The Future III: Defence Needs and Policy - The Way Ahead

Neil James

Australia Defence Association

www.ada.asn.au

What is the Australia Defence Association?

ADA founded in Perth in 1975 Only non-partisan and truly independent, community-

based, public interest watchdog and ‘think-tank’ on defence and wider national security issues

Community-based membership throughout Australia (fewer than 15% are ex-military)

Website: >www.ada.asn.au< Quarterly national journal - Defender Monthly bulletin - Defence Brief Receives no government funding and depends on

membership subscriptions and corporate donations

What is the Australia Defence Association?

The national community watchdog on national security matters. Our public interest guardianship role and function is similar to that of other community watchdogs such as: Taxpayers Australia (Taxpayers Association) Australian Consumers Association Australian Conservation Foundation

there are plenty of votes in taxes, trees and

shopping but few votes in defence

there are no votes in defence (until it is too late)

we can prove our independence by our

poverty

www.ada.asn.au

Scope

Some figures Some history An overview Macro-economic picture Some thoughts Discussion

Some Figures 4 years 2 years ahead 41 reviews of the ADF’s reserve components 3 changes of depot and 7 changes of SED 30 per cent and 50 per cent smaller than 1990 18-30 age cohort 2017 27% to 37% over the last decade 1 in a 100-year war $A1,000,000,000 14 times 3 Ministers not 1 and a 1/3

A Little History 1:

Defence spending as percentage of GDP

0

0.5

1

1.5

2

2.5

3197619811987199119972002200320042005

A Little History 2:

Where the money goes

0

10

20

3040

50

60

70

80

Defence as per cent of Federaloutlays

HESS as per cent of Federaloutlays

197619811987199119972002200320042005

History III CMF was organised and acculturated to a “3rd AIF” model

the war that never came “deemed qualified” debillitating rivalry (DPS Vs Blamey delusion)

The Army Reserve has never had enough diggers and junior NCO, except national service 1951-57 national service 1965-72 Fraser’s Afghanistan largesse diversion 1980-81 Ready Reserve Scheme

History IV Government and Opposition Spiral of broken promises and opportunities

Project Waler “deemed qualified” disaster training time debates since Millar Review RRES to HRR saga cadre quality contagion pentropic to Army 21 disasters/betrayals Awards and AWAs

Demography-economy-ethnicity ambush

History V Timor:

nice and close the Indonesians chose not to fight the rest of the world came and rescued us the folly of much “contracting out” in terms of ADF depth

The conflict with Islamist terrorism: first operational role for formed reserve units since 1945 immediacy of threat community relevance

Overview Politicians do not fix problems often because we let them

ignore the problem (or just waffle) Few Australians ever change their vote on a defence issue

alone (and then they usually do so far too late to fix it) 1 in a 100-year wars might only occur every four generations

but they do still occur expansion base retention base community-military interface (public visibility) civil-military government capacity

Cost Versus capability dilemma SES/CFA comparison - immediacy of the threat not just “localism”

The Future in Macro-economic Terms

Population in 1965

1000000 800000 600000 400000 200000 0 200000 400000 600000 800000 1000000

0-45-910-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-8485-8990-9495-99100+

Males Females

Population in 2005

1000000 800000 600000 400000 200000 0 200000 400000 600000 800000 1000000

0-45-910-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-8485-8990-9495-99100+

Males Females

Population in 2045

1000000 800000 600000 400000 200000 0 200000 400000 600000 800000 1000000

0-45-910-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475-7980-8485-8990-9495-99100+

Males Females

Average real GDP per capita by decade

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1960s 1970s 1980s 1990s 2000s 2010s 2020s 2030s 2040s

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5Per cent Per cent

Labour force growth

2003-04 2000s 2010s 2020s 2030s 2040s

160,000 1,575,000 845,000 545,000 560,000 330,000

Nominal GDP to 2042 with different productivity assumptions

0

1000

2000

3000

4000

5000

6000

7000

2001-02 2006-07 2011-12 2016-17 2021-22 2026-27 2031-32 2036-37 2041-42

0

1000

2000

3000

4000

5000

6000

7000

IGR Projection

+0.5 per cent($1016 billion)

- 0.5 per cent($852 billion)

$billion $billion

Defence spending (% of GDP)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2004-05 2041-42

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Standard Low productivity growth

Per cent Per cent

Demographic spending pressures (% of GDP)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Health Aged Care & carers Aged pensions Other social safety net Education

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

2003-04 2044-45

Per cent Per cent

Some Thoughts ADF Reserve not RANR, ARES+, RAAFAR “Reservist” not “Reserve” Joint focus, including joint reserve units Profession of Arms (there are actually few part-time doctors,

dentists, lawyers, radiographers, architects, etc) 3 Ministers not 1 and a 1/3 Real roles then long-term consistency of policy and

application HECS waiver Medical and dental cover (and gym membership) Superannuation Comparable pay rates for skills but taxed?

Discussion

www.ada.asn.au