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December 31st 2014 print

David Archibald

Alms vs Armaments

The Coalition has fallen short of its promise to significantly lift defence spending -- a worrying failure as Beijing continues to stoke regional tensions. Given the will to act, the solution is simple: reform the welfare behemoth and re-direct the savings

abbott planeOne of the reasons the Coalition won the last Federal election was because it pointed out that Australia’s spending on defence had fallen to 1.38% of GDP, the lowest level since 1938.  The promise was to spend at least 2% of GDP on defence — a pledge the Abbott government has found daunting.  The current promise is to increase defence spending by 3% per annum until the 2% of GDP figure is achieved.

The previous government had promised many things too.  The 2009 Defence white paper was entitled “Defending Australia in the Asia Pacific Century: Force 2030”. This is the document that promised twelve new submarines, amongst other good things, for Australia’s defence.  It had a short shelf life because, just eight days later, the defence budget was slashed.  Labor kept cutting the Defence budget, with a further cut of 5% in 2010 and 10.5% in 2011.

Defence expenditure peaked at 40% of GDP in 1943, during World War 2, which saw several hundred Australians killed on Australian soil – from Sydney Harbour to Darwin and round to Port Hedland.  After that war the generally accepted wisdom was that defence expenditure should be a minimum of 3% of GDP.  Given the state of the world today, with a couple of civil wars in the Middle East and North Africa (MENA) and the showdown looming in East Asia, getting to a minimum of 3% of GDP on defence would be a good idea.  And the sooner the better, one might think.

Where is the money to come from?  All taxes suppress economic activity, so we don’t want to do it by increasing existing taxes or introducing new ones.  The biggest single lump of expenditure goes to social security and welfare, at about 9% of GDP.  Defence is one-sixth that.

We all know that we have had a boom since the turn of the millennium, with GDP up 46% since 2000.  Population grew 21% over the same interval so, on average, we are about 20% better off than 14 years ago.  It turns out that welfare recipients are also about 20% better off than in 2000, with per capita welfare spending rising (in 2010 dollars) from $4,483 to $5,390 in 2013.  That 20% increase now accounts for about $20 billion per annum.  A good part of the increase was during the Howard years. Indeed, the percentage growth in per capita welfare spending actually dropped during the Rudd/Gillard era.  Howard wanted to be re-elected and was prepared to spend the country’s money to make it so.

So there’s plenty of money for defence: it’s in the welfare budget.  Defence expenditure could be doubled simply by taking per capita welfare spending back to the level of 2000 and re-directing the savings.

Would anyone really suffer if the welfare budget were to be cut?  Let’s take the recent case of the Cairns mother who allegedly stabbed eight children to death, seven of them her own.  Those children were by five different fathers.  But that’s not the problem, which is that taxpayers were paying to support them.  If the mother had to pay for the children herself, she might not have had any at all. Similarly, if fathers were made responsible for the upkeep of their progeny, they might be more careful. The Cairns mother might have had a job and contributed to society instead of being a social parasite.  The whole notion of paying single mothers to produce their offspring started with a Bill Hayden budget during the Whitlam years.

Scott Morrison has started his new ministerial post by promising to reform the heavily rorted disability pension system. If you succeed in that, Mr Morrison, there’s a lot more to be reformed after that. The savings could pay for the needed defence spending and start paying down the debt.

David Archibald, a visiting fellow at the Institute of World Politics in Washington, D.C., is the author of Twilight of Abundance (Regnery, 2014). 

 

 

 

Comments [7]

  1. en passant says:

    I spent a considerable period of my working life in the military and after I was posted from field postings to a desk job I discovered that we are in fact funding two militaries: the excellent uniformed branch that does things and fights wars and a civilian defence bureaucracy that sucks the life out of the war-fighters. Let’s call this second group the ‘Vampire Defence Welfare Parasitic Internally Focused Enervating Anti-Military, Anti-Violence All-Encompassing Diversity Promoting Team” – aka VDWPIFEAMAVAEDPT for short.
    We pay the uniformed military to learn and practice controlled violence against those the government deems to be ‘enemies of the State.’ Not surprisingly, these enemies try hard to kill our military. But to man at the other end of the two-way rifle range is not the only enemy our military has to contend with. Far harder to deal with are the armchair minions of VDWPIFEAMAVAEDPT who constantly seek out non-PC behaviours and thoughts, actions that show discrimination and bias and who with all the power granted to them will second-guess the decisions and actions of those fighting for their lives. Who can forget the decision of the non-military ‘Brigadier’ Lyn McDade who prosecuted two brave Commandoes for the collateral damage of children who were killed as they fought several Taliban trying to kill them? McDade serves on as a dark shadow and a threat to every lethal decision our warriors make. Maybe she could turn her attention to the Lint Café siege as there must be some publicity there?

