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Tuesday, 2 December 1997
Page: 11743


Mr McLACHLAN (Minister for Defence)(2.01 p.m.) —by leave—Today I am releasing the unclassified version of a strategic review endorsed by the government entitled Australia's Strategic Policy . In light of the review's findings, I am also announcing initiatives to develop or enhance key military capabilities.

Soon after coming to office I asked the Defence organisation to conduct a classified review of our strategic circumstances and the military capability decisions arising from that assessment to shape the Australian Defence Force to 2020 and beyond. Australian governments have regularly conducted such high level reviews, the most recent one being in 1993, which contributed to the previous government's 1994 Defence white paper.

As would be expected in the Defence policy area, this review is an evolutionary document both in the way it assesses regional trends and in the proposals put forward for force development. I expect this evolution of strategic thinking will continue.

Key policy areas

That said, Australia's Strategic Policy details a number of highly important policy differences. Unlike previous strategic reviews, this document takes a crucial step beyond simply describing our strategic environment to detailing a rigorous set of priorities for force development. The review details a maritime focus for the defence of Australia and its vital interests, and a logical, structured approach to Defence equipment acquisition. It moves Defence policy away from a narrow focus on responding to low-level contingency scenarios. It stresses instead our capacity to defend Australia in a wide range of circumstances by focusing on our maritime approaches.

Further, the document outlines a policy supporting an enhanced level of strategic cooperation with Asia-Pacific countries. It recognises more clearly than past reviews the inextricable link between Australia's security and the security of our region. Finally, the review places a heavy emphasis on the Defence Force's technological skills. This document directs the ADF to the forefront of the revolution in military affairs. This is essential, given the general increase in military capabilities in the Asia-Pacific.

The challenge ahead

The strategic review was not an exercise in hunting for threats. It identifies no immediate threat to Australia. It confirms that Australia is one of the more secure countries in the world. But defence planning is about the long term. The review analyses the potential for developments to cause security problems in the future, unlike our largely benign environment today.

In the past Australia benefited from being the most developed economy in our region, holding the most advanced military equipment and weapons. In some defence areas, that is no longer the case. To stay confident in our ability to defend Australia, we must be more efficient and smarter in using resources.

Developments in technology are working to our advantage. They are giving a greater capacity to watch our maritime approaches and offer high precision in the way we apply force in those approaches.

A secure country in a secure region

The focus of our policy remains on our ability to defend Australia. Australia's strategic interests do not begin and end at our shoreline. It would be a serious mistake to think we could adopt a `fortress Australia' strategy in the event of a deterioration of regional stability. We cannot be secure in an insecure region.

In the 1980s our predecessors argued that forces developed for the defence of Australia might also be called upon to operate beyond our shores to protect regional and global strategic interests. Indeed, the Labor government with coalition backing authorised a number of these deployments to the Gulf War, as well as peacekeeping in Somalia and Cambodia.

But Labor's 1994 Defence white paper did not recognise how changing strategic circumstances were changing the levels of demand which could be put on our forces in such operations. We can no longer assume that forces able to meet low-level contingencies in the defence of Australia will be sufficient to handle conflict beyond our territory.

We must make sure that the forces we develop for our own defence do indeed give options for handling crises in which vital interests may be threatened. Wherever they are called to operate, our forces must have the capacity to survive against—and defeat—modern weapons. Such weapons are being acquired in our region and will become standard capabilities for regional armed forces.

The government, therefore, rejects the argument that we must choose between a defence force to defend Australia and one able within realistic limitations to operate overseas. The Defence Force must be able to do both. The issue Australia faces is how to build a defence force able to ensure the security of the country and able to contribute to the security of our region.

So the review concludes that, while the core of our planning will be on the capabilities needed to defeat attacks on Australia, we will choose capabilities suited to a wider range of tasks. Our aim is to promote a secure country in a secure region. We will not deploy forces ill-equipped for the task. We want to avoid last minute scrambles to bring our forces up to scratch.

This review sets Defence on a path exploiting our national strengths—our high education standards, our scientific and research base, our access to technology through the US alliance and our proven ability to perform in tough military situations.

