Defending Australia in the Asia Pacific Century: Force 2030 (2009 Defence White Paper)


Synopsis:
Introduction
2009 Defence White Paper
Strategic objectives
Identified capability choices
Defence industry
Cost of capability
Alignment of cost, capability and strategic objectives

 

Defending Australia in the Asia Pacific Century: Force 2030  (2009 Defence White Paper)

Collins Class submarine 

Collins Class submarine (Source: Australian Defence Image Library)

Synopsis:

  • The number of reviews that contributed to the 2009 Defence White Paper was unprecedented. Twelve major reviews were conducted to look into nearly all aspects of the Department of Defence, including the:
    • Defence budget; preparedness, personnel and operational costs; logistics; estate; workforce; industry capacity; information, communication and technology; science and technology; air combat capability; force structure; and procurement and sustainment.
  • Most of these reviews were not made public but they influenced the outcome of the 2009 Defence White Paper and the establishment of the Strategic Reform Program, which was announced at the time of white paper’s release.
  • Additionally, a public consultation process was conducted in 2008 but it is not entirely evident what influence this had on the white paper outcomes.
  • The 2009 Defence White Paper had a 20-year outlook and contained around $43 billion worth of new initiatives for the coming decade and around $146 billion in additional funding over the life of the white paper.
  • Since the last defence white paper was released in 2000, the strategic environment had significantly changed due to the global financial crisis, the pervading threat of global terrorism, an increase in cyber security issues, maritime piracy, space capabilities, and China’s economic development and military expansion.
  • The latter features prominently in this white paper and the statements about the rise of China and the strategic implications were considered to be relatively controversial.
  • While Australia’s alliance with the United States was recognised as the most important defence relationship, self-reliance remained a consistent defence policy theme.
  • The issue of cyber security was elevated to a national security priority and as a countermeasure, the establishment of the Cyber Security Operations Centre was announced.
  • The 2009 Defence White Paper contained an ambitious number of new capabilities and enhancements for the ADF with a particular focus on maritime forces. The most expensive, long-term program undertaken announced in the white paper was the promise to expand the submarine force and assemble 12 conventional submarines in Australia.
  • Similar to the previous two defence white papers, the 2009 version identified Priority Industry Capabilities that would receive government intervention, under specific conditions, should market forces threaten Australian industries’ abilities to maintain these capabilities.
  • To accompany the 2009 Defence White Paper, the Government released the 2009 Defence Capability Plan (DCP) a couple of months later. However, it had a much shorter outlook than previous iterations of ten years—the 2009 DCP only looked as far as 2013. The DCP was expected to be updated every six months; a promise that was almost fulfilled up to 2012.
  • The level of Defence funding promised in the 2009 Defence White Paper was never realised. It promised three per cent real growth out to 2017–18; 2.2 per cent real growth from 2018 to 2030; 2.5 per cent fixed indexation from 2009 to 2030; and reinvestment of Strategic Reform Program (SRP) savings into defence capability.
  • The SRP aimed to generate $20 billion in savings over ten years via the application of efficiencies and broad-reaching savings. By 2012, the original savings targets had been all but abandoned.
  • The 2009–10 Budget was handed down only ten days after the 2009 Defence White Paper and despite the new funding model announced in the white paper, around $8.8 billion had effectively been removed from the first six years of the life of the white paper.

Introduction

Prior to the 2007 federal election, both the Minister and the Shadow Minister for Defence stated that the next government would deliver a defence white paper.[427] The Labor Party promised ‘a full detailed reassessment of Australia’s strategic circumstances’.[428] Consistent with its election promise, the Rudd Government released its Defending Australia in the Asia Pacific Century: Force 2030 (2009 Defence White Paper) in May 2009 with a 20-year outlook. In the past there had been a convention of tabling white papers in Parliament but this approach was not followed in this instance. Instead, the 2009 Defence White Paper was released at a media launch on a Saturday at the RAN’s Fleet Base East, Garden Island in Sydney.[429]

Bipartisan support was lacking. While the Shadow Defence Minister, David Johnston, stated ‘the Opposition is a strong supporter of the Australian Defence Force and national security’, he dismissed the white paper, arguing it did not provide a ‘detailed plan on how new capabilities and technologies’ were going to be paid for. He warned, to ‘that extent this document is quite dangerous’.[430]

Similar to previous defence white papers, a number of key reviews were commissioned that contributed to its development.

2008 Audit of the Defence Budget

The 2008 Audit of the Defence Budget (known as the Pappas Review) was conducted by George Pappas and supported by a team from McKinsey and Co.[431] The Pappas Review was conducted between May 2008 and February 2009 and delivered to the Defence Minister, Joel Fitzgibbon, in April 2009. The final redacted version of the report was publicly released in November 2009 as a result of a formal request under the Freedom of Information Act 1982.[432]

The purpose of the Pappas Review was to:

  • advise ‘Ministers on the efficiency and effectiveness of, and future risks associated with, the defence budget’ and
  • recommend ‘to Ministers improved arrangements for managing the Defence budget’.

A detailed description of the Pappas Review is not possible within the scope of the current publication but it is interesting to note that the Review found that the three per cent rise in real funding that would later be promised by the Government in the 2009 Defence White Paper would not be sufficient to pay for the required force capability. The Review estimated that the real growth rate would need to be 4.2 per cent.[433]

This report made clear to the Department of Defence and the Government that achieving the desired ADF capabilities, subsequently set out in the 2009 Defence White Paper, would not be possible without either a further increase in expenditure, or significant savings being made by Defence. The Government responded by introducing the Strategic Reform Program (SRP) which aimed to deliver around $20 billion in savings to help fund the 2009 Defence White Paper.[434]

Looking Over the Horizon: Australians Consider Defence

On 22 February 2008, the Rudd Government commissioned the development of a new defence white paper.[435] A public discussion paper or ‘green paper’ for the new white paper—entitled Key Questions for Defence in the 21st Century—was launched by the Defence Minister on 5 June 2008, along with a public consultation program to be overseen by a Community Consultation Panel.[436] The community consultation process was very similar to that used in the lead up to the 2000 Defence White Paper and following 30 public meetings, more than 450 written submissions, and 34 private meetings, the Panel concluded:

... the Australian community continues to support the concept that the ADF’s primary function is to defend Australia and our interests ... [and] continues to expect governments to deliver a strong, well resourced, technically superior ADF that is capable of independent action to secure Australian interests and defend Australian territory.[437]

The Panel cautioned that government decisions will be influenced by the onset of the global financial crisis ‘including those in relation to the White Paper. The current economic situation makes it even more important that the resources allocated to Defence are not wasted...’.[438] The Panel also found that ‘most people’ supported existing defence funding levels but were less supportive of increased funding.[439] Many of the Panel’s findings were summarised on a page in the 2009 Defence White Paper, except for those relating to funding.[440] Whether the community consultation process influenced the drafting of the 2009 Defence White Paper was not entirely evident.

