Tag Archive for: Marise Payne

What’s worth 14 days’ quarantine for Australia’s foreign minister?

Where Australia’s foreign minister visits tells much about what she and her government value.

Covid-19 means overseas travel for Marise Payne costs 14 days’ quarantine on the return to Oz.

The travel test now comes with an even heftier time impost, underlining the injunction: to weigh what ministers say, watch what they do.

In this year of gloom, doom and Zoom, doing it face to face means the meeting is the message. Then, seek the substance in the statements.

Payne’s two overseas trips in the age of Covid are a statement about what’s important enough to spend a total of 28 days in quarantine.

Her first quarantine-era trip was to Washington in July for the annual AUSMIN meeting.

This month, she headed to Tokyo for the second meeting of the ‘Quad’ foreign ministers of Australia, India, Japan and the United States.

Last year, the foreign ministers did their inaugural four-power pow-wow on the sidelines of the UN General Assembly—as convenient as it was symbolic. This year’s journey to Tokyo—a much less convenient pow-wow—amped up the message of the meeting.

On her way home from Tokyo, Payne visited Singapore.

The travel-importance equation thus reads: the US alliance, the Quad and ASEAN. If Payne makes a third Covid-era trip this year (for a total of six weeks in quarantine), Southeast Asia is the likely choice, to emphasise the ASEAN dimension.

The message from the meetings is Australia expressing what it values and facing what it fears. Principles and push-back join. The context is how power is balancing (or not) in the Indo-Pacific.

The dragon in the room for every meeting is China. Beijing’s behaviour injects a lot of darkness into the Indo-Pacific conversation.

The AUSMIN communiqué called out China over the erosion of Hong Kong’s autonomy, the repression of Uyghurs, coercive and destabilising actions in the South China Sea, and the need for good faith in negotiating limits on nuclear weapons.

Even when it’s not named, China gets lots of other attention, from cyber to Covid-19.

A new area of public push-back from Payne’s Washington trip was over Taiwan. In the previous decade, the annual AUSMIN communiqués never once mentioned Taiwan. (To read through a decade’s worth of communiqués is to track the fall from business-as-usual comfort to the discomfort of today’s wobbly Indo-Pacific).

From being a taboo topic, this year Taiwan got significant AUSMIN wordage and a warm embrace.

See what Australia has signed up to. We have ‘re-affirmed Taiwan’s important role in the Indo-Pacific region’. We intend to ‘maintain strong unofficial ties’. We will support Taiwan’s role in international organisations as either a full member or an observer. The push-back against China’s threats and coercion was this line: ‘The United States and Australia highlighted that recent events only strengthened their resolve to support Taiwan.’ Plus, Australia promises more aid coordination with Taiwan in the South Pacific.

Much of what Australia previously did silently with Taiwan we now proclaim. Push-back is translating into public pokes at Beijing. Taiwan is the most sensitive poke point of all, along with the power and personality of Xi Jinping.

The message out of the Quad reads: We like-minded democracies have much we can do together. We have a clear and strong interest in giving confidence to others worried about China (hi, ASEAN). The Quad demonstrates that the Indo-Pacific does have options. The future doesn’t have to be determined and dominated by China.

India is the most cautious member of the Quad, but China has done to India what it’s done to Australia—sharpened and clarified the choices. China is the godfather of Quad 2.0 just as much for India as it is for Australia.

Payne’s Quad message is crisp. Lots of China content without using the C-word. Because there’s no Quad communiqué, each foreign minister gives their own summation. Payne delivers six paragraphs that are a tight survey of the Indo-Pacific.

Australia’s foreign minister starts with Covid-19, then turns to the Indo-Pacific’s shaky strategic environment: ‘Pressure on the rules, norms and institutions that underpin stability has the potential to undermine recovery.’

Looking at but not mentioning China, she notes it’s ‘vital that states work to ease tensions and avoid exacerbating long-standing disputes, work to counter disinformation, and refrain from malicious cyberspace activity’. And she repeats the lengthier AUSMIN thought that ‘states cannot assert maritime claims that are inconsistent with international law’.

