Saturday 18 Aug 2018 | 22:44 | SYDNEY
Saturday 18 Aug 2018 | 22:44 | SYDNEY

The Defence diet: Fear and love


Graeme Dobell

22 April 2010 14:24

To save $20 billion in a decade, Defence has to overturn history. Defence has no record of sticking to a diet, and a diet that lasts a decade is unheard of.

I've been pondering reasons why Defence might be able to deliver this time, when it never has before. The starting point must be the belief that boosters and punters always embrace during an economic boom and bubble: this time, it's different! This time the bubble will not burst. Or, to relate it back to Defence, this time the budget promises will be met.

I've come up with three reasons that could be used to support the argument (belief, hope, prayer) that Defence can cut $20 billion out of itself over a decade.

The previous Canberra Column laid out the first reason, the implicit threat in the budget bargain, encapsulated in the words of the Department Secretary, Ian Watt: 'Deliver within our budget, deliver the change and reform we need to deliver SRP and we will be able to deal with Force 2030. This is the great opportunity and a great incentive for Defence.' In other words, you can have all the White Paper goodies you asked for, but only if you can save the cash.

The second reason is that Defence claims to own this diet. It was designed at the same time the White Paper was being created. This, allegedly, is why the Strategic Reform Program will be different from the Defence Reform Program imposed in 1997 by Ian McLachlan, the first Defence Minister in the Howard Government. DRP and SRP: same sort of names, same sort of aims. Except the DRP was going to save only $1 billion. Only $1 billion.

The current put-down of the old DRP is that it was nothing more than a revenue grab imposed on Defence. This time, Defence is in control of its own fate. It is a cute argument aimed at ignoring rather than rewriting history. The DRP has to be scorned by this generation of defence-o-crats because it was seen to have failed. It never delivered the promised savings in ways the auditors would accept. Defence Ministers came and went and the DRP faded from memory.

But remember the motto: This time it's different. The chant in the barnyard must be: 'DRP bad, SRP good.'

The then-and-now discussion brings us to the third point, the Prime Minister effect. John Howard was his own defence minister just as Kevin Rudd is his own foreign minister. Howard is even more of an ANZAC tragic than he is a cricket tragic. His love of the military spoke to Howard's own family history as well as range of political calculations. As with most leaders, the personal and the political intertwined.

The budget effect was that Howard never said 'no' to the military. His government was the golden era of cascading cash that will be hard to replicate for its consistency and length. The figures tell the story, as recounted in Peter Hartcher's book. Howard promised Defence a 3 per cent real annual increase. Across the life of the Howard Government, that would have lifted the military budget by 38.4%.

Instead, what Defence actually got under Howard was a rise of 107%. The bitter accounting has been offered several times by Peter Costello; try as he might, Costello could never climb over Howard to get at Defence.

The terms of the Prime Minister effect have changed. It has gone from 'feel the love' to 'know the fear'. The defence-o-crats should fear the tough days ahead as they survey the mountains of cash Kevin Rudd has promised to devote to health, and the budget tightening needed to pay for the great stimulus surge of 2009. Oh, for those sunny days when John Howard was the giver who just couldn't stop giving.

The fear factor says Defence better show that it can deliver on its budget promise — there aren't too many Howard-style Defence tragics inside Cabinet.

Photo by Flickr user kizette, used under a Creative Commons license.