    As a shadow following our uniformed soldiers she fully demonstrated her legal abilities by completely failing in her quest as an armchair warrior to prosecute combat soldiers in Afghanistan for murder. Despite her morale-sapping incompetence I have not sighted her resignation. Surely after such an epic failure to miscarry justice an ethical person would resign? As a civilian she can never gain the understanding of what happens when under fire. It cannot be much fun knowing you are completely out of your depth and held in low regard by the military in which she hold a high, but merely symbolic rank.

    The following extract is from an email from an anonymous officer who encapsulates the problem:

    “The Australian Defence Force, for example, no longer deploys soldiers or staff. It “brings together people elements”, according to the mission statement of the Defence People Group, a directorate once known simply as HR.
    The person in charge of DPG is Rebecca Skinner, the deputy secretary, Defence People. She is one of a dozen or so elite civilian bureaucrats in the Defence Department who receive a salary in the vicinity of $300,000 a year, somewhat more, incidentally, than a Major-General.
    Few would disagree that the troops currently on the ground in Baghdad deserve every dollar they earn and them some. It is hard, however, to make the case for the shiny-trousered battalions of functionaries who make up the bulk of the workforce.
    Bureaucratic reform is the challenge facing former Rio Tinto managing director David Peever, who is conducting the ‘First Principals Review of Defence’ and is due to deliver his recommendations on efficiency and effectiveness next year
    Peever and his team have much to work on. The frontline to back office ratio in Defence continues to grow in the bureaucrats’ favour. In 1999, when Australian forces were deployed in East Timor, civilians made up 24 per cent of the workforce. Now it is 28 per cent, and they are rewarded more generously.
    The number of senior executive grade public servants — that is to say those on salaries of $100,000-plus — has increased by half since 2003.
    The ranks of those in the highest paid category, SES Band 3, which currently attracts a salary of up to $450,000, have swelled from six to 11.
    Much of this unseemly growth in officialdom can be traced to a decision in the late 1990s to centralise supporting activities that the army, navy and air force once carried out separately. It is a fine idea in principle, but the problem with letting bureaucrats run the back office is that they will inevitably try to take over the front ¬office, and then we are really in trouble.
    So it is, one suspects, with the DPG, a division caught up in the prissy, moral crusades of our time and driven by obsessions that bear little relation to the strategic purpose of Defence.
    Take, for example, the five-year Defence Diversity and Inclusion Strategy, developed by the Centre of Diversity Expertise. It is more than 20 years since Defence ended institutional discrimination on the grounds of sexual orientation, yet the department has not yet gone far enough to appease the regiments of social engineers.
    The Centre of Diversity Expertise demands “specific strategic communications and marketing” (something we once called “advertising”) to attract lesbian, gay, bisexual, transgender and intersex recruits. There must be “sexual orientation, intersex and gender identity awareness and education training” and forums to discuss “best practice LGBTI workplace inclusion”. Staff must produce regular reports “on the effectiveness of workplace inclusion initiatives for LGBTI people”; Defence needs “LGBTI outreach programs”.
    That Defence, like any modern workforce, should not discriminate goes without saying. The rules against intimidation and bullying are well established and must be enforced. Yet the Centre of Diversity Expertise, like the Circumlocution Office, adopts the cause “as if it were a brand new thing of yesterday, which had never been heard of before; muddled the business, addled the business, tossed the business in a wet blanket”.
    Space does not permit us to quote more than a tiny sample of the sanctimonious jargon that oozes from Defence headquarters in Russell these days. Women, Aborigines, Torres Strait -Islanders, Culturally and Linguistically Diverse Australians, the disabled and those of a mature age get much the same treatment.
    Complying with these morally loaded, but ultimately self-defeating programs wastes countless hours of time and millions of dollars of resources that could be ¬directed to more direct ways of defending the country.
    The Defence People Group could, for example, be addressing the chronic shortage of submariners that threatens our capacity to patrol vital sea-lanes.
    The shortage is likely to get worse.
    If culture change is its goal, Defence could draw on the strengths of the Special Air Services regiment, surely among the most efficient fighting machines in the world, skilled in problem-solving and driven by results.
    Pushing paper and cultural diversity (they now even have to take into account the effect of their operations on climate change) while the enemy is trying to kill our uniformed soldiers is a recipe for disaster. Let’s form a committee to consider that …

  2. Jody says:

    This is a frightful indictment of our culture and society. Do you ever get the feeling that NOT fighting in wars for a very long time makes people soft, shallow, inward-looking, insular and naive? I’m beginning to think we’re seeing these consequences in a society which has not been seriously in fear of an existential threat for a considerable period of time. Nero fiddled while Rome burned.