Payne’s Quad statement hugs ASEAN centrality and the important principles of the ASEAN outlook statement on the Indo-Pacific.

On the purpose of the Quad, Payne offers liberal values and balance-of-power competition in the same sentence: ‘We agreed to enhance cooperation to promote a strategic balance in the Indo-Pacific, and work to support a region of resilient and sovereign states that engage each other on the basis of rules, norms and international law.’

What once would have been motherhood truism about rules and norms is today a call to action.

The value of rules and agreement will get another workout next month with the unveiling of the most important regional trade agreement ever signed, the Regional Comprehensive Economic Partnership.

China and ASEAN will be on stage beaming; Australia will be equally sunny, standing with fellow RCEPers Japan, South Korea and New Zealand. The gap on the stage will be India, while the US is the ghost at the feast.

The irony of the shiny free-trade moment is that RCEP arrives as China tightens its coercive campaign against Australia, now targeting the coal and cotton industries. Australia does push-back. China does punishment.

To put punch in Oz push-back, Marise Payne’s travels embrace the alliance, the Quad and ASEAN. To deal with China, Australia looks beyond Beijing to join with others. The message of the meetings is to build substance with the symbolism.

Strange and stressful days for Oz foreign policy

Seeing Australia’s foreign minister and their opposition counterpart arguing international affairs on the same stage is a rare thing.

The federal parliament is the nation’s great clearinghouse for all arguments, but big set-piece foreign policy debates don’t come along too often in the House of Representatives or the Senate.

The absence of international debates distresses the policy tragics, yet it has a sunny dimension: happy the House—and lucky the nation—when the political arguments are overwhelmingly domestic.

But when foreign affairs tiptoes into the parliamentary battle of taunts, thrusts and thought balloons, Foreign Minister Marise Payne owns Senate question time, while Shadow Foreign Minister Penny Wong has the run of Senate estimates hearings.

The parliament offers multiple stages and lots of different games. Eyeball-to-eyeball stuff, though, is rarer than you’d expect.

So it was, potentially, a moment to savour to have Senator Payne and Senator Wong both discussing ‘Australian foreign policy’ in the first session of the annual conference of the Australian Institute of International Affairs.

The two frontbenchers were in the same session, yet they weren’t on stage at the same time. The political dance is always part of the way such moments are played, and eyeball moments tend to be danced around.

Payne spoke first and as she exited, heading back to parliament, Wong strolled into the hall.

The personal moment happened in the foyer outside, during the crossover. Away from the stage, the foreign minister and shadow foreign minister paused for a quick greeting. Canberra can still conduct the contest with some class and civility.

While enjoying the mechanics of the microphone crossover, I reflected that Australia continues to draw benefit from its new tradition of having three women atop its foreign policy (foreign minister, shadow minister, and secretary of the Department of Foreign Affairs and Trade).

Taking over from Julie Bishop, Marise Payne became Australia’s second female foreign minister. On the Labor side, Penny Wong followed Tanya Plibersek in the shadow foreign role. And Frances Adamson became the first woman to head DFAT in August 2016.

As experienced players, Payne and Wong know how to structure the purpose and avoid the pitfalls when they speak in places like the AIIA. Pitfalls are covered by the no-stuff-up rules: no own-goals, no nasty surprises and no hostages to political fortune. The purpose is to peg out your ground, describe the terms of the debate and shift the argument a few steps. Both delivered.

In her previous post as Australia’s first-ever female defence minister, Payne was on top of the potential pitfalls, but didn’t always look as though she was revelling in the purpose. For her, moving to foreign affairs is a return to the arena that’s been her natural home during her 21 years in parliament.

She gave a big-picture speech that was fully alert and plenty alarmed about an ‘uncertain, competitive and contested world’, reflecting on structural shifts in the global balance of power.

The foreign minister offered this starting point: ‘These are important times in international affairs. We face an uncertain global environment—from Australia’s perspective, more so than any time since the end of the Second World War. We are in the midst of a major strategic realignment in the Indo-Pacific.’

Payne described geopolitical flux and major strategic competition: ‘The challenges to the status quo are of a different order of magnitude to any in the post-war period.’

