to find a credible solution that maintains the balancing act between its’ economic future which is so intrinsically linked to Chinese economic growth yet continues to reinforce its traditional military, cultural, and ideological ties with the US. While Australia’s allegiance is not seriously in question for the US the strength of the bilateral relationship means that Australia must act as a more responsible contributor to the defense alliance and not a ‘free rider’, as has recently been suggested by some US officials.