defence 2000 our future defence force

Defence 2000

Our Future Defence Force

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© Commonwealth of Australia 2000

ISBN 0 642 29544 1

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Contents

MINISTER’S INTRODUCTION V

EXECUTIVE SUMMARY VII

SECTION ONE - FOUNDATIONSCHAPTER ONE - MAKING DECISIONS ABOUT DEFENCE 3The Purpose of the White Paper 3

Why Now? 5

Looking Ahead - Strategic Risk Management 6

The Bigger Picture 7

CHAPTER TWO - SECURITY AND THE ROLE OFAUSTRALIA’S ARMED FORCES 9

Force in International Affairs 9

New Military Tasks 10

Non-Military Security Issues 12

CHAPTER THREE - AUSTRALIA’S STRATEGIC ENVIRONMENT 15Our Strategic Setting 15

An Attack on Australia? 23

The Development of Military Capabilities 24

SECTION TWO - STRATEGYCHAPTER FOUR - AUSTRALIA’S STRATEGIC INTERESTS

AND OBJECTIVES 29Ensure the Defence of Australia and its Direct Approaches 30

Foster the Security of our Immediate Neighbourhood 30

Promote Stability and Cooperation in Southeast Asia 31

Support Strategic Stability in the Wider Asia Pacific Region 31

Support Global Security 31

CHAPTER FIVE - AUSTRALIA’S INTERNATIONALSTRATEGIC RELATIONSHIPS 33

The US Alliance 34

Relationships in the Wider Asia Pacific Region 36Relationships in Southeast Asia 39

Our Nearest Neighbours 41

Strategic Relationships Beyond the Asia Pacific Region 44

CHAPTER SIX - AUSTRALIA’S MILITARY STRATEGY 46Strategic Tasks for the ADF 46

Capability Priorities for the ADF 53

Capability Development Principles 54

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SECTION THREE - PEOPLE

CHAPTER SEVEN - PEOPLE IN DEFENCE 61People are Capability 61

The Dimensions of the Challenge 62

Leadership 63

Retention 63

Recruitment 66

Education and Training 68

Reserves 69

Cadets 72

SECTION FOUR - CAPABILITYCHAPTER EIGHT - THE DEFENCE CAPABILITY PLAN 77A New Approach to Capability Planning 77

Land Forces 78

Air Combat 84

Maritime Forces 87

Strike 91

Information Capability 94

CHAPTER NINE - INDUSTRY 98The Role of Industry in our Defence 98

The Importance of Australian Defence Industry 99

Our Current Industrial Scene 101

Strengthening Our Defence Industry Capability 102

CHAPTER TEN - SCIENCE AND TECHNOLOGY 107Technology Trends and the Revolution in Military Affairs 107

Exploiting the Opportunities 109

Being a Skilled User of Technology 111

DSTO - Its Role 112

SECTION FIVE - FUNDINGCHAPTER ELEVEN - DEFENCE FUNDING 117A New Approach to Defence Funding 118

Why Do We Need to Spend More? 119

Future Reform and Efficiency Savings 121

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AUSTRALIA’S DEFENCE POLICY V

Minister’s Introduction

Six months ago, when the Prime Minister and Ilaunched the Public Discussion Paper on Defence, wesaid that the Government would be making importantdecisions about the future of Australia’s defence forcetowards the end of the year. Those decisions have nowbeen made and are presented and explained in thisWhite Paper.

The review of our defence needs has been one ofthe Government’s top priorities in 2000 andremains so. We have spent a lot of time on Defencethis year because tough decisions were needed. Aswe said in the Public Discussion Paper, Defencehad reached the point where we could notmaintain our present range of capabilities at ourpresent levels of spending. We needed to make achoice to spend more on Defence or expectDefence to do less.

After reviewing Australia’s regional environment,and our strategic interests and objectives, it wasclear that the Government could not responsiblyconsider cutbacks in Australia’s militarycapabilities. But we also recognised that justpromising more money would not fix the problem.

We needed to take a new approach to defence planning.

This White Paper is set apart from its predecessors inthree key ways.

The first is the degree of ministerial involvement in thedevelopment of this policy. Over the past year mycolleagues in the National Security Committee ofCabinet have spent many hours in discussion about allaspects of defence policy. This has resulted in the mostcomprehensive process of ministerial-level decision-making about Australia’s defence policy for many years.

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The second is the Government’s decision- announced in this White Paper - to laydown the most specific long-termdefence funding commitment given byany Australian Government in over 25years. This commitment is importantbecause of the unique demands onDefence for long-term funding clarityand reflects the special priority we giveto Defence as a core responsibility ofGovernment. However, before we couldmake that commitment, it wasnecessary to embark on a series ofreforms to Defence’s administration andmanagement. We needed todemonstrate to taxpayers that anyadditional funding provided to Defencewould be managed wisely. But havingmade that funding commitment doesnot mean that there are no furtherefficiencies to be made. The Governmentremains strongly committed tocontinuing improvement in Defence.

The third is a clear statement of theGovernment’s requirements of itsDefence Organisation. The decisions inthis White Paper provideDefence with a plan - theDefence Capability Plan - for thedevelopment of Australia’sarmed forces over the nextdecade. The Plan has beendeveloped by the Government asthe most cost-effective way tomeet Australia’s strategicobjectives. The job for Defence isnow to implement that Plan.

Together, the Government’sdevelopment of the White Paper,

the Defence Capability Plan and thelong-term funding commitments inthis White Paper establish an historicbenchmark for the developmentof Australia’s defence force. Theyare what make this White Paperso different.

We are very proud of this achievement.We would like to pay particular tributeto the work of the people of Defence -military and civilian - in developing thisWhite Paper. Their contribution hasbeen outstanding.

John Moore, MPMinister for Defence

The National SecurityCommittee of Cabinet

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Executive SummaryFoundationsMaking Decisions about DefenceFollowing the last federal election, the Governmentmade a commitment to publish a Defence White Paperin this term of parliament. That decision reflected arecognition that the Defence Force was under realpressure to meet an increasingly complex and diverserange of tasks within a budget that had remainedrelatively constant in real terms over the past 15 years. TheGovernment had become concerned that a mismatch hadarisen between our strategic objectives, our defencecapabilities and our levels of defence funding.

In response to those concerns the Government hasproduced in this White Paper - the first since 1994 - themost specific and detailed defence plan in more than25 years. It announces and explains the Government’sdecisions about Australia’s strategic policy over the nextdecade, and it outlines the Government’s plan for thedevelopment of our armed forces, matched by acommitment to provide the funds required. It is theculmination of a year of intensive government reviewof Australia’s defence needs. This review included anextensive community consultation program, led by TheHon. Andrew Peacock, AC. In a parallel activity, theviews of the people in Defence were also sought by aDefence Consultation Team.

The defence of our country and our community fromarmed attack is one of our highest national priorities.But we need to be sure that the defence budget is spentwisely and that we are not spending more than isnecessary. Defence decisions therefore need to balancetwo of the most powerful imperatives on government -security and fiscal responsibility - and these decisionsneed to bear in mind competing priorities forgovernment expenditure and the Government’s overallfiscal strategy.

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There is another perspective. Our armedforces are not simply a service providedby the Government. The AustralianDefence Force (ADF) reflects the kind ofcountry we are, the role we seek to playin the world, and the way we seeourselves. The sense of security that ourarmed forces give us underpins ouroptimistic outlook and the confidencewith which we engage the region.

Security and the Role ofAustralia’s Armed ForcesArmed force will remain a key factorin international affairs. While resortto force will continue to beconstrained by many aspects of theinternational system, governmentscannot dismiss the possibility of majorconflict between states. That risk is ashigh in the Asia Pacific region as it iselsewhere in the world.

At the same time, military operationsother than conventional war arebecoming more common. Since the endof the Cold War, there has been aworldwide upsurge in intra-stateconflicts. These disputes have placednew demands on the armed forces ofmany countries, including forhumanitarian relief, evacuations,peacekeeping and peace-enforcement.The Government believes this is animportant and lasting trend withsignificant implications for our DefenceForce. Over the next 10 years the ADFwill continue to undertake a range ofoperations other than conventional war,

both in our region and beyond. Many ofthese operations will be at the lower endof the spectrum, but often they will bemore demanding. The boundarybetween a benign situation and openconflict can become blurred.

Australia also faces many non-militarythreats to our national life, such as cyberattack, organised crime, terrorism,illegal immigration, the drug trade,illegal fishing, piracy and quarantineinfringement. The ADF will continue tohave a major part to play in coastalsurveillance and enforcement activities.Our patrol boats, maritime surveillanceaircraft and intelligence capabilities arefully engaged in the day to daymonitoring and policing of ourmaritime approaches, and their effortsare closely integrated with otheragencies. Our approach is to draw on theexpertise of the ADF where it is mostappropriate to do so, but not to allowthese roles - important as they are - todetract from the ADF’s core function ofdefending Australia from armed attack.

Australia’s StrategicEnvironmentAt the global level, two interrelatedtrends seem likely to shape our strategicenvironment most strongly -globalisation and US strategic primacy.These factors will help strengthen globalsecurity and promote economic, socialand political developments that alignwith Australia’s interests and values.Increasingly, the United Nations has

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been responding to a growing sense inthe international community that crisescausing avoidable human sufferingcannot be ignored just because theyhappen within the borders of asovereign state. The trend to a moreactive and effective UN security role isalso welcome.

The most critical issue for the securityof the Asia Pacific region is the nature ofthe relationshipsbetween theregion’s majorpowers - China,Japan, India,Russia and theUnited States.These countriesare important toA u s t r a l i a ’ ssecurity becausethey are the oneswith the power -actual or potential- to influence events throughout the AsiaPacific region. Their relationships will setthe tone for the whole region. Overall, theprospects for those relationships aregood; however, there remains a small butsignificant possibility of confrontation.

Generally, Southeast Asia remains anarea of great promise. Political and socialevolution is strengthening therobustness, legitimacy and resilience ofthe political systems in many countries.ASEAN continues to provide a focus forthe sense of shared interests andcommon goals which has been so

important to Southeast Asia over thepast several decades. There remain,however, a number of security issuesin Southeast Asia that will need tobe handled carefully if regionalsecurity is to be maintained. Countriesin our immediate neighbourhood -Indonesia, East Timor, Papua NewGuinea, and the island states of theSouthwest Pacific - face large economicand structural challenges.

Notwithstandingthe complexity ofour regionale n v i r o n m e n t ,Australia today isa secure country,thanks to ourgeography, goodrelations withneighbours, aregion where theprospect of inter-state conflict is

low, our strong armed forces and a closealliance with the United States. A directmilitary attack on Australia is unlikely.

A key factor in the evolution ofAustralia’s strategic environment is thedevelopment of military capabilities inthe Asia Pacific region. In recent timesthe region has seen the fastest growth ofmilitary capabilities in the world, andthis will continue over the next decadein ways which are important forAustralia’s defence planning. The mostsignificant trends are likely to becontinued growth in fighter aircraft

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with beyond-visual-range targetingcapability, more highly capable anti-ship missiles, and increasinglysophisticated strike and land forces.

StrategyAustralia’s StrategicInterests and ObjectivesHighest priority is accorded to ourinterests and objectives closest toAustralia. In some circumstances amajor crisis far from Australia may bemore important to our future securitythan a minor problem close at hand. Butin general, the closer a crisis or problemis to Australia, the greater the likelihoodthat it would be important to oursecurity and the greater the likelihoodthat we would be able to help to dosomething about it.

Australia’s most important long-termstrategic objective is to ensure the defenceof Australia and its direct approaches.Our second strategic objective is to fosterthe security of our immediateneighbourhood. We would be concernedabout internal challenges to the stabilityand cohesion of neighbouring countriesand concerned about any threat ofexternal aggression against them. Ourthird strategic objective is to work withothers to promote stability andcooperation in Southeast Asia. Our keystrategic interest in Southeast Asia is tomaintain a resilient regional communitythat can cooperate to prevent theintrusion of potentially hostile externalpowers and resolve peacefully any

problems that may arise betweencountries in the region.

Our fourth strategic objective is tocontribute in appropriate ways tomaintaining strategic stability in thewider Asia Pacific region. We would wantto avoid the emergence in the Asia Pacificregion of a security environmentdominated by any powers whose strategicinterests might be inimical to Australia’sand to avoid destabilising competitionbetween the region’s major powers. Ourfifth strategic objective is to contribute to theefforts of the international community,especially the United Nations, to upholdglobal security. We will continue tosupport the United States in the major roleit plays in maintaining and strengtheningthe global security order. Australia alsohas a strong interest in non-proliferationregimes that prevent the spread ofweapons of mass destruction.

Australia’s InternationalStrategic RelationshipsMost of the time, Australia pursues itsstrategic objectives in close cooperationwith its allies, neighbours and regionalpartners. Our strong alliance with theUnited States, in particular, is a keystrategic asset that will support ourbilateral, regional and global interestsover the next decade and beyond.

In the wider Asia Pacific region,Australia will pursue its objective ofsupporting strategic stability bydeveloping bilateral dialogues with keycountries in the region and contributing

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to the development of multilateralsecurity forums. In Southeast Asia,we will maintain and develop strategicrelationships to encourage regionalcooperation and help, where we can,in the development of appropriatemilitary capabilities.

In our immediate neighbourhood, theGovernment is committed to workingwith the Indonesian Government toestablish, over time, a new defencerelationship that will serve our enduringshared strategic interests. Consistentwith our goal of developing a networkof defence relationships with regionalcountries, Australia will also seek tobuild a defence relationship with EastTimor. New Zealand will remain a veryvalued defence partner. Australia willseek to remain Papua New Guinea’sprimary defence partner, offeringsubstantial support to PNG defencereforms. Likewise, the Government seeksto maintain our position as the keystrategic partner in the SouthwestPacific and will continue to remainactive in this region.

Beyond the Asia Pacific, Australia valuesits relationships with the UnitedKingdom, Canada and a number ofEuropean countries.

Australia’s MilitaryStrategyThe priority task for the ADF is thedefence of Australia. Our approach isshaped by three principles. First, wemust be able to defend Australia without

relying on the combat forces of othercountries - self-reliance. Second,Australia needs to be able to control theair and sea approaches to our continent- a maritime strategy. Third, althoughAustralia’s strategic posture is defensive,we would seek to attack hostile forces asfar from our shores as possible - pro-active operations.

The second priority for the ADF iscontributing to the security of ourimmediate neighbourhood. In thehighly unlikely event of unprovokedarmed aggression against any of ourimmediate neighbours, Australiawould want to be in a position, ifasked, to help our neighbours defendthemselves. The capability to providesuch help would be drawn from theforces we have developed for thedefence of Australia. Lower leveloperations, such as evacuations,disaster relief and peacekeepingoperations of different sorts, are themost likely types of operation that wemight need to undertake in ourimmediate neighbourhood. In general,the capabilities we develop in the ADFfor defending Australia provide forcesappropriate for these tasks, but someimportant enhancements might beneeded to meet unique demands.

The third priority for Australia’s forcesis supporting Australia’s widerinterests and objectives by being able tocontribute effectively to internationalcoalitions of forces to meet crises beyondour immediate neighbourhood. We woulddo this by contributing to international

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coalitions, drawing on the forces wedevelop for higher priority tasks.

In addition to these core tasks in supportof Australia’s strategic objectives, the ADFwill also be called upon to undertake anumber of regular or occasional tasks insupport of peacetime national tasks. Thisincludes specific and ongoingcommitments to coastal surveillance andemergency management, as well as ad hocsupport to wider community needs.

To achieve these key tasks, the ADF willmaintain and further develop anintegrated and balanced joint force thatcan provide capabilities appropriate tothe two highest tasks identified above.First, Australia will maintain maritimecapabilities - mostly air and naval forcesthat can defend Australia by denyingour air and sea approaches to anycredible hostile forces. Second, Australiawill maintain land forces - including theair and naval assets needed to deploy andprotect them - that can operate as partof a joint force to control the approachesto Australia and respond effectively toany armed incursion onto Australiansoil. Both those sets of capabilities wouldalso be able to support the security of ourimmediate neighbourhood andcontribute to coalition operations.

PeoplePeople in DefenceThe key to maintaining the ADF as afirst-class military force is having theright people, with the skills and

experience they need to succeed incomplex military operations.

The enhanced force structure outlinedin this White Paper requires thecurrent strength of the ADF of 51,500to be increased to about 54,000 full timepersonnel by 2010. The composition ofthat force will need to adapt to meetevolving needs. Recruiting and retainingsufficient skilled and experienced peoplewill be one of the most significantchallenges in building the ADF of thetwenty-first century.

To meet this challenge, Defence willneed high quality leadership. TheGovernment will explore tailoredremuneration packages to meetspecific needs of various categories ofpersonnel and measures to addresscareer development and locationstability issues. As well, recruitmentprocesses are being redesigned, and apilot scheme implemented toevaluate the advantages of acommercial service provider. As partof its strategy to attract and retainhigh quality people, Defence isinvesting in modern, effective andefficient education and training.This is a critical investment infuture capability.

The strategic role for the Reserves haschanged from mobilisation to meetremote threats to that of supporting andsustaining the types of contemporarymilitary operations in which theADF may be engaged. Increasingly, the

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Reserves will provide those skills notheld within the permanent forces or heldonly in small numbers. Thecontribution of the Reserves will beessential to the maintenance of the ADF’soperational capabilities. The Governmenthas proposed amendments toC o m m o n w e a l t hlegislation to extendthe options availablefor the use ofthe Reserves.

Also, the Governmentis committed toexpanding theparticipation ofyoung Australians in the Cadet Schemeand to providing the resources needed toachieve that. This includes a commitmentto widening the range of institutionsoffering participation in the cadets and toensuring that units are properlyresourced. The Government willincrease annual funding for the CadetScheme to $30 million by 2002 andprovide ongoing funding as necessary toensure these objectives are met.

CapabilityThe DefenceCapability PlanThe Government has launched a newapproach to capability planning bypreparing a detailed, costed plan for ourDefence Force over the next 10 years. Theaim is to provide the ADF with clearlong-term goals for its development, and

the funding needed to achieve thesegoals. This is an important element ofthe Government’s program ofcontinuous improvement in defencemanagement and the plan will alsoprovide a firm basis to develop andmonitor further efficiency reforms in

the delivery ofcapability.

The Plan has beendeveloped on thebasis of through-lifecosting estimates forthe different types ofcapability theGovernment believes

the ADF should have, covering not onlythe initial capital investment required,but also personnel, operating, supportand upgrade costs. It will be revisedannually, within the 10 year budgetconstraint, to take account of changingstrategic circumstances, newtechnologies and changed priorities.Individual projects will need to beconsidered and approved bygovernment before proceeding.Nevertheless, the Defence CapabilityPlan will provide a clear basis fordefence capability decisions now andinto the future.

The emphasis will be on a professional,well-trained, well-equipped force that isavailable for operations at short notice,and one that can be sustained ondeployment over extended periods. Thistype of force will provide the flexibilityto deal with operations other than

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conventional war, and contribute tocoalition operations.

The Army will be structured andresourced to ensure that we will be ableto sustain a brigade on operations forextended periods, and at the same timemaintain at least a battalion groupavailable for deployment elsewhere.Increased attention will be paid tosustainment of deployed forces, with theReserves given a key new rolefollowing changes to legislation to alloweasier call-out and better compensation.There will be substantial newinvestment in combat weight, logistics,transport and other enhancements toland force capability.

Overall spending on the maintenance ofcurrent land force capabilities is plannedto average around $5.9 billion per yearover the decade. The estimated capitalexpenditure needed for the capabilityenhancements will total around $3.9billion over the decade. Additionalpersonnel and operating costs amount toaround $1.1 billion over the decade.

We will maintain air-combat forces thatare at least comparable qualitatively toany in the region. The Government hasdecided to continue the upgradeprogram for the F/A-18, to proceed nowwith the acquisition of four AirborneEarly Warning & Control aircraft, toreplace and upgrade our air-to-airrefuelling capability, and to make majorprovision for the acquisition of a newcombat aircraft to follow the F/A-18,

and potentially the F-111. Overallspending on the maintenance of currentair combat capability is planned toaverage around $1.3 billion per year overthe decade. The estimated capitalexpenditure needed for the capabilityenhancements will total around $5.3billion over the decade. Additionalpersonnel and operating costs willamount to about $300 million overthe decade.

The Government’s primary goal for ourmaritime forces is to maintain an assuredcapability to detect and attack any majorsurface ships, and to impose substantialconstraints on hostile submarineoperations, in our extended maritimeapproaches. We also intend to maintainthe ability to support Australian forcesdeployed offshore, to contribute tomaritime security in our wider region, toprotect Australian ports from sea mines,and to support civil law enforcement andcoastal-surveillance operations.

The ANZAC class frigate will beprovided with a reasonable level of anti-ship missile defence and otherenhancements. A new class of at leastthree air-defence capable ships willreplace the guided missile frigates atthe end of their service life. HMASWestralia and Success will be replacedby specialist ships when they pay off.The Collins class submarines will bebrought to a high level of capability bymajor improvements to the platformand combat systems. Overall spendingon the maintenance of current

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maritime capability is planned toaverage around $3.5 billion per year overthe decade. The expected capitalexpenditure needed for the capabilityenhancements will total around $1.8billion over the decade. Additionalpersonnel and operating costs willamount to about $300 million.

Our strike capability will be upgradedwith improvements to the F-111’selectronic warfare self-protectionsystems and by the acquisition ofadditional types of stand-off weapons.The F-111 fleet is expected to leaveservice between 2015 and 2020 and, forplanning purposes, provision has beenmade for the acquisition of up to 25aircraft of the same type as the follow-onfor the F/A-18. Overall spending on themaintenance of current strike capabilityis planned to average $500 million peryear over the decade. The expected capitalexpenditure needed for capabilityenhancements will total around $800million over the decade, with noadditional personnel and operating costs.

Effective use of information is at theheart of Australia’s defence capability.Accordingly, the Government planssubstantial enhancements tointelligence, surveillance andcommunications capabilities; andcommand, logistics and businesssystems. Overall spending on themaintenance of information capabilitiesis planned to average around $1.3 billionper year over the decade. The expected

capital expenditure needed for thecapability enhancements will totalaround $1.9 billion over the decade.Additional personnel and operatingcosts amount to about $630 million.

IndustryIndustry is a vital component of defencecapability. A combination ofgovernment policy and marketpressures has brought significantimprovement in the capability ofAustralian defence industry. In manyareas, it is now highly cost-competitive.Major projects, when well managed, canintroduce new technologies and skillsinto Australian industry.

The Government’s objective is to have asustainable and competitive defenceindustry base, with efficient, innovativeand durable industries, able to support atechnologically advanced ADF. This willrequire a close partnership betweenDefence and those industries. TheGovernment’s approach will be tocapitalise on, and foster, industry’sinnovative use of advancedtechnologies. Improved linkagesbetween industry and the DefenceScience and Technology Organisationwill be a high priority.

The program of capabilityenhancements outlined in this WhitePaper provides a solid basis for long-term planning by Australian industry.There are significant opportunities formany industry sectors. They will

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engage the existing strengths ofAustralian industry and have thepotential to introduce new skills andcapacities. These include essentialsystems engineering and integrationskills in the modernisation of aircraft,ships and vehicles; the construction ofnew ships; the development of AirborneEarly Warning & Control aircraftsystems; and a range ofcommunications, command andcontrol, and information systems.

Initiatives that are part of theacquisition reform program in the newDefence Materiel Organisation willlead to improved defence-industryrelations. Defence will issue an annualreport on progress with partneringarrangements to the Defence andIndustry Advisory Council.

Science and TechnologyAustralia’s future defence capability, asset out in the Defence Capability Plan,will require access to advancedtechnology - for both equipmentand training.

The Defence Science and TechnologyOrganisation is undertaking keycooperative research and developmentprograms, including with our allies, toensure that we are well placed to makeinformed choices in the selection oftechnology and its applications. This

will be critical if Australia is to retain its‘knowledge edge’ and if we are to investwisely in future capability.

Defence, in collaboration with others,will continue to lead a research anddevelopment program in technologiesrelated to theRevolution in MilitaryAffairs to ensure that Australia isprepared for the adoption of newtechnologies as they mature. As well, theOffice of the Revolution in MilitaryAffairs has been established to identifythose aspects of technological changethat are most likely to affect major long-term capabilities. The ability to identifyand incorporate those technologies thatsustain the capability of the ADF will beguided by simulation and modelling,through both qualitative andquantitative war games.

The Defence Science and TechnologyOrganisation has an important role toplay in supporting and upgrading,through life, those platforms unique toAustralia. The organisation willcontinue to work closely with industryand universities to ensure that we areable to maintain and exploit currenttechnology and emerging opportunitiesin a timely and cost-effective manner.Improved linkages with industry will beimportant in transferring knowledgeand fostering innovation, particularly insmall to medium enterprises.

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FundingDefence FundingThe Government estimates thatdefence spending will need to growby an average of about three percent per annum in real terms over the decadeand has directed Defence to plan withinthat budget. Funding for 2001-02and 2002-03 isprogrammed toincrease by $500million and $1,000million respectivelyin order to providesubstantial fundingfor a number of keyinitiatives. By the endof the decade, defencespending in cashterms will stand at approximately $16billion per year in today’s dollars,compared with $12.2 billion this year.In all, defence spending over thedecade is expected to increase by atotal of $23.5 billion.

The defence spending figures providedin this White Paper are the most specificlong-term defence funding projectionsprovided by any Australian governmentin more than 25 years, and mark a new

approach to defence funding. Thisapproach will provide an improvedbasis for accountability by Defence togovernment and the public for theefficient and effective use of defencefunds. The Government has introduceda defence planning and budgetingprocess, built around a new, annualDefence Financial and ManagementPlan. The first of these will be produced

this year as part ofthe 2001-02 budgetcycle. In this newprocess, Defence willmove to output-based budgetingarrangements withinthe constraints of the10 year overallbudget.