  3. en passant says:

    Jody, you are quite correct. Having fought two world wars, Korea and Vietnam + many other sundry deployments the Army was managed by principles and objectives. If I measured the MBI’s (Military Board Instructions) setting out the rules they were less than a 30cms from A-Z. ARO’s (Army Routine Orders) were issued each year and had a sunset clause of one year from the date of issue. They also mentioned 30cms at a stretch. The total Army Law Manual encompassing both the peacetime Defence Act & the wartime and operational deployment Army Act was perhaps was at most 10cms wide – and all stood about 10cms tall.
    Around 1973, the military began to codify EVERYTHING into rules, procedures and standard processes. Initiative became a four-letter word. I remember having a tricky personal request from a soldier. I called a young officer with the extraordinary title of ‘SO3 Personnel P3-P6′. I’m sure you can work out what it means, but for the others the translation is: ‘Captain, Military District Personnel Branch, Standard Personnel Procedures Volume 3 to Volume 6′. After much searching he told me that the situation was not covered in regulations and therefore I must reject the soldier’s very reasonable and personally vital request.
    This is were the cardigan brigade and the uniformed military parted ways. granted the request and faced the music – but fortunately, the Brigadier for whom I worked was a real soldier and supported my decision and breaking of the rules. Why did I risk my career? Like many of the old uniformed military, I did it because it was the right thing to do.

  4. Jon R says:

    The point n the article about reforming the “welfare behemoth” and i don’t mean the one he is suggesting. I am talking about the one which delivers patrol boats which break because they were made to civilian specs. (probably the cardigan brigade’s fault) The ones who built the Collins class we then spent ten years fixing. The ones who are years behind in the AWD project. The ones who are crying because the current Government hasn’t bought forward more expensive projects.

    If the head of the Kriegsmarine had approached Hitler and suggested that only a third of the U-boat fleet was fit for service, guess where he would have been serving.

    We are now building (apparently) three air warfare destroyers, does this mean only one of them will be available at any given moment? We don’t have the money, or the time for this! Proven designs now in service, bought cheap would improve our capabilities, and keep us well ahead. Oh, I’ve just had an idea! How about we leave the building to the ADF, think of the apprenticeships we could offer! A proper naval dockyard, run to time and on money. Apprentices from all three arms learning, and actually building a capability. Producing product which did what it said on the box.

  5. en passant, I agree with you, but you should know by now that the bulk of government created ‘jobs’ are bureaucrats, and in some societies the secret police. It is an extremely rare government job that is actually wealth generating.
    Creating and maintaining an effective defence force is one of the really essential government tasks – protection of the citizenry. It is getting more difficult all the time.
    Imagine the LGBTI [or any of the other 'rights' brigades such as Gillian Triggs] trying to defend anybody against an Islamic fanatic. The most ridiculous aspect of that scenario is that they would defend [not physically of course - they are physical as well as moral cowards] the Islamic fanatic against you who would [and probably already has] risk[ed] their life to defend those who the Islamists would kill.

  6. en passant says:

    Jon R, the ‘welfare behemoth’ to which you refer is a wonder to behold. Naturally, it does not apply to everyone, but the culture as a whole is mind-boggling. At 4.55pm (16.45hrs for real people) the civilian next to me was deeply concentrating and typing away. At 4.56pm he let out a gurgle that attracted my attention as something in his genes triggered an ‘It’s Time’ signal. He stopped typing in mid-word, saved his work, closed his computer (by crashing it rather than logging off) and was at the lift by 4.57pm. I cannot explain this behaviour as it is so alien to me that I cannot get my mind around it. Such people and such organisations cannot be reformed, they must be replaced. In society in general, when this level of entropy occurs revolution takes place, things ALWAYS get even worse, but then something fresh arises from the chaos as initiative is essential.
    Not so many years ago I came across a case of the immovable politics and inertia of DMO. A newly arrived officer discovered an error, but could not have the procurement contract amended as it had passed all cardiganed (and senior uniformed sign-offs so the Army spent $xxM buying equipment that they could use (it was incompatible with its parent equipment). It was easier to let the purchase proceed than admit error and go through the process again. The officer commented that “They behave like lemmings. If the procedure says go over the cliff and common sense says don’t do it, they would follow procedure and be posthumously awarded praise for doing so.” That is a terminally ill culture.