Review of Australia’s air combat capability

The air combat capability review was commissioned in February 2008 and composed two parts that sought, amongst other things, to identify:

  • Australia’s air combat capability needs to 2015
  • the viability of retaining the F-111 strike aircraft (in service since 1973) in service beyond 2010
  • available aircraft that could fill a capability gap left by the withdrawal of the F-111 from service
  • whether the acquisition of F/A-18 Super Hornet aircraft could fill a capability gap
  • ‘trends in Asia-Pacific air power until 2045 and the relative capabilities of current and projected fourth and fifth generation combat aircraft such as the Joint Strike Fighter’
  • pros and cons for purchasing the F-22 Raptor stealth fighter aircraft and
  • the role of Australian industry in developing future air combat capability.[441]

On 17 March 2008, the Defence Minister announced the outcomes of Part A of the air combat capability review and concluded:

    • There has been a lack of sound, long-term air combat capability planning decisions by the former Government over the course of the last decade.
    • The retirement of the F-111 was made in haste but is now irreversible. The cost of turning the F-111 back on would be enormous and crews and skills have already moved on.
    • The former Government’s decision to leave Australia’s air defences in the hands of the Joint Strike Fighter project was a flawed leap of faith in scheduling terms, and combined with the quick decision to retire the F-111 early, allowed an air combat capability gap to emerge.
    • The subsequent timetable the former Government put on the acquisition of an interim fighter left defence planners with no choice but to recommend the Super Hornet. No other suitable aircraft could be produced to meet the 2010 deadline the former Government had set. One year on, that is now even more so the case.
    • Cancelling the Super Hornet would bring significant financial penalties and create understandable tensions between the contract partners.
    • The Super Hornet is an excellent aircraft capable of meeting any known threat in the region and is the only aircraft which can meet the small delivery window created by the former Government’s poor planning processes and politically-driven responses.[442]

Part B of the air combat capability review was not publicly released. However, the main findings were incorporated into the 2009 Defence White Paper, which endorsed the purchase of around 100 Joint Strike Fighter (JSF) aircraft.[443]

Force Structure Review

The Force Structure Review was conducted by Defence as part of the white paper process and aimed to ‘define Australia’s future force structure and capability needs’.[444] According to the Chief of the Defence Force, Angus Houston, in June 2008, the Force Structure Review would not only define the white paper, but produce a new Defence Capability Plan (DCP). Houston stated:

Fundamentally, what the Force Structure Review is doing... is coming up with a force to meet the strategic tasks that will be defined in the white paper and then looking at how we translate that into an acquisition program into the future; in other words, a new DCP...

We will be looking at every capability requirement in the ADF. A Force Structure Review is a very robust process and we need to go through it. It is a process that will take some time. What comes out of the Force Structure Review will be a fundamental outcome from the white paper process...[445]

While the Force Structure Review was not publicly released, the key elements were contained in the 2009 Defence White Paper, which stated:

The force structure review examined plausible defence planning contingencies, the capabilities required for successful operations in those contingencies, and the systems and equipment that would deliver the necessary capabilities. From that analysis, the review identified gaps in our current and projected force structure and presented options to remedy these gaps for the Government’s consideration.[446]

Mortimer Review

In May 2008, the Rudd Government announced a review of defence procurement and sustainment to follow up on the implementation of the Kinnaird Review recommendations from 2003.[447] Headed by David Mortimer, the subsequent report—Going to the Next Level: the Report of the Defence Procurement and Sustainment Review—made 46 recommendations focusing on the effectiveness of reforms implemented within the Defence Materiel Organisation (DMO) and the potential for further reforms.[448]

In its response to the Mortimer Review, the Government agreed to 42 of the 46 recommendations. Three recommendations were agreed to in part and one was not agreed to.[449] The Government agreed with Mortimer (and Kinnaird) that the DMO required a more businesslike approach, and the procurement reform program was spelt out in the 2009 Defence White Paper.[450]

2009 Defence White Paper—companion reviews

Eight companion reviews were undertaken during the 2009 Defence White Paper planning and writing process. These reviews were not made public but contributed to the white paper and the Strategic Reform Program.[451] The eight companion reviews were:

  • Review of the Defence Capability Plan
  • Review of Defence preparedness, personnel and operating costs
  • Review of Defence logistics
  • Review of the Defence estate
  • Review of the Defence workforce
  • Review of the Defence industry capacity
  • Review of Defence information and communications technology and
  • Review of Defence science and technology.[452]

2009 Defence White Paper

Prior to the 2007 election, the Labor party committed to ‘maintaining defence spending, including a minimum annual 3 per cent real growth until 2016’.[453]

At the time the 2009 Budget was handed down (ten days after the 2009 Defence White Paper was launched), the Defence Minister stated that the 2009 Defence White Paper ‘sets out some $43 billion worth of new initiatives over the decade ... approximately $146 billion of additional funding across the life of the White Paper to 2030’.[454] To support capability development funding, Defence would be subject to significant efficiencies and savings under the Strategic Reform Program (SRP) as well as other funding measures.[455]

While the time horizon was two decades, the Government promised the next defence white paper would be delivered ‘at intervals no greater than five years’ as part of the Government’s ‘new strategic risk-based approach to defence planning’.[456]

The 2009 Defence White Paper was released into a strategic environment that had changed significantly since the 2000 Defence White Paper, with developments such as: [457]

  • the global financial crisis
  • international terrorism, as highlighted in the defence updates of 2003, 2005 and 2007
  • cyber security, maritime piracy and the use of space for strategic purposes and
  • China’s economic development and military modernisation, as mentioned in the 2007 Defence Update.[458]

