It was just another day in Australia’s arms race.
In January, as the Omicron variant swept across Australia, infecting hundreds of thousands and placing hospital systems in NSW and Victoria under unprecedented strain, Defence Minister Peter Dutton announced a multi-billion dollar arms deal with the United States.
Australia would be buying more than 100 M1A2 Abrams tanks from the United States, plus some whizz-bang bulldozers. The cost? $3.5 billion. Not bad in the middle of a pandemic. Wags on social media made jokes about whether they came with rapid antigen tests.
The tank purchase is just the latest in a string of high-price weapons buys. In December, Prime Minister Scott Morrison appeared alongside his South Korean counterpart, President Moon Jae-in at Parliament House. The two leaders were there to announce a $1 billion arms deal with South Korean industrial giant Hanwha, which will build 30 self-propelled howitzers for the Australian Defence Force in Geelong.
The announcement allowed Morrison to revel in his happy place, the photo opportunity, flanked by some top brass from the Army. The K9 howitzer is a big gun mounted on tank tracks. It will add to the Army’s artillery inventory. Like the new tanks, the K9 will slot into the ADF’s mechanised battle groups. The spending spree will up-gun and up-armour a land force that has traditionally been based around light infantry.
$4.5 billion for tanks and howitzers sounds like a lot of money. It’s quadruple what the Commonwealth spends on the ABC each year. But in defence spending, this is small beer. The new tanks and howitzers are part of an Asian arms race. Unlike the race to roll out COVID vaccines, this is one race in which the Morrison government is enthusiastically competing.
In part because everyone’s been distracted by a pandemic, it’s not well understood how rapid Australia’s arms build up is. Defence spending is growing at around 5% a year in real terms. The government has earmarked an eye-watering $270 billion over the decade to 2030 for buying new weapons—a budget it will probably end up exceeding. From a low of around 1.5% of gross domestic product in the Rudd-Gillard years, Australian defence spending has zoomed past 2% of GDP, and is headed up from there.
Along with the spending splurge comes waste. Lots of waste. A recent report from the Australian National Audit Office found that Defence is currently managing $121 billion of acquisitions. Astonishingly, this figure is an under-estimate: the biggest project of all, Australia’s nuclear submarines, are not even properly budgeted for yet. The reason for this, as you might have heard, is that the government cancelled the previous contract with France’s Naval Group. It hasn’t got around to signing a new deal for submarines yet. Another project examined in the audit, the ADF’s fleet of MRH90 helicopters, were cancelled before Christmas by Peter Dutton.
When you cancel a mobile phone contract before it finishes, you sometimes have to pay an ‘early termination charge’ to pay out your contract. The Australian taxpayer is also on the hook: the break fee for the French subs runs to around $450 million, and that figure doesn’t include the money we’ve already spent on submarine designs that will now be thrown in the bin. More money has been wasted on the MRH90 helicopters, multi-billion dollar acquisitions that will now be retired a decade early. On land, the Army’s quest to give individual soldiers a digital link-up is many years late and hundreds of millions over-budget. Plenty of other acquisitions are in trouble—the Audit Office estimates that various major projects are a combined 33 years late.
Why is Australia embarking on a massive arms race? The answer is China.
For years, Australia got rich selling minerals to the factories and smelters to our north. But as China re-armed and began to assert itself in the South China Sea, Australian defence planners and security analysts started to get worried. Beginning with the Rudd government’s Defence White Paper in 2009, and accelerating throughout the 2010s, Australia has steadily strengthened its hawkish stance on our major trading partner.
Tensions in the South China Sea have played a major part. China has built a number of major air bases and ports on reclaimed land in the strategic waterways to its south-east, upsetting near neighbours and rattling regional assumptions of US hegemony. For its part, China claims that it is simply asserting its territorial sovereignty up to the notorious ‘nine dash line‘.