Impact of regional economic growth

Let me address in detail some of the issues covered in the strategic review. Two key factors are shaping Australia's strategic environment; East Asian economic growth and its implications for arms modernisation programs and the changing strategic relativities between the region's major powers.

To quote the foreign and trade policy paper, In the National Interest, changing `relativities of power and influence which flow from the economic rise of East Asia will profoundly influence Australia's foreign and trade policy over the next fifteen years'. Notwithstanding the recent currency crisis in some regional countries, that long-term judgment holds.

Even if there is only moderate economic growth, if defence spending is constant as a proportion of GDP, some regional countries could have doubled defence spending by 2010. Regional defence spending is not a threat to Australia. Countries have a legitimate right to modernise their forces. However, that military modernisation, in the event of conflict, could have an impact on its scale and intensity. That leads me to the second key factor shaping our security environment—changing strategic relativities.

Changing strategic relativities

In the 1970s and 1980s, we defined our region of primary strategic interest as South-East Asia, the South-West Pacific and the eastern reaches of the Indian Ocean. Today, tensions in North-East Asia—for example, on the Korean peninsula—have flow-on effects in South-East Asia much more directly than was the case in the 1970s and 1980s. We cannot allow our thinking to be influenced by artificial boundaries. This strategic review re-emphasises the importance of North-East Asia to our own security.

A key issue is the prospect of increased strategic competition between the region's major powers. The end of the Cold War and economic growth has changed the strategic balance in Asia. Underlying any consideration of changing relativities is the role of the United States. A continuing US strategic engagement and presence in East Asia is vital to regional security.

China is emerging as a powerful economic force in our region, with a desire to play a more influential role. We do not see China as a threat to Australia. We and the region want China to be outward looking, prosperous and cohesive—helping to build a stable and cooperative Asia-Pacific. The relationship between the United States and China will be fundamental to stability in the future. The good management of that relationship is essential. We welcome the recent commitment to developing a strategic partnership by President Clinton and President Jiang Zemin.

Strategic policy fundamentals

The strategic review does not attempt to predict future military conflicts. Rather, it assesses the enduring features of our strategic environment and the long-term trends likely to affect that environment. The review articulates our key strategic interests as follows:

.   avoiding destabilising strategic competition between the region's major powers,

.   preventing the emergence of a region dominated by any power or powers who might wish to damage Australia's interests,

.   keeping South-East Asia—especially, maritime South-East Asia—free from destabilising disputes,

.   working with neighbours to strengthen their security, thereby preventing the intrusion of foreign military forces which might attack Australia, and

.   preventing the proliferation of weapons of mass destruction in our region.

Naturally, these priorities must be kept under constant scrutiny and be re-evaluated in the light of strategic developments. We consider that there are three basic tasks which the ADF could be required to perform:

.   defeating attacks on Australia,

.   defending our regional interests, and

.   supporting a global security environment which discourages interstate aggression.

Our highest priority remains defeating attacks on Australia.

Policy imperatives

Possessing the forces we need to defeat any realistic scale of attack on our territory is the basis of our wider defence posture. Maintaining this level of military capability is very relevant to how we are perceived by our neighbours and allies. We aim to be self-reliant in defending our territory, without relying on the combat forces of other countries.

But there will be continued close contact with allies for non-combat support, including intelligence and resupply in a crisis. A potential aggressor would have to cross our air and sea approaches and, having launched an attack, sustain their forces across this gap. Our strategic geography dictates that we should plan to defeat attackers in those approaches, before they reach our territory.

New strategies

In recent years, Australian defence planning placed too much emphasis on reactive operations—especially what have been called `low-level contingencies'. Relying on reactive options runs the risk that any crisis would be prolonged. They place little pressure on an adversary to cease attacking or threatening Australia, and concede the initiative to an adversary over the pace and duration of the crisis.

Pro-active operations in the defence of Australia could enable us to take the military initiative, put pressure on an adversary to cease hostilities and provide confidence that Australian lives and property would be protected. In defending Australia, pro-active military operations targeted against an aggressor's forces in our maritime approaches would seek to pressure those forces before they were able to lodge on our territory. This approach recognises the fact that Australia would have already suffered a major strategic blow if it ever became necessary to fight an attacker on our own soil.