In 2009, the ADF personnel strength stood at around 55,000, which was above the target figure set out in the 2000 Defence White Paper of about 54,000 by 2010.[459] ADF operational deployments had increased from some 1,600 personnel in mid-2000 to 3,500 by 2008–09.[460]

Procurement decisions received greater scrutiny in the wake of project cancellations such as the Super Seasprite helicopter program at a cost of more than $1.4 billion and the Boeing contract to deliver a tactical Unmanned Aerial Vehicle (UAV) capability to the ADF. Additionally, the 40-month delay in the Wedgetail AEW&C aircraft delivery resulted in a modified program being undertaken to allow completion of the project.[461]

Strategic objectives

In the context of Australia’s military strategy, both the 2000 and the 2009 Defence White Papers identified minimising ADF casualties as a defence objective.[462] The 2009 Defence White Paper went further by expressing unusually frank references to the inevitable outcome of combat operations—casualties:

The Government has decided that it is not a principal task for the ADF to be generally prepared to deploy to the Middle East, or regions such as Central and South Asia or Africa, in circumstances where it has to engage in ground operations against heavily armed adversaries located in crowded urban environments. This entails a requirement to engage in high-intensity close combat which brings with it the risk of an unsustainable level of casualties for an army the size of Australia’s.[463]

China’s economic rise and military expansion gained prominence in the 2009 Defence White Paper:

... the pace, scope and structure of China’s military modernisation ha[s] the potential to give its neighbours cause for concern if not carefully explained, and if China does not reach out to others to build confidence regarding its military plans. China has begun to do this in recent years, but needs to do more. If it does not, there is likely to be a question in the minds of regional states about the long-term strategic purpose of its force development plans, particularly as the modernisation appears potentially to be beyond the scope of what would be required for a conflict over Taiwan.[464]

Strategic stability in the Asia-Pacific hinges, to a large degree, on the relationship between China and the United States.[465] As Mark Thomson (ASPI) put it, ‘the rise of China is front and centre in the strategic vista’ [of the 2009 Defence White Paper].[466] Just prior to the white paper’s release, Opposition Leader Malcolm Turnbull thought the suggestion that Australia would inevitably collide with a highly militarised China in the future was a ‘highly contentious proposition’.[467] Turnbull recommended that Australia take a more proactive approach to work with allies and encourage China to be constructively engaged in the region and globally ‘across the whole gamut of economic, environmental and security challenges facing the world’.[468]

Australia’s key strategic partners were cited as ‘Japan, and increasingly India’, but the ‘alliance with the United States is our most important defence relationship ... an integral element of our strategic posture’.[469] However:

Australia would only expect the United States to come to our aid in circumstances where we were under threat from a major power whose military capabilities were simply beyond our capacity to resist. Short of that situation, the United States would reasonably expect us to attend to our own direct security needs and, in any event, we should not expect anything less of ourselves.[470]

This statement summed up the continuing theme for Australia to be militarily self-reliant and was reiterated throughout the paper. However, Rod Lyon and Andrew Davies from ASPI argued that the wording of this statement ‘seems to mistake a policy of self-reliance on our part with an implicit reinterpretation of the obligations contained within ANZUS’. Lyon and Davies contended that, under ANZUS, the United States should come to our aid ‘regardless of the size of the attacker’.[471] The 2009 Defence White Paper recognised the importance of the ANZUS Treaty for the parties to the agreement to ‘act to meet the common danger’.[472] Nonetheless, the paper interprets the ANZUS Treaty as not committing ‘Australia or the United States to specific types of actions, but it does provide a clear expectation of support’; the type of support provided by Australia after the 11 September 2001 attacks in the United States.[473]

The 2009 Defence White Paper did not address whether Australia’s alliance with the United States, to the point of being an ‘integral element of our strategic posture’, might adversely affect Australia’s regional relations over the next two decades.[474] Rather, it concluded that Australia needs to ‘engage China as a responsible stakeholder in support of our common desire to see stable, prosperous and well-governed nations in our immediate region’.[475]

In Australia’s immediate region, the most important defence relationship remained Indonesia closely followed by the Five Power Defence Arrangements, thereby suggesting a boost in defence relations with Singapore and Malaysia (along with the United Kingdom and New Zealand).[476]

In the South Pacific, Australia was concerned ‘to promote economic security, good governance and internal stability’.[477] In Timor Leste the focus would be on capacity-building for that country’s armed forces.[478]

The need to contribute to contingencies elsewhere in the world focused predominantly on the ADF’s commitment to the war in Afghanistan:

We cannot insulate ourselves from the consequences that would flow if Afghanistan were again to be abandoned to a brutal Taliban regime providing haven and support to terrorist groups... We therefore have a direct interest in denying terrorists unfettered access to training camps and operating bases in Afghanistan... we also demonstrate that we are committed to doing our fair share to tackle global security challenges.[479]

Overall, the regional outlook was not markedly different for the ‘concentric circle’ of strategic objectives outlined in the 2000 Defence White Paper.[480] Lyon and Davies concluded in relation to this that ‘the thrust of reasoning underpinning much of the document, looks very much like the old Defence of Australia strategic construct that underpinned the White Papers of 1987, 1994 and 2000’.[481]

The emerging threat of cyber attacks against Australia received greater attention in the 2009 Defence White Paper and was elevated to a priority national security issue.[482] The white paper emphasised the potential impact of the emerging ‘serious threat’ of ‘cyber warfare’ against Australia’s critical infrastructure.[483] It also stated that cyber attacks on Australia’s ‘defence, security, Government and civilian information infrastructure’ could seriously threaten Australia’s national security.[484] As a counter measure, the Government established the Cyber Security Operations Centre (CSOC), which was officially launched on 15 January 2010, to operate within the Australian Signals Directorate (ASD—formerly the Defence Signals Directorate) with a mandate to provide greater situational awareness and respond to cyber threats.[485] CSOC has reported that the trends in the cyber attack threat level against Australia increases significantly each year. In 2011, 1,259 incidents were identified; in 2012, the number of incidents increased to 1,790; and in 2013, the figure jumped to 2,148 incidents.[486]