Matters weren’t helped by a string of diplomatic incidents and trade disputes. Australia accused China of hacking the ANU and Parliament House servers. There has also been a lot of concern about Chinese government coercion of Chinese nationals living in Australia. There was the flap over possible Chinese influence in Parliament, which claimed the career of Labor Senator Sam Dastyari. Australia banned Chinese companies from buying electricity transmitters or selling 5G telecoms equipment. China then fought a minor trade war with us, imposing rolling bans on barley, wine and other commodities. Relations really deteriorated when Australia called for an international commission on the origin of Coronavirus.
As with any disagreement, both parties have grievances. The Australian foreign policy establishment is worried about growing Chinese power projection in the South China Sea, as well as espionage, hacking and interference in Australian domestic affairs. China has a semi-official list of 14 points it is angry about, including banning Huawei from the domestic 5G network, speaking out about the South China Sea and Xinjiang, the COVID origins inquiry, and Malcolm Turnbull’s foreign interference laws being used against Chinese interests. Whatever the cause, Australia is now in the throes of a major Chinese strategic scare. All aspects of our foreign and defence policy are being reoriented in favour of opposition to Chinese influence and containment of Chinese power.
The poster-child for the new cold war is AUKUS, last year’s explosive secret deal to abandon the French submarine contract and throw our lot in with the US and UK, in return for access to nuclear submarines and other top-secret technology. AUKUS is the end of any pretence Australia wishes to seek security in Asia, to use Paul Keating’s formula, rather than from Asia. There is more than a hint of white supremacy to the deal: we have again allied ourselves with the Anglophone powers, the former imperialists who once ruled Hong Kong, Manilla and Singapore—the same powers that imposed the ‘century of humiliation’ on China.
Australia’s foreign policy debate is so stunted that there has been almost no deep discussion about whether AUKUS is a good idea. But the diplomatic fall-out from the special deal has been significant. AUKUS wrecked our relationship with France, supposedly an ally. It worried Malaysia and Indonesia, supposedly our friends. It enraged China, not actually an enemy. It even managed to inflict substantial damage to NATO, the North Atlantic alliance between the US and Europe. But AUKUS did get Australia a promise that we would be given access to nuclear submarine technology, enabling us to build new attack submarines … sometime in the 2040s.
Whether that technology transfer is worth it is currently impossible to tell. Australia’s gamble on nuclear attack submarines will take two decades to play out. That’s how long it’s likely to take for Australia to commission and build even one boat, and put in place the nuclear industry and support facilities to sustain it. Nor can we simply order new American or British subs: their shipyards are fully occupied building their own submarines. In any case, Australia will require a massive industrial effort to develop a domestic nuclear facility able to maintain and service nuclear-powered subs. We’ll have to educate, train and deploy hundreds of nuclear scientists and technicians—a significant challenge for a country with a declining manufacturing capability. Any boats we do get probably won’t arrive for a very long time. Just as well AUKUS isn’t meant to a traditional defensive alliance, then.
Nuclear attack subs are very capable. They have no fuel constraints and can make their own air, so can stay submerged essentially indefinitely. This makes them formidable naval assets. A fleet of eight, as Morrison and Peter Dutton say we will acquire, will certainly improve the capability of our naval forces, if and when they eventually enter service.
But while nuclear subs are long range and lethal, this doesn’t mean they will be decisive in a future conflict. Germany lost both its U-boat campaigns in the Atlantic, between 1915 and 1917, and between 1939 and 1943. It was the aircraft carrier, not the submarine, that proved the winner in the Pacific War. Submarines cannot fight an air war or a ground war. France had a powerful navy in 1940: it ended up being sunk by the British to stop it falling into German hands, after France was defeated by Wehrmacht tanks.
Some analysts point to further advantages from AUKUS, such as access to yet-unspecified secrets in hypersonic missiles, artificial intelligence, stealth, or quantum computing. Any or all of these may well be important, even transformative, in the longer term. But they are as yet merely promises.
Whatever the technological possibilities, AUKUS underlines worrying trends in Australia’s defence procurement policies, which have long been subject to wild cost overruns. Australia is acquiring a suite of hugely expensive weapons platforms that won’t be numerous enough to make a difference in a hot war with China, and may not be ready in time for one either.
