Tag Archive for: Richard Marles

Disruption, deterrence and dollars

‘Strategy without money is just hot air.’

— Deputy Prime Minister and Defence Minister Richard Marles speaking at ASPI’s 2023 conference, 14 September, Canberra

At ASPI’s national conference, the deputy PM and defence minister was doing ‘d’ alliteration—disruption, deterrence and dollars.

The Richard Marles line on dollars channels a famous Canberra creed, uttered in sharp and grumpy tones by the man who created the modern defence department, Arthur Tange: ‘Until you’re talking dollars, you’re not talking defence.’

The minister’s view of ‘hot air’ is an important policy balloon that translates as a Labor target. Track the dollars in the days to come to measure the actual power of the policy.

The last time Labor was in government, especially under Julia Gillard, it looted the defence budget for other purposes (including getting Australia through the 2008–09 global financial crisis). While not referencing that history, Marles painted a picture of a different Labor government dedicated to lifting defence spending.

The change reflects darkly different times.

A decade ago, the Gillard government built policy on a happy vision of the bounties flowing from the ‘Asian century’. Today, Marles describes a threatening Indo-Pacific where deterrence and defence must be linked to the hopes of diplomacy: ‘If we want to maintain peace and stability, then getting the hard-power equation right is a critical component of that. And certainly that’s how we think about it in terms of our own strategic landscape now, which is very complex and not a little threatening.’

Marles’s description of the way the world has changed is also a description of what’s changed in Labor’s worldview.

Australia’s budget history since federation, he said, reflected a ‘binary sense of war and peace’. In peace, defence spending went down; in war it jumps. ‘I don’t think that’s the world we’re in now. I think the grey zone is much bigger.’ The end of the binary divide, Marles said, meant old norms no longer applied.

On the budget, Marles is talking future dollars some years out, because the projection in the May budget didn’t reflect the urgency of the demands on defence. ASPI’s 2023–24 defence budget brief called it ‘the big squeeze’. The only increase over the next three years is compensation for the increased cost of imported military equipment flowing from a fall in the value of the Australian dollar.

Marles said Labor was working with the three-year forward estimates bequeathed by the previous Coalition government:

In a rational world, defence spending is a function of strategic threat. And we aspire to be a rational government, and that’s why you’re seeing an increase in defence spending. What we inherited when we came to government was an increase. That increase is maintained through the forwards. And so we actually went to the election saying we would commit to precisely the same funding the former government had established and that’s what we are doing over the forward estimates.

Taking that as Labor’s starting point, a key measure of the difference between hard strategy and hot air will be how the spending line keeps rising. And that’s where the government’s promise to lift defence spending to 2.3% of GDP over a decade becomes the target to monitor, as Marles explained:

We’ll stay on the same pathway of increase over the next four years. Through the next 10 we’re going to increase the trajectory. So, to put numbers on that, basically defence spending was somewhere below 2% [of GDP]; it’s about 2% now under the trajectory that we inherited from the former government with their 2.1% within a decade.

We are taking 2.3% because of the strategic threat that we perceive. I guess the question then, given the strategic threat, if you seek to be rational, is 2.3% the right answer? We think it is.

As the defence minister mused, 2.3% of GDP is a response to what Australia sees before it. If the view changes, the dollar ambition will have to change too:

I don’t sit here thinking that we are on the eve of conflict. I sit here thinking that we are in the midst of uncertainty, that predicting the next 10 years is very difficult.

I can completely imagine a peaceful trajectory over the next decade and beyond. I think that’s entirely in the realm of possibility and that’s obviously what we should all be seeking. The difficulty is I can imagine something else and it’s the uncertainty of that which gives rise to the fact that we are seeing an upswing in our defence spending.

In questions, ASPI’s Jennifer Parker pushed Marles on the dollars, pointing out that the defence funding profile still rests on a frame going back to the 2016 defence white paper. Much had changed. Had the time come to rethink the funding profile?

‘Strategy without money is just hot air,’ Marles replied. ‘We’re talking about a 10% increase on what was intended to be committed just 17 months ago, over the course of the next decade. Instead of 2.1%—2.3% of GDP. That is a very significant step. And it is a very significant step in historic terms.’

The final question was about the content of the classified version of the defence strategic review and a new focus on how Australia needs to plan to mobilise businesses and the private sector for defence purposes.

Marles said the full version of the review discusses mobilisation: ‘It’s really the first discussion of that kind of issue in a defence document—a document that Defence has embraced—probably since the end of the Second World War. It’s a hugely significant analysis.’

Australia is already digesting the reality of a lot more money for defence. The emerging questions centre on the nation’s risk appetite in uncertain times to deliver deterrence. And what would ‘mobilisation for defence purposes’ mean for Australia? Even if you don’t see all that as a great disruption, it’s certainly different. And it is delivering a different Labor government.

Marles’s focus for the US–Australia alliance: integrate, integrate, integrate

Washington was the last of the Quad capitals that Richard Marles visited in his opening diplomatic salvo as Australia’s deputy prime minister and defence minister. But, as far as defence matters are concerned, the agenda that he took to Washington was arguably the most ambitious and complex of all.