Identified capability choices

The 2009 Defence White Paper dismissed as a false dichotomy earlier interpretations that Australia’s defence requirements meant choosing between ‘“continental” or “defence of Australia” approach, and a “global” or “expeditionary” approach’.[487] Furthermore, a ‘defence policy founded on an implicit bargain that others would come to our aid with combat forces if we were threatened or attacked is simply too uncertain a basis for providing for our security and an irresponsible abrogation of Australia’s strategic sovereignty’.[488] By the same measure, the Government took the view that basing Australia’s defence policy on a narrow ‘defence of Australia’ approach would also be an irresponsible abdication of our responsibility as a capable middle power, able to contribute to global and regional security, including through military force. The resulting formal statement of defence policy therefore envisaged an ADF that was self-reliant.[489]

The 2009 Defence White Paper detailed the practical implications of these policies. The ADF now required the capabilities to:

    • act independently where we have unique strategic interests at stake, and in relation to which we would not wish to be reliant on the combat forces of any foreign power
    • lead military coalitions where we have shared strategic interests at stake with others, and in relation to which we would be willing to accept a leadership role, in part to compensate for the limited capacity or engagement of others and
    • make tailored contributions to military coalitions where we share wider strategic interests with others and are willing to accept a share of the burden in securing those interests.[490]

The white paper stipulated that posturing the ADF to effectively contribute to regional and global military contingencies while sustaining the ability to conduct humanitarian assistance and disaster relief activities did not ‘create a requirement for maintaining an extensive range of specialised capabilities within the ADF’. The force structure required to undertake the tasks outlined in the 2009 Defence White Paper was expected to ‘generate a wide range of capabilities which can be deployed for such tasks with very little warning’.[491] As such, an ambitious number of new capabilities and enhancements were advanced with maritime forces receiving the most attention.

Maritime forces

The Government considered that there was a need to substantially expand the ADF’s ability to project force to maintain freedom of navigation, protect shipping and to transport and support land forces.[492] An expanded submarine fleet would need to be large enough to maintain an effective operational presence, at long range, as well as protect other key ADF assets. Moreover, the expanded submarine force would be used as a strategic deterrent.[493]

Anti-submarine warfare capabilities, offshore maritime warfare, mine countermeasures and border protection capabilities would also be enhanced.[494] Specifically, the maritime component of what the 2009 Defence White Paper called ‘Force 2030’ would include:

  • eight new, larger, frigates optimised for anti-submarine warfare, to replace the eight Anzac frigates
  • 12 new, non-nuclear and long-range submarines to be ‘assembled’ in South Australia, replacing the existing six Collins Class submarines
  • 24 new naval combat helicopters ‘as a matter of urgency’ in place of the cancelled Super Seasprite acquisition (the decision to acquire 24 MH-60R Seahawk helicopters was made in June 2011 and they began to enter service in early 2014)[495]
  • around 20 new multi-role Offshore Combatant Vessels to replace existing patrol boat, mine countermeasure, hydrographic and oceanographic ships
  • a 10,000–15,000 tonne strategic sealift ship and
  • six new heavy landing craft to assist amphibious operations.[496]

A number of capability decisions announced in the 2000 Defence White paper were reinforced in the 2009 version, including:

  • three Air Warfare Destroyers, with the possibility of a fourth
  • two Landing Helicopter Dock amphibious trooping ships
  • a replacement for supply ship HMAS Success
  • 46 MRH-90 Multi-Role Helicopters to replace the ageing Sea King helicopters and expected to enter service with the RAN in 2010 (these helicopters are to be shared with the Army in replacing the Black Hawk helicopters: the RAN will get six, a further seven will be used for joint training, with the remainder assigned to the Army)
  • continued upgrades to the Collins Class submarines and
  • weapons upgrades for the Anzac Class frigates.[497]

There were timetables for only four of the seven new capabilities. The Multi-Role Helicopters would enter service in 2010. The remaining three timeframes were vague. Design and construction of the new submarines would span ‘three decades’—that is, until at least 2039. The Landing Helicopter Docks would be delivered ‘in the coming decade’ and a supply ship at ‘the end of the next decade’.[498]

Land forces

The 2009 Defence White paper stated that capability improvements were required for land forces, but that the size and structure of the Army would not need any major changes.[499] Some of the key capabilities included:

  • acquiring up to 1,100 deployable protected vehicles to ‘replace existing armoured personnel carriers, mobility vehicles and other combat vehicles which, in the past, have had limited or no protection’. Delivery of this capability was expected to be completed by 2012
  • continued upgrade of the existing M113 Armoured Personnel Carriers (a project in the 2000 Defence White Paper) to provide 430 enhanced vehicles by the end of 2011
  • continued acquisition of 7,000 deployable support vehicles to replace existing wheeled transport and logistic vehicles
  • acquisition of seven CH-47F Chinook battlefield lift helicopters to replace the Army’s six CH-47D helicopters
  • continued acquisition of the MRH-90 Multi-Role Helicopters to replace the Army’s Black Hawk helicopters. The MRH-90 was expected to enter service with the Army in 2011. The ADF had already begun to accept the MRH-90s into service from December 2007 but stopped in 2010 when significant problems emerged.[500] The ADF resumed aircraft acceptance from May 2012, with the 29th helicopter accepted in June 2014.[501]
  • new 155mm howitzer artillery, both self-propelled (two batteries) and towed (four batteries) with the latter being moveable by helicopter or strategic airlift. In May 2012, the Government decided to cancel the acquisition of self-propelled howitzers and instead announced the acquisition of two additional towed howitzer batteries in October 2012.[502]

As in the 2000 Defence White Paper, the Government undertook to enhance capabilities for individual soldiers, including non-lethal weapons, due to the ADF’s operations ‘in proximity to civilian populations’.[503]

Air power

The Air Combat Capability Review (mentioned above) confirmed the utility of bridging the air combat capability gap through the purchase of 24 F/A-18 Super Hornets, which was reflected in the 2009 Defence White Paper.[504] The white paper announced that the second batch of 12 F/A-18 Super Hornets would be equipped with ‘the electronic warfare “Growler” variant—the EA-18G’.[505]

Many of the other air power capability proposals had already been foreshadowed in the 2000 Defence White Paper or existing programs, including the ongoing development of the acquisition of:

  • 72 to 100 Joint Strike Fighters (JSFs) to be managed in conjunction with the withdrawal of the F/A-18 Super Hornet to avoid a gap in Australia’s air combat capability
  • eight new maritime patrol aircraft to replace the AP-3C Orion surveillance aircraft fleet
  • up to ten fixed wing aircraft to replace the DHC-4 Caribou, which would be withdrawn from service in 2009[506]
  • six new E-7A Wedgetail aircraft (AEW&C), which were contracted in 2000 (this project incurred a number of problems, only achieving Final Operational Capability (FOC) in May 2015)[507] and
  • five KC-30A multi-role air-to-air refuelling and transport aircraft, first approved in 2003 and entering service from 2010.[508]

New air power capabilities announced in the 2009 Defence White Paper comprised:

  • unspecified maritime strike weapons for the JSF
  • seven large Unmanned Aerial Vehicles (UAVs) capable of performing at high-altitude and for long distances in support of manned maritime surveillance aircraft and
  • two C-130J Hercules aircraft in addition to the existing fleet of 12, with the older C-130H being retired.[509]

As with many of the future capabilities already mentioned, no timetable was given for the introduction of the new air power capabilities beyond the expectation that they would be available by 2030.

Defence industry

The 2009 Defence White Paper dedicated six pages to procurement, sustainment and industry support.[510] Similar to previous defence white papers, the 2009 Defence White Paper reassured industry that its support is ‘critical to defence capability and operational effectiveness’.[511] Through the Government’s defence industry policy, the 2009 Defence White Paper promised to ‘grow local industry capacity and competitiveness’ by:

    • increasing industry capacity and competitiveness through targeted productivity and workforce growth initiatives
    • building greater flexibility into Defence Capability Plan reprogramming to mitigate the adverse capacity and capability impacts associated with large expenditure peaks and troughs and
    • if necessary, increasing the amount of offshore expenditure, to a level that allows for a more managed, sustainable and achievable local industry growth rate.[512]

The 2009 Defence White Paper recognised that ‘total self-sufficiency in defence industry capabilities would be impractical for a nation of Australia’s size’ and is not necessary under the Government’s defence policy.[513] Nonetheless, similar to previous white paper statements, the Government was committed to maintaining specific industry capabilities in Australia that aligned with strategic interests. As such, the Priority Industry Capabilities (PICs) were announced to define ‘those industry capabilities which would confer an essential strategic capability advantage by being resident within Australia, and which, if not available, would significantly undermine defence self-reliance and ADF operational capability’.[514] The Government asserted that it was ‘prepared to intervene in the market to ensure that PICs remain healthy and available’.[515] Specifically, the Government would only provide support ‘where market failures would be so detrimental to our strategic interest as to justify such intervention’. These factors, which would prompt support from the Government, included:

    • the criticality of the industry capability to our posture of defence self-reliance
    • the value-for-money represented by such intervention
    • the ‘health’ of the industry sector, in terms of workforce size and skill levels, and capacity constraints, individual firm viability (in cases where this would be justified) and
    • market structure.[516]

While the 2009 Defence White Paper did not identify the specific capabilities that would attract PIC level support, the Government sought to monitor capabilities such as:

      • ‘high-end’ system and ‘systems of systems’ integration capabilities, including for electronic warfare development, the protection of networks and computers, including in the field of cyber defence, communications security testing services and through-life support of cryptographic equipment, and system life cycle management capabilities to maintain and extend the service life of ADF systems
      • naval shipbuilding, including specialist design and engineering services; warship repair, maintenance and upgrade capabilities, and essential facilities; submarine design and construction, repair, maintenance, upgrade and overhaul capabilities; selected development, production, upgrade and through-life support of underwater acoustic technologies and systems
      • development, repair and precision machining of composite and exotic materials, signature management capabilities and coatings, and anti-tampering capabilities
      • the ability to produce selected ballistic munitions and explosives; repair, maintain, test and evaluate guided weapons; repair, maintain and upgrade capabilities in relation to infantry weapons, small arms and remote weapons stations on combat vehicles
      • through-life and real-time support of mission and safety critical software; system assurance capabilities for both ICT hardware and software; the repair and maintenance of specialist AEW&C systems; the development and through-life support of JORN and phased-array radars; secure test facilities and test ranges; the development and support of targeting and precision navigation capabilities
      • development of capabilities in the field in terms of combat clothing and personal load carriage equipment
      • repair and maintenance of armoured vehicles and
      • the repair, maintenance and upgrade of rotary and fixed-wing aircraft.[517]

    The Government provided industry with broad information about PIC support in a brochure released shortly after the white paper was handed down.[518] In addition to the PIC program, the 2009 Defence White Paper promised that local industry would be promoted in global supply chains; the Skilling Australia’s Defence Industry (SADI) program would be enhanced by expanding the number of skilled workers and developing career pathways; Australia’s skill base would be improved in the fields of engineering and system integration; and where required ‘rebalance offshore and local procurement activities’.[519]

    Defence Capability Plan 2009

    The 2009 DCP contained around 110 project proposals and phases worth approximately $60 billion. Despite the DCP reflecting the ambitions of the 2009 Defence White Paper, which had an outlook to 2030, the DCP’s outlook was significantly reduced to 2013, in contrast to the ten-year outlook of previous DCPs. However, the Government believed that industry preferred more up-to-date information and therefore promised to update the DCP electronically every six months; a promise they almost fulfilled with five revised DCPs and one Defence Capability Guide being published from 2009 to 2012.[520]

    The format of the 2009 DCP was very similar to previous DCPs except that the planned schedule highlights now distinguished date ranges for First Pass and Second Pass approvals.[521]

    Cost of capability

    Funding for the 2009 Defence White Paper contained the following components:

    • ‘3 per cent real growth in the defence budget to 2017–18’
    • ‘2.2 per cent real growth in the defence budget from 2018–19 to 2030’
    • ‘2.5 per cent fixed indexation to the defence budget from 2009–10 to 2030’
    • reinvestment by Defence of the savings from its ‘Strategic Reform Program back into priority defence capabilities as agreed by the Government’ and
    • ‘shortfalls against the white paper funding plan to be offset by Defence’.[522]

    Alignment of cost, capability and strategic objectives

    The Strategic Reform Program (SRP) was based on recommendations from the Pappas Review (see discussion above) and formed a central part of the Government’s financial plan for defence in the 2009 Defence White Paper. The SRP aimed to generate $20 billion over ten years through the application of efficiencies and savings.[523] The $20 billion of extra revenue created by the SRP was to be reinvested in defence, and therefore help fund the major capital equipment proposals contained in the 2009 Defence White Paper.[524]