In the restrained language of foreign minister speeches, this signals serious concern that the international system is heading back to the jungle.

All governments cry wolf to dramatise the dangers and importance of what they confront. Still, this era looms as decidedly lupine.

The third panellist in the session, Allan Gyngell (Canberra wise owl and AIIA president) noted that every Oz government since 1945 has declared that the international situation ‘has never been more fluid and uncertain’. But this time, Gyngell says, it’s not a wolf cry: the region is changing ‘in ways without precedent in Australia’s modern history’ (a phrase from the 2017 foreign policy white paper).

Wong is also alarmed about the international system, focusing on the challenge of nuclear disarmament in a time of disruption. The Strategist offers you a sharpened version of that speech here, outlining what a Shorten Labor government would do on nuclear disarmament.

As always for Labor, the tension in the discussion—and the balance sought—is between being strong on disarmament and continuing to strongly embrace the US alliance.

During questions, Wong said that in government she’d look to again appoint an ambassador for disarmament, but pushed back at the suggestion of a minister for disarmament: ‘I would have thought, though, it’s something you want your minister for foreign affairs kind of engaged in, so I’m not sure I’m particularly keen for you to reduce my job description just at the moment.’

Another major international issue the shadow foreign minister tackled during questions was climate change, firing this zinger: ‘It is an existential challenge. I think it is—I’m trying to find an adjective that is not too undiplomatic—but I think it is both deeply distressing and irresponsible and frankly unworthy of a party of government the way in which the Liberal Party has allowed internal division to frustrate any progress on climate action in Australia for a decade.’

The applause that line got was loud proof of a political tenet—never offer your opponents an easy target or a simple shot on a hot topic. And the no-punching-bag rule dictates that the minister and shadow minister must be careful about standing on the same stage at the same time.

The strategic dimensions of Australia’s new defence minister diarchy

Image courtesy of the Department of Defence.

For the first time Australia now has two senior ministers in the Defence portfolio, with Marise Payne as Minister for Defence and Christopher Pyne as Minister for Defence Industry. Minister Pyne is more senior in Cabinet ranking, but Minister Payne is adamant they are equals in the portfolio. Last year the Abbott government’s First Principles Review proposed killing off the diarchy; this year the Turnbull government has doubled down and created another at the higher level! Wry comments aside, this innovation is strategically significant.

There’s always debate over whether economics is the foundation of security or the converse. This has a new twist, with some arguing that warfare is unrewarding for the major powers today, given the highly interdependent nature of the international system. Geopolitics is giving way to geo-economics. Foreign Minister Bishop might agree, given her observation that ‘economics is power and power is economics’. At least some think that the Prime Minister believes that trade is the new black, rather than preparing for conflict.

Reflecting that view, the Turnbull government’s election platform mantra was ‘jobs and growth’. Defence was often mentioned, but related to economics not security, with the continuous shipbuilding strategy being pitched in terms of ‘securing thousands of advanced manufacturing jobs for decades to come’ rather than the strategic value of the warships to be procured. So it’s not surprising that a new Defence Industry Minister position and lots of new industry support funding followed this new policy direction.

Critics will say this simply reflects pandering to the electorate—and in an era of Brexit and Trumpkins there’s much in that. A major issue in today’s global politics is the perception that globalisation’s economic benefits haven’t been sufficiently shared.

Transfer payments from the winners to the losers is one answer—and Australia has been remarkably successful in this compared to others. By some estimates, Australia is the second most equal on wealth distribution out of 27 major countries, with Japan topping the chart. Despite this, there are still worries that we could be declining towards the extreme inequality found in the US and the UK. But transfer payments are now unfashionable, so the big new idea is indirect government payments, such as paying a premium to build submarines in South Australia. That’s potentially better for many reasons: it can foster innovation, equips people with useful skills, gives individuals interesting lives, improves the nation’s capabilities and capacities, and helps ensure societal stability.