Of course, Marles’s meeting with US Defense Secretary Lloyd Austin and his team was not his first. The two met twice on the sidelines of the Shangri-La Dialogue in Singapore last month. But a dedicated bilateral visit offered some obvious advantages, particularly so early in the new Australian government’s tenure. For one, it allowed top officials to explore issues of common interest in more depth than at engagements on the sidelines of regional forums. The rest of Marles’s visit provided opportunities for direct engagement with other important parts of the US system, including other government departments, the wider strategic and defence policy community, Congress, and defence industry entities.

If Marles’s excellent address at the Center for Strategic and International Studies was a tone-setter, then three words capture the essence of the agenda Marles would have sought to prosecute with Washington: integrate, integrate, integrate.

Importantly, Marles repeatedly made clear over the course of his visit that his government wasn’t looking to reinvent the wheel when it came to the US–Australia alliance’s defence integration program. Rather, his message was that the wheel needs to spin faster, whether in advancing defence technology cooperation or accelerating ambitious force posture plans—both longstanding objectives held by successive Australian governments.

For instance, at CSIS Marles flagged his intention to propose specific measures to streamline cooperation through the US national technology and industrial base, or NTIB. This mechanism is intended to facilitate greater defence innovation and easier technology sharing between the US and its most trusted allies, Australia included. Yet prohibitive export-control regimes and bureaucratic misalignment have prevented the NTIB from delivering on its promise as a veritable defence free-trade zone, barriers that continue to hamper Australian efforts to develop sovereign capabilities with US help, such as the guided weapons and explosive ordnance enterprise. It’s unclear exactly what reforms Marles proposed to his interlocutors at the Pentagon. But in making this a centrepiece for his engagement with American counterparts, Marles continued with the proactive efforts of former defence ministers Peter Dutton and Linda Reynolds to ensure that the NTIB remains at the top of the bilateral agenda.

Efforts to get the NTIB working properly feed directly into another defence integration priority for the new government: AUKUS. Indeed, one of the NTIB’s chief architects has warned that, without urgent reform, longstanding collaboration could yet sink technology co-development and transfer projects flagged under AUKUS. Australia’s future nuclear-powered submarines, of course, remain the big-ticket item, and Marles indicated before his departure that accelerating the subs’ delivery timeline would be central to his discussions in DC. But Australia is looking for substantial advanced-capability pay-offs from AUKUS much earlier than the 2040s. Marles’s emphasis on the need for Australia to acquire long-range strike, advanced cyber capabilities and so-called area-denial systems like uncrewed underwater systems underscored that perspective, and will undoubtedly have been close to the top of the agenda in his meetings with senior US defence officials.

However, implementing AUKUS and the NTIB isn’t just about maximising benefits for Australia. Indeed, at CSIS Marles argued that Australia’s goal was to ‘supplement and strengthen US industry and [shared] supply chains’ by providing ‘a trusted second source’ for critical items like precision munitions for both militaries. In that sense, the alliance’s defence industrial and technology integration initiatives are closely tied to the expanded force posture initiatives (EFPIs) announced at AUSMIN last year, which are also intended to better integrate Australian and US defence forces. Marles made clear at the Australian–American Leadership Dialogue that he sees AUKUS as, ideally, facilitating the sort of ‘seamless’ defence industrial integration that would truly reflect the interoperability of US and Australian forces, and make Australia ‘a much more potent and effective’ security partner in the region.

With EFPI implementation high on the agenda, the government’s planned force posture review provides an opportunity to better integrate Australian forces with the US and prepare them for the sorts of ‘high‑end warfighting and combined military operations’ flagged in last year’s AUSMIN communiqué. As Marles argued at CSIS, timely progress on the EFPIs will be crucial if the alliance is to ‘move beyond interoperability to interchangeability’. Plans to develop a shared logistics, maintenance and sustainment capability as part of the EFPIs to support high-intensity and high-end operations neatly capture this dynamic.

However, an expanding aperture for the US military presence in Australia should also prompt Canberra and Washington to deepen their joint strategic planning—to better ‘share the burden of strategic thought’, as Marles put it. This is something that alliance practitioners have long called for as part of wider efforts to modernise the alliance for new and emerging deterrence challenges. Of course, Taiwan has dominated much of the public discussion on this point. But the growing number of close encounters between Australian and Chinese aircraft and warships across the region, and concerns that Canberra and other regional allies have that such ‘routine’ coercion could escalate into conventional conflict, make this more important than ever—particularly if the EFPIs are to be implemented and leveraged in ways of greatest benefit to Australian interests.

It goes without saying that implementing this integration program—only a part of the wider bilateral agenda—will take more than one successful high-level visit. But Marles’s clear message to Washington that the wheels of integration need to spin faster than ever before is cause for optimism that the US–Australia alliance can get ‘match-fit’ for defence challenges in the Indo-Pacific.