The Government is committed topursuing substantial efficiency savingsin areas that include property disposal,contracting out, improved informationtechnology management and reducedpersonnel overheads. Any furthersavings achieved, and that theGovernment decides will be retained inDefence, will be offsetfrom the projected funding guidancefor Defence.

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THE GOVERNMENT’S DEFENCE POLICY 1

Section One | Foundations

AUSTRALIA’S DEFENCE POLICY2

AUSTRALIA’S DEFENCE POLICY 3

1 – Making DecisionsAbout Defence

The Purpose of the White Paper

1.1 This Defence White Paper announces and explainsthe Government’s decisions about Australia’s strategicpolicy over the next decade. It sets out a plan for thedevelopment of our armed forces, and makes acommitment to provide the funds required.

1.2 These decisions are the culmination of a year ofintensive government review of Australia’s defenceneeds. The Government has examined thefundamentals of our strategic policy, includingAustralia’s strategic environment, our national interestsand objectives and the role of our alliances and regionalstrategic relationships. Based on this examination, wehave reviewed the changing roles of armed forces,Australia’s military strategy, the capabilities we havetoday - including the vital role of the serving men andwomen of the Australian Defence Force - and broaderbudget and value for money considerations, includingthe ongoing requirement for efficient managementof Defence.

1.3 We have also considered the opportunities andchallenges of science and technology and the importantrole of Australian industry. All of these issues areaddressed in the White Paper.

1.4 We have listened to the views of the Australianpeople. The Government’s Community ConsultationProgram, led by The Hon. Andrew Peacock, AC, has beenthe most extensive and successful effort in many yearsto engage Australians in decisions about defence policy.

1.5 The Public Discussion Paper, published in June thisyear, posed the key questions about our future defenceneeds. The Community Consultation Team held 28public meetings around Australia, as well as many


meetings with State and localgovernments, interest groups, businessand industry associations. The Teamreceived over 1,100 writtensubmissions.

1.6 The Team’s report,received by theGovernment inOctober, provides aunique snapshot ofthe views that wereput forward. In aparallel activity, theviews of peoplewithin Defence weresought by a DefenceConsultation Team.The key findings ofthe CommunityConsultation Report,and many of those ofthe Defence Consult-ation Team Report,are highlighted inboxes throughout theWhite Paper.

1.7 The result of thisprocess of review and consultation is themost specific and detailed defence planproduced by any Australiangovernment in more than 25 years.

1.8 We believe it is important to provideAustralians with a comprehensiveaccount of our strategic policy. TheCommunity Consultation Process hasconfirmed the deep interest manyAustralians have in the foundations ofour national security.

1.9 It is also important to provide ourDefence Force with a clear statementof what the Government and thepeople of Australia expect of itsmembers. The decisions set out in this

White Paper providethe direction theyneed to do their job,and underline theG o v e r n m e n t ’ scommitment toensuring the DefenceForce will be anattractive career foryoung Australians.The decisions willalso help theefficient manage-ment of Defence,by setting outexactly what theGovernment expectsfrom it.

1.10 Finally, thisWhite Paper explainsour defence andstrategic policies toAustralia’s allies,

friends and neighbours. Australia haslong been an advocate of transparencybetween countries in our region aboutnational policies on strategic issues,including the basis of forcedevelopment. By understanding betterthe foundations of one another’sstrategic policies, countries find iteasier to work together and avoidmisunderstandings. This has beenrecognised by many countries in our

The Community ConsultationTeam undertook to consultextensively and widely... Ourconsultations extended over nineweeks, running from 6 July 2000 to7 September 2000, and included 28public meetings, plus meetings withState and local governments,interest groups, business andindustry associations in capitalcities and numerous regionalcentres. Throughout the process, awebsite provided on-line access tothe discussion paper and otherinformation, as well as telephone,facsimile and e-mail contact detailsfor comments and submissions.

Report of the CommunityConsultation Team


region in recent years, with agrowing number of governmentsnow publishing detailed defencepolicy statements.

Why Now?1.11 This is the first Defence WhitePaper since 1994, and only the fourthsince 1976. Following the last federalelection, the Government made acommitment to publish a DefenceWhite Paper in this term of parliament.We believed the Defence Force wasunder real pressure in trying to meet acomplex and diverse range of taskswithin a budget that had remainedrelatively constant in real terms overthe past 15 years.

1.12 In 1997 the Government reviewedits strategic policy, and concluded that,with the end of the Cold War and withdynamic economic growth in Asia,

Australia’s strategic circumstanceshad become more demanding and thepotential demands on our armed forceshad grown. We said that Australiawould need progressively to upgradeits forces to assure our future capacityto defend our territory, and to enhanceour capacity to contribute to thesecurity of the region.

1.13 At the same time, following theDefence Efficiency Review, theGovernment undertook major reformsto the management of Defence,designed to improve efficiency andmaximise the capability that could bedelivered from the defence budget.Further reforms are now beingundertaken, especially in theacquisition and financial managementareas. These reforms are a critical partof the Government’s new approach todefence planning.


1.14 Nonetheless significant questionshave remained about the ability of theADF to sustain the full range of itscapabilities at appropriate levels ofsophistication and readiness fromwithin its present resources. TheGovernment has been concerned forsome time that a mismatch haddeveloped between our strategicobjectives, our defence capabilities andour levels of defence funding.

1.15 These questions were highlightedby the deployment of INTERFET toEast Timor last year. This was thelargest and most demanding militaryoperation undertaken by the ADFin a generation. It was a majorachievement, reflecting great credit onthe men and women of the AustralianDefence Organisation, and on theoverall quality of their training,equipment and preparation. ButINTERFET also provided aninvaluable opportunity to test andevaluate many aspects of our militarycapabilities, and to learn importantlessons about how we could do thingsbetter. The Government has drawn onthese lessons in this White Paper.

Looking Ahead -Strategic RiskManagement1.16 Defence is a difficult area of publicpolicy. The defence of our country andour community from armed attack isone of our highest national priorities.The Government has a responsibility

to make sure that Australia has thearmed forces we need to protect ourcountry if it is threatened. But ourDefence Force is also one of our largestnational expenses, costing around 1.9per cent of our gross domestic product.We need to be sure that we arespending enough on defence, but wealso need to be sure that the defencebudget is spent wisely and that we arenot spending more than is necessary.

1.17 Defence decisions therefore need tobalance two of the most powerfulimperatives on government - securityand fiscal responsibility - and thesedecisions need to bear in mindcompeting priorities for governmentexpenditure and the Government’soverall fiscal strategy.

1.18 Striking that balance is madeharder by the environment ofuncertainty in which defencedecisions must be made. We cannotpredict with certainty when or whereAustralia might need to use its armedforces. Today we are among the moresecure countries in the world. But ourdefence policy must take account ofthe possibility that changes in theinternational situation, especially inthe dynamic Asia Pacific region, couldproduce a more unstable andthreatening strategic situation. Theend of the Cold War showed how majorchanges in our strategic environmentcan happen, and we need to look a longway ahead. Decisions about thedevelopment of our armed forces can


have time frames of 20 years or more.Our defence decisions today thereforeneed to consider the strategicenvironment we might face after 2010.We must take account of thepossibility of major changes over thattime, including for the worse.

1.19 Of course we cannot guard againstall possibilities or eliminate strategicrisks. We have looked for the most cost-effective ways to minimise such risks,taking account not only of thelikelihood of aparticular threat butalso of how seriousit would be forAustralia if itmaterialised.

The BiggerPicture1.20 Makingdecisions about ourarmed forces involvesa lot of detailedanalysis: regionaltrends and scenarios,risks and probab-ilities, interests andobligations, cost-effective force optionsand new technologies.But there are, inaddition, otherimportant factors thatwe need to keep inmind. There is abigger picture.

1.21 Our armed forces are not simply aservice provided by government. Theyare part of our national identity. TheADF reflects the kind of country weare, the role we seek to play in theworld, and the way we see ourselves.

1.22 This is particularly the case inrural and regional Australia, wheremany local communities have a closeaffinity with the local ADF base orReserve unit. Some of these comm-unities, such as Darwin, Cairns and

Townsville, derives i g n i f i c a n teconomic benefitsfrom the defencepresence, while inother areas thecapacity of localindustry to supportdefence projectsis often seen ascritical to efforts toattract new work.In making decisionsabout the futureof Defence, theGovernment willfocus not just onwhat it can do toimprove the ADF,but also on whatDefence and theADF can do forlocal communities,and the respon-sibilities Defencehas as an employer

It was clear to us as we travelled thecountry that the ADF is held in highregard. The achievements, traditionsand culture of the Defence Forceform an important part of the fabricof Australian life. The pride thatAustralians have in the DefenceForce, as displayed at ANZACceremonies and more recently inrelation to our troops in East Timor,was evident to us in towns and citiesacross our country.


The presence of Defence in regionalAustralia provides considerableeconomic and industrial benefit tothe local region.

There are very strong links betweenmany local communities and theADF bases.

Report of the CommunityConsultation Team: Key findings


and contributor to local andregional economies.

1.23 These factors are not onlyimportant to us in times of crisis. Thesense of security that our armed forcesgive us underpins our optimisticoutlook and the confidence with

which we engage the region. Ourdefence capability and our commitmentto shared interests help to strengthenregional security. In the final resort,Australia’s defence forces serve as thedecisive deterrent to any countrycontemplating armed action against us.

9AUSTRALIA’S DEFENCE POLICY

2 – Security and The Role ofAustralia’s Armed Forces

Force in International Affairs

2.1 The Government has considered the future role offorce in international affairs, including the argumentthat changes in the structure of the international systemwill reduce the importance of force in relations betweennations over coming years.

2.2 The Government does not dismissthese views, and indeed it places a highpriority on working with others, at boththe regional and global level, to furtherminimise, and if possible to eliminate, therisk of war. The continuing threat ofproliferation of weapons of massdestruction makes those efforts all themore important.

2.3 Resort to force will continue to beconstrained by many aspects of theinternational system, and armed conflictbetween states will remain less commonthan in earlier centuries. But there remainsa risk that circumstances may still arisein which these constraints are noteffective. That risk is as high in the AsiaPacific region as it is elsewhere in theworld. It is best minimised by realismabout the challenges still to be faced instrengthening peace in our region, and acommitment to work with others, bothlocally and globally, to build a more

robust and resilient international system.

2.4 This requires strategic policy which is integratedwith wider diplomatic and political policies. The waysin which we do that are described in Section Two of thisWhite Paper. But it also means we need to maintain a


capable defence force, that is trainedand equipped to meet the demands ofconventional wars between states.

New Military Tasks2.5 Australia has been engaged in onlyone conventional conflict since theVietnam War, and that was the GulfWar of 1990-91. But our armed forceshave been busier overthe last decade, andespecially the pasttwo years, than at anytime since ourinvolvement inVietnam. This reflectsa worldwide trend.

2.6 It is clear thatvarious forms ofmilitary operations other thanconventional war are becoming morecommon. Since the end of the ColdWar, there has been a worldwideupsurge in intra-state conflicts. Thesedisputes have accounted for the vastmajority of armed conflicts, and haveplaced new demands on the armedforces of many countries, including forhumanitarian relief, evacuations,peacekeeping and peace-enforcement.

2.7 The ADF is no exception. Over thepast decade we have deployed the ADFto places as diverse as Namibia, Somalia,Western Sahara and Rwanda in Africa;the Gulf and elsewhere in the MiddleEast; and Cambodia, the SolomonIslands, Papua New Guinea(Bougainville), Indonesia (drought relief

in Irian Jaya) and East Timor in ournearer region. In these places, the ADFhas undertaken tasks from famine anddisaster relief to peacekeeping andhumanitarian assistance.

2.8 The Government believes thatthis is an important and lastingtrend, with significant implicationsfor our Defence Force. Over the next 10

years the ADF willcontinue to undertakea range of operationsother thanconventional war,both in our ownregion and beyond.Preparing the ADFfor such operationswill therefore take amore prominent

place in our defence planning than it hasin the past.

2.9 In many cases, especially at thelower end of the spectrum of intensity,we are likely to need to deploy quicklyand operate effectively in dangerousand uncertain situations that may notnecessarily require the use of force. Ourtasks might include distribution ofrelief supplies, evacuation of civilians,providing medical help or monitoringa peace agreement.

2.10 But often these operations willbe more demanding. The boundarybetween a benign situation and openconflict, either against local irregularsor more capable armed forces, canbecome blurred.

Participation in peacekeepingoperations, particularly in theregion, is strongly supported asbeing in Australia’s interest.

Report of the CommunityConsultation Team: Key finding


2.11 Even in benign situations, anevident capability to use force canhelp to keep things peaceful. Whentrouble starts, the ability to respondpromptly with a clear predominanceof force will often restore peacequickly, which is important not justfor achieving the mission, but also forprotecting our servicemen andservicewomen.

2.12 This means thatthe capabilities weneed for these types ofoperations will have alot in common withthose we develop formore conventionalconflicts.

Non-MilitarySecurityIssues2.13 Australia facesmany security concerns other thanthose involving military force. Theseinclude the potential for non-militarythreats, such as cyber attack, organisedcrime and terrorism. They also includeconcerns over illegal immigration, thedrug trade, illegal fishing, piracy andquarantine infringements.

2.14 Many of these problems, such asillegal immigration, involve thechallenge of effective surveillance,patrolling and policing of ourmaritime approaches. Illegalincursions into our ExclusiveEconomic Zone and territorial waters,

and onto our territory, constitute anon-going problem for Australia. Giventhe size of our maritime jurisdiction,this is a significant challenge.

2.15 The Government has recentlyundertaken a major review of ourcoastal surveillance and enforcementactivities, including the significant

contribution madeby Defence to theseefforts. That reviewproposed importante n h a n c e m e n t s ,including improveds u r v e i l l a n c ecapacity throughthe acquisition oftwo extra aircraft,and the establishmentof an integratedsurveillance centre.The Governmenthas allocated $124

million over four years to fund theseand other measures.

2.16 The ADF will continue to have amajor part to play in these activities.Our patrol boats, maritimesurveillance aircraft and intelligencecapabilities are fully engaged in theday to day monitoring and policing ofour maritime approaches, and theirefforts are closely integrated withother agencies. These capabilities willbe maintained and enhanced. A seniornaval officer has been placed in chargeof the integrated surveillance centre asDirector-General Coastwatch.

Most people believe the ADF shouldbe structured to maintain a war-fighting capability for the defence ofAustralia and its interests.

They argued that such a force couldreadily be adapted for other roles,such as peacekeeping, but thereverse is not true.



2.17 New defence capabilities havethe potential to make an even biggercontribution to coastal surveillancein the future. Within a few years, theADF’s wide area surveillance systemwill provide the potential forcontinuous real-time coverage of ournorthern air and sea approaches.This system will be fully integratedwith other national coastalsurveillance capabilities, to provide ac o m p r e h e n s i v ecoverage of ships andaircraft approachingour shores. TheGovernment is givinghigh priority to thiscapability and toensuring that itc o n t r i b u t e seffectively to ourp e a c e t i m esurveillance needs.

2.18 The ADFmaintains counter-terrorist capabilitiesfor resolving situa-tions that are beyondthe capacity of our police forces. It alsohelps in sea search and rescue and specialcircumstances such as the Olympics,bushfire fighting, and in responding toother types of natural disaster.

2.19 Defence will also be among thekey contributors to the Government’s

efforts to develop responses to cyberattack on Australia’s criticalinformation infrastructure. This newsecurity challenge is being takenseriously by the Government, and acomprehensive national approach iscurrently being developed.

2.20 The ADF can and will play anincreasing role in helping to addressa wide range of these non-military

security concerns.But the rise of thesenew types ofsecurity problemshas not made theold kinds of threatsless important. Andusing the ADF -trained andequipped for armedconflict - is notnecessarily the mostcost-effective wayto address new non-military securityconcerns. Civilianresponses may be

more appropriate. Our approachis to draw on the expertise of theDefence Force where it is mostappropriate to do so, but not to allowthese roles - important as they are -to detract from the ADF’s corefunction of defending Australia fromarmed attack.

Many participants argued that themost immediate threats are non-military, namely illegal immigration,drug smuggling, attacks oninformation systems and terrorism.

Some communities were concernedthat our sea and air borders may bebeing breached and would welcomean increased ADF presence acrossthe north.



3 – Australia’sStrategic Environment

3.1 This Chapter outlines those aspects of Australia’sstrategic environment that will influence the overalldirection of our strategic policy and force developmentover the next 10 to 20 years. Section Two of the WhitePaper will describe how our strategic policy will seekto influence this environment.

Our Strategic SettingThe Global Context3.2 At the global level, two interrelated trends are likelyto shape our strategic environment - globalisation andthe primacy of the United States. The trends ofglobalisation especially in trade, investment andcommunications are increasing cross-borderintegration and interdependence around the world. Thisis changing the ways countries work and - especiallyin economic fields - is powerfully shaping the optionsavailable to governments. Overall, globalisation lookslikely to be good for security because it strengthensthe stake that governments and people have in thesmooth working of the international system. Forexample, increased international flows of trade,investment and technology increase the benefitsof a stable international environment and the costs ofany disruption.

3.3 However, the security benefits of globalisation arelimited by countervailing pressures. First, nation-statesremain the most important strategic actors. Moreover,nationalism in various forms remains potent and insome areas is an increasingly powerful motivator.Second, globalising trends are being accompanied bygrowing regionalism, especially in the field of security,where the end of the Cold War has moved attention


from the global power balance to aseries of regional strategic systems -including the Asia Pacific. Third, theintegrative trends of globalisationthemselves are not irreversible andcould be especially vulnerable to adeteriorating security environment.

3.4 The United States today has apreponderance of military capabilityand strategic influence that is uniquein modern history. Thatpreponderance supports a generallystable global strategic environment.The primacy of the United States isbuilt on the strength of its economy,the quality of its technology, thewillingness of US governments andvoters to accept the costs and burdensof global power, and theacknowledgement by most countriesthat US primacy serves their interests.All these factors are likely to endure.The Government believes this willserve the strategic interests of the AsiaPacific region including Australia, and

will promote economic, social andpolitical developments that align withour interests and values.

3.5 However, we should be careful notto take US primacy for granted. Overthe coming years the US global rolemay come under pressure, both fromwithin the United States and fromother countries.

3.6 Domestically, the United States willcontinue to accept the human andmaterial costs of supporting causesthat directly touch its vital interests.But the willingness of the UnitedStates to bear the burden of its globalrole where its interests are less directcould be eroded, especially if it facesprotracted commitments, heavycasualties or international criticism.

3.7 Abroad, no country in the worldwill have the military or economicpower to challenge US global primacyover the next few decades. But theUnited States could be obstructed and


frustrated at the regional level. Withadroit diplomacy, the United Statesshould be able to minimise suchregional challenges. The key will beto show that US primacy can work inthe interests of less powerful countries.

3.8 A third significant global trend hasbeen the evolution of the UnitedNations. Over the past decade the UNhas become more active and effective.In doing so it has broadened the rangeof its activities and responsibilities inthe security area. The UN has grappledwith internal problems and crises fromthe Balkans to Rwanda, Cambodia andEast Timor, responding to awidespread recognition thatinternational security can be affectedby problems within, as well asbetween, states.

3.9 The United Nations has also beenresponding to a growing sense in theinternational community that crisescausing avoidable human sufferingcannot be ignored just because theyhappen within the borders of asovereign state. It is too early to saywhether a new principle ofhumanitarian intervention is beingestablished. If so, it would need to beapplied with caution as well ascompassion. But the trend to a moreactive and effective UN security roleis welcome.

3.10 Outside the Asia Pacific region,strategic problems continue to be mostlikely in the Middle East, andpotentially also in Central Asia.

European security problems, such asthose in the Balkans, will be managedprimarily by NATO and Europeansecurity structures. Russia’s futureplace in the European and globalstrategic environment remainsunclear. Security and stability inEurope will continue to depend on themaintenance of an effective workingrelationship between Russia, and theUnited States and its European allies.Africa will continue to suffer fromcrises which may require internationalengagement to minimise suffering andhelp towards solutions.

The Asia Pacific Region

3.11 Although there remains a risk oflocalised or more widespreadeconomic downturn from time to time,the Asia Pacific is set to be the mostdynamic region in the world over thenext few decades. Economic growthshould help build stability. But it willalso put strains on old relationships,raise new expectations and perhapsoffer new temptations.

3.12 The most critical issue for thesecurity of the entire region is thenature of the relationships between theregion’s major powers - China, Japan,India, Russia and the United States.These countries are important toAustralia’s security because they havethe power - actual or potential - toinfluence events throughout the AsiaPacific region. Their relationships willset the tone for the whole region.


3.13 The United States is central to theAsia Pacific security system, and its rolewill be critical in maintaining securityover the coming decades. It will be inAsia that the United States is likely toface the toughest issues in shaping itsfuture strategic role - especially in itsrelationship with China.

3.14 The trilateral relationshipbetween China, Japan and the UnitedStates will define the East Asianstrategic framework. Both Beijing andWashington clearly understand theimportance of managing the US-Chinarelationship effectively, and recognisethe costs to both ofthem - and to the restof the region - if theyfail to do so. Thebenefits of a stable andcooperative relation-ship would be verygreat. Important steps have been made,for example in progress towardsChina’s accession to the World TradeOrganisation. But significantproblems remain in the relationship -especially concerning the issue ofTaiwan. It is therefore possible that US-China relations may be a significantsource of tension in the region incoming years. This could be importantto Australia’s security.

3.15 The US-Japan relationship is thekey pillar of US strategic engagementin Asia. The strength of US securitycommitments to Japan, and the scaleof US military deployments in

Northeast Asia, which the US-Japanrelationship facilitates, is critical tomaintaining strategic stability in thewhole region. The US-Japanrelationship has great depth andresilience, and both sides have workedeffectively in recent years to overcomeproblems and adapt to new conditions.This has provided a welcomeframework in which Japan has been ableto take a larger role in regional andglobal security issues. Without thereassurance provided by the USrelationship, Japan would face difficultstrategic choices with security

consequences for othercountries in the region.

3.16 The KoreanPeninsula is clearly a keydynamic factor in theNortheast Asian strategicbalance. Reconciliation

between North and South Korea,leading to a reduced level of militaryconfrontation, seems closer now thanfor many years. But it could alsointroduce new pressures - includingover the future of US forces in Korea -which would need carefulmanagement.

3.17 Russia has significant interests inthe Asia Pacific region, particularly inNortheast Asia. It has moved toimprove its relationships with Chinaand India, partly to try tocounterbalance US strategic influencein the region. The way thoserelationships develop will be


important to thefuture strategicdynamics of the AsiaPacific region.

3.18 India’s economicgrowth is enhancingits strategic potentialand influence in theregion. Its nucleartests, and thedevelopment of anoperational nuclearcapability, havemade the regionalnuclear balance more complex. Thereare elements of strategic competitionbetween China and India that havebeen amplified by the development ofIndia’s nuclear capability. The futureof this relationship will be importantfor the security of the whole region.The risk of war - and even of nuclearwar - between India and Pakistanremains significant and disturbing,but it is India’s growing role in thewider Asia Pacific strategic systemthat will have more influence onAustralia’s security.

3.19 In general, we believe the forces forpeace and stability in the Asia Pacificregion are strong, helped by thegrowth of regional multilateralstructures and frameworks. Thelikelihood is that over the comingdecades the region will enjoy growingeconomic integration and politicalcooperation. But there will inevitablybe tensions between the major powers

of Asia over the next20 years, and theirrelationships maychange significantly.There is a small butstill significantpossibility ofgrowing ands u s t a i n e dc o n f r o n t a t i o nbetween the majorpowers in Asia, andeven of outrightconflict. Australia’s

interests could be deeply engaged insuch a conflict, especially if it involvedthe United States, or if it intruded intoour nearer region.

The Nearer Region andImmediate Neighbourhood3.20 The security of the nearer region- Southeast Asia and the SouthwestPacific - could be affected directly byinstability and conflict among theregion’s major powers, but countries ofthe nearer region also face majorchallenges of their own.

3.21 Overall, Southeast Asia remainsan area of great promise. Economicliberalisation and institutionalreform provide hope that in manycountries a return to high growthrates can be sustained over thelonger term. Political and socialevolution is strengthening therobustness, legitimacy and resilienceof the political systems in many

It was also clear that there was awidespread appreciation thatimportant changes were underwayin our region. Many people wereconcerned that these changes hadheightened instability in the regionand introduced a new measure ofunpredictability about Australia’sstrategic outlook.



countries. And despite the strains ofeconomic crisis and rapidenlargement of its membership,ASEAN continues to provide a focusfor the sense of shared interests andcommon goals which has been soimportant to Southeast Asia overrecent decades. There remain anumber of security issues, such asconflicting claims in the SouthChina Sea, which will need to behandled carefully if regionalsecurity is to be maintained.

3.22 The countries of our immediateneighbourhood - Indonesia, EastTimor, Papua New Guinea, andthe island states of the SouthwestPacific - face large economic andstructural challenges.

Indonesia3.23 Indonesia is at a critical point inits history. The political evolution ofthe past few years has seen a vibrantdemocracy emerge with unexpectedspeed. The successful conduct ofelections throughout the country inJune 1999 and the subsequentinstallation of a democraticgovernment have been an historicachievement for the people ofIndonesia. Since May 1998, they haveshown a determination to makedemocracy work. This is a major causefor optimism about Indonesia’s future.

3.24 But at the same time there arechallenges ahead. Three issues inparticular stand out. The first is thechallenge of political evolution

through democratisation anddecentralisation. The second is theneed for wide-ranging economicreforms to put Indonesia back on thepath to sustainable growth. The thirdis the resolution of religious, separatistand other challenges to the cohesionand stability of Indonesia.

3.25 The Government believes theinterests of Indonesia’s neighbours,and of the Indonesian peoplethemselves, will best be served by acountry that is united, stable anddemocratic; well-governed andprosperous; cohesive and peaceful athome; and responsible andrespected abroad.