With the continuing rise of the machine, Artificial Intelligence might make most of us losers but that doesn’t mean the country will be poorer. In geo-economic terms the nation might well be better off, but governments wary of a displaced electorate might need to redistribute the new wealth, including through ‘make work’ exercises.

Defence seems an easy cash cow for such initiatives. Some argue that the money will be spent anyway, so why not spend it to get security and economic benefits—just as America or Sweden does? The huge US defence budget doesn’t just service security demands, but also serves domestic societal and industrial purposes. It would’ve been cheaper for the US to have bought Austral ships built in Perth but that’s not how it works, so Austral now builds them in Alabama.

For the Turnbull Government, the 2% GDP promised for Defence spending can seemingly undertake similar double duty. After all, the promise was for increased defence spending, not increased defence capability. But does that approach give a good return on investment? Economic rationalists would argue not, though there are enough analyses based on tax clawbacks etc. to muddy the waters. America’s view is crystal clear, but the business of America is business. For Australia though, would the nation be better off if government invested in some area other than defence? Would government spending in another industry sector be more efficacious?

Another popular reason for supporting costly national defence industries is that they can provide export income. Many OECD nations do so, like Switzerland and Norway. But most OECD nations export niche defence products and stay away from warship-building, a tough area to compete in. It’s not clear that Australia will it be able to leverage its spending on shipyards with exports. The experience of small- and medium-sized OECD nations suggests that Minister Pyne might need to find technology niches in which our shipbuilding companies can excel (like Austal’s mastery of aluminium hulls) if exports are the goal.

Defence’s capability requirements presently drive what Defence buys but an export focus could change that. The French government decided years ago that its Services would buy whatever conventional weapons the government (read DGA) and industry thought would sell internationally. (Its nuclear forces were treated differently.) France’s export-oriented defence companies were kept viable by the national defence budget. A similar approach here could influence how the ADF is equipped.

So which Defence Minister’s task has priority? If Defence wants to buy a top shelf capability from overseas but an Australian company offers something similar but not as good, or requiring a developmental effort, which prevails? The issue becomes more complicated when it turns to money: if the Australian product is more expensive than a comparable overseas product, which gets the contract?

Minister Pyne might be first amongst equal senior Defence Ministers, especially as he might ‘own’ more of the Defence budget. Minister Payne is ‘just’ concerned with preparing for and fighting wars, whereas Minister Pyne has a broad nation-building task that surely rivals cat herding in terms of balancing competing interests. Minister Pyne needs to produce really complicated stuff on time, provide a good return on investment, counter the negative aspects of globalisation and assist in winning the geo-economic battle. Oh, and he needs to do that by the next election in three years time. No pressure.

 

Amiable defence debate meets China

Image courtesy of Flickr user Tom Woodward

The defence discussion in the Australia election is calm and agreeable in tone—except for China.

The Turnbull government doesn’t want to push too hard on the South China Sea, while the Labor opposition is more gung-ho.

And how much is China threatening ‘serious economic consequences’ if Australia follows the US show-and-go lead in the South China Sea?

Apart from that, agreement and good humour prevailed when the Government and Opposition sat down to ‘argue’ defence policy.

The National Press Club debate was more a friendly discussion between the Defence Minister, Senator Marise Payne, and the Opposition’s shadow Defence Minister, Senator Stephen Conroy. As Senator Conroy said in his concluding remarks, the debate demonstrated ‘an overwhelming degree of bipartisanship.’

Even the apprehensions and anxieties about China are a matter of tacit consensus between the Coalition and Labor.

The public difference on China is a matter of degree: how hard should Australia go to demonstrate its overflight and sailing rights in the South China Sea?

Senator Conroy said standing instructions don’t allow the Australian Defence Force to do a Freedom of Navigation operation in the South China Sea—it’s a government decision. And so far, no decision has been made and no such instruction issued.

The shadow Defence Minister repeated that a Labor government would authorise such operations to challenge the ‘absurd building of artificial islands on top of submerged reefs.’

He said Australia should act against ‘destabilising behaviour’ because ‘the international rules system is under threat.’ Cop that, China.

On Freedom of Navigation ops in the South China Sea, Senator Payne said Australia ‘won’t flag or comment publicly on future ADF activities.’

