The great Aussie defence bludger

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There is dumb. And then there is really, really stupid. Australian defence falls into the latter category.

In his address to the Shangri-La Dialogue Hegseth made clear the Trump administration’s priority defence policy region is Asia.

…Poland expects to spend 4.7 per cent of its GDP on defence this year. Lithuania plans to spend 5.5 per cent and Estonia 5.4 per cent next year, and Germany is hiking its defence budget by 75 per cent immediately to 3.5 per cent of GDP. There are also reports that Germany is planning a further rise to 5 per cent before the end of the decade.

In his speech Hegseth contrasted the efforts of some Asian allies with the substantial spending commitments already made by America’s NATO partners when Europe faces a less formidable threat.

This is the context for Hegseth asking Defence Minister Richard Marles to lift Australian defence spending from its current 2 per cent of GDP to 3.5 per cent “as soon as possible”. During his plenary presentation, Hegseth appeared to be looking straight at Marles when he stated that in the case of some allies “tough love” was needed.

Albanese’s response so far has been to stick with the government’s plan to lift defence spending from its current 2 per cent of GDP to 2.33 per cent in eight years. “What we’ll do is we’ll determine our defence policy. And we’ve invested across the forwards, an additional $10bn in defence,” he said.

We have just had three Chinese ships humiliate our continental defence. The appearance of nuclear armed ships (yes, one may have been) missile minutes off Australian cities could not be a better warning of what is to come.

If we do not prepare some kind of continental deterrence capability, then China will dominate Australia without firing a shot. That’s the beauty of gunboat diplomacy.

We should obviously also be shouldering our share of regional defence in conjunction with the US. Merely spending as much as it does, which is what is being asked of us, is only a political calculation and more than fair.

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It is a fundamental principle of alliance management.

The more pressing question is what the budget (and discussion) should be if we were serious about deterring Chinese influence. European scale for starters, in conjunction with allies.

What happened to Australia when it is so soft and entitled that it refuses to boost defence capability to sub-standard, while it is thrilled to lift spending by more than that on the disabled?

Are we going to shoot them at the Chinese?

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.