3.26 But it is not for Australia, or otheroutsiders, to tell Indonesia how thesegoals can best be achieved. It isimportant that we convey effectivelyour understanding of the problemsthat Indonesia faces, our respect for theefforts they are making, and our deepsupport for Indonesia’s nationalcohesion and territorial integrity. Inparticular, we should continue toaffirm the strength of the strategicinterests we share in the security of ourtwo countries.

3.27 Indonesia’s size, its hugepotential, and its traditionalleadership role in Southeast Asiamean that adverse developmentsthere could affect the security of thewhole of our nearer region, andbeyond. While not regardingdevelopments of such seriousness as


likely, Australia needs to recognisethe possibility that, were they tooccur, Australia’s security couldbe affected.

East Timor3.28 East Timor’s emergence as anindependent state is a new factor in oursecurity environment. Thewillingness of Presidents Habibie andWahid to facilitate East Timor’stransition, and to build a friendlybilateral relationship betweenIndonesia and East Timor, are mostwelcome. But important securityissues remain, which may not beresolved by the time the UN-sponsored transition to independenceis completed, probably by theend of 2001.

3.29 There is a significant risk ofcontinued security challenges fromarmed militias opposed toindependence. It is clearly importantthat East Timor should be allowed todevelop in peace, without the threat ofintimidation or violence. The prospectof continued insecurity is thereforedisturbing. That insecurity couldalso pose problems for relationsbetween Indonesia and East Timor.Australia will look to the IndonesianGovernment to continue to work toprevent militia activity in EastTimor from being supported fromWest Timor.

3.30 East Timor, for its part, will needto establish a national approach tosecurity and defence issues that serves


its interests andmatches its resources.This will be importantboth for the security ofEast Timor and for the stability ofour near neighbourhood. A positiveapproach to relations with Indonesiawill play a major role in achievingthis stability.

Papua New Guinea3.31 Twenty-five years afterindependence from Australia, PapuaNew Guinea has maintained many ofthe key foundations of progress andprosperity, including an activedemocracy, free press, and anindependent judiciary. Its economicpotential is exemplified by abundantmineral resources.

3.32 But as its leaders haveacknowledged, Papua New Guinea hasmade little progress over the past fewyears, and in important respects hasslipped backwards. Economic growthhas been slow, corruption has afflictedpublic life, social progress in areas likeeducation and health has been limited,and law and order have deteriorated.Many of these problems can be tracedto weaknesses in its parliamentary,governmental and administrativearrangements. Prime MinisterMorauta has taken important steps toaddress these issues. NonethelessPapua New Guinea faces a long anduncertain road to prosperity andstability. Without progress, importantproblems that have significance for

security and stabilitybeyond its borders willremain. One is the threatto national cohesion

from secession movements, mostparticularly in Bougainville. Anotheris the potential for threats to thesecurity of legitimate governmentfrom unlawful and violent challenge,including by elements within thearmed forces.

3.33 More broadly, if Papua NewGuinea’s problems continue, its abilityto handle future challenges will behampered, and its viability as aneffective state could come into question.

Southwest Pacific3.34 Australia, New Zealand andPapua New Guinea share theSouthwest Pacific with 13 othercountries. They are all unique, withdifferent histories, cultures,institutions, opportunities andproblems, but they have some things incommon. These include the inherentproblems of national development forsmall and isolated nations, many withan unsustainable relationship betweenpopulation and resources.

3.35 Current problems in Fiji andthe Solomon Islands provideimportant evidence of deep-seatedethnic and political problems that posethreats to law and order, legitimategovernment and even nationalcohesion in some Pacific Island states.In others, such as the small states of


Polynesia andMicronesia, economicand environmentalchallenges areuppermost.

3.36 Pacific Islandleaders are well awareof many of theseproblems, and aretaking steps to differentdegrees to addressthem. Even so, thestability, cohesion andviability of some ofthese nations willremain undersignificant pressureover the years ahead. Their resultingvulnerability will continue to be astrategic concern for Australia.

An Attack on Australia?3.37 Australia today is a secure country,thanks to our geography, good relationswith neighbours, a region where theprospect of inter-state conflict is low, ourstrong armed forces and a close alliancewith the United States. Of these positivefactors, only the benefits of our strategicgeography are immutable. But thechances of an attack on Australiaremain low.

3.38 A full-scale invasion of Australia,aimed at the seizure of our country andthe erasure or subjugation of ournational polity, is the least likelymilitary contingency Australia mightface. No country has either the intent

or the ability toundertake such amassive task. Theregion’s major powerscould conceivablydevelop the cap-abilities to undertakean invasion of thecontinent, but nonehas anything like thatlevel of capability atpresent, and it wouldtake many years ofmajor effort todevelop. They wouldalso need to establishmajor bases near

Australia. Such developments arenot credible unless there were to bemajor changes in the region’s securityenvironment.

3.39 A major attack on Australia, aimedat seizing and holding Australianterritory, or inflicting major damage onour population, infrastructure oreconomy, remains only a remotepossibility. The capabilities toundertake such an attack would beeasier to develop than those needed foran invasion, especially if bases nearAustralia were accessible. Suchdevelopments are highly unlikely in ourcurrent strategic environment, but ourdefence planning cannot altogetherdismiss the possibility that they mightoccur. Some countries have weapons ofmass destruction - nuclear, biological orchemical weapons - which, delivered bylong-range ballistic missiles, could


reach Australia. But it is very unlikelythat any of those countries would seeadvantage in attacking Australia withsuch weapons, not least because of ouralliance with the United States.

3.40 Minor attacks on Australia, aimed atharassing or embarrassing Australia, orputting pressure on our policies, wouldbe possible with the sorts of capabilitiesalready in service orbeing developed bymany regionalcountries. But suchattacks wouldbecome credible onlyif there were a majordispute. Even then, itwould be mostunlikely that anothergovernment wouldmiscalculate so badlyas to think that itwould gain byattempts at militaryi n t i m i d a t i o n .Nonetheless such miscalculationsdo occur, and sometimes withlittle warning.

The Development ofMilitary Capabilities3.41 A key factor in the evolution ofAustralia’s strategic environment isthe development of militarycapabilities in the Asia Pacific region.This will influence the relationshipsbetween countries in the region, and itis a critical issue to consider indeciding Australia’s own future

capability needs. In recent times theAsia Pacific has seen the fastest growthof military capabilities in the world.There have been four factorsunderpinning that trend: economicgrowth, development of managerialand technical skills, changingstrategic perceptions and priorities,and access to technology. All of these

factors seem likely toendure over the nexttwo decades. Ourdefence planningtherefore needs totake account of thelikelihood thatcapabilities in ourregion will continueto show substantialand sustainedgrowth, in wayswhich are importantto Australia’smilitary situation.

Air Combat Capabilities3.42 Over the last 10 to 15 years, anumber of regional defence forces havebegun to develop sophisticated aircombat capabilities. They haveintroduced new-generation fighterswith the weapons and sensor systemsfor Beyond Visual Range air combat -which means the ability to detect andattack hostile aircraft from ranges ofup to 60 or 70 nautical miles. Until themid-1990s Australia was one of veryfew countries in the Asia Pacific regionwith BVR capabilities. By 2005, at least

Most people argued that currentlyno country in the region either hadthe capability to attack Australiasuccessfully or had shown anyhostile intentions towards us.Importantly though, few wereprepared to discount totally thepossibility of another country usingmilitary force at some time tothreaten Australia or its interests.



nine regional countries, apart from theUnited States and Australia, will havedeveloped these capabilities, and somewill have built up substantialnumbers of BVR-capable fighteraircraft.

3.43 In a parallel development, somecountries in the region are expected toacquire Airborne Early Warning andControl aircraft over the comingdecade. These aircraft provide a keyedge in air combat, because they allowearlier detection of hostile forces, andmore effective deployment of aircraftin action. They also contributecritically to maritime and strikeoperations. By 2010, some sevenregional countries apart from theUnited States and Australia areexpected to have acquired variouslevels of AEW&C capability.

3.44 These developments, and othersincluding air-to-air refuelling andrelatively low-cost stealthmodifications to make aircraft harderto detect, will mean thatacross the region - includingin some countries ofSoutheast Asia - there arelikely to be significantincreases in air-combatcapability over the comingdecade.

Naval Forces3.45 Naval forces willbecome more capable overthe coming decade as a

result of a number of well establishedtrends. One is the proliferation ofhigh-capability anti-ship missilessuch as Harpoon, Exocet and theirRussian equivalents. Over the pastdecade a number of regional countrieshave acquired more sophisticated anti-ship missiles with longer range, betterguidance, and more capable systemswhich allow several missiles to belaunched at a target simultaneouslyfrom different directions. The numberof types of platform that can launchthese missiles has also increased toinclude not just ships but submarinesand several types of aircraft. Thesetrends are expected to continue overthe current decade. For example weexpect to see supersonic anti-shipmissiles enter service in severalcountries in the region over that timeand the capability to target ships atlong range will improve. Regionalnavies will also deploy improveddefences against these missiles ontheir ships.

3.46 Another key develop-ment is the expansion ofsubmarine capability in theregion. Over the comingdecade it is likely that thecapabilities of submarinesbeing operated by regionalnavies will improve sig-nificantly, and a number ofnavies will acquire sub-marines for the first time.Anti-submarine warfare cap-abilites will also improve.


Strike Forces3.47 Strike capabilities will continue toimprove in the region with theintroduction of more capable aircraft,supported by air-to-air refuelling insome cases, and able to be fitted withlonger range stand-off weapons. Shipsand submarines in some regional naviesmay also develop enhanced strikecapabilities, as they acquire long-rangecruise missiles and shorter range stand-off weapons. Such weapons will carryincreasingly sophisticated guidancesystems and warheads and will besupported by more advancedreconnaissance and targeting systems.

3.48 Defences against strike will alsoimprove, with better air combat cap-abilities and more advanced surface-to-airmissiles coming into service in the region.

Land Forces3.49 Most land forces throughout theregion already have a numericaladvantage in troop numbers overAustralia’s. Land forces in the region willbecome more sophisticated, with thewider introduction of importanttechnologies such as night-visionequipment, unmanned aerial vehiclesfor reconnaissance and improvedcommunications. Firepower andmobility will be enhanced in manyarmies by acquisition of morehelicopters, including reconnaissanceand fire-support helicopters, and newtypes of armoured vehicles.

3.50 At lower levels of technology, butstill very important in many types of

operation, we expect to see a widerange of non-state actors, includingcriminals and insurgents, continuingto gain access to modern, sophisticatedweaponry. The proliferation of lightguided weapons such as shoulder-fired anti-aircraft missiles is likelyto continue.

Information Capabilities3.51 Developments in informationtechnology, and the rapid changesthey are bringing to the nature ofwarfare, will enhance the operationaleffectiveness of armed forces over thecoming decade. Intelligence,surveillance, communications,command and control capabilities,and the whole spectrum ofinformation warfare, will expandsignificantly. To take one example, theincreased availability of high-qualitysatellite imagery from commercialsources will significantly enhance theinformation-gathering capabilities ofmany countries.

Weapons of Mass Destruction3.52 Weapons of mass destructionremain a concern for the region’sstrategic stability. Nuclear, chemicaland biological weapons, and their chiefmeans of delivery - ballistic missiles -are all aspects of weapons of massdestruction over which we need toremain vigilant. The trend towardsproliferation of weapons of massdestruction globally will require ourcontinued focus.


Section Two | Strategy


4 – Australia’s StrategicInterests and Objectives

4.1 This Chapter explains the Government’s decisionsabout Australia’s broad strategic policy: our strategicinterests, objectives and priorities.

4.2 At its most basic, Australia’s strategic policy aimsto prevent or defeat any armed attack on Australia. Thisis the bedrock of our security, and the mostfundamental responsibility of government. But thereis more we can do to prevent attack on our territory thanbuilding armed forces, and our armed forces need to beable to do more than simply defend our coastline. Wehave strategic interests and objectives at the global andregional levels. Australia is an outward looking country.We are engaged in many different ways - economic,cultural and personal - with the region around us andthe world beyond. We are a major trading nation, withour prosperity dependent on our engagement withother countries.

4.3 Australia therefore cannot be secure in an insecureregion, and as a middle-size power, there is much wecan and should do to help to keep our region secure,and support global stability. Working with others wecan do a lot more than we can do by ourselves.

4.4 At the same time we must be realistic about thescope of our power and influence and the limits to ourresources. We need to allocate our effort carefully. Todo that we need to define and prioritise our strategicinterests and objectives. We do that in the followingparagraphs, listing our interests and objectives inpriority order.

4.5 We have given highest priority to the interests andobjectives closest to Australia. In some circumstances amajor crisis far from Australia may be more important


to our futuresecurity than aminor problemclose at hand. But ingeneral, the closer acrisis or problem toAustralia, the moreimportant it wouldprobably be to oursecurity and themore likely wewould be able tohelp to dosomething about it.

4.6 The existence of strategic interestsin a situation does not determine howAustralia would respond in the eventof a crisis which challenged thoseinterests. Australia would always havea range of options, and thegovernment of the day would need todetermine how best to respond. Inparticular, careful considerationwould always need to be given beforethe serious step of deploying forceswas taken. That consideration wouldneed to balance the Australian interestat stake with the human, financial,political and diplomatic, and widercosts of committing military forces.Nevertheless, our defence planningrecognises that the Government maydecide that such a commitment couldbe warranted in some circumstances.It is of course intrinsic to Australia’sapproach to regional affairs that suchcommitments would be undertakenin collaboration with regional friendsand allies, and with full respect for

other countries’sovereignty andterritorial integrity.

Ensure theDefence ofAustralia andits DirectApproaches4.7 Australia’s mostimportant long-termstrategic objective isto be able to defendour territory from

direct military attack. We thereforehave an overriding strategic interest inbeing able to protect our directmaritime approaches from intrusionby hostile forces. As outlined inChapter Three, a major attack onAustralia is not at all likely in currentcircumstances, and even minor attacksare improbable. But we do not rule outthe possibility, especially over thelonger term, that circumstances mightchange in ways that make the prospectless unlikely. Even if the risk of anattack on Australia is low, theconsequences would be so serious thatit must be addressed.

Foster the Security ofour ImmediateNeighbourhood4.8 Our second strategic objective is tohelp foster the stability, integrity andcohesion of our immediateneighbourhood, which we share with

Most people believe that the first andforemost task for the ADF is thedefence of Australia.

An integral part of this belief is anexpectation that the ADF, alone orwith coalition partners, should beable to undertake significantoperations within the region,particularly in our nearer region.



Indonesia, New Zealand, Papua NewGuinea, East Timor and the islandcountries of the Southwest Pacific. Wewould be concerned about majorinternal challenges that threatened thestability and cohesion of any of thesecountries. We would also be concernedabout any threat of outside aggressionagainst them. We have a key interest inhelping to prevent the positioning inneighbouring states of foreign forcesthat might be used to attack Australia.

PromoteStabilityandCooperationin SoutheastAsia4.9 Our thirdstrategic objective isto work with othersin Southeast Asia topreserve the stability and cooperationwhich has been such a notableachievement over the past few decades.Our key strategic interest is to maintaina resilient regional community that cancooperate to prevent the intrusion ofpotentially hostile external powers andresolve peacefully any problems thatmay arise between countries in theregion. We would be concerned aboutany major external threat to theterritorial integrity of the nations in ournearer region, especially in maritimeSoutheast Asia, whether that threatcame from outside or insidethe region.

Support StrategicStability in the WiderAsia Pacific Region4.10 Our fourth strategic objective is tocontribute in appropriate ways tomaintaining strategic stability in theAsia Pacific region as a whole, and tohelp contribute to building a strongersense of shared strategic interests.Australia has a direct interest in thestability of the Asia Pacific region as awhole, and especially in the relationsbetween the major powers. We would

want to avoid theemergence in theAsia Pacific regionof a securitye n v i r o n m e n tdominated by anypowers whosestrategic interestsmight be inimicalto Australia’s. We

would also want to avoid destabilisingstrategic competition between theregion’s major powers, and preserve asecurity environment in which theregion’s economic development canproceed unhindered by threats to trade.

Support Global Security4.11 Our fifth strategic objective is tocontribute to the efforts of theinternational community, especiallythe United Nations, to uphold globalsecurity. The success of the UN innurturing the principle that armedaggression by one state against another


is not to be tolerated, and theeffectiveness of its mechanisms inmarshalling an international responsewhen the principle is flouted, areimportant Australian strategic interests.That is a key reason why Australia isamong the UN’s most consistentsupporters. We will also continue tosupport the United States in the majorrole it plays in maintaining andstrengthening the global security order.

4.12 Australia also has an interestin preventing the spread of weapons

of mass destruction (WMD). Thisinterest has both a humanitarianand a strategic aspect. We have aninterest in helping to ensure that no-one should experience the horrors ofnuclear, chemical or biologicalwarfare. We have a strategic interestin minimising the risk thatWMD might one day be used orthreatened against us. Effectiveglobal non-proliferation regimes arevital to limit the spread of WMD inour region.


5.1 This Chapter explains how Australia works withother countries to achieve our strategic objectives. Thatcooperative work is possible because Australia’sstrategic interests are compatible with the interests ofso many other regional countries. This is important toAustralia’s security, because we do not have the poweror reach to protect many of our interests on our own.

5.2 We work through the growing range of multilateralsecurity forums and arrangements in our region, as wellas a network of bilateral defence and securityrelationships, including Australia’s most importantsingle strategic relationship - our alliance with theUnited States.

5.3 This work is integral to Australia’s foreign policy, whichplaces the highest priority on supporting our strategicinterests. Australia has a highly professional and capablediplomatic service, which works continually in Australia,at missions abroad and in international organisations tohelp build the kind of security environment we want andto maximise Australia’s influence on events to Australia’sadvantage. Assistance provided to other countries underour aid program is also important in advancingAustralian interests.

5.4 Australia’s strategic objectives are also supported bythe efforts of Australians outside Government.Australian companies build important economiclinkages, our schools and universities help establishenduring bonds of understanding and affectionthrough the education they provide to individuals allthrough the region, and some Non-GovernmentalOrganisations contribute by helping to solve majorproblems of human welfare that could eroderegional stability.

5 – Australia’s InternationalStrategic Relationships


5.5 Our armed forces complement andsupport the frontline work of ourdiplomats. Australia’s influence onsecurity issues in our region andbeyond is, to a significant degree,dependent on our willingness andability to commit forces to operationswhen necessary. The quality andcapability of the ADF is therefore anessential underpinning to the day today diplomacy that shapes ourstrategic environment.

The USAlliance5.6 In 2001,A u s t r a l i a ’sf o r m a lalliance withthe UnitedStates willreach 50 yearsof age withthe anniversary of the signing of theANZUS Treaty in September 1951. Ourstrategic links of course go backfurther than that, to 1941 and the startof the Pacific War. But for the past 50years ANZUS has given therelationship shape, depth and weight.The Treaty remains today thefoundation of a relationship that is oneof our great national assets.

5.7 Since the end of the Cold War theUnited States and its allies haverefashioned and reaffirmed theiralliances to meet contemporary needs.As the Asia Pacific region has emerged

as a focus of global security in thecoming decades, so the US-Australiaalliance is as important to both partiestoday as it has ever been.

5.8 The renewed vigour of the US-Australia alliance is founded onenduring shared values, interests andoutlook, as well as common sacrificesthat extend back almost a century. Italso reflects our awareness of thechallenges that we face in the region

over thecoming yearsand thebenefits westand togain by co-operation. ForA u s t r a l i a ,continued USengagementwill supportour defence

capabilities and play a critical role inmaintaining strategic stability in theregion as a whole. For the United States,Australia is an important ally, a keypartner in regional security efforts anda significant potential contributor tocoalitions.

5.9 The US-Australia alliance works atthree closely connected levels. First,there is a vast array of bilateralcooperation in the practical businessof defence and security. Training andexercising opportunities allow ourdefence personnel to stay equal to thebest. New arrangements established


this year give Australia even betteraccess to US military technology,including in highly critical andsensitive areas that could give us a vitaledge in combat. The kind of ADF thatwe need is not achievable without thetechnology access provided by the USalliance. Intelligence cooperation andsharing play a central role inenhancing our understanding of theworld around us.

5.10 The Governmentexpects that theseforms of practicalcooperation willcontinue to growover coming years.Technology offersnew opportunities towork together, and todeepen cooperationin many areas. It alsoprovides new imperatives to achievecloser integration and interoperabilityof capabilities and systems. In an eraof high technology warfare, effectivealliances will need systems that canoperate at a level of detail in real time.Those systems will need to be built inpeacetime if they are to be of value ina crisis.

5.11 Second, our alliance works at theregional level. One of the main benefitswe seek from the alliance is thesupport it gives to sustained USengagement in the Asia Pacific region.The alliance is important to the UnitedStates as one of the key elements of its

network of Asia Pacific bilateralalliances that also includes Japan,Korea, Thailand and the Philippines, aswell as close defence relationships withother important regional powers suchas Singapore. This network of alliancesand close strategic relationships is atthe heart of the US strategic posture inAsia, and is thus central to regionalstability. This serves key Australianinterests and objectives.

5.12 Our strongsupport for USengagement in theregion complementsand reinforces ourcommitment to aninclusive andc o o p e r a t i v eapproach to regionalsecurity. Ourparticipation in the

network of alliances is about regionalsecurity. It is not about constrainingother countries from pursuing theirlegitimate objectives and interests.

5.13 Third, the US-Australia alliancewill continue to be founded on ourmutual undertakings to support eachother in time of need. Theseundertakings are stated clearly in theANZUS Treaty, which does not commiteither of us in advance to specific typesof action, but which does provide clearexpectations of support.

5.14 The Government views theseundertakings very seriously. Webelieve that, if Australia were attacked,

There is strong support for the USalliance and the majority view isthat we should strive for as muchself-reliance as possible within thecontext of the alliance.



the United States would providesubstantial help, including with armedforce. We would seek and welcomesuch help. But we will not depend onit to the extent of assuming that UScombat forces would be provided tomake up for any deficiencies in ourcapabilities to defend our territory. Ahealthy alliance should not be arelationship of dependency, but ofmutual help. In the long run,dependency would weaken thealliance, both in the eyes of Australiansand in the eyes of Americans. For thatreason, self-reliance will remain aninherent part of our alliance policy.

5.15 There is one important exceptionto this principle of self-reliance.Australia relies on the extendeddeterrence provided by US nuclearforces to deter the remote possibility ofany nuclear attack on Australia.

5.16 Australia’s undertakings in theANZUS Treaty to support the UnitedStates are as important as USundertakings to support Australia.Those undertakings reflect Australia’sown strong interests in sustaining astrong US strategic presence in the AsiaPacific region.

5.17 Over the next decade and beyond,our alliance with the United States willhelp us to pursue all of the strategicobjectives that we set out in thepreceding part of this White Paper. Itis the breadth of benefit we receivefrom the alliance, as well as its depth,which makes it such an important

element of our overall strategic policy.But we should not take the health ofour alliance for granted. We will needto work hard with the United States toensure its continuing viability andrelevance in a period of change.

5.18 Australia’s alliance with theUnited States works as a two-wayrelationship. We are a dynamic,independent-thinking and, onoccasion, constructively criticalpartner of the United States. Thealliance provides excellent access toand significant influence on USthinking and policy on the Asia Pacific,and we provide a distinctly regionalperspective in our contribution. Attimes, of course, the United States andAustralia will differ in our approachesto issues, or on the priority we givethem. When that happens, it isimportant that Australia has an abilityto pursue our interests independently.

Relationships in theWider Asia PacificRegion5.19 Australia pursues its objective ofsupporting strategic stability in thewider Asia Pacific region bydeveloping bilateral strategicdialogues with countries in the region,and contributing to the developmentof multilateral security forumsand mechanisms.

5.20 Over the past few years Australiahas made a major effort to establishregular exchanges with regional


countries on strategic issues. Thesehave covered the regional securitysituation, the management of sourcesof tension and ways to enhance sharedstrategic interests.

5.21 These discussions have brokennew ground in the evolution ofAustralia’s strategic policy, as we havesought to project our views andperspectives more directly to regionalcountries. We have recognised inparticular that more fluid andcomplex strategic relationships areevolving among the major powers, andthat Australia’s interests could bedeeply engaged in them. TheGovernment therefore believes it isimportant that Australia take a long-term approach to building up ouraccess to those countries’ strategicthinking, and our influence in theirdecision making.

5.22 Our aims are realistic. We seek firstsimply to ensure that countries in theregion understand Australia’sapproaches to key issues, and that weunderstand theirs. We also hope to beable to explore ways to narrow anydifferences and build on commonperceptions. Over thelonger term we hopethere will beopportunities todeepen our discussionsto the point that we canestablish clearcommon agendas andpursue common goals.

5.23 Our strategic dialogue with Japanis well developed and longstanding. Asa country of great power and potential,it is an important partner. Over the past50 years, Australia and Japan havebuilt a close and multifaceted bilateralrelationship, based not only on a majortrading relationship, but also onpeople-to-people linkages, and anincreasing sense of shared values,interests and objectives.

5.24 We share with Japan acommitment to a strong and enduringUS role in regional security and awillingness through our respectivealliances to work hard to support USengagement. We also share a widerange of other strategic interests andobjectives, including freedom andsecurity of navigation and trade, andstrong support for the UN’s role inglobal security. We have already workedtogether on key security issuesincluding non-proliferation, Cambodiaand East Timor - where Japan providedINTERFET with generous help.

5.25 China, as the country with thefastest growing security influence inthe region, is an increasingly

important strategicinterlocutor forAustralia. TheGovernment places ahigh priority onworking with China todeepen and developour dialogue onstrategic issues.


5.26 All countries in the region havean interest in finding approachesto regional security issues whichserve shared interests in a stableand cooperative internationalenvironment. Nonetheless, some hardissues will need to be addressedfrankly, such as different perceptionsof the value and importance of the USrole in the region. Our strategicdialogue with China provides anopportunity to contribute to thatprocess.