Then she got a second chance at the South China Sea in a later question from the Xinhua correspondent; a sign of the times that the only non-Oz media question came from China’s news agency.

Senator Payne told Xinhua:

‘Australia will continue to maintain its position of supporting freedom of navigation, freedom of overflight according to international law in all of our activities. And that includes the South China Sea. It’s quite clear that amongst the competing claims there is an impact on relationships, an impact on stability within the region…We’re not in the business of commenting publicly in advance on specific details of future ADF activities.’

The beauty of the not-comment-in-advance stance is the wriggle room it gives Canberra in Beijing. The wriggle can even be taken as a wink that Australia won’t follow the US lead.

Such wriggle space is necessary, according to Senator Conroy, because China could be leaning on Australia economically, using the recently signed Australia–China free trade agreement:

‘I was very disturbed to see a report recently that the Chinese government, when Mr Turnbull visited Beijing, said that if Australia was to engage in a Freedom of Navigation operation [in the South China Sea] that there will be serious economic consequences for them. I can’t confirm that’s true. I just observe that I read that report. I find that a very disturbing way to do business. If that was the case, that sort of bullying needs to be stood up to. A free trade agreement is meant to work as a free trade agreement, not be political leverage to force other outcomes and acquiescence and obsequiousness.’

Senator Payne was asked about Kim Beazley’s view that a Trump Presidency would force Australia to immediately re-do the 2016 Defence White Paper.

The first jovial response from the Minister: ‘Kim just loves White Papers, that’s all. There’s never enough White Papers for Kim.’

She then went on to sing the hymn about the primacy of the alliance. Australia will work with whoever is President of the US. Amen.

The Opposition leader, Bill Shorten, may think The Donald is ‘barking mad’, but his shadow Defence Minister can still belt out the hymn:

‘We only have one alliance. It’s incredibly vital to our national interests. And we are 100 per cent behind that.’

Tradition upheld. Then a few quick kicks at The Donald.

Senator Conroy said Trump’s negative comments about Japan and South Korea undermined the alliance system in Asia that the US has built over decades.

The Senator then cited a US friend on the fringes of the Trump campaign who’d complained that five months out from the election Trump had no transition plan for taking office.

For a professional polly like Stephen Conroy this goes beyond appalling to unbelievable. Badmouthing allies is one thing. But not thinking about what to do with power if you win! No wonder apparatchiks everywhere are aghast at being Trumped.

Elections, of course, are as much about the pollies as the policies.

And the first question of the debate was about the Fin Review yarn that if the Liberals win, party conservatives want the deposed PM, Tony Abbott, back in the ministry as Defence Minister.

Asked her response at reading that story over breakfast, Marise Payne, gave a one-sentence response, elegant in what it didn’t say: ‘I was very comfortable knowing that the matter will be a decision for the Prime Minister.’

The Abbott-as-Defence Minister balloon drew a predictably neutral, even cool response, from the Prime Minister.

You don’t give any life to a red-hot thought bubble like that in the middle of an election: make the denial as mild as possible so as not to offend. Give the thing not a breath of encouragement and hope it drops away quickly.

The spectre of the Abbott resurrection fluttered in Marise Payne’s final line, ending proceedings.

The Defence Minister may merely have followed proper form in not tempting the political gods. Or her closing words may have been mightily indicative.

After the election, she looks forward to doing much more in Defence ‘if I continue in this role.’

If. The voters decide. Then the PM gives or takes away—with much depending on the size of the win and the temper of the party.

Junior ministers: breathing space

Dan Tehan’s arrival as the Minister for Defence Materiel—as well as Veterans Affairs and Minister assisting the Prime Minister for the Centenary of ANZAC—is the latest in a long parade of junior Defence Ministers over the last decade. A three-year electoral cycle and the regular churn of Prime Ministers and Defence Ministers since 2007 all make for a merry-go-round of ministry positions.