For instance, Australia has recently finished building three state-of-the-art air warfare destroyers, at a cost of around $3 billion each. We’ve gone on to order nine new frigates, which will be even bigger than the destroyers, but not as capable. These ships haven’t been designed yet, so they are at least a decade away from delivery. Hard-headed analysts like the Australian Strategic Policy Institute’s Marcus Hellyer question why we don’t just build more air warfare destroyers, which we already know how to do. But even with 12 big surface warships, Australia likely won’t be able to control our northern sea approaches against a powerful antagonist. China is quickly outbuilding the US Navy, launching powerful new cruisers and destroyers at the rate of several a year.
Similar grandiosity haunts the Australian Army, so pleased with its new tanks and howitzers. The new armour is part of an ambitious mechanisation project that will kit out the Army out with bulky new infantry fighting vehicles, at a total cost of around $30 billion. But Australia is only buying around three brigades’ worth of vehicles. This is not remotely enough armour for a land war in Asia. On the other hand, for a low-end insurgency in the region, heavy armour will be overkill. Army chief Rick Burr says the Abrams is ‘the only part of the ADF that can successfully operate in medium to high-threat land environments.’ But that’s a war Australia is likely to lose.
Australia’s Army currently has eight active combat battalions, plus some special forces—fewer than landed at Gallipoli. It’s a rounding error in any regional conflict larger than a police action. Our land forces are well trained, well equipped—and tiny. Like the Belgian army in both world wars, the Army’s most likely fate in a land war in Asia is early defeat by a larger adversary.
Underlying these critiques is a larger failure—the absence of a viable grand strategy. What is the point of Australia’s defence force, if not to defend Australia and its vital interests? Indeed, that’s what the various Australian defence policies normally state in their opening paragraphs. The problem is that the ADF can’t actually defend Australia from a hostile great power. If we stumbled into such a conflict without powerful allies, we would quickly lose. As defence analyst Hugh White noted in his recent book, How to Defend Australia, a Commonwealth government that proposed to build a defence force to genuinely defend Australia from military attack in the 21st century would need to build a radically different force.
It would be much bigger and more expensive, for starters. No meaningful analysis of a viable defence force that might defend Australia against a great power attack can deny that such a task requires a much larger air force and navy, and probably a substantial army to boot. How big is big enough? At a minimum, hundreds of advanced jet fighters, dozens of submarines, and a hefty force of advanced missile systems. A powerful land force based in northern Australia would also be an important deterrent. The cost of all this might be double, or triple, or quadruple what we spend on national defence now.
A genuine defence-of-Australia posture would also mount a very different force structure to our current boutique army, navy and air force. There are informed commentators and thinkers who think Australia needs to radically rethink its grand strategy in the next decade. Albert Palazzo, a philosopher-hawk based in the Army’s land warfare centre, thinks Australia needs to invest heavily in hypersonic rockets and other missile systems that will allow the ADF to strike at regional adversaries from inside our own continent.
Current defence technology favours the offensive, in the form of advanced missiles like the hypersonic weapon recently deployed by China. Australia could take advantage of this, by investing in a muscular missile force that could dominate our sea-air gap and much of our surrounding region. Long-range ballistic missiles and powerful surface-to-air and anti-shipping missiles are a minimum requirement here—backed up by subs, long-range bombers and a viable space force of military satellites. Of course, our neighbours might not like that—but if we’re genuinely building fortress Australia, we shouldn’t care.
Our current force structure is light years away from such capabilities. We have spent tens of billions on capabilities we probably won’t need, and which likely won’t prove useful in defending our national interests. In particular, the ADF has a real problem buying small numbers of high tech platforms that will simply be swamped in any kind of serious conflict—from our diminutive Army, to our boutique attack helicopter force, to our three air warfare destroyers. Most dangerously, we are short of missiles—the critical ammunition of modern warfare.