5.27 In 1998 we established strategicdialogue with Russia. Russia hasinfluence and expertise in many Asiansecurity issues, especially in NortheastAsia. We have therefore welcomed theopportunity to compare notes on arange of topics and hope to deepenour dialogue.

5.28 India is increasingly important tothe wider regional strategic balance.This has not only increased Australia’sinterest in building contact on securityissues with India; it has also made Indiamore interested in Australia’sdistinctive approach and outlook onregional security affairs. TheGovernment hopes that earlyprogress can be made in setting up thekind of dialogue that will allow us toexplore and better understand oneanother’s perspectives.

5.29 Finally, we are seeking tostrengthen our strategic relationship

with South Korea. It seems likely thatSouth Korea will continue to become amore important and influential elementof the Northeast Asian securitycommunity, especially if the currentpromise of improved relations with theNorth bears fruit. Whatever happens,the Korean Peninsula will continue tobe a key focus for Northeast Asiansecurity concerns for many years andthus important to the security of thewhole region. We are therefore keen todevelop our strategic dialogue withSouth Korea, both to improve ourunderstanding of events on thePeninsula itself, and to benefit fromKorean perspectives on wider regionalsecurity issues. We also welcome SouthKorea’s increased engagement inregional affairs, as reflected for examplein its important support for INTERFETand UNTAET.

5.30 In all of these relationships the keyfocus has been, and is expected to continueto be, strategic dialogue. But in many ofthem, to different degrees, we will also seekto build a greater sense of transparencyand familiarity by undertaking programsof contact between our armed forces anddefence organisations. Activities suchas ship visits and naval passageexercises, staff-college and officer-cadetexchanges and visits, and technicalexchanges on issues of mutual interest,will provide valuable opportunities forfurther deepening our strategicrelationships with these key countries.


Relationships inSoutheast Asia5.31 Australia’s aim is to promote ourstrategic objectives in Southeast Asiaby helping to shape and support anetwork of multilateral and bilateralrelationships that enables countries towork together to manage anydifferences and which could, ifnecessary, help in responding tochallenges to shared interests.

5.32 Our policy has been to emphasisethe close alignment of our strategicinterests with those of our SoutheastAsian neighbours, to encourageregional cooperation among theSoutheast Asian states, and to helpwhere we can in the development ofappropriate regional militarycapabilities.

5.33 In pursuingthese policies overthe past 30 to 40years, Australia hasbuilt up strongbilateral defencerelationships withalmost everycountry inSoutheast Asia.Overall there isprobably nocountry, eitherwithin the region oroutside it, that hasgreater range anddepth of defencecontact with the

countries of Southeast Asia thanAustralia. This effort is underpinnedby a substantial and sustained patternof deployments by all kinds of ADFunits to Southeast Asia. This provideshelpful benchmarks for the pace ofactivity we should aim to sustain if weare to continue to achieve our strategicobjectives in Southeast Asia.

5.34 Each of our defence relationshipsin Southeast Asia is unique, with itsown history, context, approaches andgoals. In each of them, in different waysand to different degrees, we work withour partners by training together,undertaking combined exercises,technical cooperation, and theexchange of staff college students andother personnel. In addition we aim to

build substantivedialogue on keystrategic issues.

5.35 The economiccrisis of the late1990s slowed themomentum ofdevelopment in anumber of our defencerelationships asresource constraintslimited some types ofactivity. But it alsostimulated significantmanagement reformin many defenceorganisations andwe have been able tocontribute usefully


to this process by drawing on our ownreform experience. We expect the paceof development to pick up again asdefence budgets return to sustainedgrowth.

5.36 Australia’s close defencerelationship with Singapore ischaracterised by shared strategicperceptions, and includes extensiveexercises and training by the SingaporeArmed Forces in Australia. AsSingapore’s forces are the most capablein Southeast Asia, exercising withthem provides important benefits tothe ADF.

5.37 Australia and Malaysia have a longhistory of military cooperation,demonstrated over the years byAustralia’s support for the territorialintegrity of Malaysia in earlier crisesand through the ongoing ADFpresence at Butterworth. A wide rangeof practical bilateral cooperationunderlines the durability of our sharedinterests in regional security.

5.38 Australia’s membership of theFive Power Defence Arrangements(FPDA) commits Australia, along withNew Zealand and the UnitedKingdom, to assist Malaysia andSingapore against external aggression.Membership of the FPDA servesenduring Australian interests in thesecurity of maritime Southeast Asia,and complements our bilateralrelationships in the region. The FPDAis changing in response to increasingcomplexity in the regional environment

and to meet the demands of modernwarfare. The FPDA Ministers’ Meetingin 2000 reaffirmed the basic purpose ofthe Arrangements, and recognisedtheir likely evolution from mainly airdefence to a combined and jointoperational focus.

5.39 Australia and the Philippines alsohave a long-standing defencerelationship. The Philippines’ supportfor regional security was recentlydemonstrated through itscommitment to INTERFET andUNTAET. Australia is seeking to buildon the relationship by enhancingdialogue and extending cooperation indefence reform and modernisation.

5.40 Thailand’s provision of importantsupport and leadership in East Timorin 1999 and 2000 demonstrated itswillingness to act cooperatively withAustralia and others in support ofregional security. Australia is seekingto consolidate and broaden the defencerelationship and deepen our strategicdialogue with Thailand through anexpanding program of cooperativeactivities including maritimesurveillance cooperation, furthercooperation on financial andmanagement reform, and science andtechnological cooperation.

5.41 Our strategic relationship withVietnam is in its early stages. We haveconducted a regular dialogue onregional security issues since 1998 andare seeking to establish a broad-based


strategic relationship that wouldinclude regular visits and trainingexchange programs.

5.42 Australia is also maintaining anddeveloping modest defencerelationships with other countries inSoutheast Asia, notably Cambodia and Brunei.

5.43 In addition to our bilateral relation-ships with Northeast and SoutheastAsian countries,Australia has alsobeen an activesupporter of theASEAN RegionalForum (ARF). TheARF is the key forumfor multilateraldialogue on securityissues in the AsiaPacific region. ForAustralia, the Forumc o m p l e m e n t sbilateral securityarrangements inp r o m o t i n gtransparency andcontributing toconfidence and trustamong regionalcountries. Participation in the Forumraises the profile of Australia in theregion and enables us to contribute toshaping the regional securityenvironment. It would be in Australia’sinterests to see the ARF play a greaterrole in regional security through itsdevelopment and use of preventive

diplomacy mechanisms. This mightinclude contributing to thedevelopment of regional norms ofconduct aimed at avoiding conflict andsettling disputes without resort to thethreat or use of force.

Our Nearest NeighboursIndonesia5.44 Our biggest and most important

near neighbour isIndonesia. Over thepast 30 years, bothAustralia andIndonesia haveworked hard toestablish and nurturea close defencerelationship based ona strong sense ofshared strategicinterests. We havemade significantprogress despitedifferences inapproach to someissues - for examplethe role of themilitary in society.

5.45 Indonesia’sdemocratic transition, and its decisionto allow East Timor a referendum onits future, have in many ways removedsome of the earlier constraints on thedevelopment of a deeper strategicrelationship. But the tumultuousevents following the East Timor ballotlast year, culminating in the

Quite a number of people urgedAustralia to show regionalleadership through activities suchas the development of collectivesecurity arrangements in the Asia-Pacific region.

... there was notable support for asound relationship with Indonesia.Indonesia’s moves towardsdemocracy were raised assomething Australia should seekto support, through increasedpeople-to-people links, trade andmilitary ties.



deployment of INTERFET, causedunderstandable tensions betweenAustralia and Indonesia, whichresulted in the suspension of mostareas of defence contact.

5.46 Lingering misunderstandings inIndonesia about Australia’s recent rolein East Timor have so far made it hardto build on the opportunities offered byIndonesia’s democratising achieve-ments to establish the foundations of anew defence relationship. ButAustralia’s fundamental interests andobjectives in having a good defencerelationship with Indonesia remain asimportant as ever. The Government iscommitted to working with theIndonesian Government to establishover time a new defence relationshipthat will serve our enduring sharedstrategic interests.

New Zealand

5.47 Like other aspects of the trans-Tasman connection, our defencerelationship with New Zealand showsthe imprint both of our strongsimilarities and of the sometimessurprising differences between us.

5.48 The similarities start with ourstrategic interests, which are closelyaligned. We both assume that as amatter of course we would come toeach other’s help in time of trouble.That assumption is given formalexpression in the undertakings ofthe ANZUS Treaty, which remains in

force between Australia and NewZealand, notwithstanding thesuspension of its United States-NewZealand element.

5.49 But New Zealand’s strategicperceptions and outlook differ fromAustralia’s in significant ways.New Zealand’s view that its strategiccircumstances may not require themaintenance of capable air andnaval forces differs from Australia’sview of our own needs. We wouldregret any decision by New Zealandnot to maintain at least some capableair and naval combat capabilities.Such forces would allow a moresignificant contribution to be madeto protecting our shared strategicinterests, especially in view of theessentially maritime nature of ourstrategic environment.

5.50 On the other hand the high qualityof New Zealand’s forces is beyondquestion. They made an outstandingcontribution to INTERFET, andAustralia is grateful for the speed andgenerosity with which they werecommitted and supported. Weappreciate New Zealand’s recentdecisions to ensure that its land forceswill be equipped adequately for a rangeof more likely contingencies, and weknow that the men and women of theNew Zealand Defence Force willcontinue to constitute a highlyprofessional force. New Zealand willremain a very valued defence partnerfor Australia.


Papua New Guinea

5.51 As our closest neighbour and acountry with which we have deephistorical associations, Papua NewGuinea will always be an importantfactor in Australia’s strategicthinking. Australia’s enduringstrategic interests in the security andstability of Papua New Guinea areevident from our history, and theyare embodied in the undertakingscontained in the PNG-Australia JointDeclaration of Principles signed in1987. This reflects the expectation thatAustralia would beprepared to commitforces to resistexternal aggressionagainst Papua NewGuinea. Over the 25years sincei n d e p e n d e n c e ,Australia hasmaintained asubstantial defencerelationship with Papua New Guineaand has provided significant levelsof support to the Papua New GuineaDefence Force (PNGDF). We want toremain Papua New Guinea’s primarydefence partner and to maintain adefence relationship based onmutual benefit and reciprocity.

5.52 Events over the last decade,including the Bougainville conflictand the Sandline affair, have placedenormous pressure on the unity andeffectiveness of the PNGDF. More

recently, endemic funding andadministrative problems, andconcern over the political role of thePNGDF, have confirmed that it is inneed of reform.

5.53 The Morauta Government hasstated a clear commitment to pursuecomprehensive reform of the PNGDFand it has signalled that it willwelcome external assistance in thereform process. Australia willcontinue to offer substantial supportto PNG defence reform. Australian

assistance to helpstabilise the PNGDFin the short-termwill be linked tolong-term reform ofthe force. We sharethe Morautag o v e r n m e n t ’ sassessment that akey aspect ofdefence reform will

be restructuring the PNGDF so that itcan perform effectively within thenecessarily limited resources availableto it. Recent events elsewhere in theSouth Pacific have underlined theimportance of a PNGDF that is loyaland responsive to political control.

Southwest Pacific5.54 In the Southwest Pacific, as inPapua New Guinea, our aim is tomaintain our position as the keystrategic partner. Australian interests

A number of people suggestedAustralia needed to pay moreattention to the South Pacific,especially given recentdevelopments.



in a stable and secure Southwest Pacificare matched by significantresponsibilities as leader and regionalpower. We would be very likely toprovide substantial support in theunlikely event that any country in theSouthwest Pacific faced substantialexternal aggression.

5.55 Recent developments in the Pacificunderscore the changing dynamics ofthe region and the need for continued,focused engagement. Instability inFiji and the Solomon Islands hasbrought a downscaling of ouractivities in those countries. But wewill retain Defence Attaches andappropriate, cooperative programs.

5.56 The Pacific Patrol Boat Project,which provides assistance for patroland protection of the large maritimezones of Pacific Islands, is at the coreof our Defence Cooperation Program inthe South Pacific. The Pacific PatrolBoat Project will continue, with theGovernment having recentlyannounced the decision to extend it fora further 15 years. Through the PacificPatrol Boat project and other programs,some 70 ADF advisers areposted to Pacific islandstates, and about 400members of Pacific securityforces receive military, trade,technical, and professionaltraining in Australia each year.We are also active in theSouthwest Pacific in providinghelp in appropriate ways to their police forces.

East Timor

5.57 Within a short time East Timorwill pass from UN authority to fullindependence. Australia will seek todevelop an effective defencerelationship with East Timor, as wehave with all of our near neighbours.East Timor faces formidable securitychallenges. Our aim will be to provide,with others, an appropriate level ofhelp and support for East Timor as itbuilds the capabilities and nationalinstitutions that it will need to ensureits security and thereby contribute tothe security of its neighbourhood.

Strategic RelationshipsBeyond theAsia Pacific Region5.58 Australia values a number ofdefence and strategic relationshipswith countries outside the Asia Pacificregion. With the United Kingdom wehave important traditional andpractical links, with shared strategicperceptions and values, and importantday to day activities involving highly

valued intelligence, trainingand technological co-operation. We have a similarrelationship with Canada and

benefit from the significantcommon perspectives which flowfrom our similarity in size.

5.59 We have valued defencerelations with a number ofEuropean countries, includingGermany, Italy and France, with


all of whom we share globalperceptions and some challenges incapability development. Our linkswith France are reinforced by ourcommon interest in developments inthe Southwest Pacific, where Franceremains an important power.

5.60 With all of these countrieswe have developed valuable defenceindustry relations. We welcome

involvement by them in Australia’sdefence industry and access to theirdefence technology. Finally, thenature of these relations wasforcefully demonstrated by theirsupport to INTERFET. This was atimely reminder that we can benefitin direct and specific ways fromdefence relations with countries farfrom our shores.


6 – Australia’sMilitary Strategy

6.1 This Chapter explains the tasks of Australia’s armedforces in achieving our strategic objectives, theconsequent priorities for the development of ourmilitary capabilities and the principles underpinningour force-development priorities.

Strategic Tasks for the ADFDefending Australia6.2 The Government has reaffirmed that the primarypriority for the ADF is to maintain the capability todefend Australian territory from any credible attack,without relying on help from the combat forces of anyother country. An attack on Australia would be the mostserious and demanding military contingency we couldface. We would want a range of options to respondeffectively. This provides a clear basis for our defenceplanning, which is clearly understood both byAustralians and our neighbours. And we are confidentthat forces built primarily to defend Australia will beable to undertake a range of operations to promote ourwider strategic objectives.

6.3 The Government’s approach to this task is shapedby the following principles.

Self-Reliance6.4 Our armed forces need to be able to defend Australiawithout relying on the combat forces of other countries.This principle of self-reliance reflects, fundamentally,our sense of ourselves as a nation. As we made clear indiscussing our US alliance in Chapter Five, theGovernment’s commitment to self-reliance does notreflect any lack of confidence in our allies. Nor does itsuggest that we would not seek and expect help from


our allies andfriends intime of need.It simplymeans thatwe should notrely on othershaving eitherthe capacityor the will-ingness todefend ourc o u n t r y ,especially ifwe have not taken the effort to provideeffectively for our own defence.

6.5 Moreover, self-reliance doesnot preclude us from planning on asignificant degree of support innon-combat areas includingintelligence and surveillance, re-supply and logistics.

A Maritime Strategy6.6 The key to defending Australia isto control the air and sea approachesto our continent, so as to deny them tohostile ships and aircraft, and providemaximum freedom of action for ourforces. That means we need afundamentally maritime strategy. Ourstrategic geography, our relativelysmall population and our comparativeadvantage in a range of technologiesall dictate that our defence shouldfocus on our air and sea approaches.

6.7 The nature of our air and seaapproaches is such that a maritimestrategy includes a vital and central

role for landforces. Theywould assistair and navalforces tocontrol thosea p p ro a c h e sand would beneeded todefeat anyi n c u r s i o n sonto ourterritory. Akey role

would be to ensure the security of thebases from which our air and navalforces operate. They provide thefoundations for a maritime defenceposture. The scale of our land forcesalso dictates the strength of forcesneeded for any hostile lodgment in ourapproaches or on Australian soil. Thelarger those forces need to be, the moresupport they would need - and themore vulnerable they would be to ourair and naval forces.

Proactive Operations6.8 Australia’s strategic posture isdefensive in the most fundamentalsense. We would not initiate the threator the use of force, and our objectivesin conflict would be to terminatehostile operations against us as quicklyas possible, and to our maximumbenefit, at minimum cost in lives andresources. But that does not mean thatour approach would be operationallydefensive. On the contrary, if attacked,Australia would take a highly


proactive approachin order to secure arapid and favourableend to hostilities.

6.9 We would beconcerned to ensurethat hostilities wereconcluded swiftlyand decisively,without harmingunnecessarily the prospects for futurerelations with the adversary. However,we would aim to minimise Australiancasualties and damage. We wouldtherefore seek to attack hostile forcesas far from our shores as possible,including in their home bases, forwardoperating bases and in transit. Wewould aim to seize the initiative anddictate the pace, location and intensityof operations.

Contributing to the Securityof our ImmediateNeighbourhood6.10 Our second priority is to havedefence forces able to make a majorcontribution to the security of ourimmediate neighbourhood. Australianeeds to be able to work with ourneighbours to respond in the veryunlikely event of armed aggressionagainst them. We also need to be ableto join UN-sanctioned internationaloperations to help them manage otherchallenges to their stability. This mightrequire the ADF to contribute toregional peacekeeping andhumanitarian relief operations and

help evacuateAustralians andothers from regionaltroublespots. Weshould be preparedto be the largest forcecontributor to suchoperations. Ourplanning needs toacknowledge that we

could be called upon to undertakeseveral operations simultaneously, aswe are at present in East Timor,Bougainville and the Solomon Islands.

Resisting Aggression6.11 In the highly unlikely event ofunprovoked armed aggression againstany of our immediate neighbours,Australia would want to be in aposition, if asked and if we concludedthat the scale of our interests and theseriousness of the situation warrantedsuch action, to help our neighboursdefend themselves.

6.12 The capability to provide suchhelp would be drawn from the forceswe have developed for the defence ofAustralia. Fortunately the strategicgeography of our neighbourhoodmakes this feasible. All of ourimmediate neighbours are island andarchipelagic states. Their defencesagainst external aggression would -like Australia’s - rely heavily on theability to control their air and seaapproaches and prevent hostile forcesfrom approaching their shores. The airand naval capabilities we develop for

Many people are worried that thecapabilities of all three Serviceshave been cut to the point wherethey are inadequate for effective andsustained deployment in the region.



the defence of Australia would be ableto make a valuable contribution to thistask. Land forces would also beimportant for securing bases, andproviding specific contributions suchas special forces.

6.13 We would provide such supportonly at the request of a neighbouringgovernment, and would expect to beable to operate from bases in itsterritory. We would also expect thatother regional countries would providesupport, most probably in the form ofa coalition operatingunder a UN ori n t e r n a t i o n a lmandate.

L o w e r - L e v e lOperations6.14 Lower-leveloperations, such asevacuations, disasterrelief and peace-keeping operationsof different sorts, arethe most likely typesof operation that wemight need toundertake in our immediateneighbourhood. The ADF needs to beprepared and equipped to undertakesuch operations should it be requiredto do so.

6.15 In general, the capabilities wedevelop in the ADF for defendingAustralia provide forces appropriatefor these tasks. However, theexperiences of East Timor,

Bougainville, Cambodia and elsewherehave taught us important lessonsabout the use of forces in lower levelcontingencies. Such operations havespecific characteristics that placestrong demands on some elements ofthe ADF, especially our land forces,logistics capacity and deploymentcapabilities. Key lessons and theirimplications for our forces include thefollowing.

• Training. Operations like INTERFETand the Peace Monitoring Group on

Bougainville placegreat demands on thetraining and personalquality of the menand women of theADF. In sometimesdangerous and amb-iguous situations,they can be calledupon to make snapjudgments that canhave life and deathsignificance. Oftenthese decisions mustbe made on the spotby junior personnel

who must have the training,preparation and personal qualitiesto handle such situations.

• Readiness and Sustainment. The needfor operations such as evacuationsor support for a legitimategovernment can arise quickly andwith little warning, so forces need tobe available at high levels of


readiness. Some kinds of operations,such as peacekeeping, can require arelatively large presence on theground, so significant numbers ofpersonnel might need to bedeployed and supported. And whilesome types of operations such asevacuations are over quickly, others,such as some types of peacekeeping,can last for months or even years. Soit is important that forces are sizedand structured to allow sustainmentand rotation.

• Deployment and Support. Forces mayneed to be inserted, and evacueesextracted, sometimes in dangerouscircumstances, so substantialmilitary air and sealift must beavailable. Forces must be supportedand provided with a wide range ofservices in difficult conditions.There is often a need to providerelief services to local populationsas well. We therefore need adequatelogistics and support capabilities,including deployable medicalfacilities, cargo-handling systems,water and fuel supply facilities, andengineering capabilities.

• Firepower and mobility. Success inpacifying an unstable situationoften depends on a demonstratedability and willingness to usepreponderant force swiftly inresponse to any violence, so forcesneed to have ample firepower. Whilesuch operations might typicallyinvolve lightly-armed adversaries,there can be potential for escalation

by intervention of well-armedconventional forces. We need to havecapabilities available to deter or, ifneed be, respond to such escalation.This would often involve not justland force capabilities but also airand naval forces to protect forceelements as they deploy, maintainlines of supply and provideadditional firepower.

• Command and Communications. Thetask of leading such operationsplaces additional demands onthe ADF for command,communications, intelligence andother facilities.

6.16 The Government intends that,within the capabilities we develop forthe defence of Australia, we will makesure that we have sufficient forces tomeet these demands, so that we arewell prepared to respond to crediblecontingencies in our immediateneighbourhood.

6.17 At the same time, it is importantthat we recognise the limits toAustralia’s ability to influence andhelp in major crises, even in ourimmediate neighbourhood. Relativelysmall crisis situations can require veryhigh levels of resources to manage andcontrol. For example, even if we hadhad much larger forces than we havetoday, Australia could not haveundertaken to restore peace andsecurity in East Timor underINTERFET except with the help of alarge number of coalition partners


and the cooperation of the Indonesianauthorities. Australia wouldcontemplate contributing with armedforces to an international response inour immediate region only if it had thesupport of our neighbours, and ofother countries from the regionand beyond.

6.18 More broadly, our approach tolower level regional crises needs torecognise that the use of armed forcesis not always a useful or practicalresponse to a crisis. The Governmenthas developed a set of guidelines forcommitment of the ADF to lower leveloperations. These conditions include:

• the nature and extent of Australia’sinterests, including strategic, political,humanitarian and alliance issues;

• whether the mission has a clearmandate, goals and end-point;

• whether the mission’s goals areachievable in all the circumstancesand with the resources available;

• the extent of international supportfor the mission;

• costs of Australian participation,including the effect on the ADF’scapacity to perform other tasks;

• training and other benefits tothe ADF;

• risks to personnel involved; and

• consequences for Australia’s widerinterests and internationalrelationships.

Supporting Wider Interests6.19 The third priority for Australia’sforces is to be able to contributeeffectively to international coalitionsof forces to meet crises beyond ourimmediate neighbourhood where ourinterests are engaged. Such coalitionsmight involve operations ranging frompeacekeeping and disaster relief torelatively high-intensity conflict. Ingeneral, the closer a crisis to Australia,the larger the contribution we wouldwant to be able to provide.

6.20 We do not envisage that Australiawould commit forces to operationsbeyond our immediate neighbourhoodexcept as part of a multinationalcoalition. The scale of our contributionwould depend on a wide range offactors, but in general we would expectto make a greater contribution tocoalition operations closer to home,where our interests andresponsibilities are greater. InSoutheast Asia we would want to beable to make a substantial contributionto any regional coalition that wedecided to support - especially if itinvolved our undertakings under theFPDA. In the wider Asia Pacific regionwe would want to have the capacity tomake a significant contribution to anycoalition we thought it appropriate tojoin. In most cases the United Stateswould lead such a coalition, and wewould expect our forces to operateclosely with US forces. Beyond theAsia Pacific region we would normally


consider only a relatively modestcontribution to any wider UN orUS-led coalition, proportionate to ourinterests and the commitments ofcontributors from elsewhere inthe world.

6.21 We would be most unlikely tocontemplate the leadership of anycoalition operations that were focusedbeyond Southeast Asia or theSouth Pacific.

6.22 We would apply similar criteria tothose outlined above in paragraph 6.18to deciding whether or not to commitforces in particular circumstances. TheGovernment would always place highpriority on force protectionarrangements for Australiancontingents to ensure that nounnecessary risks were taken withAustralian lives.

6.23 We would expect to be able toprovide the forces needed to contributeto coalition operations from within thecapabilities we develop for the defenceof Australia and for operations withinour immediate region. The keyrequirements of such forces would bethat they should be able to succeedwith an acceptable level of risk in theoperational environment expected,taking into account the levels ofadversary forces and capabilities thatthey might encounter. They shouldalso be capable of operating adequatelywith the other coalition members.

6.24 In broad terms, these conditionssuggest that a major Australian

contribution to a coalition for higherintensity operations would more likelyinvolve air or naval forces than landforces. The air and naval forces wedevelop for the defence of Australiawill provide the Government with arange of options to contribute tocoalitions in higher intensityoperations against well-armedadversaries. Our land forces would beideally suited to provide contributionsto lower intensity operations includingpeace-enforcement, peacekeeping andmany types of humanitarianoperations. Such operations are muchmore likely than high intensityoperations and would emphasisemobility and the levels of protectionand firepower appropriate for our ownenvironment, rather than the kinds ofheavy armoured capabilities neededfor high intensity continental warfare.

Peacetime National Tasks6.25 In addition to these core tasks insupport of Australia’s strategicobjectives, the ADF will also be calledupon to undertake a number of regularor occasional tasks in support of widernational interests. These includespecific and ongoing commitments tocoastal surveillance and emergencymanagement, as well as ad hoc supportto wider community needs.