In reviewing our military strategy for defeating attacks on Australia, the government will, therefore, give higher priority to maritime forces—that is, air and naval forces able to operate in our northern sea approaches. Moreover, the key future technologies for maritime operations involve enhanced surveillance and information gathering capabilities, as well as the ability to command and control military forces engaged in operations. These technologies are elements of `knowledge warfare', an area where Australia has significant national potential, which we will seek to maximise as a national strategic priority.

Relations with friends and allies

We have also reviewed our priorities for our international security and defence relationships. Our alliance with the United States is our most important strategic relationship. Longstanding defence links with most of the countries in South-East Asia and the South-West Pacific also lay the foundation for further cooperation.

We are working to develop a shared commitment to regional peace and stability among as many Asia-Pacific states as possible. But while our ties with our neighbours in South-East Asia and the South-West Pacific are of enormous strategic importance, the fact is that the region's strategic centre of gravity is North-East Asia.

So we are increasing our links with North-East Asia, particularly with Japan and China. We share many strategic interests with Japan and have already instituted regular political military talks, complemented by modest military-to-military links such as intelligence exchanges. We have also an increasing dialogue with China and evolving defence contacts. Multilateral structures such as APEC and the ASEAN Regional Forum, ARF, are a useful complement to bilateral ties, providing a very valuable forum for security dialogue.

Capability implications

In terms of military capability implications, a key issue is the benchmark against which we measure our own capabilities. The acquisition of high-technology defence capabilities throughout the Asia-Pacific means we cannot take for granted that our forces will keep their technological edge. To maintain our relative strategic position, our forces must measure up to two key benchmarks:

.   first, we must have the capability to deny our air and sea approaches to any credible force, and

.   second, we must maintain a very strong regional presence as a maritime power.

The discipline this imposes on how we shape our forces leads to some tough policy choices. These involve making decisions on the balance of resource allocations between land, air and naval forces; between current preparedness and future capability; between the scale of forces immediately deployable and the time they can be kept in the field. Few countries, however, have as clear-cut a strategic focus as Australia when it comes to making these choices. Our geography dictates a maritime focus for defence. One of the most important outcomes of this review is that we have followed through the logic of our own strategic analysis.

Priority one: the knowledge edge

I said earlier that this review puts the Defence Force at the forefront of the revolution in military affairs. That is because our highest capability priority is the `knowledge edge'—exploiting information technology so that we can use our relatively small forces to maximum effect. We are giving priority to investments in three elements of the knowledge edge—intelligence, command systems and surveillance. It is a major challenge to integrate these elements into a unified system giving commanders a complete picture of the battlefield, and enhancing their control of our forces—and doing that in real time, 24 hours a day.

The knowledge edge is the area which, more than any other capability, can be the decisive factor in combat, especially when it is combined with the high capabilities of our defence personnel. The government has approved a number of projects to enhance ADF knowledge edge capabilities, including:

.   airborne early warning and control aircraft,

.   enhanced satellite communications,

.   an advanced secure military messaging system,

.   an Army battlefield command support system, and

.   an automated command support system for joint operations.

Priority two: maritime capabilities

Our second priority relates to developing military capabilities to defeat threats in our maritime approaches. We are developing a mix of air, surface and sub-surface forces to create a formidable barrier to any hostile ships and aircraft in our maritime approaches. Air superiority is a decisive capability.

Australia faces a difficult set of choices over the next decade about our future fighter aircraft capabilities. My department is examining options on the balance of emphasis we should put between upgrading the sensors and combat systems of the FA18 and acquiring new aircraft. It is likely that a major upgrade of the FA18 will be required—whatever the outcome of these studies—as an interim step in modernising our air capabilities. These decisions are for a later day—and, I might add, a later budget context.

We are also looking at upgrading our air-to-air refuelling capability. As foreshadowed in the last budget, we will upgrade the survivability, maintenance and habitability of our guided missile frigates. That includes upgrading their radar systems, communications equipment, anti-submarine and mine-avoidance sonars and an improved defensive missile system. We will enhance the surface strike and underwater defence capabilities of our ANZAC ships, including the acquisition of anti-ship missiles for the ANZAC's new helicopters.

