Date created: 28 November 1996 Last modified: 18 November 1997 Maintained by: John Quiggin John Quiggin
Nov 29, 1994
Over the past ten years, the processes of microeconomic reform have imposed continuous pressure on the public sector in Australia. Spendingon items perceived as luxuries has been pruned ruthlessly, while traditional public sector practices have been abandoned in favor of market-driven processes. But one area of public spending has remained almost entirely immune from this scrutiny. While spending in areas such as housing has been slashed, military spending has grown strongly in real terms.
Arts spending has been cut, but the need of the military to support marching bands and aerial acrobatic troupes has not been questioned. Tertiary education has been squeezed relentlessly, but the most expensive university in the country (the Australian Defence Forces Academy) continues to provide an excellent liberal education for future officers. Most notably of all, some of the most discredited forms of protectionist industry policy, abandoned elsewhere, have reappeared in the form of massive armaments production programs with open-ended government guarantees.
Our armed forces (I avoid the euphemism 'defence forces' for reasons which will become apparent) cost about $10 billion each year. What do we get for this massive expenditure? First, we get insurance against the remote contingency that a foreign country will attempt to invade Australia. Since it is this aspect of the armed forces role that has rendered them largely exempt from scrutiny, it is important to observe just how remote the possibility of invasion is. There is currently no country in the world, except the United States, capable of mounting such an invasion. We would almost certainly have a decade or more of warning if any other country attempted to develop such a capacity. Our nearest neighbor, Indonesia, spends far less on its armed forces than we do, and has been stretched to the limit in the attempt to maintain control over East Timor and Irian Jaya (as well as over Indonesia's domestic 'security').
Even if there were a country with the military capacity to invade Australia, such an event would be highly unlikely. In the fifty years since World War II, Saddam Hussein's brief occupation of Kuwait stands out as the only occasion on which one internationally recognised state has invaded and occupied another, and this is scarcely an example that invites emulation. Even in this extreme case, border disputes and some dubious historical arguments provided Saddam with at least a fragmentary pretext for his actions. A successful invasion of Australia would imply a complete breakdown of the entire post-war world order, in comparison with which the collapse of Communism would be a marginal event.
Because there is no plausible chain of events that could lead to an invasion, it is difficult to know how to spend money in a way that will reduce our already small risk. Our current military configuration, which was basically constructed as part of the Western Alliance against the Soviet Union, is certainly not designed for continental defence.
Advocates of military spending, such as Michael O'Connor, recogise all of this. They do not suggest that the armed forces are there to defend us against invasion. Rather they suggest that their primary purpose is to enable Australia to 'project influence' beyond our borders.
The projection of influence may be a worthy goal but it is certainly one which should be subject to the usual calculus of costs and benefits. First, can we project influence more cheaply through armed force than through foreign aid, diplomatic missions and the like. Second, do ordinary Australians benefit more from a capacity to project influence abroad than from, for example, the provision of sufficient police to make our streets safe at night.
In my view, the answer to both of these questions is negative. In the last twenty years we have spent about $200 billion (1994 dollars) on the armed forces. Thetotal influence we have projected abroad has been only marginally more than we got from the construction of the Friendship Bridge, which cost only a few hundred million. Our biggest single effort, the Gulf War, did not even garner enough goodwill to stop the US pushing us out of Middle Eastern wheat markets. The recent involvement of the armed forces in humanitarian and peacekeeping missions has been worthwhile, but, in most of these cases, we could have done more good, at less long-run cost, with a purpose-designed nonmilitary body. Such a body might include an armed police element, which would be trained in the problems of maintaining order in turbulent situations such as those of Rwanda and Somalia, but would not be designed to fight against organised armed forces. In all recent cases of this kind where Australia has made a commitment, it has been clear that the forces would be withdrawn in the event of significant military opposition.
The second issue is whether funds spent projecting influence abroad would be better spent at home. If the calculus is based purely on national interest, there seems to be no doubt that they would. The $200 billion we have spent on defence over the last 20 years would have been sufficient to eliminate hospital queues, ensure that no qualified student went without tertiary education and massively increase investment in physical infastructure such as roads, railways and telecommunications. Even if we had held real military spending at the 1980 level, we would have saved about $20 billion.
In comparison, the benefits to ordinary Australians of our capacity to forcibly 'project influence' appear to be very small, if indeed they exist. Our military capabilities have never been of any benefit to individual Australians who have been kidnapped by terrorist groups or imprisoned and, in some cases, executed by foreign governments. They have never deterred any foreign government from repudiating debts to Australia, nationalising Australian-owned assets or making trade policy decisions adverse to Australian interests. Indeed, it is very difficult to envisage any situation where our capacity to project military influence could yield benefits remotely commensurate with the costs.
Our international obligations, along with the need to be prepared for the unlikely event of a buildup of military forces with the potential to threaten Australia, mean that we cannot avoid some military spending. But if we abandoned the grandiose and chimerical idea of 'projecting influence' we could meet all of our legitimate military needs with a real expenditure level no greater than the amount we spent in 1980 and probably at a cost much below this.
John Quiggin is Professor of Economics at James Cook University and author of Great Expectations: Microeconomic reform and Australia, published by Allen & Unwin.
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