Underlying the strategic malaise is a frightening lack of understanding of, or even literacy about, the rise of modern China. The return of China as a global power is one of the defining events of modern history. Perhaps it is not to be expected that an insular and populist prime minister would demonstrate a wide grasp or interest in world affairs. But Morrison’s complacent xenophobia is mirrored by many in Australia’s security establishment, which has seized on China’s rise as the raison d’etre for a new cold war. Chinese-born Australians should logically be amongst our most useful human resources in such a scenario, but instead they are refused security clearances and hunted out of the armed forces and public service as potential sleeper agents.
More worryingly, Australia’s defence and foreign policy apparatus, supposedly committed to cold-eyed realism, seems incapable of a nuanced understanding of what is going on in East Asia. No-one doubts China is more assertive and more hegemonic under Xi Jinping. Why, then, is Australia muscling up? A good example is Peter Dutton’s recent vocal statement committing Australia to military intervention in the case of an attack on Taiwan. The Minister for Defence said it is ‘inconceivable‘ that Australia would not send forces to support America in the event of a hot war across the Taiwan Strait. Australia is talking tough, but is tough talk in the national interest?
The Republic of China is a vibrant democracy and an important trading power in terms of technology in its own right. However, it’s not a formal ally, it’s not part of ANZUS, and has never enjoyed treaty ties with Australia. Taiwan is very close to China, but far away from us. Traditional realism would suggest it is not in Australia’s national interest to fight China to save Taiwan. The more sensible option may well be to sit on the fence.
Taking a nuanced position on international affairs requires a skill that Australia has neglected in recent years: diplomacy. We wouldn’t need to build high walls and bristling defences in a region where we’re friends with all the major powers. And indeed, this was the environment we’ve enjoyed for the last 30 years. Well into the 2010s, Australia was a respected and friendly middle power, allied with the global superpower, friendly with China, and with good relationships with our key neighbours.
The Morrison years have squandered much of Australia’s diplomatic goodwill. Even if Australia had no say in the rise of an assertive China, we’ve handled that rise badly, and our standing in the region has eroded. Australia’s relationship with China is in crisis. Our friendship with Indonesia has deteriorated. Malaysia has backed China; New Zealand is edging towards unarmed neutrality. Pacific island nations are enraged by Australia’s slovenly lack of action on climate change. We’ve also slashed funding to the Department of Foreign Affairs. AUKUS solves none of these problems—indeed, it exacerbates them.
Diplomacy doesn’t always work, as history shows. But Australia doesn’t appear to meaningfully trying it. Skilful diplomacy offers Australia options that military intervention can’t. A strong military without a coherent diplomacy will achieve little, but in any case, Australia hasn’t got a strong military. Despite the ‘Indo-Pacific’ and the ‘quad’, despite all the think tank discussion papers and ‘2+2’ defence minister conferences, we have not yet built a viable coalition to counter-balance a rising China. If our grand strategy is containment, it is failing.
The infuriating thing about the Morrison government’s foreign policy clumsiness is that the stakes are high. China is indeed reasserting its power in Asia, and all of its neighbours, near and far, must recalibrate. The Xi Jinping years have seen a transition in Chinese grand strategy from the tao guang yang hui of Deng Xiaoping to a more aggressive stance, often caricatured as ‘wolf warrior diplomacy‘, in reference to a popular Chinese action movie series. More broadly, China under Xi seeks to refashion the global order to a manner it finds more amenable to its refurbished power. Just as Germany after Bismarck rushed to acquire a foreign empire, China under Xi has embarked on the ‘belt and road‘, an ambitious program of Eurasian strategic investment. China is the dominant power in Asia, the largest and most populous continent: why should it continue to chafe under the yoke of a global system dictated by Americans at the end of the second world war? Xi calls the new approach ‘major country diplomacy with Chinese characteristics.’ All of this raises urgent questions of statecraft for Australia. How sensible is it for Australia to actively oppose China’s rise? Is it even possible?