6.26 One of the most important ofthese is the critical contribution thatthe ADF makes to the security of ourcoastline from illegal immigration,smuggling, quarantine evasion and


other intrusions on our sovereignty.This contribution has been describedin Chapter Two.

6.27 Other peacetime national tasksinclude counter-terrorist response,maritime search and rescue, andnatural disaster relief.

• ADF Special Forces maintain ahighly respectedcapacity forcounter-terroristoperations whichis among the mostsophisticated inthe world;

• E m e r g e n c yM a n a g e m e n tAustralia providestraining, nationalpolicy coordinationand coordinatedresponses for civilemergencies;

• the ADF’s long-range air andnaval capabilitiesassist maritimesearch and rescue,u n d e r t a k enavigational andhydrographic work, and alsosupport fisheries management;

• major contributions are made toother events, such as the Sydney2000 Olympic Games and thecoming Centenary of Federationcelebrations; and

• ADF units, including Reserve units,

make a major contribution todisaster relief in Australia and ourimmediate neighbourhood.

6.28 The procedures to be followed inusing the ADF to support domesticlaw enforcement and the rights andresponsibilities of ADF members onsuch duties have recently been

clarified and mademore workable withthe passage of newlegislation.

CapabilityPriorities forthe ADF6.29 The Governmenthas determined thatin order to achievethese strategic tasks,the ADF will maintainand further developan integrated andbalanced joint forcethat can provide twokey sets of capabilities.

6.30 First, Australiawill maintainmaritime capabilities -

mostly air and naval forces - that candefend Australia by denying our airand sea approaches to any crediblehostile forces. These forces will alsohave the ability to support Australianforces deployed in our region andsupport the security of our immediateneighbourhood, as well as contribute

Most people argued for a betterresourced Defence Force and that aproperly equipped and balancedforce structure provides the bestway of coping with all eventualities.


There was a firm belief that whilethe defence of Australia should bethe first and foremost priority, itshould not be the exclusive option.Instead, in structuring a balancedforce for mid-intensity conflict theADF can adapt to undertakeoperations other than war duringpeacetime.

Report of the DefenceConsultation Team


to coalition operations in higherintensity conflicts.

6.31 Second, Australia will maintainland forces - including the air andnaval assets needed to deploy andprotect them - that can operate as partof a joint force to control theapproaches to Australia and respondeffectively to any armed incursion onto Australian territory. These forceswill also have the capability tocontribute substantially to supportingthe security of our immediateneighbourhood, and to contribute tocoalition operations further afield, inlower intensity operations.

Capability DevelopmentPrinciples6.32 The priorities set out in thepreceding paragraphs are the basis onwhich the Government has takendecisions about the developmentof the ADF’s capabilities. Thosedecisions have been guided by thefollowing principles.

Operational Flexibility6.33 Nothing can remove the elementof the unexpected from our militaryaffairs. Over the next decade, we canbe reasonably sure that governmentswill consider using the ADF incircumstances that we have notenvisaged. So our defence planningshould not leave us with a set ofcapabilities that is too narrowly

focussed on specific scenarios. Ouraim is to provide Australia with a setof capabilities that will be flexibleenough to provide governments witha range of military options across aspectr um of credible situationswithin the priorities set out in thisChapter.

Integrated Capability

6.34 Capability is much more thanjust a piece of equipment. It includeseverything that contributes to theADF’s ability to achieve a particularresult at a particular time. Thatmeans it encompasses personnel andtheir training, support andmaintenance, logistics, intelligence,doctrine, and many othercontributing elements. It draws onthe wider national infrastructure,including the key role of industry. Italso means that different types ofcapability themselves need to worktogether to achieve larger results.The ways in which differentelements of capability, and differentcapabilities themselves, worktogether are critical to the effectiveconduct of operations. We havetherefore sought to consider how theelements of the ADF can best worktogether to provide an integrated setof capabilities.

Interoperability

6.35 The same factors place a premiumon interoperability between our forces


and those of our allies and othercountries with whom we might wantto operate in coalition. Thedevelopment of interoperability -within limits of cost and other factors- is an important issue in capabilitydevelopment.

Fully Developed Capability6.36 We need to be realistic about theamount of warning we might receiveof the need to use our armed forces.Crises do not usually occur withoutsome indication, so we do not need tokeep our forces constantly at thehighest pitch of readiness foroperations. That would be veryexpensive, and it would erode ourcapabilities because forces held at veryhigh readiness cannot undertake thefull range of training and exercising.

6.37 But - except in the case of a majorattack on Australia - we cannot assumethat we would receive enough warningof a crisis to allow us to build majornew capabilities, or significantlyexpand or enhance existing ones. Itwould take several years at least toreplace or upgrade our key platformsand systems, and to train the people tooperate and support them.

6.38 The Government thereforebelieves that Australia shouldmaintain in a fully developed form thecapabilities that would be necessary toachieve key tasks. Our aim is toestablish a sustained long-termprogram to develop and upgrade our

forces progressively so they retain therequired level of capability without theneed for crash programs.

Capability Edge6.39 The Government believes thatAustralia’s defence planning shouldaim to provide our forces with a clearmargin of superiority against anycredible adversary. We will plan togive our forces a high chance ofsuccess and survival. To achieve thatwe need to ensure that, workingtogether, our forces have an overallcapability edge in key roles. We havetaken account of the expected trendof capability developments in theregion over the next 10 years andbeyond, and have planned for sustainedimprovements in our capabilities tomeet those expected trends. We have notbased our planning on the forces orcapabilities of any particular countryor set of countries, but have looked atcapability trends throughout ourwider region.

6.40 Maintaining a capability edgewill not be easy. In future we will nolonger be able to rely, as we have inthe past, on an assumption that eitherour technology or our trained peoplewill be decisively better than those ofother regional forces. Our focus, evenmore than at present, will be on theadvantages we can achieve bycombining well-trained people withthe effective use of technology - whatwe have called the ‘knowledge edge’.


Our capability edge will also comefrom the innovative ways in which wedevelop our doctrine, organisationand logistics.

Operational Concurrency6.41 Problems often come together, soit is important that our Defence Forceshould be able to do more than onething at a time. But Australia cannotmaintain forces that would allow us todo all the things we might want to beable to do concurrently in differentlocations. We therefore do not plan onthe ability to undertake majoroperations simultaneously in morethan one theatre of operations.However, within a theatre of operation,especially in the defence of Australia,we would need forces large enough toundertake some types of operationsimultaneously in widely separatedlocations. And in ourimmediate region, wemay need to be able tosustain one majordeployment andundertake a lesserdeployment at thesame time.

Sustainment6.42 We must be ableto sustain our forcesonce deployed. Asustainable force callsfor different things: theability to replace

combat units in sufficient time and thecapacity to supply and support forcesoperating at high tempos. It thereforeneeds an effective long-term approachto recruiting and retaining our people,and it needs a capable industry base todraw on for support.

Technology Focus6.43 The Defence Capability Planplaces a high priority on maximisingthe opportunities offered by theinformation technology revolution tomake our forces more effective.Information capabilities have beenhighlighted in a separate capabilitygrouping to ensure that they receiveproper attention and prominence, butin reality information systems will beprofoundly important in thedevelopment of all our capabilities. ForAustralia, effective exploitation of

i n f o r m a t i o ncapabilities will becritical to maintainingour edge.

6.44 More broadly, wehave given closeattention to thepotential forrevolutionary changesin the nature of warfareand the composition ofarmed forces flowingfrom current andprospective tech-nological innovations.We have balanced two


imperatives - on the one hand, to keepopen opportunities to take advantage ofmajor redirections in technology as theyemerge and, on the other hand, tosustain the pace of development of ourforces to take advantage of technologiesalready available.

6.45 Our guiding principle has been toplan to exploit technologies that arenow under active development, but notto defer investment where no newalternative is now in prospect. Wherepossible, we have sought to allow timefor new technologies to evolve beforecommitting ourselves. More discussionof our approach to the future oftechnology in our capabilities isprovided in Chapter Ten.

6.46 The Government has also takenaccount of the lessons of the Collinssubmarine project for the approach weshould take, in conjunction withAustralian industry, to thedevelopment of high-technologycapabilities. The difficulties with theCollins project should not deter usfrom developing high-technologycapabilities, because they are essentialto our ability to defend Australia. Butthey should caution us against takingunnecessary technical risks indeveloping new systems where

existing ones may be adequate, and toensure that risks are better understoodand managed in future projects. Theselessons are being applied in the reformof our acquisition processes that is nowunder way. This reform program andour approach to effective partneringwith industry are described inChapter Nine.

Cost-Effectiveness

6.47 The Government has sought at alltimes to provide the maximumcapability at the lowest possible cost byseeking the most cost-effectivesolutions available. For example, we arelooking for ways to minimise thenumber of different types of platformsand systems that the ADF operates, inorder to save training, operating andsupport costs. This has had animportant impact on our approach tothe planning of some types ofcapability. While we have providedspecific, costed proposals for new andenhanced capabilities in the DefenceCapability Plan, any alternative, morecost-effective means of achieving thedesired capability result will beconsidered before final governmentapproval for specific projects.


Section Three | People


7 – People in Defence

People are Capability

7.1 On the basis of the key strategic directions set out inSection Two, the Government hasundertaken a thorough review ofAustralia’s military capability needs. Ourfirst consideration has been to ensure thatthe ADF will have the right people, withthe right skills and experience to createthe capabilities we need to undertakecomplex military operations.

7.2 The strength of Australia’s military forces has alwaysbeen the quality of its people. Since Federation,Australia’s armed forces have earned an enviablereputation for toughness, resilience and resourcefulness.This has been demonstrated in two world wars andcountless other deployments. In recent years, ADFpersonnel have made an essential contribution tostability in the nearer region and around the globe.

7.3 The key requirement for meeting the wide andessentially unpredictable range of contingencies that

could arise is a substantial pool of highlycompetent professionals - especially at themid-levels of the Defence Force. Morespecifically, the potential of theenhancements outlined in Chapter Eightwill be realised only if they are partneredwith effective personnel policies. Recruiting,developing and retaining high qualitypeople for our Navy, Army and Air Force isessential to turning weapons, equipmentand systems into world class capabilities.

7.4 One of the most important things the Governmentcan do to recruit and retain high quality people is toprovide clear strategic direction for the development of

People should not be regarded as acost but valued for what theyprovide - the competitiveadvantage.



the Defence Force and the resources tofund the planned enhancements. ThisWhite Paper makes clear theGovernment’s intention to maintainthe ADF as a first-class military force,able to fight and win.

7.5 In return, the Government demandsthat resources, including people, aremanaged efficiently to ensure that ouruniformed personnel, especially inoperational and supporting units,are properly trained, equipped andlooked after.

7.6 The recent high tempo ofoperations, coupled with thecontinuing drive for efficiency throughoutsourcing, restructuring andreductions, hasplaced considerablepressures on manyADF personnel.These pressures havebeen particularlyevident in operationaland operational-support units. Butthe high operationaltempo and the drivefor efficiency have been necessary toprotect our strategic interests andenhance our capability at a time offinancial stringency.

7.7 The fact that the high operationaltempo has been achieved within atight defence budget is a tribute to thecommitment and dedication ofDefence personnel, but the Government

also recognises that this level ofachievement is unsustainable withincurrent resources. Recruiting andretaining sufficient numbers of peoplewith the right qualities and levels ofexperience will be one of the mostsignificant challenges in building theADF of the twenty-first century.

The Dimensions of theChallenge7.8 The enhanced force structureoutlined in this White Paper requiresthe current strength of the ADF of51,500 to be increased to about 54,000full-time personnel by 2010. Thecomposition of that force will need to

adapt to meetevolving needs.

7.9 Recruiting theright sort of peoplefor our Defence Forcewill not be easy. Inthe last financialyear, the number ofpeople recruited intothe ADF fell short of

the target figure by 25 per cent - morethan 1,300 people. Figures for thecurrent financial year do not indicatea marked turn around.

7.10 Retaining the right people is alsodifficult and, when separation ratesfrom the three Services are higher thannormal, the recruiting problem isgreatly exacerbated.

There is a broad view that theDefence organisation is not givingsufficient attention to personnelissues.



7.11 Clearly, the Navy, Army and AirForce should not be trying to retain alltheir people - a flow of new talent andfresh ideas is necessary. But annualseparation rates from the three servicesare presently running at between 11per cent and 13 per cent, up from 9 percent in the early 1990s. The problem iscompounded by the fact that many ofthose leaving are doing so at the verytime in their career when they have themost to contribute.

7.12 If the separation and recruitmentrates of the last two years were tocontinue, over the coming decade, thestrength of the ADF in 2010 would beabout 12,000 below the target figure of54,000. The Government will takefirm action to ensure that does nothappen.

7.13 To provide the people we need,bureaucratic inefficiencies need to beeliminated and the ADF must changeits culture and approach to ensure itspeople feel valued. More specifically,Defence must:

• demonstrate high quality leadership;

• retain more skilled and experiencedpeople;

• recruit effectively; and

• offer high-quality education andtraining programs.

Leadership7.14 To ensure success in militaryoperations and foster a first-class workenvironment, Defence must have

effective leaders at all levels. Goodleaders focus their efforts onsupporting their people, and onbuilding up commitment, skills andteamwork to achieve results.

7.15 The day to day behaviour of seniorleaders, both civilian and military, caneither support or undermine attemptsto make Defence a more rewardingplace to work. The ADF hasconsistently demonstrated the qualityof its leadership in military operations,particularly at the tactical level.However, new leadership challengeshave emerged. These include a mixedmilitary, civilian and commercialworkforce and a greater emphasis onensuring Defence resources are usedefficiently, as well as effectively.

7.16 Defence is implementing a rangeof senior leadership developmentinitiatives. In coming years, theseinitiatives will be embedded inpersonnel policies, and education andtraining systems. The aim is to ensurethat an effective ‘leadership culture’ isin place, not a ‘bureaucratic culture’.Improving leadership will remain oneof Defence’s highest priorities.

Retention7.17 To be a ‘knowledge organisation’Defence must retain skilled andexperienced people. Ensuring thatpeople do not leave the ADF when theyare of most value is a priority concernfor the Government.


7.18 Defence will use retention toshape its future workforce. Thisrequires a sophisticated approach thatidentifies the experience profileneeded and thenactively manages toachieve that profile.Mechanisms areneeded to encourageturnover in thoseparts of the Serviceswhere it is necessaryand to retain thenumbers and skill-sets we need in otherareas. The Govern-ment’s policies willaddress:

• the uniquecharacteristics ofService life;

• job satisfaction;

• remuneration, superannuationand compensation;

• health and safety; and

• career and lifestyle issues.

Unique Characteristics ofService Life7.19 The Government recognises theunique requirements of service life andthat being part of the ADF is more thanjust another job. People who serve inthe Navy, Army and Air Force are notcivilians in uniform. The Governmentrecognises that the members of theProfession of Arms are different; theyare required for example to place

themselves at risk. This is the startingpoint for the Government’sdevelopment of a long-term personnelstrategy.

Job Satisfaction7.20 The Governmentis committed toproviding theresources, trainingand equipmentnecessary to ensurethat the ADF is a first-class militaryforce - the essentialfoundation fora high degree of jobsatisfaction withinthe ADF. Theinitiatives outlinedin this White Paper

will ensure Defence is focused onachieving its goals and that its peopleare provided with the ways and meansof achieving these goals. Leaders at alllevels will be judged not only on thereadiness and capability of those theycommand and their management ofresources, but also on the morale of thepeople they lead.

Remuneration,Superannuation andCompensation7.21 There is a need to tailorremuneration packages to meet thespecific needs of the differentcategories of personnel in the DefenceForce. These include both young,

There is strong public support forthe Government to treatemployment in the Services as aunique vocation or way of life, notas just another job.


Service in the ADF is now seen as‘just a job’ [but] the ADF is not likeany other business.



operationally-oriented personnel whoseek a short-term career in the ADF andmore experienced members who havethe skills and knowledge to train andlead the force. The Government alsorecognises the need to adopt a long-termcare approach that embracessuperannuation, compensation andtransitioning to veterans’ entitlements.

7.22 The Government has initiated areview of ADF remunerationarrangements to look at methods ofproviding a more effective, efficient andflexible framework. The focus of thereview is to provide options thatimprove the attractiveness of the totalremuneration package within overallDefence budgetconstraints, whiletaking into accountthe specificcircumstances facedby ADF personnel.

7.23 Options formore effectiver e m u n e r a t i o narrangements couldinclude:

• a restructuredADF pay systemthat recognisesdifferent skills andmarket values, andprovides bettertransparency andgreater choice;

• packages based onskills as well as

rank, and taking more account ofwider labour-market forces;

• the establishment of more specialisttrade structures within Defence;

• putting in place employmentconditions that recognise differentcareer and work expectations ofADF people across their careers; and

• the possibility of providing moreflexible superannuation benefits forADF personnel through specificallydesigned arrangements.

Health and Safety7.24 A key element of retention mustbe an increased focus on the health,

safety and well-being of ADFpersonnel. This willalso maximise theircontribution, andhence ADFcapability. The costof work-relatedinjury and disease,both in human andfinancial terms, issubstantial andincreasing; militarycompensation costshave more thandoubled over the lastfive years. As westrive to maintain ahigh state ofreadiness, introducecomplex newtechnologies and

Retention issues need to beaddressed before tackling othercapability issues.


Many serving members arefrustrated by inadequate trainingopportunities and conditions ofservice, leading to low morale andpoor retention rates.

There is significant concern aboutADF personnel leaving at the pointin their career at which they havethe knowledge and experience theorganisation needs.

Report of the CommunityConsultation Team: Keyfindings


rely more on contractors and industry,Defence needs to redouble its efforts tomeet its duty of care.

Career and Lifestyle7.25 Various factors cause experiencedADF members to leave the ADF.These include frequent postings todifferent areas, which make it difficultfor the member to accommodatefamily and personal considerationssuch as spouse or partner employment,continuity of education for children,disabilities and home ownership.Furthermore, the impact of thecommercial support program on sometrade and professional structures hasrestricted opportunities for careerdevelopment, respitepostings andlocational stability.

7.26 In order tocounter the impactof these influenceson retention theGovernment will:

• ensure that theimpact onfamilies, in termsof spouse orpartner employment opportunities,education and special needs, will bean important consideration inposting decisions and when locatingall new capabilities andestablishments;

• ensure that, wherever practical,establishments are collocated to

increase the options for back-to-back postings;

• build closer relations with industry,particularly in engineering andtechnical trades areas, to developshared career structures;

• make it easier for individuals whohave left to pursue careeropportunities within industry toreturn to Defence, either on a full orpart-time basis; and

• encourage home-ownership forADF personnel.

Recruitment7.27 Improved retention will ease therecruitment task significantly. But

c h a n g i n gdemographics willstill present manychallenges.

7.28 Over the nextdecade, the rate ofgrowth in theAustralian labourforce is likely to slowand its age profileincrease. There is alsolikely to be a generaldecrease in the

participation rate for men and anincrease in the participation rate forwomen, a move from full-time to part-time employment, more womenhaving their first child at a later ageand then re-entering the workforce,and young people spending longerperiods in education. All of these

Many submissions argued that theoutsourcing of support functions forthe Defence Force has been a majorcontributor to de-skilling and lowmorale within the Defenceworkforce.



trends will make it harder to attractpeople to serve in the ADF.

7.29 Australia’s healthy economy alsopresents challenges for ADFrecruitment. The labour market iscompetitive, unemployment is fallingand more young people areundertaking higher education. Theseconditions make it very much anemployees’ market with anunprecedented level of choice.

7.30 In light of these factors, it is clearthat Defence must broaden its appealas a career for young Australians. If theADF is to become the employer ofchoice for more people, its culture andapproach will need to change - and beseen to change.

7.31 Market research undertaken byDefence in 1998 found that only fourper cent of those aged between 18 and35 would ‘definitely consider’ a career inthe Defence Force and a further seven

per cent would ‘consider’ such acareer. However, preliminaryfindings from Defence’s most recentresearch suggest those figures areincreasing. This is very significant.An increase of even one per cent tothe 1998 figures would add about51,000 potential recruits to the pool- or about the number of full-timepersonnel currently in theDefence Force.

7.32 The Defence Force recruitingprocess is also being redesigned. A pilotscheme is under way in Victoria andTasmania to evaluate a commercialservice-provider. If the pilot scheme issuccessful and the new system thenimplemented across Australia, thenumber of recruitment officeswould increase from 16 to 90.

7.33 Better use of technology, includingcall centres, will enhance access forthose making inquiries. It will also


deliver information more rapidly andallow faster, more efficient processingof applications.

7.34 Defence will reinforce theseinitiatives by continuing to maintaina strong ADF involvement in therecruiting function.

EducationandTraining7.35 The fourthelement ofD e f e n c e ’ sp e r s o n n e lstrategy ism o d e r n ,effective andefficient education and training.Education and training is a criticalinvestment in future capability.

7.36 A better education and trainingprogram will help Defence to attract andretain high quality people and newtraining will be needed as capabilitiesare enhanced.

7.37 In recent years, Defence’sdelivery of education and traininghas changed significantly. Central tothese changes has been a continuingshift towards a more integratedapproach covering the commonneeds of both military and civilianpersonnel, including through therationalisation of existing institutionsand courses. The result has beengreater effectiveness and efficiency.

7.38 Defence education and traininghas also been aligned more closelywith the National TrainingFramework. This will continue.Defence people are able to gainnationally recognised qualificationsunder the Framework. This is an

i m p o r t a n trecruitmentincentive andwill also helpto retainpeople. Inaddition, itwill allow thedevelopmentof moree f f e c t i v epartnerships

with industry in the key areas ofcapability development, engineeringmanagement, maintenance andmodification.

7.39 The integration of educationand training can be taken further toinclude logistics, intelligence andinformation, and communicationtechnologies. The creation of theDefence Materiel Organisationprovides an excellent opportunity forthe rationalisation of logisticseducation and training.Improvements to military post-graduate education and educationalservices at the Australian DefenceForce Academy will also follow ahigh-level review, due to be completedin mid-2001.


7.40 Innovation will also play a keyrole in improving Defence educationand training. More use will be madeof flexible learning techniques,featuring enhanced informationsystems. Simulators will play agreater role in providing cost-effective and realistic training.

7.41 These initiatives will complementthe ADF’s existingoperational trainingregimes. In trainingtheir people foroperations, theServices are alsoembracing leading-edge practices andsystems that give ourforces a crucial edge.

Reserves7.42 In addition to the issues addressedin the preceding part of this Chapter,there are a number of issues that relatespecifically to the Reserves.

7.43 A more effective Reserve componentis needed to meet the changingdemands posed by Australia’sstrategic environment. Today, Reservescomprise about 42 per cent of the totalADF. Over the next decade, Reserves willbecome a more important element ofthe ADF’s capability. Given thelikelihood of frequent and concurrentoperations, the Reserves will be the mostefficient way of providing sustainmentand surge capacity. Moreover, they canprovide skills not available within the

permanent forces or held only insmall numbers.

7.44 Traditionally, the Reserves havebeen viewed as a mobilisation base forthe ADF in time of major conflict. Butrecent military operations havehighlighted the importance of theReserves in meeting the requirementsof contemporary military operations.

To illustrate thispoint, in the past twoyears the ADF hasutilised moreReservists on full-time service thansince the end ofWorld War II.Reserves havecontributed to short-notice operations intheir initial phases,helped to sustain

those operations, and provided surgecapacity to support peak periods ofoperational training and demand.

7.45 As a result, the strategic role for theReserves has now changed frommobilisation to meet remote threats tothat of supporting and sustaining thetypes of contemporary militaryoperations in which the ADF may beincreasingly engaged.

7.46 A number of supporting policyinitiatives are under way or beingdeveloped. These include:

• new legislative provisionsgoverning the use and employmentof the Reserves;

...the Reserves are an important linkwith the Australian communityand ...could be a valuable force forsustainment purposes [but] they aregreatly under-utilised...



• measures to strengthen the linkageswith the community;

• improved training; and

• better recruitment and retentionstrategies for the Reserves.

7.47 The decisions the Governmenthas taken this year to enhancethe contribution of the Reserves toADF capability are of fundamentalimportance and will profoundlychange the Reserves. They providegreater options for the employmentof the Reserves, while demonstratingto the Reservists themselves, and thecommunity from which they aredrawn, that measures are beingput in place to support them intheir service.

Legislative Changes7.48 Of the Government’s initiatives toenhance theReserves, changes tothe legislationgoverning the useand employment ofReserves will havethe greatest impact.The Governmenthas proposedamendments tolegislation to extendthe options availablefor the use of theReserves. Thechanges will enablethe Government tocall out the Reserves

as a whole or in part for a wide rangeof operations, including combat,defence emergency, peace-enforcement, peacekeeping, civil andhumanitarian aid, and disaster relief.The Government is very conscious ofits responsibility to use these increasedpowers only when necessary.

7.49 Importantly, the changes willprovide the framework to introducenew categories of Reserve service, toallow for some units and individualReservists to be held at higher levelsof readiness.

7.50 Other legislative amendmentswill also incorporate appropriatemeasures to protect the jobs ofReservists, and support their familiesand employers. Employer support forthe Reserve is crucial. The legislativeamendments will allow the

payment of financialincentives to assistemployers and self-employed Reservistsdefray the costs ofsupporting andreleasing employee-Reservists forextended periods oftraining ando p e r a t i o n a ldeployment. Theseinitiatives areestimated to costaround $20 millionper year.

The public strongly supports theconcept of Reserve forces being fullpartners in the ADF, particularly tohelp sustain operations. Mostpeople believe there are too manyimpediments at present for Reserveforces to meet that objective.

The public expressed strongsupport for measures that wouldmake it easier to deploy Reserves,and deploy them quickly.



Strengtheningthe Linkageswith theCommunity7.51 The Reservesenjoy a special andunique relationshipwith the local andregional comm-unities from wherethey are recruited andsupported, and inwhich they serve.Reservists are abridge between the ADF and thecivilian community. They bringwelcome diversity to the ADF and canhelp influence and shape the militaryculture in terms of the prevailingcommunity demographics, valuesand attitudes.