As Tehan’s Parliamentary bio makes clear, he has a distinct interest in national security matters, including two Masters degrees in international relations, service as a DFAT official and as a Ministerial adviser. Elected as the Member for Wannon in 2010, Tehan has spent the last two years as Chair of the Parliamentary Joint Committee on Intelligence and Security. Members have access to classified material and an important oversight role of the intelligence agencies during a time of serious pressure over terrorism. Tehan has also been active writing for the media on military operations in the Middle East and counterterrorism—something that marks him out as an MP with serious interests in public policy.

The art of being a junior Minister is to find some breathing space to make a substantive policy contribution. For a number of reasons, that’s harder than one might think. The first challenge is to establish an effective working relationship with the Minister for Defence. I have had the privilege of watching at reasonably close range relations between senior and junior ministers in the defence portfolio for several decades. News flash: they don’t always work together well.

Like all relationships it comes down to personalities. Some junior ministers have a burning conviction that only time or a cosmic injustice will stop them from becoming the senior minister. Those people usually find themselves being starved of interesting work. Conversely there have been cases where talented junior ministers were denied policy oxygen by insecure and controlling senior ministers. At times relations became so toxic that there was little or no communication between Ministers. Not always though: The combination of John Faulkner as senior minister and Greg Combet as Minister for Defence Personnel, Materiel and Science stands out as one that worked well. Both men were grown-ups with little need to prove their standing by playing games.

A persistent problem has been to work out the division of responsibilities between senior and junior ministers. Wikipedia helpfully (but not always accurately) lists the various junior ministerial titles and incumbents over the years. ‘Minister for Defence Science and Personnel‘ was a title often used. In practice, Defence science doesn’t generate much ministerial business. It offers interesting work but not much of it. By contrast the personnel function has a high workload of cases relating to individual grievances and conditions of service matters. There’s more than enough to keep a minister busy, but little of the work ever successfully addresses strategic workforce planning for either the military or civilian sides of Defence.

The Minister for Defence Material position first emerged in 2009 to be held in succession by Greg Combet, Jason Clare and Mike Kelly. Stuart Robert kept similar responsibilities as Assistant Minister for Defence and Mal Brough occupied the role of Minister for Defence Materiel and Science for a few short months. Brough’s formally allocated responsibilities are presumably the starting point for Dan Tehan to discuss his new role with Defence Minister Payne. Those responsibilities are set out by Defence as follows:

Assist the Minister for Defence on:

  • Defence materiel acquisition and sustainment projects except for major projects listed with Minister for Defence.
  • Equipment disposal.
  • Monitor Projects of Concern.
  • Defence skilling programmes to support industry.
  • Industry capacity, structure, policy and engagement.
  • Implementation of the Naval Shipbuilding Plan.
  • ICT elements of the Integrated Investment Programme.
  • Science and technology policy.

While this sounds like a sensible list of tasks, political reality complicates the picture. A multibillion dollar ‘project of concern’ like, for example, the Air Warfare Destroyer program is hardly going to be left to a junior minister to handle. Likewise, Minister Payne keeps formal responsibility for the Naval Shipbuilding Plan, which will limit Tehan’s scope for the independent ‘implementation’ of it.

What could Dan Tehan offer to do that would be of most value in his new areas of responsibility? As the release of the Defence White Paper looms, two big implementation tasks will need government attention. The first is to give real substance and energy to linking industry more closely to Defence as a ‘fundamental input to capability’. To do so, a major cultural change effort is needed. Second, there’s a need to give practical shape to the capability development and acquisition system now that the Defence Materiel Organisation has been shuttered. That area hasn’t been reformed so much as smashed. It needs close Ministerial attention.

Finally, in his Veterans Affairs role, Tehan has inherited what many fear is a future tsunami of PTSD-related cases emerging largely, but not exclusively, from over a decade of operations in Afghanistan and Iraq. It will call on major reserves of compassion and policy agility to address this coming wave of troubled veterans.

One thing’s for certain, defence industry will welcome Tehan’s arrival.  After the White paper’s release the new Minister will have an amazingly ambitious set of defence capability plans to implement, and a clean slate on how best to do it. Take a deep breath, Minister, now dive right in.