    I made a passing comment about battle plans must not disrupt the climate or the environment. That rash statement probably brought a smile, but it is true. We have created a whole department to ensure that we fight sustainable battles (probably to ensure that as we fight off invaders we do not to hurt animals or the environment). This military and national suicide note is now entrenched in ‘procedures”, viz:

    It seems our elected representatives regard the dictates of Agenda-21 as being of such importance that even the defence force must comply, as stated in the Defence Ecologically Sustainable Development Strategy (DESDS for short):

    “This strategy is a high level overarching guide to the integration of Ecologically Sustainable Development (ESD) principles within Defence such as resource use, environment and heritage management, development of capability, procurement practices, infrastructure development, the operation of Defence Training Areas, and Defence contribution to community well-being……The United Nations 1992 environmental summit in Rio de Janeiro developed Agenda 21, which sets out a blueprint for sustainable activity across all areas of human activity. The Council of Australian Governments endorsed the National Strategy for Ecologically Sustainable Development (NSESD) to illustrate Australia’s commitment to ESD, and implementation of Agenda 21. The NSESD has become the benchmark for ESD in Australia…..The NSESD defines ESD as:

    ‘…using, conserving and enhancing the community’s resources so that the ecological processes, on which life depends, are maintained and the total quality of life, now and in the future, can be increased’……. Sound environmental management practices are in place to equip Defence personnel to understand and behave in accordance with environmental legislation and its obligations…….In the United States some land has been removed from the Defence Forces’ stewardship, due to failure to appreciate the need for robust environmental management.”

    The state of the Defence Department and its civilianisation of operational strategy and support is truly wasting $Bn’s and not producing warfighting equipment and capabilities. The purchase of the Joint Strike Fighter almost guarantees we will lose control of our skies and that means the destruction of our troops on the ground. The sheer size of Oz means that any enemy will have difficulty occupying all of the land mass, but it is certain that we will not be able to dislodge them. Oh, and submarines cannot effectively operate between Broome and Cooktown, so unless we are attacked by penguins (or by India or NZ) more submarines are not the answer. Please send a note to all potential invaders that arriving via Indonesia is out of bounds and not allowed. We should include another note reminding them of their obligations under Agenda 21. That should deter them …
    Jon, you made a second valid point:
    ” We are now building (apparently) three air warfare destroyers, does this mean only one of them will be available at any given moment?” Actually, I suspect you probably just made a lucky guess, but the answer is ‘Yes! you win the prize’. 33% availability is normal. It is too long and complicated to explain here, but the good news is that we will often have two at sea and on rare occasions, all three. The problem is when they go in for scheduled servicing, repairs and upgrades we may never see them again. Read Hal Colebatch’s wonderful book on wartime work practices in our dockyards. Nothing has changed. The RAAF does better because it has more uniformed maintenance technicians.

  7. en passant says:

    DenandSel: Yes, I do know (only too well that government ‘job creation’ is exactly that. There is an attitude, reinforced by process, regulations and culture that inhibits people in government jobs from ‘doing the right thing’. On one occasion I asked a long-serving junior clerk to do something. The reply was that they were not qualified and it was not in their job statement. I lodged a formal complaint (and got one against me in return!) Sanity was never restored, but after several hundred hours of paper-shuffling, arbitration and counselling the matter was dropped, though all recognised that I had been a bad boy.
    As for the ‘diversity issue’, I am less sanguine and dogmatic as private sexual orientation does not lessen warlike traits. The Spartans and Alexander the Great encouraged homosexuality as a form of ‘bonding’ and they fought well. Until recently the unwritten rule was ‘don’t ask & don’t tell’, because overt homosexual or lesbian behaviour was disruptive to those not so inclined and to unit cohesion.
    In twenty+ years I suspected only two or three military people I knew of being homosexual. I did not ask and they did not tell. However, I later found out that three others (all males) that I knew well were so inclined.
    All three were in combat arms and two of them were decorated for bravery. One of them is a superb soldier. He kept his sexual orientation to himself throughout his service – and still admits nothing to this day (though everyone knows) … My problem with the current approach is that it has gone from the shadows to publically ‘in your face’ or else. Just ask Bernard Gaynor, who was terminated for expressing abhorrence at the lifestyle of the LGBTI Brigade. Now it is a case of if you do not actively support the LGBTI agenda ‘Don’t Ask & Don’t Tell – but if asked, make sure you lie and be wildly supportive”