We plan to expand and enhance our submarine capabilities, including by the acquisition of more capable torpedoes and a mining capability. And we will begin work on enhancing the current Collins class design to provide data to guide decision making on future enhancements of the class, or the possible acquisition of additional submarines should that be deemed necessary. This process will build on the strengths of the Collins, taking full advantage of new technological developments.

We have a continuing requirement to conduct patrol and enforcement operations now carried out by the Fremantle class patrol boats. The offshore patrol vessel had originally been designated for these tasks. Following Malaysia's decision not to award its OPV contract to Tenix, our judgment is that the scale of investment required for an Australian-only OPV is not appropriate for the performance of primarily peacetime patrol tasks. We will extend the life of the Fremantle class boats for as long as economical, followed by replacement with a boat for similar purposes.

Priority three: strike capability

Our third priority is strike, that is, the ability to operate proactively against enemy forces in the defence of Australia and our interests. Our plan is to maintain the F111 in service until 2015 to 2020; to expand the operational fleet by upgrading our existing F111Gs; and to acquire long-range stand-off weapons as well as improving the electronic warfare and air-defence suppression capabilities of the F111s. By stand-off weapons, we mean something with greater range than the short-range weapons already being acquired. But we are not proposing very long-range weapons, such as the Tomahawk land attack cruise missile. We do not require this weapon to meet current strategic circumstances.

Priority four: defeating threats on Australian territory

Our fourth priority is land capabilities to defeat threats on Australian territory. Our priorities are to develop:

.   highly-mobile joint task forces;

.   a limited amphibious capability;

.   improved land surveillance equipment;

.   aerial fire support and reconnaissance helicopters

.   additional light armoured vehicles for reconnaissance and troop lift, and;

.   special force elements will receive added attention to improve counter-terrorist and other capabilities.

Land forces remain an essential part of our military capability. Indeed, this government has given a great deal of attention to the restructuring of the Army following the critical Defence self-assessment of capabilities in the Army 21 review. Army capabilities will therefore increase as a result of these initiatives, with the land force taking a larger share of the capital equipment budget than in recent years.

Priority focus

Together, the enhanced military capabilities I have outlined—and the rigorous set of priorities against which they have been developed—will give us the most modern, capable force in our immediate region. This force relies on highly skilled personnel using high technology and modern equipment to achieve mobility, hitting power and flexibility, exploiting information technology to attain maximum effect from relatively small forces.

These initiatives will bring a comprehensive enhancement of the military capabilities of the ADF over the coming decade, enabling the force to meet the key benchmarks I mentioned earlier. We will upgrade all our major combat ships and aircraft, restructure and re-equip the land force and invest heavily in technology to promote the knowledge edge.

Of course, such capabilities don't come cheaply. Over recent years, we have spent some $2.2 billion annually on investment in new equipment. The defence reform program will, over the next three years, realise a one-off saving of $500 million and mature annual savings of between $900 and $1,000 million. Current defence spending levels will allow us—with the savings from the reform program—to substantially modernise our existing defence platforms like the surface fleet, to acquire airborne early-warning aircraft and to give the Army greater mobility.

However, the current budget does not make it possible for us in the medium term to contemplate developing major new capabilities in the form of new fighter aircraft, or a new surface combatant should government decide that such acquisitions were needed. In determining the need for future equipment capabilities and levels of spending, the government will monitor developments in Australia's strategic circumstances as well as the Defence organisation's progress in implementing the reform program.

Conclusions

Australia is one of the more secure countries in the world. But that has not always been the case. Circumstances could arise which would reduce our security from armed attack. While we do not expect those circumstances to occur, strategic policy—in developing assessments of our future environment—needs to take a long view.

In taking this long view, we recognise that the ADF is the guarantor of Australia's sovereignty. We have a natural advantage in the strengths and abilities of the young people who join the ADF. This review ensures that these people will be equipped and trained in the best way possible. Australia's Strategic Policy provides the planning, ensuring that the Defence Force is capable of meeting this most fundamental of challenges. I present the following papers:

Australia's Strategic Policy—Report and Ministerial Statement, 2 December 1997 .