    At the time of the 2009 Budget release, the Defence Minister claimed the ‘new funding model’ detailed in the 2009 Defence White Paper ‘fully covers off the capability and other funding requirements set out in the Defence White Paper’.[525] As with other white papers, the fulfilment of plans beyond the three-year election cycle might depend on a new government’s attitude. In any event, even a re-elected government might face new challenges, requiring a reassessment of key capability programs. Yet the 2009 Defence White Paper declared ‘for the first time, an Australian Government has committed to funding a Defence White Paper for the life of the White Paper’.[526] In practice, the 2009 Defence White Paper funding model began to unravel in less than two weeks. The 2009–10 Budget, released on 12 May 2009 (just ten days after the 2009 Defence White Paper), indicated that the 2.5 per cent fixed indexation would be postponed—it would be ‘calculated from 2009–10 but applied from 2013–14’.[527] In effect, the 2009–10 Budget removed an estimated $8.8 billion from the first six years of the life of the 2009 Defence White Paper.[528]

    According to ASPI analysts, because the 2009 Defence White Paper:

    ... fails to provide any concrete milestones for when things will be delivered over the next decade, the available funds can be spent at a leisurely pace and we will be none the wiser. With no tangible targets to be met prior to 2030, the question of having enough money is hypothetical.[529]

    Opposition Leader Malcolm Turnbull dismissed the funding arrangements as ‘back of the envelope calculations’.[530]

    Mark Thomson (ASPI) assessed that maintaining the Australian defence inventory had required an ‘average annual growth above inflation of around 2.6%’.[531] On that basis, the reduction to 2.2 per cent real growth in the defence budget from 2018–19 to 2030, promised in the 2009 Defence White Paper, would be inadequate.

    Independent of the budget allocations, there was the question of whether the Department of Defence had the capacity to make the level of savings envisaged in the SRP. As Paul Barratt, a former Secretary of the Department of Defence, concluded—’Defence savings: the impossible dream’.[532]

    By the time the 2012–13 Budget was handed down:

    $10.6 billion worth of promised funding from the first five years of [the] White Paper ha[d] been deferred to parts unknown in the future, $10 billion in savings (above and beyond those promised by the SRP) have been cut from funding promised between 2011 and 2021, and another $2.5 billion of new initiatives over the decade have been imposed upon Defence without funding or offsets. [533]

    Thomson had predicted back in 2009 that the budget allocation did not match the ambitions of the 2009 Defence White Paper.[534] ASPI tried to estimate the overall costs:

      • the new funding model adds in excess of $10.5 billion over the decade, including $5.3 billion in the first four years
      • $8.8 billion has been deferred within the decade, including $6.8 billion in indexation from the first six years and $2 billion in savings from the first four years and
      • the eighth, ninth and tenth years receive some deferred funds, with the remainder pushed beyond the decade.[535]

    The Senate Foreign Affairs, Defence and Trade Committee inquiry into procurement procedures for defence capital projects commented in its final report that detailed funding figures for the 2009 Defence White Paper were lacking and that when ‘questioned at Senate Estimates in June 2009, the then CDF, Air Chief Marshal Angus Houston, stated that it would cost somewhere between $245 and $275 billion (in 2009–10 budget dollars) to realise Force 2030’.[536]

    One conclusion that might be drawn about the 2009 Defence White Paper is that its lack of funding detail, barring the vision for 2030, was a logical implication of the promise of five-yearly white papers. Possibly, the 2009 Defence White Paper was seen by the Rudd Government as setting a broad framework, with the details of how this was to be fulfilled, to be refined every five years. However, if that was the intention, it was not specifically stated.

    As it turned out, the financial underpinning of the program, immediately weakened by revisions in the subsequent federal budget, could not survive the competing pressures originating in the repercussions of the global financial crisis.

    The 2009 Defence White Paper was in many ways an ambitious document. It attempted to establish, to some degree, the Government’s expectations of what the ADF should look like in 2030 while acknowledging how much, in broad terms, such a force would cost. However, within a few years it would become clear that the Government was unable to meet the necessary funding commitments and by 2012, Thomson declared the ‘2009 defence white paper is dead’.[537]

    Another area about which the 2009 Defence White Paper was perhaps more ambitious than its predecessor concerned the SRP. The 2000 Defence White Paper noted that Defence had been subject to efficiency savings leading up to the white paper’s release; producing around $1.2 billion in 2000–01. A further $200 million of efficiency savings per year to 2003–04 was expected.[538] On the other hand, the 2009 Defence White Paper efficiency measures—$20 billion in savings over ten years to be reinvested in defence—had not been met. ASPI claimed that by May 2012, the original targets for the SRP had ‘been abandoned’ and in 2011–12, Defence had been compelled to return some of its SRP related savings to the Government, rather than have them reinvested in defence as originally intended.[539]

     



    [427].      T Thomas, ‘Define, re-state and refine—inside the 2007 defence update‘, Australian Defence Business Review, June-July 2007, p. 13, accessed 13 January 2015.

    [428].      Australian Labor Party, Labor’s plan for defence, ALP policy document, Election 2007, p. 2, accessed 13 January 2015.

    [429].      Australian Government, Defending Australia in the Asia Pacific century: force 2030, op. cit., accessed 13 January 2015; J Fitzgibbon (Minister for Defence), The 2009 defence white paper: the most comprehensive white paper of the modern era, media release, 2 May 2009, accessed 13 January 2015; and G Dobell, ‘The white paper and media management‘, Lowy Institute for International Policy, blog, 6 May 2009, accessed 13 January 2015.

    [430].      D Johnston (Shadow Minister for Defence), Defence white paper, media release, 2 May 2009, accessed 13 January 2015.

    [431].      Department of Defence, 2008 audit of the defence budget (report prepared for the Minister for Defence by G Pappas), April 2009, accessed 13 January 2015.

    [432].      J Faulkner (Minister for Defence), Defence budget audit released, media release, accessed 13 January 2015.

    [433].      2009 Defence White Paper, op. cit., p. 137; Department of Defence, 2008 audit of the defence budget, op. cit., p. 7.