Tony Abbott’s trillion dollar legacy

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There’s only one question in defence circles today: Will Malcolm Turnbull retain Tony Abbott’s commitment to spend 2% of GDP on defence in 2023, and if so, in what form? Prior to the leadership change, there was no doubt that the forthcoming White Paper would plot a course to the 2% target. But what once seemed certain is now an open question.

Neither Turnbull, new treasurer Scott Morrison nor new defence minister Marise Payne were members of the National Security Committee (NSC) of Cabinet when the White Paper was drafted. Until they have a chance to consider the document, they can’t possibly form a view on the matter. To release the document without close scrutiny would be irresponsible.

Wisely, therefore, when the new minister was asked if she had received a guarantee that defence funding would continue at the level committed by the previous government, she replied ‘it is not a discussion that I have had yet’, adding that ‘without a strong economy we can’t possibly support that level of spending’. Herein lies the core issue; the financial demands of the yet-to-be-released defence white paper will have to be reconciled with the Turnbull government’s yet-to-be-formulated economic agenda.

On the eve of the 2015 budget, I argued that the government faced a dilemma dividing its response between mitigating economic risks on the one hand and strategic risks on the other. Since that time, developments on neither front have been encouraging.

In the economic realm, global growth continues to undershoot expectations—as it has every year since 2010. To make matters worse, China’s economy is struggling to boost domestic consumption transition so that it can move away from export and investment led growth. The problem is that China’s inadequate social safety net predisposes households to save rather than spend.

According to some analysts, a sustainable trajectory for the Chinese economy means something like 3-4% rather than 7.5% annual growth. But even that disappointing outlook might prove elusive; analysts at Citigroup believe that a recession is possible in China over the next two years, with dire consequences for the world economy. Given Australia’s sensitivity to commodity prices, a serious Chinese downturn would, to say the least, exacerbate our economic woes. Our first line of defence in such a circumstance is low debt, yet the Commonwealth’s debt burden continues to grow, and will do so until the budget is brought back into surplus.

Even if China manages to muddle through its present difficulties, Australia still faces the challenge of restructuring its economy to the post-resource boom reality. Hence Turnbull’s rapid convening of an economic reform summit. Here’s the thing: economic reform costs money. Significant changes create winners and losers, and losers have to be compensated—at least in the first instance. Nowhere is this truer than in the critical area of tax reform.

On the strategic front, troubles continue around the globe. Russia is in Syria. The Taliban controls parts of Kunduz. And the South China Sea boasts several thousand acres of artificial islands thanks to China. Nothing has changed to ameliorate the strategic uncertainty Australia faces.

The resulting dilemma is simple to understand; every dollar spent on reforming the economy or retiring debt can’t be used to boost defence spending, and vice-versa. If that weren’t enough, the electorate has proven itself both volatile and resistant to belt-tightening. The latter was reflected in the hostile reception accorded the relatively moderate savings measures in the 2014 budget, while the former explains the demise of the Abbot prime ministership less than 24 months after a landslide election win.

If the decision is taken to abandon or delay the 2% promise, there will be risks. Without careful management, the US might conclude that—as with the 2009 White Paper—we talk a big game but fail to deliver. It would also require Defence to go back to the drawing board and yet again delay the release of the White Paper. But it’s unlikely that voters would notice the difference, and the opposition couldn’t raise concerns given its policy of spending 2% only when economic circumstances allow.

When all is said and done, the 2% of GDP target was a political gesture rather than a reasoned response to the strategic risks Australia faces. What’s more, any arbitrary financial target is manifestly a poor basis for defence funding. Defence planning should be about the strategic outcomes sought rather than the financial inputs consumed. My instinct is that we could get by with spending less, especially if a more careful approach to major naval acquisitions is adopted (see here, here and here), and even more if hard decisions are made regarding the shape of navy.

It’s possible, and perhaps likely, that the Turnbull government will simply rubber stamp the draft white paper and accept the 2% of GDP funding model. If that happens, in excess of a trillion dollars will be spent on defence over the next 20 years without any pretence of the expenditure being determined by the strategic risks we face—let alone balanced against the mounting risks to our economy.