7.52 Given the greater contributionbeing asked of Reservists and, in turn,the communities from which they aredrawn, the Government hasrecognised the need to engage an evenbroader range of stakeholder groups. Amajor public awareness andcommunication strategy will informand educate the community andemployers about the Government’sReserves enhancement program,while promoting the Reserves and thevalue of the Reserves’ contribution toAustralia’s defence capability.

7.53 The Defence Reserves SupportCouncil (DRSC) has also beenaugmented. It has been given a wide-ranging charter to liaise with

stakeholder groupson matters affectingReserves’ availabilityand to act as aninterface between thecommunity and boththe Government andthe ADF.

ImprovedTraining

7.54 An improvedReserve capability

will require adequate resources andequipment to be allocated toensure that Reservists are trainedand equipped to meet operationalrequirements.

7.55 While the training will be drivenby military requirements, many of thecompetencies gained will be directlytransferable to the civilian workplace atno direct cost to employers. To betterdemonstrate the value of military andskills training to Reservists andemployers alike, the existing Defenceprogram, which is seeking to have itstraining accredited within the nationaltraining framework, has beenaccelerated.

7.56 Reservists will have nationallyrecognised evidence of theirattainments and employers will haveonline access to a database ofcompetencies gained through theiremployee-Reservists’ participation inmilitary service.

Greater incentives for reservists andtheir employers are also stronglysupported.

Regional Australia has great pridein our Defence Force and identifiesstrongly with the local Reserveunits.



7.57 To realise those benefits, reciprocalcommitments will be required fromReservists and their employers.Reservists, particularly those requiredto maintain high levels of individualreadiness, will be asked to commitsignificantly more time to training toachieve higher levels of militarycompetencies, and to maintain themover time.

7.58 This increased commitment willimpact on the Reservists, their familiesand communities, and their employers.Defence will develop a range ofmeasures to manage those impacts,including:

• changes to conditions of service;

• innovative ways of deliveringtraining, such as breaking downtraining into modules and phases;and

• continuing consultation with theReserves’ stakeholder community tofacilitate Reservists’ leave fortraining.

7.59 As a major employer of Reservists,the Government will show the way byhaving leave policies and employmentpractices that support the release ofReservists for peacetime trainingand deployment.

Better Recruitment andRetention7.60 The Government will continue toaddress the issues of Reserverecruitment and retention by

redirecting the focus back to thecommunities from which Reservistsare drawn. Community support isimportant to the overall process ofrecruitment and local Reserve unitswill play a greater role in attracting andfostering recruits. This, in concert withthe national Reserves recruitmentprogram, should result in improvedrecruiting results. The financialincentive package for employers willalso directly support recruiting.

7.61 The legislative changes will alsoallow the ADF to adopt more flexiblerecruiting and management strategies.These will enhance retention ofmilitary experience by offeringincentives to full-time members tocontinue serving in the Reserves,rather than leave the ADF completely.Permanent force members will be ableto transfer to the Reserves, andReservists to lower levels of readiness.This will help to retain trained peoplein the ADF.

Cadets7.62 The Australian Services CadetScheme (ASCS) comprises the NavalReserve Cadets, Australian ArmyCadet Corps and the Air TrainingCorps. 25,000 cadets in 417 units areestablished in communitiesthroughout Australia, providing youthdevelopment programs within amilitary context in schools and inwider community settings. This


There is support for a cadet scheme,funded and controlled by Defence.


provides a tangible link for the ADF tothe Australian community at large.

7.63 An association between ouryoung people and the AustralianDefence Force has long been valuedand strongly supported by theAustralian community. TheGovernment’s vision for the ASCS isfor it to provide opportunities for allyoung Australians to obtaincomprehensive personal challengesand growth, enhanced self-esteem andself-discipline, and adventurousenjoyment in a military setting.

7.64 Also, the Government iscommitted to expanding theparticipation of young Australians inthe Cadet Scheme and to providing theresources needed to achieve that. Thisincludes a commitment to wideningthe range of institutions offeringparticipation in the cadets and toensuring that units are properlyresourced. The Government willincrease annual funding for the CadetScheme to $30million by 2002and provideongoing funding asnecessary to ensurethese objectivesare met.

7.65 The Governmentwill ensure cadetshave a more cohesive framework andsupport base within the ADF. This willallow the ASCS to build further upon itssuccess as a key youth development

organisation and as a source of futurerecruits for the ADF. For many cadets,participation in such a scheme is thefirst, voluntary step towardsrecruitment into the Defence Forceeither on a full-time or part-time basis.The 1999 ADF census showed that 22%of full time ADF personnel and 25% ofReservists were once cadets. As well,former cadets remain in the services forcomparatively longer periods and ahigh proportion reach senior rank.

7.66 In addition, a first class CadetScheme presents our regional and ruralcommunities with the opportunity tobuild links with the Defence Force,which would not be available in anyother way. Cadets engendercommunity involvement, and supportfor the ADF. This is reinforced by cadetsdirectly participating in ceremonies ofnational significance like ANZAC Day.Moreover, participation in cadets givesopportunities for young people todevelop their skills in a youth trainingenvironment. Defence will pursue the

formal accreditationof the cadet activityprograms within thenational trainingframework to build onthe tangible outcomesof cadet participation.

7.67 The Governmentacknowledges the

valuable work that many people havedevoted to the ASCS to date, at stateand local levels. Several stategovernments have also established


cadet-style programs in recent years.Defence will continue to workcollaboratively with these emergingprograms by establishing ASCS unitswithin the state frameworks and bysharing its extensive experience infostering cadet and youth activities.

7.68 Through the enhancementsplanned over the next three years theGovernment is confident that cadetswill have a proper place in theAustralian community and allAustralians who participate as cadetswill have a rewarding experience.


Section Four | Capability


8 – The DefenceCapability Plan

A New Approach ToCapability Planning

8.1 To ensure that Australia will have the forces neededto achieve the tasks outlined in Chapter Six, theGovernment has formulated a detailed, costed plan forAustralia’s military capabilities over the next 10 years,with broad guidance on major issues over the following10 years. In doing this we have developed a newapproach to defence capability planning. Our aim is toprovide the Defence Force with clear, long-term goalsfor the development of our armed forces, and thefunding needed to achieve those goals. We have calledthis the Defence Capability Plan.

8.2 The Defence Capability Plan will not remainimmutable over the next decade. It will be reviewedannually to take account of changing strategiccircumstances, new technologies and changedpriorities. Individual projects will need to be consideredand approved by government before proceeding.Nevertheless, the Capability Plan will provide a clearbasis for decisions now and into the future.

8.3 The key to this new approach is the Government’sdecision to provide, for the first time, Defence fundingcommitments covering the whole of the coming decadematched to a planned set of capability enhancements.This will allow development of robust plans for thefuture shape of our Defence Force, with a clearunderstanding of what will be affordable. It also allowsthe Government to set firm financial constraints forDefence, and benchmarks against which theorganisation’s performance will be measured. This willbe done on an annual basis through the introductionof a new yearly Defence Financial and ManagementPlan, which is described in Chapter Eleven.


8.4 The DefenceCapability Plan hasbeen developed onthe basis ofthrough-life costingestimates of thedifferent types ofcapability in theADF, covering notonly the initialcapital investmentrequired but alsop e r s o n n e l ,operating, supportand upgrade costsover a 20 yearperiod.

8.5 With these long-term costing estimates,the Government hasbeen able to makeinformed judgmentsabout the relativecost-effectiveness ofdifferent types of capability inachieving Australia’s strategicobjectives. On the basis of thosejudgments we have set out capabilitydevelopment paths for each of our keyareas of capability over the next 20years, and specific, costed developmentplans for each major type of capabilityfor the coming decade.

8.6 The Defence Capability Plan is animportant element of theGovernment’s program of continuousimprovement in Defence management.It will allow the Government to

evaluate better theperformance ofDefence in thedelivery of capabilityagainst the Plan. Itwill also provide afirm basis to developand monitor furtherefficiency reforms inthe delivery ofcapability.

8.7 This approachwill also allow theGovernment to lookmore systematicallyat our Defenceindustry needs andopportunities, andfind ways to manageprocurement andsupport in wayswhich are more to thebenefit of bothDefence and industry.

8.8 This Chapter sets out theGovernment’s Defence Capability Planunder five broad capability groupings.

Land Forces8.9 The land force capability groupingincludes all elements of the Army, andthose elements of Navy and Air Forcewhose principle task is to deploy them.

Capability Goal

8.10 The Government’s aim is toprovide land forces that can respond

Most participants supported theneed for a highly capable ADF.Specifically, there was notablesupport for:

- the Army being able to sustaincombat operations in twoseparate locations;

- the Navy retaining a blue watercapability based on surfacecombatants and submarines;

- replacing and expanding thepatrol boat fleet;

- maintaining highly capablecombat aircraft;

- a capacity for long-range strikeoperations; and

- maintaining a capability edge inkey areas, including intelligence,surveillance and reconnaissancecapabilities.



swiftly and effectively to anycredible armed lodgment onAustralian territory and provideforces for more likely types ofoperations in our immediateneighbourhood. We have thereforedecided that it is no longer a priorityto provide the basis for the rapidexpansion of the Army to a sizerequired for majorcontinental-scaleoperations. Rather,we place emphasison providing aprofessional, well-trained, well-equipped forcethat is available foroperations at shortnotice, and onethat can besustained over extended periods.This type of force will have theflexibility to deal with operationsother than conventional war, andcontribute to coalitions.

8.11 In view of the issues raised inearlier chapters of this White Paper,the development of our land forcesneeds to reflect a new balancebetween the demands of operationson Australian territory and thedemands of deployments offshore,especially in our immediateneighbourhood. While still givingpriority to the defence of Australiain our overall strategic and forceplanning, the development of our

land forces will take fuller accountof the demands of possible short-notice operations in our immediateneighbourhood. For much of thelast two decades, land force planninghas been dominated by a focus onpreparations to meet lower levelcontingencies on Australian territory.That focus will now be broadened to

meet a wider rangeof possiblecontingencies, bothon Australianterritory and beyond.

8.12 We have,however, decidedagainst thedevelopment ofheavy armouredforces suitable for

contributions to coalition forces inhigh intensity conflicts. These forceswould be expensive, and are mostunlikely to be needed in defence ofAustralia or in our immediate region.But in accordance with the principleswe have set out, our land forces willhave the combat weight they need toachieve their missions withoutundue risk.

8.13 The Government has consideredthe implementation of these broadgoals under four headings: ReadyFrontline Forces; Sustainment andRotation; Combat Weight; andDeployment, Support and Command,Control, Communication andIntelligence (C3I).


Ready Frontline Forces8.14 The Government plans tostructure the Army to ensure that wewill be able to sustain a brigadedeployed on operations for extendedperiods, and at the same time maintainat least a battalion group available fordeployment elsewhere. To achieve this,the Government plans to retain on apermanent basis the increasednumbers of land force units that havebeen brought to high readiness overthe last two years. This is an expansionin the number ofinfantry battalions athigh readiness fromfour to six. Recentenhancements to theAir Force CombatSupport Groups fordeployed operationswill also bemaintained.

8.15 Under this plansix battalion groups, each of around1,000 personnel, will be held at nomore than 90 days notice to move, andmost at 30 days or less. They include aparachute battalion, two light infantryair-mobile battalions, a motorisedbattalion, a mechanised battalion, anda commando battalion. In addition, wewill maintain the current SASRegiment of around 700 personnel athigh readiness.

8.16 These forces will be organised inthree brigades and the SpecialOperations Group as at present. The

brigades, each of around 3,000personnel, will include, in addition tothe infantry battalions, a rangeof specialised combat units suchas armour, artillery, aviation,combat engineers, and logistics andsupport units.

8.17 The Third Brigade, based inTownsville, will continue to providelight, air-mobile forces available forimmediate deployment. The FirstBrigade, based in Darwin, will providelight mechanised and light armoured

forces to provideadded combat powerand weight for mored e m a n d i n gcontingencies. TheSeventh Brigade,based in Brisbane,will provide amotorised formationcomprised of bothfull-time and

Reserve units. It provides depth to theother two brigades by providing arange of highly mobile forces. Taskforces for particular contingencieswould be assembled from these readyforces to meet the specific needs ofeach operation.

8.18 The Special Operations Group,comprising the SAS Regiment, a highreadiness commando battalion and aReserve or part-time commandobattalion, supports a range of SpecialForces roles. In addition to providinglong-range reconnaissance capabilities,

Efforts should be made to improvecommunity awareness of theactivities of Coastwatch and theirlinkage with the Regional ForceSurveillance Units.



these units are capable of conductingstrike and water-borne operations. TheSAS Regiment will continue to providea counter-terrorist capability.

8.19 The Army will also continue toprovide three Regional ForceSurveillance Units.These units, basedin north WesternAustralia, theNorthern Territoryand far northQ u e e n s l a n d ,conduct ongoingreconnaissanceand surveillanceoperations insupport of then a t i o n a lsurveillance effort.

Sustainmentand Rotation8.20 TheGovernment haspaid specialattention to thecapacity of our land forces to sustainoperations once deployed. This hasbeen a significant weakness of ourland forces in thepast. The Government believes thatservice personnel should not berequired to serve on operationsfor longer than six to 12 monthsat a time, and that they should be givena substantial period of recuperationbefore being deployed again. As we

have seen in East Timor, that places realdemands on our personnel structures.

8.21 One of our three higher-readinessbrigades, the Seventh Brigade, inaddition to providing capabilities forimmediate deployment where

necessary, willprovide rotationforces andreplacements fordeployed forces.

8.22 In order tobetter train andprepare our forcesfor combat, theG o v e r n m e n tplans to invest in aCombat TrainingCentre to be basedin Townsville.This facility willensure thatour combat unitscan be trainedand tested to thehighest levels asquickly as

possible. On current planning, thiscentre would begin operating around2006.

8.23 The key to our sustainmentcapability in future will come from ourReserve forces. In line with the newemphasis on a small, high-readinessarmy ready for deployment, the role ofour Reserve forces will undergo a majortransition. In the past, Reserve forces


have been intended primarily toprovide a partially-trained basis toexpand the Army for major landoperations in some future crisis.

8.24 The Government believes thatthese roles do not meet Australia’sstrategic needs, and that they do nottake proper advantage of the skillsavailable in the Reserves. Therefore, asexplained in Chapter Seven it isplanned to reorientthem. Henceforththeir clear prioritywill be to providef u l l y - t r a i n e dpersonnel to ourready frontlineforces deployed onoperations. Thiswill greatly enhanceour capacity tosustain forces onoperations forextended periods.

8.25 This will also change the natureof Reserve service. In the past,Reservists had very little prospect ofbeing required to deploy on activeservice, though some volunteered to doso. But if the pattern of operations forour forces remains as busy in future asit has been over the past decade, manyReservists are likely to be called on.Reserve service will therefore be amore serious commitment than it hasbeen in the past, but also a morerewarding one.

8.26 Some important changes, alsooutlined in Chapter Seven, will need tobe made to legislation affectingReserve service and to theorganisation, training andadministration of Reserves to realisefully their new role.

Combat Weight8.27 The Government believes that our

land forces shouldhave sufficientf i r e p o w e r ,protection andmobility toprovide clearadvantage in anylikely operationsin defence ofAustralia or in ourimmediate region.It therefore aims tointroduce aprogram of rapidenhancement of a

range of combat capabilities for ourland forces. The key elements of thisprogram are as follows.

• Two squadrons (around 20-24aircraft) of Armed ReconnaissanceHelicopters planned to enter servicefrom 2004-05. These will constitutea major new capability for Army,providing deployable, flexible, high-precision, and highly mobilefirepower and reconnaissance.

• An additional squadron (about 12aircraft) of troop-lift helicopters to


provide extramobility for forceson operations. Inparticular, thesehelicopters willenhance ourcapability tooperate off ournewly acquiredtroop ships, HMASManoora and Kanimbla.These helicopters areplanned to enter servicearound 2007.

• Major upgrade of 350 of our M113Armoured Personnel Carrier fleet,with the upgraded vehicles plannedto enter service from around 2005.

• A new shoulder-fired guided weaponfor key elements of the force to attackarmoured vehicles, bunkers andbuildings. This weapon is planned toenter service around 2005.

• Improved body armour, weapons,night vision equipment andcommunications systems for allsoldiers in deployable land forces.New equipment should begin toenter service from around 2003.

• New air defence missile systems tosupplement the existing RBS-70 andreplace the existing Rapier systems,giving comprehensive ground-based air defence coverage todeployed forces. These systems areplanned to enter service fromaround 2005 and 2009 respectively.

• Twenty new 120mm mortar systemsmounted in light armoured vehicles

to improve mobilefirepower planned toenter service in 2006.

• A new thermalsurveillance system andtactical uninhabited aerialvehicle (UAV) to providesurveillance for deployedforces, planned to enterservice from around 2003and 2007 respectively.

8.28 In addition, sustainedinvestment will be made in

maintaining or enhancingcurrent land force capabilities such asour 105mm and 155mm field artillery.

8.29 Taken together with majorinvestments made in recent years,including the acquisition of additionallight armoured vehicles and Bushrangerinfantry mobility vehicles, these decisionsconstitute the most significantenhancements to Army’s combat power inmany years.

Deployment, Support and C3I8.30 The Government has paidattention to the lessons of theINTERFET operation, and has givenhigh priority to improving the ADF’scapacity to deploy forces on operationsand support them while deployed.

8.31 Australia’s amphibious liftcapability is being substantiallyincreased by the introduction intoservice of amphibious support ships,HMAS Manoora and Kanimbla, after the


lease of the catamaran HMAS Jervis Bayexpires. The Government has decidedto plan on replacement of the LandingShip HMAS Tobruk when it reaches theend of its service life in 2010, and toprogram the replacement of Manooraand Kanimbla in 2015. The result is thatAustralia’s recently expandedamphibious lift capability will beretained at its present level of threemajor ships. In addition, we plan toreplace the fleet of 15 medium landingcraft and six heavy landing craft, andstudy options to retain access to theunique capabilities of catamarans suchas Jervis Bay.

8.32 Our airlift capabilities will beenhanced by the acquisition of newaircraft to replace the Caribou from2010, and by the refurbishment of our12 C130H aircraft by about 2008. Weplan to undertake a major program toprovide better electronic warfare self-protection of our transport aircraftand helicopters from missiles byaround 2004.

8.33 We plan to increase the capacityto supply deployed forces by a series ofinvestments in logistics units andsystems. The Logistics Support Forcewill be enhanced by increasing thepreparedness of individual units - thiswill provide improved support todeployed forces and an enhancedability to rotate forces. We plan toenhance our specialist transport andpetroleum supply units, and invest innew water and fuel supply systems,including new desalination systems.

These enhancements are planned toenter service by 2005. Logisticscapacity will also be enhanced by anumber of important programsincluding a major replacementprogram for Army’s fleet of trucks,scheduled to start by 2008.

8.34 Medical services to deployedforces are planned to be improved byinvestment in enhanced deployablemedical facilities, planned to enterservice in 2006. Improved bridgingcapabilities will be provided for Army’sengineers, entering service in 2005.

8.35 We plan to undertake a majorprogram of investment in improvedintelligence support, communicationsand command systems specifically fordeployed forces over the next few years.

Costs8.36 Under the Defence CapabilityPlan, the Government anticipates thatspending on the maintenance ofcurrent land force capabilities willaverage around $5.9 billion per yearover the decade. The estimated capitalexpenditure needed for the capabilityenhancements outlined here will totalaround $3.9 billion over the decade.Additional personnel and operatingcosts amount to around $1.1 billionover the decade.

Air Combat8.37 Air combat is the most importantsingle capability for the defence ofAustralia, because control of the air


over our territory and maritimeapproaches is critical to all othertypes of operation in the defenceof Australia.

8.38 Australia’s air-combat capabilityis based on our fleet of 71 F/A-18aircraft with their sensor systemsand missiles, supported by othersystems including air-to-airrefuelling (AAR), and an integratedcommand and communicationssystem, including surveillanceand battlespace management systemsin the Air Defence GroundEnvironment. It relies heavily onintelligence and surveillance systemsthat are covered in the InformationCapability grouping.

Capability Goal8.39 The Government believes thatAustralia must have the ability toprotect itself from air attack, and controlour air approaches to ensure that we canoperate effectively against any hostileforces approaching Australia. TheGovernment’s aim is to maintain the air-combat capability at a level at leastcomparable qualitatively to any in theregion, and with a sufficient margin ofsuperiority to provide an acceptablelikelihood of success in combat. Theseforces should be large enough to providea high level of confidence that we coulddefeat any credible air attack onAustralia or in our approaches, andcapable enough to provide options todeploy an air-combat capability to

support a regional coalition. They willalso have the capacity to provide air-defence and support for deployedground and maritime forces in ourimmediate region.

Major Challenges

8.40 The ADF faces three majorchallenges in meeting this capabilitygoal over the next decade.

8.41 First, as described in ChapterThree, the air-combat capabilities of anumber of defence forces throughoutthe region have grown steadily inrecent years, and are expected tocontinue to do so. The effect of all thesechanges is that, increasingly over thecoming decade, the capabilities of ourF/A-18 aircraft will be outclassed by anumber of regional airforces. Thatmeans that our aircraft could bedetected and attacked before theycould respond. We thereforeneed to address this set of emergingdeficiencies in our basic air-combat capabilities.

8.42 Second, our AAR aircraft - fourBoeing 707 aircraft - are close to theend of their effective life. Over the nextfew years they will need to besubstantially refurbished or replaced ifwe are to retain an AAR capability.AAR is important to our air-combatforce because it extends the range andendurance of our fighters. This iscritical for covering our extended airapproaches, including offshore


territories such as the Christmas andCocos (Keeling) Islands, and forproviding air support to surface shipdeployments including amphibioustask forces and land forces deployed inour immediate neighbourhood. Wetherefore need to address the future ofour AAR capability.

8.43 Third, we needto address the futureof our air-combatcapability after theF/A-18 aircraftreach the end oftheir service lifebetween 2012 and2015. It is importantto start to addressthis issue now.

Key Decisions8.44 The Govern-ment’s currentplans involve fourmajor steps toaddress thesechallenges.

8.45 First, we plan to continue theupgrade program for the F/A-18aircraft. Significant phases are alreadyunder way, including the installationof a new and significantly improvedradar, and the acquisition of newadvanced air-to-air missiles.Additional phases have now beenscheduled to provide the fighter forcewith a range of upgrades. This

programme of upgrades is plannedto be completed by 2007 andincludes:

• advanced tactical data links toallow our aircraft to exchangecombat information instantlywith other units, allowing bettercooperative tactics;

• a new helmet-mounted missilecueing system toget the best out ofour new short-range air-to-airmissiles;

• structural improve-ments to extendthe life of theairframe andreduce its detect-ability by enemyradars; and

• some initialimprovements toelectronic warfareself-protection.

8.46 Second, wewill proceed now to

acquire four Airborne Early Warningand Control (AEW&C) aircraft, withthe possibility of acquiring a furtherthree aircraft later in the decade. TheAEW&C will make a majorcontribution to many aspects of aircombat capability, significantlymultiplying the combat power of theupgraded F/A-18 fleet. They willimprove command and control,improve capacity for air defence of


surface ships, and enhance our strikecapability. The aircraft are planned tostart entering service around 2006.

8.47 Third, we have scheduled a majorproject to replace and upgrade ourAAR capability. This project willacquire up to five new-generation AARaircraft, which would have thecapacity to refuel not only our F/A-18aircraft but also our F-111 andAEW&C aircraft over a wide area ofoperations. These aircraft will alsoprovide a substantial air cargocapability, and are planned to enterservice around 2006.

8.48 Fourth, the Government willexamine options for acquiring newcombat aircraft to follow the F/A-18,and potentially also the F-111.Provision has been made in theDefence Capability Plan for a project toacquire up to 100 new combat aircraftto replace both the F/A-18 and F-111fleets. Acquisition is planned to start in2006-07, with the first aircraftentering service in 2012. TheGovernment has specifically madefinancial provision to allowacquisition of high-performanceaircraft to provide the basis for themaintenance of Australia’s criticalair-combat edge well into thetwenty-first century. Much workremains to be done over the next fewyears to define and refine ourrequirements, and to establish theoptimum balance betweencapability and numbers. That time

will also allow better evaluation ofa number of competing aircrafttypes.

8.49 In addition to these major projects,the Government plans to continuesignificant investments in other keyelements of air-combat capability. Thisincludes the Air Defence GroundEnvironment, which integrates keyair defence assets including ground-based radar and command systems,and AEW&C aircraft and providesa comprehensive picture of activityin the area of operations tocommanders. The Government plansalso to continue to invest in trainingsystems, which will ensure that ourpersonnel retain the critical edgein skills.

Costs

8.50 Under the Defence CapabilityPlan, the Government anticipatesspending an average of $1.3 billion peryear on maintenance of current aircombat capability over the decade. Theestimated capital expenditure needed forthe capability enhancements outlinedabove totals around $5.3 billion over thedecade, and additional personnel andoperating costs amount to about $300million over the decade.

Maritime Forces8.51 Australia’s forces for maritimeoperations give us the ability to deny


an opponent the use of our maritimeapproaches, and allow us the freedomto operate at sea ourselves. In ourmaritime strategic environment, theability to operate freely in oursurrounding oceans, and to deny themto others, is criticalto the defence ofAustralia, and toour capacity toc o n t r i b u t eeffectively to thesecurity of ouri m m e d i a t en e i g h b o u rh o o d .Capable maritimeforces also provideimportant optionsfor contributing toregional coalitionsin support of ourwider strategicinterests andobjectives.

8.52 Australia’s maritime forcesconsist of our surface fleet - includingmajor combatants, helicopters andsupport ships; submarines; maritimepatrol aircraft; mine hunters; andpatrol boats. They also draw onthe capabilities of our F/A-18 andF-111 aircraft - which have a potentanti-shipping strike capacity - andon the intelligence and surveillancecapabilities falling under theInformation Capabilities grouping.They will also draw in the futureon our AEW&C aircraft forsurveillance.