    [434].      Australian Government, Response to the defence budget audit, Department of Defence, November 2009, accessed 13 January 2015; Australian Government, The strategic reform program: delivering force 2030, Department of Defence, 2009, accessed 13 January 2015.

    [435].      J Fitzgibbon (Minister for Defence), New defence white paper, media release, 22 February 2008, accessed 13 January 2015.

    [436].      J Fitzgibbon (Minister for Defence), Defence Minister launches discussion paper and community consultation program, media release, 5 June 2008, accessed 13 January 2015; Department of Defence, Key questions for defence in the 21st century: a defence policy discussion paper, Canberra, 2008, accessed 13 January 2015.

    [437].      Department of Defence, Looking over the horizon: Australians consider defence, Defence Publishing Service, Canberra, December 2008, pp. 1–2, accessed 13 January 2015.

    [438].      Ibid., p. ix and 1.

    [439].      Ibid., p. 4.

    [440].      2009 Defence White Paper, op. cit., p. 18.

    [441].      J Fitzgibbon (Minister for Defence), Review of Australia’s air combat capability, media release, 18 February 2008, accessed 13 January 2015.

    [442].      J Fitzgibbon (Minister for Defence), Poor air power planning exposed but Super Hornet to stay, media release, 17 March 2008, accessed 13 January 2015. 

    [443].      2009 Defence White Paper, op. cit., p. 78.

    [444].      Department of Defence, Defence annual report 2007–08, op. cit., p. 7.

    [445].      Senate Standing Committee on Foreign Affairs, Defence and Trade, Official committee Hansard, 4 June 2008, p. 110, accessed 13 January 2015.

    [446].      2009 Defence White Paper, op. cit., p. 58.

    [447].      Malcolm Kinnaird headed the Howard Government’s review into Defence procurement. Kinnaird presented the final report to Government in August 2003 making ten recommendations that emphasised the need for reform, including the DMO becoming ‘more business like’. M Kinnaird, Defence: procurement review 2003, Department of Defence, 15 August 2003, accessed 13 January 2015; G Combet (Parliamentary Secretary for Defence Procurement), Defence procurement and sustainment review, media release, 7 May 2008, accessed 13 January 2015.

    [448].      Defence Procurement and Sustainment Review, Going to the next level: the report of the defence procurement and sustainment review, (Mortimer Review), Department of Defence, 18 September 2008, accessed 13 January 2015.

    [449].      Australian Government, The response to the report of the defence procurement and sustainment review (Mortimer Review), Department of Defence, 2008, accessed 13 January 2015.

    [450].      2009 Defence White Paper, op. cit., pp. 125–126.

    [451].      A Houston (Chief of the Defence Force) and N Warner (Secretary of Defence), Round table discussion for the Federal Government’s defence white paper, Department of Defence, Canberra, transcript, 7 May 2009, accessed 13 January 2015.

    [452].      Department of Defence, Defence annual report 2007–2008, DoD, Canberra, 2008, p. 2, accessed 13 January 2015; N Warner (Secretary of the Department of Defence), 256,800 paper hand towels: mending defence’s broken backbone, Lowy Institute for International Policy, speech, 10 June 2008, accessed 13 January 2015.

    [453].      Australian Labor Party, Labor’s plan for defence, op. cit., pp. 2 and 7.

    [454].      J Fitzgibbon (Minister for Defence), Budget 2009–10: defence budget overview, media release, 12 May 2009, accessed 13 January 2015.

    [455].      Ibid.

    [456].      Department of Defence, 2009 Defence White Paper, op. cit., pp. 11–12.

    [457].      Ibid., p. 16; T Thomas, ‘2009/10 defence budget analysis‘, Australian Defence Business Review, 13 May 2009, accessed 13 January 2015.

    [458].      Department of Defence, 2009 Defence White Paper, ibid., pp. 9 and 34; 2007 Defence Update, op. cit., p. 19.

    [459].    Department of Defence, Defence annual report 2008–2009, DoD, vol. 1, Canberra, 2009, p. 27; 2000 Defence White Paper, op. cit., p. xii, accessed 13 January 2015.

    [460].      Department of Defence, Defence annual report 1999–2000, op. cit., pp. 81–85; Department of Defence, Defence annual report 2008–09, ibid., p. 2.

    [461].      ANAO, The Super Seasprite, op. cit., p. 14; Department of Defence, Defence annual report 2008–09, ibid., p. 42; ANAO, 2008–2009 major projects report: Defence Materiel Organisation: Department of Defence, Audit report, 13, 2008–09, ANAO, Barton, ACT, 2009, pp. 71–74, accessed 13 January 2015.

    [462].      2000 Defence White Paper, op. cit., p. 48; 2009 Defence White Paper, op. cit., p. 53.

    [463].      2009 Defence White Paper, ibid., p. 56.

    [464].      Ibid., p. 34.

    [465].      Ibid., p. 34.

    [466].      M Thomson, The cost of defence 2009–2010, op. cit., p. 1.

    [467].      M Turnbull (Leader of the Opposition), Power balance in Asia: the Coalition perspective, Lowy institute of International Policy, speech, 1 May 2009, accessed 13 January 2015.

    [468].      Ibid.

    [469].      2009 Defence White Paper, op. cit., pp. 93 and 96.

    [470].      Ibid., p. 50.

    [471].      R Lyon and A Davies, ‘Assessing the defence white paper 2009‘, Policy Analysis, Australian Strategic Policy Institute, 7 May 2009, p. 2, accessed 13 January 2015.

    [472].      2009 Defence White Paper, op. cit., p. 94.

    [473].      Ibid., p. 94.

    [474].      2009 Defence White Paper, op. cit., p. 93.

    [475].      Ibid., p. 95.

    [476].      Ibid., p. 97.

    [477].      Ibid., p. 98.

    [478].      Ibid., p. 98.

    [479].      Ibid., p. 44.

    [480].      Strategic objectives in 2000 were to ensure the defence of Australia and its direct approaches; foster the security of our immediate neighbourhood; work with others to promote stability and cooperation in South East Asia; contribute in appropriate ways to maintaining strategic stability in the wider Asia-Pacific region; and contribute to the efforts of the international community, especially the United Nations, to uphold global security. Cited in 2000 Defence White Paper, op. cit., p. x.

    [481].      R Lyon and A Davies, ‘Assessing the defence white paper 2009‘, op. cit., p. 2.