Paul Keating doesn’t think so. After 26 years away from the National Press Club, he returned to the forum in November in an interview with the ABC’s Laura Tingle on Australia’s deteriorating strategic outlook. ‘The country is now very much at odds with its geography, and its lost its way,’ he told Tingle. Repeating his old formula, he pointed out that ‘we’re still trying to find our security from Asia, rather than in Asia.’ China certainly faces significant challenges, he argued, not least an ageing population, environmental degradation, and the policy pitfalls of the ‘middle income trap‘. But the United States won’t be able to contain China, and Australia shouldn’t be trying. Keating ridiculed the fashionable notion of the ‘Indo-Pacific’ as ‘a fiction’, pointing out that India and the western Pacific are thousands of kilometres apart. ‘My point is that China is now so big, and is going to grow so large, it will have no precedent in modern economic history,’ Keating concluded.
But few now are listening to Keating, a prime minister from the last century. His dream of an Australia that sees itself as part of Asia seems further away than ever. Australia’s understanding of its region is going backwards: few politicians or senior policymakers can speak Mandarin, let alone Korean, Bahasa or Tagalog. Fewer students are studying Asian languages at school. Universities are slashing Asian language and culture courses. Engagement is in eclipse. When we do engage with Asia, it’s more often to buy weapons than it is to render aid, as we saw in December’s flag-fest with Moon Jae-in.
The dark irony of Australia’s arms race that we’ve just gotten out of a losing war. 2021 was the year America and its allies, including Australia, finally abandoned Afghanistan. There was almost no fanfare, and even less introspection, merely a mad scramble to evacuate. An alliance of the richest nations in the world, led by the world’s foremost military power, was defeated by an opponent with little more than small arms and explosives. The Taliban possessed no air force, but they had something America and its allies lacked: a strategy. All the Taliban had to do was wait out America. Ashraf Ghani’s client regime in Kabul disintegrated even before the last US troops departed.
Neither the media nor Australia’s political or military leaders have paused long to consider our dismal failure in Afghanistan. Documented war crimes by Australia’s SAS forces have not forced any deep thinking about what Australia was doing in the conflict, or why the war was lost. Australia abandoned faithful translators and provincial allies in the rush to get out before Kabul fell. We also abandoned the schools we built and the provincial officials in Uruzgan province we had fought to protect. Grimmest of all, Afghanistan’s civilians now face famine, a famine in no small part brought on by Western sanctions. As usual, those dying first are the very young and the very old.
These are the costs of Australia’s ‘forever alliance’ with the US, one in which faithful service includes regular participation in foreign misadventures. The US alliance straps Australia to the mast of America’s decaying democracy, with potentially catastrophic consequences. It was only a year ago that armed insurgents mounted a clumsy but deadly assault on the Capitol in Washington. As historian Emma Shortis writes in her excellent recent book Our Exceptional Friend,
‘during the Trump years, the relationship between Australia and the United States continued almost as if nothing had changed, as if Trump were a normal president with normal policies and not a white supremacist who posed a very real threat to American democracy and to the world. Towards the end of his time in office, the Australian government was just about the closest friend Donald Trump had in the world.’
Shortis argues that ‘it is time for an honest recognition of why we prefer the continuation of American dominance—even in the form of Trump and Pompeo—than we do even the possibility of Chinese influence.’
It is easy to laugh at the Q Shaman and his gaudily clad fellow rebels. But the Munich putsch of 1923 was also a shambolic affair. Thoughtful observers are now wondering whether the US will survive as a contiguous state, so riven is America between its red and blue tribes. Serious Canadians worry about a possible American civil war. With the US Democratic party tanking in the polls, ambitious Republicans gerrymandering congressional districts, and a revanchist Trump waiting in the wings for 2024, how long will we be able to say that America remains a genuine democracy?
No-one in Canberra seems to care. We’re all in on AUKUS, just as we were for Vietnam, for Iraq, and for Afghanistan. Such is the price of US fealty, as Morrison, quietly backed by Labor, locks Australia into a new century of imperial over-reach. Australia has been much concerned about the rise of China. We don’t seem worried enough about the decline of America.
Ben Eltham is a journalist and researcher. He lectures in the school of media, film and journalism at Monash University.