Defence White Paper 2016: Yet another invalid comment by yet another prominent economist

Why is so much economist commentary on national defence investment so wrong so often? Surely practioners of the dismal art should know something about our constitution and Australia's history. Even if so many of them apparently understand little or nothing about how our long-term strategic security infrastructure needs adequate and sustained resourcing (not the opposite) so it can best deter or manage strategic risks over many decades hence.


Letter to The Australian 
Friday, 26 February 2016
(not published)

In trying to comment on Defence White Paper 2016 your economics editor, David Uren, appears to confirm large gaps in his understanding of other disciplines (“Big spending means other portfolios hit”, 26/2, p6).

He incorrectly compares only federal, rather than national, spending when mistakenly claiming defence investment is the “third largest area of government spending”.

He ignores that defence is the only major area of government spending that is wholly funded federally.

And that national spending on social security, health and education in particular each continue to dwarf investment in our national defence infrastructure.

As federal and state debt repayments often do too.

Moreover, David claims that projected defence allocations over the next decade will mean other portfolios face cuts without the necessary qualification that, for once, this actually reverses what normally happens in Australian governance – and why this infrequent fiscal trend is now necessary.

Nor does he provide the necessary context that it is defence investment alone that has suffered the biggest proportionate and actual cuts in recent years and that much of the new program is catch-up financing to redress the damage inflicted by constant and generally arbitrary reductions.

The greatest single strategic security risk facing Australia continues to be vertical fiscal imbalance – largely driven by the selfish and short-sighted belief that the federal level of government should solve every problem regardless of the effect on those functions, such as defence, only the federal government can do.

The consequent inter-generational inequity we inflict on our children and grand-children is threefold.

  • Not paying our fair share now of the long-term and sustained investment needed in Australia’s strategic security means they will eventually have to pay much more in taxes to fix our neglect.
  • Unlike us though they may not have sufficient time to do it before a crisis hits them.
  • We are also needlessly exposing them to greater strategic risk, both in terms of weakened deterrence and significant consequences if our gambling with their future goes wrong.


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