    [482].      2009 Defence White Paper, op. cit., pp. 9 and 83.

    [483].      Ibid., p. 9.

    [484].      Ibid., p. 85.

    [485].      Ibid., p. 83; Australian Government, ‘Cyber Security Operations Centre‘, Department of Defence, website, accessed 13 January 2015.

    [486].      J Franzi, Managing cyber security in an increasingly interconnected world, Department of Defence, speech, 5 May 2014, accessed 13 January 2015.

    [487].      2009 Defence White Paper, op. cit., p. 46.

    [488].      Ibid., p. 47.

    [489].      Ibid., p. 48.

    [490].      Ibid., p. 13.

    [491].      Ibid., p. 60.

    [492].      Ibid., pp. 60 and 64.

    [493].      Ibid., p. 64.

    [494].      Ibid., pp. 64 and 72.

    [495].      S Smith (Minister for Defence) and J Clare (Minister for Defence Materiel), New naval combat helicopters, media release, 16 June 2011, accessed 13 January 2015; Department of Defence, MH-60R in-service ceremony, media release, 25 January 2014, accessed 13 January 2015.

    [496].      2009 Defence White Paper, op. cit., p.73.

    [497].      Ibid., pp. 63 and 71.

    [498].      Ibid., p. 72.

    [499].      Ibid., p. 75.

    [500].      ANAO, Multi-role helicopter program, Audit report, 52, 2013–14, ANAO, Barton, 2014, accessed 13 January 2015.

    [501].      RAN, ‘MRH90 Taipan: multi role helicopter‘, RAN website, accessed 13 January 2015; The Auditor-General, 2013–14 major projects report: Defence Materiel Organisation, op. cit., p. 218.

    [502].      S Smith (Minister for Defence) and J Clare (Minister for Defence Materiel), 19 new Howitzer guns for the Army, media release, 16 October 2012, accessed 13 January 2015.

    [503].      2009 Defence White Paper, op. cit., pp. 76–77.

    [504].      Ibid., p. 78.

    [505].      Ibid., p. 79.

    [506].      Ibid., pp. 78–80.

    [507].      Auditor-General, 2013–14 major projects report: Defence Materiel Organisation, op. cit., p. 206; K Andrews (Minister for Defence), Wedgetail aircraft achieves final operational capability, media release, 26 May 2015, accessed 13 January 2015.

    [508].      Ibid., pp. 79–80.

    [509].      Ibid., p. 79.

    [510].      2009 Defence White Paper, op. cit., pp. 125–130.

    [511].      Ibid., p. 125.

    [512].      Ibid., pp. 127–128.

    [513].      Ibid., p. 128.

    [514].                   Ibid., p. 128

    [515].      Ibid.

    [516].      Ibid.

    [517].      Ibid., p. 129.

    [518].      Department of Defence, Priority industry capabilities: fact sheet, July 2009, accessed 13 January 2015.

    [519].      Ibid., pp. 129–130.

    [520].      Department of Defence, Defence capability plan 2009, Canberra, 2009, pp. iii–iv; J Faulkner (Minister for Defence) and G Combet (Parliamentary Secretary for Defence Procurement), Defence capability plan 2009: supporting Australian defence industry, media release, 1 July 2009, accessed 13 January 2015.Parliamentary Library Catalogue, ‘Defence capability plan: project update summary’, [Library catalogue].

    [521].      First Pass approval allocates funds from the Capital Investment Program to enable the options endorsed by Government to be investigated in further detail while Second Pass is the point at which the Government will endorse a specific capability solution and approve acquisition funding. Department of Defence, Defence capability development handbook 2014, 24 June 2014, p. 10, accessed 13 January 2015; ibid.

    [522].      The non-farm GDP implicit price deflator had been abandoned because it was subject to ‘substantial fluctuations’. Instead, the white paper allocated fixed indexation set at 2.5 per cent, the target consumer price inflation of the Government and Reserve Bank.  Cited in 2009 Defence White Paper, op. cit., pp. 137–138.

    [523].      J Fitzgibbon (Minister for Defence), Budget 2009–10: defence budget overview, op. cit.

    [524].      Ibid.

    [525].      Ibid.

    [526].      2009 Defence White Paper, op. cit., p. 137.

    [527].      Budget review 2009–10, Research paper, 33, 2008–09, Parliamentary Library, Canberra, 2009, accessed 13 January 2015.

    [528].      M Thomson, The cost of defence: ASPI defence budget brief 2009–2010, op. cit., p. vi.

    [529].      Ibid., p. 104.

    [530].      M Turnbull, cited in J Gordon, ‘Defence plan holds financial “time bombs”, Rudd warned‘, Sunday Age, 3 May 2009, accessed 13 January 2015.

    [531].      M Thomson, The cost of defence: ASPI defence budget brief 2009–2010, op. cit., p. 103.

    [532].      P Barratt, ‘Defence savings: the impossible dream‘, Australian Observer blog, 16 September 2009, accessed 13 January 2015; H White, cited in L Mayoh, ‘Forces project rapped‘, Sunday Telegraph, 3 May 2009, accessed 13 January 2015.

    [533].      M Thomson, The cost of defence: ASPI defence budget brief 2012–2013, Australian Strategic Policy Institute, Canberra, 2012, p. 112, accessed 13 January 2015.

    [534].      M Thomson, The cost of defence: ASPI defence budget brief 2009–2010, op. cit., pp. 101–103.

    [535].      Ibid., pp. 101–102.

    [536].      Senate Foreign Affairs, Defence and Trade References Committee, Procurement procedures for defence capital projects: final report, The Senate, Canberra, August 2012, accessed 13 January 2015.

    [537].      B Nicholson, ‘Budget 2012: military suffers the biggest blow‘, The Australian, 9 May 2012, p. 8, accessed 13 January 2015.

    [538].      2000 Defence White Paper, op. cit., p. 121.

    [539].      S Smith (Minister for Defence) and J Clare (Minister for Defence Materiel), Budget and strategic reform program; ADFA and ADF reviews; PNG processing centre; Pakistan and death of Osama bin Laden, press conference, transcript, 6 May 2011, accessed 13 January 2015; M Thomson, The cost of defence: ASPI defence budget brief 2012–2013, op. cit., p. 131.

     

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