Capability Goal8.53 The Government’s primary goalfor our maritime forces is to maintainan assured capability to detect andattack any major surface ships, and toimpose substantial constraints on

hostile submarineoperations, in ourextended maritimeapproaches. It alsointends tomaintain theability to supportAustralian forcesdeployed offshore,to contribute tomaritime securityin our wider region,to protectAustralian portsfrom sea mines, andto support civil lawenforcement andcoastal surveillanceoperations.

8.54 The Government’s aim istherefore to maintain, in addition toa highly capable air-based maritime-strike capability in the F/A-18 andF-111 fleets, a capable surface fleetable to operate in a wide range ofcircumstances throughout ourmaritime approaches and beyond.Our ships should be able to operateeffectively with those of the UnitedStates, and to contribute to regionalcoalition operations. Oursubmarines should be able to operateeffectively in high capability


operational environmentsin the Asia Pacific region.Our maritime patrolaircraft should have thecapacity to operatethroughout our region,with high-quality sensorsand weapons for attacks onsurface ships andsubmarines. Our patrolboats should be able tomake a cost-effective andsustained contribution to civilcoastal enforcement andsurveillance operations.

Major Issues

Surface Fleet8.55 By the end of next year, when thelast of the guided missile destroyers(DDGs) is decommissioned, Australia’ssurface fleet will consist of two classesof major warship. The first of those isthe six guided missile frigates (FFGs)that entered service between 1980 and1993. The second class is the ANZACships, two of which have now beendelivered, with another six scheduled toenter service by 2006. Three keyquestions about the future shape of thefleet have been considered in developingthe Defence Capability Plan.

8.56 The first is the adequacy of ships’defences against the more capable anti-ship missiles that are proliferating inour region. Without adequate defences,our ships would be limited in theirability to operate against capable

regional navies and withinrange of hostile air forces.A project now under waywill provide such defencesfor the FFGs, but theANZACs do not haveadequate defences andhave other significantdeficiencies in theircombat capabilities.

8.57 The second is therequirement for a long-

range air-defence capacity in the fleet.Without such capability, our shipswould be more vulnerable to air attack,less capable of defending forcesdeployed offshore and less capable ofcontributing effectively to coalitionnaval operations.

8.58 Third, we have considered thefuture provision of support ships,which can increase our maritimecapability by keeping ships at sealonger and at greater ranges from port.One of our support ships — HMASWestralia — pays off in 2009 and theother in 2015. Our 10 year plantherefore needs to address thereplacement of these ships.

8.59 In relation to these issues, theGovernment’s planning is as follows.First, the ANZAC ships are plannedto be upgraded to provide areasonable level of anti-ship missiledefences and other enhancements oftheir combat capabilities, includingthe fitting of Harpoon anti-shipmissiles. This project is scheduled to


start in 2001 with upgraded ships inservice by 2007.

8.60 Second, the FFGs are planned tobe replaced when they aredecommissioned from 2013 by a newclass of at least three air-defencecapable ships. It is expected thatthese ships will be significantlylarger and more capable than theFFGs. The project is scheduled tocommence in 2005-06. TheG o v e r n m e n t ’ sstrong preference isto build these shipsin Australia, whichwill providesignificant work forAustralia’s ship-building industry.

8.61 Third, theGovernment plansto replace HMASWestralia , whichis a convertedcommercial tanker,with a purpose-built support shipwhen it pays off in2009. We also planto replace oursecond supportship, HMAS Success, with another shipof the same class when it pays off in2015. The Government’s strongpreference is to build these ships inAustralia. The project to replace HMASWestralia is planned to start around2004-05.

8.62 Our Seahawk and Super Seaspritehelicopters provide an important andintegral part of the surface fleetsurveillance, anti-submarine and anti-surface warfare capabilities. TheGovernment plans a major mid-lifeupgrade of the Seahawk commencingaround 2003.

Submarines8.63 The Government plans to bring all

six Collins classsubmarines to ahigh level ofcapability by majorimprovements toboth the platformand combat systems.M o d i f i c a t i o n salready under wayto some boats haveresulted in majorimprovements inthe acousticperformance of theboats and in thereliability of anumber of the shipsystems. Interimmodifications tothe combat systemhave improved

performance. All boats will now bemodified for better acousticperformance and reliability and a newcombat system will be fitted, withwork starting next year. The first boatwith the new combat system isplanned to be available in 2005-06. A


program of ongoing upgrades will alsobe established.

8.64 In addition, a project is alsoscheduled to replace our currentheavyweight torpedo with a new andmore capable weapon beginning in2002-03. The first new torpedoes areplanned to enter servicearound 2006.

Maritime Patrol Aircraft8.65 Australia’s fleet of 19 P-3C Orionmaritime patrol aircraft areundergoing a major upgrade whichwill provide an excellent capabilityover coming years. Two additionalenhancements have been planned: thefitting of new electro-optical sensors toimprove capacity to detect ships underdifficult circumstances, startingaround 2004-05, and the acquisition ofa new lightweight torpedo to improvethe P-3C’s critical submarine-killingcapabilities, starting around 2002. Aremaining shortfall is self-protectionfor the aircraft from missiles if theywere to be deployed in medium orhigh threat environments.

8.66 The P-3Cs will reach the end oftheir current planned life in around2015. Unless new technology emergeswhich offers more cost-effective waysto perform the P-3C’s roles, theGovernment would intend to retainthe maritime patrol aircraft capabilitypast that date. The Defence CapabilityPlan therefore provides for a majorrefurbishment or replacement of the

P-3C fleet starting around 2007.

Patrol Boats8.67 The 15 Fremantle class PatrolBoats are close to the end of theirservice life. These boats make a criticalcontribution to coastal surveillanceand enforcement, and are accorded ahigh priority by the Government. Oncurrent planning a project will startnext year to provide a new class ofpatrol boat to replace the Fremantlesas they are decommissioned. The newboats will preferably be built inAustralia and are expected to enterservice from 2004-05.

Costs

8.68 Under the Defence CapabilityPlan the Government anticipatesspending an average of $3.5 billion peryear on maintenance of currentmaritime capability over the decade.The expected capital expenditureneeded for the capabilityenhancements outlined above totalsaround $1.8 billion over the decade,and additional personnel andoperating costs amount to about$300 million.

Strike8.69 The strike capability groupingcovers the forces that enable Australiato attack hostile forces in the territoryof an adversary, in forward operatingbases, and in transit to Australia. TheGovernment believes that this


capability is an important element ofAustralia’s military posture because itprovides us with the flexibility todestroy hostile forces before they arelaunched towards Australia and whenthey may be most vulnerable. Strikecapability allows Australia more scopeto determine the pace and location ofhostilities, and would impose majordefensive costs on an adversarycontemplating hostile action againstus. Strike forces can provide excellentsupport to Australian forces deployedabroad, and may also offer a valuableoption for contributing toregional coalitions.

8.70 Strike operations could beconducted by F/A-18s and potentiallyalso by P-3C aircraft, ships andsubmarines, if they were providedwith appropriate weapons. Specialforces can also perform strikeoperations. But Australia’s strikecapability consists primarily of ourfleet of F-111 long-range bombers.They are the focus of this section.

Capability Goal8.71 The Government’s aim in thedevelopment of our strike capability isto ensure that we have the capabilityto contribute to the defence ofAustralia by attacking military targetswithin a wide radius of Australia,against credible levels of air defences,at an acceptably low level of risk toaircraft and crew. We do not intend toseek a strike capability large enough to

conduct sustained attack on anadversary’s wider civil infrastructure;our capability would be focussed on anability to attack those militarilysignificant targets that might be usedto mount or support an attack onAustralia. We do, however, want tohave the capacity to mount sustainedstrike campaigns against a significantnumber of such targets. We also wantthe capacity to strike targets withsufficient accuracy to minimise risk ofcollateral damage.

8.72 The Government expects that thestrike capabilities developed for thedefence of Australia would provideoptions to contribute to regionalcoalitions against more capableadversaries at acceptable levels of riskto crew and aircraft.

Major Issues8.73 The Defence Capability Plan hasconsidered three key issues in relationto the future of our F-111 strikecapability.

8.74 First, the capacity of the F-111s toovercome improving air defences hasbeen enhanced recently byimprovements to their electronicwarfare self-protection (EWSP)systems, and by the acquisition of stand-off weapons which allow aircraft tolaunch attacks from outside the rangeof some air defence systems. But over thecoming decade further improvementswill be required in both areas. The


Government has therefore decided toundertake further EWSP upgrades andacquire additional types of stand-offweapons with longer range, and withdifferent guidance and targetingsystems to provide more alternativeattack options and better capabilityagainst hardenedand area targets.These projects areplanned to startaround 2004. Thefirst enhancementsfrom this programare expected toenter servicearound 2008-09.

8.75 Second, theG o v e r n m e n t ’ sdecisions to acquireAEW&C aircraftand enhance ourAAR capability,outlined in theparagraphs above on Air Combat, willalso substantially contribute to ourstrike capability. For the first time wewill be able to refuel our F-111s in the air,which will increase their range, payloadand tactical options. The expansion ofour AAR capability will also enhancethe capacity of the F/A-18s to undertakestrike missions at longer range, withgreater weapons loads. AEW&Caircraft will help the strike forcepenetrate air defences and avoid hostileforces. Inflight refuelling for ourAEW&C aircraft will increase theircapacity to support strike missions.

8.76 Third, the Government hasconsidered the future of ourstrike capability after the F-111leaves service, expected to bebetween 2015 and 2020. It isunlikely that there will be any

c o m p a r a b l especialised strikeaircraft suited toour needs avail-able at that time.A range ofalternatives may beavailable by then,including themuch greater use oflong-range missilesfired from largetransport aircraft,naval platforms, oreven unmannedcombat aerialv e h i c l e s .

Alternatively, the best option may bespecialised strike variants of air-combat aircraft. This would allow thereplacement of the F-111 by the sametype of aircraft as we buy to follow theF/A-18, which would result in largesavings in operating costs. TheGovernment does not believe it isappropriate to attempt to resolve thefuture of our strike capability any timesoon. However for planning purposesit has made provision for theacquisition of up to 25 aircraft of thesame type as the follow-on for theF/A-18, in addition to up to 75 new


aircraft programmed for the air-combat role.

Costs

8.77 Under the Defence CapabilityPlan, the Government anticipatesthat over the decade it will spend anaverage of $500 million per year onmaintenance of current strikecapability. The expected capitalexpenditure needed for thecapability enhancements totalsaround $800 million over the decade,with no additional personnel andoperating costs.

Information Capability8.78 Effective use of information is atthe heart of Australia’s defencecapability. In part this is a reflection ofa worldwide trend, as informationtechnology is transforming the ways inwhich armed forces operate at everylevel. All forms of capability are beingtransformed by the innovative use ofinformation technology. But this trendis more significant to Australia than tomany other countries. Our strategiccircumstances mean that innovativeapplications of different aspects ofinformation technology offer Australiaunique advantages.

8.79 Major advances in surveillancetechnology will allow us to detecthostile forces far from our shores witha speed and certainty that would have

been unthinkable even a few years ago.Faster secure communications anddata links between tactical units - forexample aircraft and ships - will allowthem to cooperate in combat withunprecedented speed and ease. Thiswill multiply their effectivenesssignificantly, allowing us to do morewith our relatively small forces. Andbetter management, logistics andcommand systems will improve ourability to apply our forces better tomaximum effect.

8.80 Moreover, the application andexploitation of informationtechnology is an area in whichAustralia has a significant nationaladvantage. Our workforce - includingboth ADF personnel and industry - arehighly educated and skilled in the useof information technology. We haveaccess to excellent software andintegration skills. So this is an aspectof military capability in which we canand should aim to make a difference.Together with our traditionalemphasis on high levels of trainingand expertise in our people, thisadvantage will constitute the‘knowledge edge’, which will be thefoundation of our military capabilityover the coming decades.

8.81 For this reason, the DefenceCapability Plan has focussed oninformation capabilities as a separatecapability grouping, to ensure thatthese developments receive the focusand priority they deserve.


8.82 This grouping covers intelligenceand surveillance capabilities,communications, information warfare,command and headquarters systems,and logistics and businessapplications. Many other aspects ofinformation capability are embeddedin the platforms and systems coveredby the other groupings.

Capability Goal8.83 The Government’s aims forInformation Capabilities are toposition the ADF to harness advancesin informationtechnology in waysthat ensure thatthe ADF hastimely, accurateand secureinformation toexploit fullyindividual andunit combatcapabilities, andallow theiremployment inmore flexible ways. Our specificobjectives include:

• maintaining first-rate intelligencecapabilities;

• developing a comprehensivesurveillance system providingcontinuous coverage of ourextended air and sea approaches;

• developing an integrated commandsystem covering operations at alllevels and in all environments;

• providing communicationcapabilities that can supportAustralian operations throughoutour territory and our immediateregion, with increased capacity tosupport a range of new informationsystems;

• maximising the efficiency andeffectiveness of our logistics systemsand management processes by cost-effective investment in informationtechnology applications; and

• ensuring these systems aremanaged effectively, secure against

i n f o r m a t i o nwarfare attack andable to achieve ahigh level ofinteroperabilitywith our allies andpartners.

Major IssuesIntelligence8.84 Goodintelligence will

remain critical to Australia’s strategicposture in a complex and fluidenvironment. We need to have thecapacity to monitor comprehensivelyseveral crises at the same time andprovide effective operational supportto deployed forces. New technologiesoffer new opportunities for collection,analysis and distribution ofintelligence. If effectively exploited,these can help provide a war-winningedge to forces in the field, as well as


give decision-makers at the strategiclevel a better understanding of thecomplex crises they need to manage.But new technologies also erode ourintelligence capabilities by making iteasier for intelligence targets to protectinformation. The Defence CapabilityPlan therefore incorporates substantialand sustained investment in enhancedintelligence capabilities, including:

• enhanced signals intelligence andimagery collection capabilities;

• enhanced geospatial informationsystems;

• improved intelligence processingand dissemination systems; and

• deeper levels of cooperation with theUnited States in some key systems.

Surveillance8.85 Technology developments areexpanding significantly the potentialfor sustained, 24-hour surveillance ofour northern approaches, particularlyby the Jindalee Operational RadarNetwork (JORN) and other systems.The Government plans to exploit thesedevelopments by undertaking asustained program of enhancement tothe JORN over the horizon radarsystem once it enters service in 2002.We also plan to improve our ability tofuse data from JORN and other sensorsystems to provide an integratednational surveillance picture.

Communications8.86 Sustained investment incommunications capability will be

necessary to support the application ofinformation technology innovations,especially for deployed forces. Keyenhancements planned include thefixed network within Australia, long-range communications to deployedforces, networked communicationssystems throughout an area ofoperations, tactical communications forcombat units, and improvedcommunications network managementsystems. Specific projects willinclude higher capacity satellitecommunications based on a commercialprovider, enhanced broadbandcommunications with ships at sea, andimproved battlespace communications forair and land force elements.

Command, Logistics andBusiness Systems8.87 Investment in systems to improvethe efficiency and effectiveness ofcommand and management functionsin the ADF is a high priority. Improvedcommand arrangements and systemsare essential to our ability to deployand operate effectively in complexenvironments at short notice. Betterlogistics and business systems willincrease combat power in the field andsave money. The key investmentsplanned over the coming decade arethe establishment of a single collocatedTheatre Headquarters, and thedevelopment of two deployableheadquarters to provide on the spotcommand for two deployed forcessimultaneously; a single integratedcommand support system linking all


Capability Capital Personnel and TotalGrouping Expenditure Operating Costs

Land Forces $3.9 billion $1.1 billion $5.0 billion

Air Combat $5.3 billion $0.3 billion $5.6 billion

Maritime Forces $1.8 billion $0.3 billion $2.1 billion

Strike $0.8 billion $0 billion $0.8 billion

Information Capability $1.9 billion $0.6 billion $2.5 billion

Total $13.7 billion $2.3 billion $16 billion

Capability EnhancementsSummary of Costs 2001-02 to 2010-11

ADF elements; and an integratedpersonnel, logistics and financialsystem based on e-business principles.

Costs8.88 Under the Defence CapabilityPlan the Government anticipates thatover the decade it will spend an

average of $1.3 billion per year onmaintenance of informationcapabilities. The expected capitalexpenditure needed for the capabilityenhancements totals around $1.9billion over the decade, and additionalpersonnel and operating costs amountto about $600 million.


9 – Industry

9.1 Australian industry is a vital component of Defencecapability, both through its direct contribution to thedevelopment and acquisition of new capabilities andthrough its role in the national support base. So a strongindustry base benefits Defence. We must take a strategicapproach to our defence industry base, and not regardits capabilities as simply a by-product of procurementdecisions. The Government recognises that it has animportant role to play in outlining clear long-termdirections for the development of the ADF to provide amore predictable and sustainable basis on whichindustry can plan.

The Role of Industry in our Defence9.2 Traditionally, the ADF has relied on industry for theprovision of military equipment, even though some of

this was provided by government-ownedfactories and dockyards in Australia. Withthe privatisation of government defenceindustries and the continuing outsourcingof defence support functions, thedependence on industry, and more generallythe private sector, has grown dramatically.Support for combat capabilities, such asmaintenance and repair of aircraft,increasingly resides in industry.

9.3 This trend of increasing reliance on industry willcontinue. Australia’s future defence capability willrequire access to advanced technology - for bothequipment and training. The development, provisionand support of that technology is largely the domainof industry, although the Defence Science andTechnology Organisation (DSTO) can also play a

There is strong public support for asound, competitive domesticindustrial base as a key element ofthe national defence effort.



significant role alongside industry,particularly in the early stages oftechnology development.

9.4 For all of these reasons, theGovernment’s defence industry policyproceeds from therecognition thatindustry, bothmanufacturing andservice, will continueto be an integral partof Australia’s defencecapability.

The Importance ofAustralian DefenceIndustryWhat We Need...9.5 The Government’s overall objectivefor Australian defence industry was setout in the 1998 publication entitledDefence And Industry - Strategic PolicyStatement. In summary, we want asustainable and competitive defenceindustry base, able to support atechnologically-advanced ADF. Thiscalls for efficient, innovative anddurable industries - and a closepartnership between Defence andthose industries.

9.6 Australia needs a specificallytargeted set of capacities in ournational industry and support base.With our national defence expenditureaccounting for only one per cent ofworld military expenditure, it isunrealistic to aspire to completeindustrial self-sufficiency. Nor is

complete self-sufficiency necessary,given our ability to access and acquiremany important technologiesfrom overseas.

9.7 Rather than self-sufficiency,Australia needssupport in-country forrepair, maintenance,modification andprovisioning -especially in wartimewhen the ADF wouldneed urgent andassured supply.

However, for provision of some high-cost items, such as guided weapons, itwill be more effective to stockpile keysupplies than to replicate foreignproduction facilities with high start upcosts and low production rates.Australian defence industry, possiblyworking in association with DSTO andother research and developmentagencies, also needs to have a capacityto develop new solutions for the ADF’scapabilities needs. This is particularlythe case in those niche areas where wehave needs unique to our environment- and when it is cost-effective for us toseek innovative solutions.

9.8 Within that framework, the areasthat attract the highest priority forsupport from Australian defenceindustry are:

• combat and systems software andsupport;

• data management and signalprocessing, including for informationgathering and surveillance;

Industry groups see themselves as afourth arm of defence capability.



• command, control andcommunications systems;

• systems integration;

• repair, maintenance and upgradesof major weapons and surveillanceplatforms; and

• provision of services to support thepeacetime and operationalrequirements of the ADF.

...And How to Achieve It9.9 To meet those needs, theGovernment’s approach will be astrategic one that seeks to capitalise onareas where Australia’s industry basedemonstrates particular strengths. Inthose areas, ourdefence industrypolicy willrecognise and fosterA u s t r a l i a ni n d u s t r y ’ sinnovative use ofa d v a n c e dtechnologies. Thisincludes buildingbetter linkagesbetween industry and DSTO tocapitalise on Australia’s strengths ininformation capabilities, as it isparticularly important that industryhas the ability to provide high qualitysupport in such areas as command andcontrol systems, electronic warfarecapabilities, surveillance and sensors.

9.10 There are a number of areas wherethe capacity for high technologysoftware support has been

successfully introduced intoAustralian industry via defenceprojects, such as those relating toupgrades and integration of systemson aircraft and command supportsystems. This provides Australia withthe opportunity to generate acapability edge through the innovativeuse of that technology.

9.11 Significant parts of the DefenceCapability Plan call for technologicallyinnovative solutions. The Governmentwill seek to capitalise on the potentialof Australian industry to offer suchsolutions by continuing to initiate andpursue high-technology projects. Wewill, however, give much greater

emphasis tomanaging riskeffectively in thoseprojects. Moreover,important parts ofour technologydevelopment effortwill remain basedon existing, proventechnology designs,as were the ANZAC

and Minehunter Coastal ships.

9.12 The Government will also seek tomake greater use of off-the-shelfpurchases, especially where theadditional capability from Australian-specific modifications does not justifythe increased cost and risk. However,total reliance on off-the-shelfpurchases is neither achievable nordesirable. It would risk our forceshaving inferior technology in key areas


such as combat systems, and place theADF at a serious disadvantage if localindustry were unable to repair ormodify critical equipment in wartime.

9.13 Defence industry will not flourishwithin the Australian defence marketalone, with its finite and uneven levelof demand. Rather, sales to Defenceshould be the basis for capturingbroader markets, here and overseas. Inshort, Australian defence industryneeds to be competitive on aninternational basis. Defence will assistthrough export facilitation - consistentwith Australia’s internationalobligations and foreign policy andstrategic interests - and willincreasingly look at the potential forinternational collaboration whenconsidering its own procurements.

9.14 Ultimately, however, the ability todevelop a prosperous and effectiveAustralian defence industry rests with industry itself. The Governmentwill shape the environment in whichindustry makes itsdecisions, but will notintervene and shapethe market throughsubsidies andp r e c o n c e i v e dsolutions. We will notlimit ourselves topurchases fromAustralian industry,nor pay an undulyhigh premiumfor them.

Our CurrentIndustrial Scene9.15 Industry undertakes a wide rangeof tasks for the ADF. It:

• repairs and maintains much of theADF’s equipment;

• fuels its aircraft, ships and vehicles;

• provides munitions;

• feeds, clothes, houses andaccommodates its people;

• transports those people and theirstores;

• fits and tests new weapons andsensors to ADF platforms;

• builds and adapts new weapons tosuit our unique needs; and

• helps to train the men andwomen serving in the Army, Navyand Air Force.

9.16 To undertake these tasks,Australia’s defence contractors have awide range of high level skills andcapabilities - from heavy engineeringto modern electronics and softwareengineering and provision of basic

services.

9.17 A combinationof governmentpolicy and marketpressures hasbrought significantimprovement in thecapability ofAustralian defenceindustry. In manyareas, it is nowhighly cost-

There is widespread concern aboutthe decline in Australia’smanufacturing capability, the de-skilling of Australia’s workforce,including the ADF, and aboutindustry’s capacity to support andsustain ADF deployments.



competitive. Major projects, when wellmanaged can introduce newtechnologies and skills in Australianindustry.

9.18 Australian industry generally nowhas the capacity to maintain all of theADF’s equipment, but sometimes witha high level of dependence on overseassupply of spare parts, specialisedmunitions and advice on technology.

9.19 Australia’s defence industry haslimitations indesign andm a n u fa c t u r i n gcapabilities. Manycompanies in mostdefence sectorsremain dependenton AustralianDefence orders, withi n f o r m a t i o ntechnology being anotable exception. Defence exports aresmall and diversification into civilmarkets has been patchy, with mostsuccess being in the aerospace sector.

9.20 The ability to develop newtechnology is strong in some specialistareas - such as underwater systems -but lacks a broad base. Much of theresearch and development base inAustralia resides in smallercompanies.

9.21 Industry consolidation hasoccurred, but not yet on the scales ofNorth America and Europe. Many ofthe Australian mergers and

acquisitions in the defence sector haveconsisted of larger companiesabsorbing smaller ones, rather than aconsolidation among the largercompanies themselves.

Strengthening OurDefence IndustryCapability9.22 The Government is committed tostrengthening the defence industry base

- without encouraginginefficiency ordependence. As set outin the Defence andIndustry - StrategicPolicy Statement theGovernment ispursuing six specificobjectives. They are to:

• integrate industryinto capability

development;

• enhance industry’s contribution tothe nation’s capability edge;

• reform procurement;

• establish new ways to involveAustralian industry in defencebusiness;

• increase Australian exports andmateriel cooperation; and

• commit to cultural change andimproved communication.

9.23 In 1998, as part of the defenceindustry policy statement, theGovernment announced 49initiatives. Nearly all of these

Defence industry is worried by theincreasing gap between statedpolicy toward industry and itspractice.



initiatives are now in place, but weneed to build on these steps. The focuswill be on providing better guidanceto industry, developing better businesspractices within Defence, andbuilding better relationships betweenDefence and industry.

Better Guidance9.24 A sustainable Australian defenceindustry needs a predictable basis onwhich to plan. Importantly, theprogram of capability enhancementsoutlined in ChapterEight provides thatsolid basis for long-term planning byAustralian industry.

9.25 Through theDefence CapabilityPlan, the Govern-ment has set outdevelopment pathsin each of the keycapability areas overthe next 20 years.This will improveDefence’s abilityto assess moresystematically and better manage theindustry capacity associated with eachmajor Defence capability area.

9.26 The Government wantsappropriate, strong Australianindustry involvement in pursuing theprogram of enhancements outlined inthis White Paper. There are significantopportunities for many industry

sectors in the program. They willengage the existing strengths ofAustralian industry and have thepotential to introduce new skills andcapacities. These include essentialsystems engineering and integrationskills in the modernisation of aircraft,ships and vehicles; the construction ofnew ships; the development ofAEW&C aircraft systems; and a rangeof communications, command andcontrol, and information systems.

