Investment in defence capabilities is inadequate and even declining

The real situation of defence spending over the last three decades and the probable effect of further changes to the federal-state compact.

The Coalition’s federal electoral success in 2004 has increased calls from both sides of politics for significant changes to the federal compact, such as the Commonwealth taking over all hospitals or all aspects of universities.

Revision of the federal compact on domestic issues is largely a matter of personal political opinion.

National security and defence, however, are the highest responsibilities of government and the only major areas of governance that are wholly Commonwealth responsibilities. This is never going to change.

Unfortunately defence is also a matter that generally sways few voters until it is too late.

All these factors have led to the long-term neglect of defence by governments of all persuasions.

Defence has already been progressively squeezed over the last five decades by the Commonwealth’s increasing direct funding of areas of governance traditionally regarded as the responsibility of the states.

Health and education are the two major examples but others, including law and order and land use compensation, are also on the rise. This too is unlikely to change.

If the Commonwealth is to assume even greater responsibility for areas that are large and seemingly ever-increasing consumers of taxation revenue there are obvious implications for our national security.

Defence needs adequate, long-term and sustained funding, and this is not a peripheral issue in discussions about amending the federal compact.


As the graph clearly shows, while spending on defence has remained largely static or has even decreased in real terms, federal spending in the areas of social security, health and education continues to grow at an increasing rate.

The addition of substantial spending by the states and territories shows that, each year, Australia now spends over eight times as much on social security, more than four times more on health and just on four times more on education as we invest in our defence.

Spending in these areas of social governance is important — but for the foreseeable future defence remains just as important and is being continually neglected.

Politically all governments pay lip service to the importance of defence.

Few politicians are genuinely interested or have relevant experience, and very often defence policy and capability matters are ignored because of their perceived complexity.

Many members of parliament consider defence unimportant politically.

They believe the electorate is more concerned about the big social expenditure areas and seek to buy votes accordingly. They also see faster political advancement in working these latter fields.

The electorate blindly trusts the national government to look after defence but are being continually let down.

Our defence must be guaranteed an effective share of our interest and our resources.

This includes real parliamentary oversight rather than party-political nitpicking over administrative details. Most importantly, it also needs adequate, long-term and sustained investment that is effectively quarantined from the perpetual short-term perspectives of our political, budgetary and governmental processes.