9.27 The AEW&Cproject will use anddevelop keyindustry skills andnew capabilities insystems integrationand advancedelectronics. Thesenew skills will becritical to effectivesupport of the newaircraft over theirlife, and willcontribute to thec o n t i n u i n gdevelopment ofskills needed forother Defence

capabilities. These include the longerterm commitment to acquisition ofadvanced combat and strike aircraftand systems to replace F/A-18 and F-111 aircraft. In addition, the AEW&Cproject offers particular opportunitiesto access overseas markets andaugment skills and technologythrough international collaboration.

Defence industry wants to see astrong industry aspect in theforthcoming Defence PolicyStatement that includes a cleararticulation of the longer-termrequirements of both Governmentand industry.

Defence industry wantspredictability and direction to allowit to plan in a sustainable manner.



9.28 Australian shipbuilders now haveguidance on the Government’s navalshipbuilding program for a decade andbeyond. In particular, the Governmenthas foreshadowed a major surfacecombatant program to follow theANZAC project, which is nearingcompletion.

9.29 Until that newc o n s t r u c t i o nprogram gets underway, the upgrade ofthe ANZACfrigates, planned tostart in 2001 andfinish in 2007, willhelp navalshipbuilders retaintheir physicalinfrastructure and some of theirexisting workforce skills. Theconstruction of new patrol boats andtwo new support vessels providesopportunities for industry, althoughutilising different skills andinfrastructure from that required forlarge combatant vessels.

9.30 The Government is alsocommitted to developing andsustaining the engineering and designcapabilities needed to support the landforces. In particular, Australianindustry will have a high level ofparticipation in the upgrade of theM113 armoured vehicles, which willcomplement the program alreadyannounced for additional lightarmoured vehicles.

9.31 The information technology andelectronics sectors will also benefitfrom the Government’s program.Australian industry has built up asubstantial skill base in the highpriority areas of surveillance andreconnaissance, imagery, intelligencesystems, communications, commandand control, information management,

and informationsecurity systems.High prioritycapabilities nowbeing developedwithin industryinclude data fusionand electronicwarfare systems.The Government

is keen to maintain this skill-basethrough involving industry inthe range of new command,control communications,intelligence capabilities and similarsystems identified in the DefenceCapability Plan.

9.32 Developing a sustainable industrybase also means encouraging researchand development opportunities andexport activities. As part of our overallindustry and technology policy, theGovernment is finalising anInnovation Action Plan, which willoutline measures to foster new ideas,encourage commercialisation ofresearch into new technologies andsupport such research. Consistent withthis approach, future solicitations formajor defence projects will encourage


bidders to offer a broader range ofresearch and development and exportproposals as part of their AustralianIndustry Involvement program. Wewill look for industry proposals thatoffer gains to Defence and commercialbenefit to the company.

Better Business Practices —Defence Acquisition Reform

9.33 On coming to office theGovernment was concerned that theorganisation it inherited did not havesufficient flexibility, capacity and thenecessary governance arrangements toproperly manage complex Defenceprojects and maintain capability. TheGovernment has introduced a series ofchanges to address these problems -most recently and importantlythrough the establishment of a singlearea of accountability andmanagement headed by the UnderSecretary Defence Materiel. Thisamalgamation of the DefenceAcquisition Organisation and SupportCommand Australia to form a singleDefence Materiel Organisation willenable an effective whole-of-lifeapproach to be taken to defencemateriel and simplifies Defence’sinteraction with industry.

9.34 To be fully effective, the newDefence Materiel Organisation requiresorganisational and in some casescultural reorientation away fromCanberra towards its operating base inthe operational units. As part of this, the

Government will improve support of itsmateriel personnel through a range ofinitiatives including improvedconditions of service in keeping withchanged mobility requirements, astronger focus on selecting for anddeveloping individual competencies,and improved usage of militarypersonnel. Changes will go hand inhand with the clarification of personalresponsibilities and accountabilities.Such improvements will facilitate asmarter and more focused use ofexternal professionals and industry.Industry will also be engaged earlier,through simplified processes, which incombination with other measures willlead to reduction in unnecessaryindustry cost and improved projectturn-around times. There will also bemore effective use of past performanceevaluations for assessing contractorsand their proposals. Importantly, theMateriel organisation will adoptcommercial best practice as its normand assess its performance againstindustry benchmarks.

Better Relationships9.35 Difficulties in past Defence projectshave sometimes corresponded withpoor relationships between thecontractor and Defence. The need forbetter management of therelationships was identified in the 1998Strategic Policy Statement, and theGovernment is undertaking a range ofreforms in this area.


9.36 Part of the acquisition reformprogram in the new Defence MaterielOrganisation will involve earlier andmore frequent involvement ofindustry in development of projects,facilitated by better funding ofinvestigatory phases of projects.More informative briefings on a one-to-one basis will be used and costestimates will be made visible toindustry.

9.37 Partnering arrangements willbecome commonplace for significant

Defence procurements. Defence hasnow set up a unit tasked withpromoting and monitoring Defenceindustry relationships, and will issuean annual report card on its progresswith partnering to the Defence andIndustry Advisory Council.

9.38 Many of these initiatives arealready under way. By mid-2001,Defence will present animplementation report to the Defenceand Industry Advisory Council. Thisreport will be made public.


10 – Science andTechnology

10.1 An important part of maintaining our capabilityedge is to harness people and technology. This WhitePaper is being prepared at a time when technology ischanging rapidly and Australia must be in a positionto embrace and adapt to these changes. In some areas,improvements in technology are likely to affect militarycapabilities and operations significantly. For example,the vast and far-reaching changes in informationtechnology combined with innovative design ofplatforms may lead to ‘mission convergence’ - that is,complex systems that can undertake more than oneprimary mission.

10.2 On the other hand, we must be carefulnot to be oversold on technology change. Thecapabilities that are planned in the contextof this White Paper will be with us for a longtime, notwithstanding that they may beupgraded several times during their lifetime.As such, those capabilities will be a majorand enduring determinant of our futureforce structure.

10.3 This Chapter describes the key trendsin defence-related technologies and how theGovernment plans to exploit technologicalopportunities to enhance ADF capability.

Technology Trends and theRevolution in Military Affairs10.4 The Government has considered the trends indefence technology in developing the DefenceCapability Plan set out in this White Paper. We havebeen concerned to exploit the new opportunities in a

There was widespread agreementthat Australia should maintain theknowledge edge in intelligence,surveillance and reconnaissancecapabilities.



sensible and structured way. We haveattempted to identify those aspects oftechnological change that are mostlikely to affect major long-termcapabilities and thus whereinvestments will need to be made incoming years.

10.5 The most important developmentchanging the conduct of warfare is theability to increase vastly the speed andcapacity to collect, organise, store,process, tailor and distributeinformation. This development isdriven primarily by informationtechnologies to meet civil andcommercial needs.

10.6 The uptake of informationtechnology by the military, pioneeredin the United States, is having such aprofound effect thatit has led to what isgenerally known asthe Revolution inMilitary Affairs(RMA). TheG o v e r n m e n trecognised theo p p o r t u n i t i e spresented by theRMA and hasestablished an Officeof the Revolution inMilitary Affairs. Thisoffice is focussed onexploring opportunities anddeveloping our RMA partnershipswith other nations, particularly theUnited States. The Government alsosupported a research and development

program in RMA-related technologiesto ensure that Australia was preparedfor the adoption of new technologies asconcepts matured. This researchprogram will continue to be led byDSTO in collaboration withuniversities, other researchorganisations and industries.

10.7 Characteristics of the RMAinclude:

• integration of military forces forjoint operations;

• individual systems and capabilitiesnetworked together to achievewhole-of-force effects;

• technology changes and changes tomilitary operations and doctrine;

• increased tempo of operations; and

• asymmetric threats.

10.8 The RMA alsoplaces a highpremium on newpersonnel skills,training approachesand organisationalstructure.

10.9 RMAtechnologies impartthe ability to knowmore than one’sadversary inrelevant areas. This

can result in a decisive militaryadvantage when linked withappropriate weapons and concepts ofoperation. Indeed, this will mostprobably be one of the decisive factors

The recognition of the advantagesof the information age was echoedin a number of submissions, andwas characterised by theacknowledgment of the ‘Revolutionin Military Affairs’ and the need forAustralia to capitalise on theopportunities this presented.



in warfare over the coming decades. Asexplained in Chapter Eight, ourinformation capability is particularlysignificant in Australia’s strategiccircumstances. We must ensure thatwe have the skills and infrastructure toabsorb and adapt the technologiesinvolved to our needs. We haveprogrammed major investments inthis area, includingi m p o r t a n tc o o p e r a t i v eprograms with theUnited States. Thesecover not onlyi n f o r m a t i o ntechnology per se,but also incorporatethe emerging use ofs p a c e - b a s e dsystems. Theseinvestments will be supported byenhanced research and developmentprograms in DSTO where Australianresearch is an important component inour international cooperation.

Exploiting theOpportunitiesPrecision Effects

10.10 Information technology in themilitary domain is not limited tobattlespace situational awareness issues.It is also an important contributor toother significant trends in warfare -improved command systems, ‘just intime’ logistics and achieving precisioneffects at long range.

10 .11 In the latter case ,improvements in guidance andtargeting systems, enabled byinfor mation technology andelectronics generally, will becomplemented by improvementsin other areas of weaponstechnologies that will improverange and reduce collateral damage.As technology advances, weapons will

become moreadaptable andtailored throughincreased use ofsoftware-controlsystems. We mustensure that wehave the skills toexploit thisemerging abilityto tailor weapons

to our specific needs. At the sametime we need to maintain awarenessof emerging weapon concepts thathave the potential to have a majorimpact on the future battlespace.Leading edge research anddevelopment programs in DSTO,working closely with industry, willbe fundamental for building thesekey capabilities in Australia.

Platforms and Networks10.12 In platform technologies,information technology again has thepotential to change the way we fight.Current trends are not only to improvethe cooperation between all types ofplatforms through sensor and


networking developments but also,through automation and remotecontrol, to greatly decrease the numberof personnel needed to operate theplatform, thus reducing bothpersonnel-related costs and risks. Inaddition, platform effectiveness isfurther advanced by developments instealth technologies and self-protection systems - electronic andphysical - which are likely to improveperformance markedly againsttargeting missiles. Unmanned AerialVehicles and Unmanned CombatAerial Vehicles are emerging conceptsthat offer Australia a great deal ofpotential for surveillance,reconnaissance, information gatheringand eventually the delivery of combatpower. To this end, Australia willcontinue a cooperative project in amajor Unmanned Aerial Vehicleprogram with the United States.

10.13 Increased reliance on networks inmilitary operations requires strongassurance as to their availability andsecurity against potential adversaryactions (information operations).DSTO has established a research anddevelopment program in this area,which will be enhanced as Defencecapabilities are fielded and inresponse to increasing threats toDefence networks.

10.14 Although informationtechnology and electronics-relatedissues will be a major driver of thecapabilities of future platforms, thereare other important technology

developments that will greatlyinfluence how we acquire, generateand maintain our fleets. For example,electric propulsion for surfacewarships has the potential torevolutionise existing concepts for shipdesign by freeing up hull space,lowering purchase price, and reducingoperating and maintenance costs.DSTO has initiated a research program,with overseas cooperation, tounderstand how these technologiesmight change ship operations.

10.15 Advanced information andintegration technologies provide theability to upgrade combat capabilityrapidly. This is particularly the case forour aircraft and ships. Since we operatesome platforms that are unique toAustralia - such as the Collins classsubmarines and F-111 aircraft - weneed to have available the science andtechnology skills to support upgrades.DSTO, working closely with industryand overseas partners, has establisheda centre of expertise in combat systemsin support of the Collins. This centrewill be expanded to include othermaritime and air combat systems withan enhanced role for DSTO in supportof system upgrades.

10.16 This ability for rapid upgradeswill also drive a continued need tokeep the hull or airframe in service forlong periods. Australia has built up areputation as a world leader inextending the service life of aircraft.DSTO in collaboration with industryneeds to ensure that these skills are


maintained since some life extensionscan be very cost-effective and theexpertise is not available elsewhere. Ina more general sense, we need tomaintain basic skills across a widerange of technologies in order todeliver the in-service support andenhancement of the combatcapabilities outlined for developmentin this White Paper.

Human Dimensions10.17 Wherever technology developmentslead us, in the final analysis, peoplecarry out military tasks so it isimportant that we continue to attachtop priority to the human aspects oftechnology in warfare. Nowhere is thismore evident than in the landenvironment where the individual willcontinue to be the primary warfighting‘platform’. Developing technologies insuch areas as night vision, navigationand micro-vehicles will enable thesoldier to move faster and see further,conduct operations over 24 hours in allterrains and have vastly improvedfirepower at his or her fingertips. DSTOhas established a research programaimed at better understanding andsupporting individual and small groupsof soldiers which will be developedfurther as new technologies emerge.

10.18 In addition to the application ofscience and technology directly to ourcombat capabilities, the emerginginformation-based technologies havethe potential to change the way we

train for operations. Advances incomputer-based simulation canprovide cost-effective planning andtraining tools using virtual reality-based simulators.

Being a Skilled User ofTechnology10.19 Many, if not most, of the emergingtrends are underpinned by advances inelectronics, with informationtechnologies being the most pervasive.However, these will be complementedby new fields such as biological andnano-technologies, and improvementsin materials and structures. All of thesetechnologies will be closely watchedover the coming years. The primarychallenge is to select and acquireexpertise and capability in thosetechnologies that offer the mostadvantages in gaining andmaintaining the knowledge edge.

10.20 Most technologies will emergefrom the civil sector and the challengefor military communities will be toidentify the potential and then committhe time and resources to adapt theminto military tools and capabilities.Australia must have the capability todo this in selected niche areas.

10.21 The ability to identify effectivelyand incorporate those technologiesthat sustain the capability of the ADFwill be guided by simulation andmodelling, through both qualitativeand quantitative wargames. Defence


will evaluate its current warfareconcepts and seek to capitalise onopportunities and prevent or dominatepotential threats to our security.

10.22 A natural outcome of rapidlyemerging technology and itsincreasing uptake by Defence is aneed to understand how best to useit in theenvironmentswhere we mightoperate. Forinstance, mostmissiles aredesigned tooperate in thecool northernhemisphere - fardifferent fromour hot humidtropics. We canexpect scienceand technologyto be ofi n c r e a s i n gimportance tothe ADF as wemove to thefuture.

DSTO - ItsRole10.23 To succeed in this dynamicenvironment Defence, andparticularly DSTO, must remainattuned to trends and be agile inresponding to them. This means thatDSTO must be a highly focussed and

expert science and technologyorganisation that can interpret militaryneeds. It must be able to assess overseastrends, develop new technologies whereappropriate, and build strong linkageswith industry to ensure that, whereappropriate, new technologies areexploited to our advantage.

10.24 Besidesthis, DSTO willplay its part inmeeting theGovernment’sreform agendafor Defence and- consistentwith theGovernment’sfo r t h c o m i n gI n n o v a t i o nAction Plan - forinnovation inthe widerresearch andd evel o p m e n tc o m m u n i t yand industry.DSTO is puttingin placeimproved andmore trans-parent account-

ability arrangements that will allowincreased visibility and responsivenessof its program of work to governmentand to its stakeholders.

10.25 As well, DSTO will undertake afundamental review of its program ofwork and its structures to ensure that


it is poised to take best advantage of theemerging RMA, information and otherhigh technologies. However, it willneed to retain its more traditional butvital science and technology expertisein areas such as aircraft and shipstructures.

10.26 DSTO has a role to play insupporting and upgrading, throughlife, those platforms unique toAustralia. It must continue and widenits liaison with industry anduniversities to provide the nationalsupport infrastructure for suchplatforms and elsewhere whereappropriate. Improved linkages withindustry will be important intransferring knowledge and fosteringinnovation, particularly in small tomedium enterprises.


Section Five | Funding


11 – Defence Funding

11.1 To fund the program of development for Australia’sarmed forces that is set out in the Defence CapabilityPlan, the Government estimates that defence spendingwill need to grow by an average of about three per centper annum in real terms over the next decade. (Realspending is measured by reference to the GDP deflator.)The Government is committed to meeting this fundingrequirement, and it has directed Defence to plan withinthat budget. The Government intends that funding for2001-02 and 2002-03 will increase by $500 million and$1,000 million respectively, to provide substantial initialfunding for a number of key initiatives. Extra fundingwill be additional to the supplementation, ranging from$415 to $444 million per annum, that the Governmenthas already provided to generate the extra forces forAustralia’s involvement in INTERFET and UNTAET. In

later years, funding increases may fall belowthree per cent, depending on budgetary anddefence requirements in a given year.

11.2 Over the last decade defence fundingremained relatively constant in real terms.The proposed level of growth constitutes asubstantial increase in defence spending. Bythe end of the decade, defence spending incash terms will stand at approximately $16billion per year in today’s dollars, comparedwith $12.2 billion this year. In all, defencespending over the decade is expected toincrease by a total of $23.5 billion in realterms, compared to total defence spendinghad the defence budget been held flat in realterms over the decade. While the majorityof this additional funding will pay for theenhancements outlined in Chapter Eight,

The public supports an increase indefence funding.


We gained a strong sense that...themajority of the public viewedincreased investment in ourmilitary capabilities as a prudentinsurance measure...There was avery strong consensus that this is notime for complacency aboutAustralia’s national defence effort.



$7.5 billion of thisfunding has beenallocated to maintainexisting capabilities.

11.3 A long-termgrowth rate of threeper cent per annumis slightly below theaverage annualgrowth rate ofAustralia’s economyover the last twodecades. If oureconomy grows onaverage as fast overthe next decade as it has over the lasttwo decades, then the Government’sdefence funding projections will meanthat in 2010 we will be spending aboutthe same proportion of GDP ondefence as we are today. That remains1.9 per cent. We believe this level offunding is justified within our overallnational priorities and will ensurethat we can achieve the strategicobjectives we have identified.

A New Approach toDefence Funding11.4 The defence spending figuresprovided in this White Paper are themost specific long-term defencefunding projections provided by anyAustralian government in more than25 years.

11.5 The Government has taken theimportant step of providing this

guidance for Defencebecause it recognisesthe difficulty ofplanning andbudgeting for thedevelopment ofdefence capabilitieswithout a clearunderstanding offunding levels adecade ahead, andeven beyond. Forexample, ourdecisions about thefuture compositionof the Navy’s surface

fleet need to take account of the costsof building new ships throughout thisdecade and into the next.

11.6 The Government’s new approachto capability planning and defencefunding will provide an improvedbasis for accountability by Defence togovernment and the public for theefficient and effective use of defencefunds. The Government hasintroduced a defence planning andbudgeting process, built around a new,annual Defence Financial andManagement Plan. The first of thesewill be produced this year as part of the2001-02 budget cycle.

11.7 In this new process, Defence willmove to output-based budgetingarrangements within the constraintsof the 10 year overall budget.

11.8 Each year as part of the budgetprocess, Defence will present in the

A recurring theme during DCTmeetings was the fact that Defencemust focus on spending which iscost-effective in the long-term, notjust on short-term costs.


The public expects greaterdiscipline in defence expenditure.



Defence Financial and ManagementPlan an annual program which willdetail those projects, measures andactivities required to implement theDefence Capability Plan in that year. Itwill also present and explain anyrevisions of the Defence CapabilityPlan that may be necessary.

11.9 A key element of that process willbe the setting of annual targets for thedelivery of capability that Defence willbe held accountable for meeting.Government will also consider forapproval all major capabilitydevelopment proposals. This includesthe details of each new majorinvestment project, and significantchanges to force structure andpreparedness levels.

11.10 Other improvements in financialand budgetary management inDefence have also been implemented,

including the refinement of businessstructures to separate outputmanagement from enabling and ownersupport streams; the appointment of aChief Finance Officer to improveorganisational and financialaccountability and performanceinformation; and the establishment of aDefence Improvement Committee,chaired by the Minister for Defence, tooversee continuous improvements at alllevels of Defence in management andaccountability.

Why Do We Need toSpend More?11.11 Four key cost pressures haveaffected the defence budget in recentyears and have resulted in the need toplan on a sustained increase in defencefunding. These are personnelcosts, operating costs, investment in


new capability and increasedreadiness costs.

Personnel Costs11.12 Defence per capita personnel costshave risen by an average of 4.9 per centper annum over the last decade. Thatis faster than the increase in averagepersonnel costs in the community as awhole. That margin can be attributedto the significant rise in average skilllevels in both the ADF and Defence’scivilian workforce, as the size of thatworkforce has fallen sharply. Over thepast fifteen years, the number ofpermanent uniformed personnel hasfallen by 27 per cent from 70,000 to51,000, and numbers of civilianemployees have fallen by 60 per centfrom 40,000 to 16,000.

11.13 These decreases reflectsubstantial efficiency gains through acombination of commercialisation,outsourcing and increasing labourproductivity, which have beenimportant factors in limiting defencecost increases. The Government willcontinue to look for furtheropportunities to increase labourproductivity within Defence, whilebeing mindful of the constraintsassociated with our required forcestructure and associated preparednesslevels. In recognition of thoseconstraints, the Government hasfactored into the projected defencefunding increases provided for in thisWhite Paper an allowance for 2 percent per annum growth in Defence’s

real per-capita personnel costs. Inaddition, separate provisions havebeen made for the additional personnelcosts associated with specificcapability enhancements.

Operating Costs11.14 Operating cost pressures haveincreased in recent years. Over thecoming decade it is expected that thesepressures can be offset by furtherefficiencies, and by capital investmentin new and refurbished systems withlower operating costs. The fundingprojections are therefore based on anestimate that operating costs will notgrow in real terms over the decade,except for the additional operatingcosts of new enhanced capability,which are specifically provided for.

Investment in Capability11.15 The third key factor driving theneed for defence funding increases isthe need to undertake substantialinvestment in new capabilities and tomaintain existing capabilities over thenext decade. These pressures have beenamplified especially by the need tomake provision for the replacement ofthe F/A-18 fleet. Although the F/A-18will still be in service for another 15years, significant funding for itsreplacement will need to be providedfrom about 2007.

Increased Readiness11.16 Defence funding has beenpressured by the need to increasesignificantly the readiness of many


elements of the ADF over recent years.As we have explained in earlier chapters,the past decade has seen a steadilyaccelerating increase in the demands onthe ADF for the conduct of active andoften highly demanding operations. Forthe past four years theADF has beencontinually deployedin significantnumbers tooperations withinour own immediateneighbourhood, aswell as to a range ofsmaller operationsfurther afield. Thedefence budget is nor-mally supplementedfor the specificadditional costs ofundertaking eachoperation, as it isdifficult to budget inadvance for thei n h e r e n t l yu n p r e d i c t a b l eoccurrence of suchcosts. But theincreased costs ofmaintaining forces athigher levels of readiness for suchoperations is reflected in the defencebudget, and imposes significantpressures on it. The Government hasconcluded that it is important tomaintain the current higher levels ofreadiness over coming years, withassociated costs to the defence budget.

Future Reform andEfficiency Savings11.17 Defence has undertaken majorreforms over the past decade, and hasproduced efficiency savings of the orderof $30 million in 1991-92 to more than

$1200 million in 2000-01. Further efficiencymeasures are underway, which areexpected to deliveradditional savings ofat least $200 millionper year by 2003-04.These savings havebeen included in thefunding projectionsin this White Paper.

11.18 The Govern-ment’s decision toproject sustainedincreases in defencefunding over thecoming decade doesnot indicate that webelieve there are nofurther efficiencysavings to beachieved in Defence.On the contrary,

there are clearly important areas inwhich substantial efficiency savingscan be made. The Government iscommitted to pursuing these savingsvigorously in areas includingproperty disposal, greater use ofcontracting-out, improved ITmanagement and reduced personnel

Increased expenditure on defencewas not just viewed as aninvestment in weapons systems, butalso as an investment in the futureof Australia. The ADF had a socialcontract with Australian society inthat it provided job security,training and direction for the youthof Australia.


Apart from business groups, manypeople considered that theoutsourcing of support functionshad been taken too far and wasimpacting negatively on theoperational capabilities of theDefence Force.



Defence Funding - Total Estimated Cost by Five Broad Capability Groups

0

2

4

6

8

10

12

14

16

18

$Bn

Capability Groupings

Land ForcesAir CombatMaritime ForcesStrikeInformation Capability

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

1

1 In constant 2000-01 prices.

overheads. Any further savingsachieved and that the Governmentdecides will be retained in Defence, willbe offset from the projected fundingguidance for Defence.

11.19 The Government placesparticular priority on ensuring thatsavings measures do not adverselyaffect the fundamentals of theprofession of arms, or the ADF’s abilityto respond effectively to the uniquedemands of military operations. Reform

measures that are entirely appropriatein the civilian sector, including incivilian areas of Defence, may be lessappropriate in the military context. Weare very conscious of the unique natureof military service, and of the need toensure that reform measures do notdetract from it. At the same time theGovernment is strongly committed tocontinuing improvement and the needto ensure that money spent on defenceis managed wisely.

AUSTRALIA’S DEFENCE POLICY

Australian War Memorial images

Pages 3 and 23ART22494 - Private A.E. (‘Curley’) IrwinDrawing by Ivor Hele, 1943 - coloured crayons andcharcoal on brown paper

Page 5ART21055 - Compass platform, HMAS HobartDrawing by Norton, Frank, 1941 - carbon pencilheightened with white crayon

Page 9ART21930 - Pilot Sergeant, Port PirieDrawing by Ivor Hele, 1942 - pen and ink with wash

Page 16ART40626 - Diggers embarking on ChinookhelicopterDrawing by Ken McFadyen, 1967-1968 - charcoal

Page 21ART22739 - Barge landing, Oro Bay, New GuineaPainting by Roy Hodgkinson, 1942 - black andsanguine crayon with coloured washes

defence 2000 our future defence force

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