Defence Strategic Update and Force Structure Review: the highlights and lowlights

Updated July 11 at 12:21pm

Defence funding this week has been coming thick and fast with first a dedicated cyber announcement around the Australian Signals Directorate (ASD) and then the Defence Strategic Update and Force Structure Review released the following day.

Plus a new cyber statement will be released later this year, according to Minister for Defence Senator Linda Reynolds who confirmed the timeline at an ASPI speech yesterday.

It is welcome to see the official viewpoint that Australia does not have a 10-year strategic warning window, that climate change is a factor in Defence planning and that the Update is thinking about the replacement for capabilities and platforms not yet even in service themselves.

The Update and FSR are strong and pragmatic policy documents underpinned by a considerable amount of thought and modelling from the department and government.

What is most surprising about these series of documents is the funding profile given the Australian economy going through a COVID-19 recession; the ambitious funding profile set forth in the 2016 White Paper looks like it will actually come to fruition (see graph below).

Also of note is the fact that Defence funding has been decoupled from GDP measures (the two per cent mark we’ve been aiming towards will be effectively smashed by the updated figures), an excellent choice given the ever changing nature of the GDP pie.

The headline figure of $270 billion across the coming decade, up from the 2016 White Paper number of $195 billion, is not to be sneezed at. The big winners are maritime and cyber/information, with the other domains of air, land and space also faring well.

The minister also confirmed in her ASPI speech that while humanitarian aid and disaster relief (HADR) missions are important for both Australia and the region, they are not core business for Defence. It must also be noted at this point that many of the new capabilities in the FSR are aimed at these types of missions. More on this in future articles.

The focus on emerging technologies and long-range strike for all three services is what analysts have been calling on government to lean towards is finally coming. Air Force will be the first cab off the rank with LRASMs from the US Navy which will be in service in 2023 with training to begin next year, Minister Reynolds said.

Shown in the graphic below, there is a good split between what each of the funding areas will look.

Upon further interrogation of the new documents, it blends together the old and new programs with little regard for program numbers or names, the mainstay of Defence accountability and tracking for many. This makes it hard to track how programs or projects are progressing within the Integrated Investment Plan (IIP) framework.

When directly questioned at the afore mentioned ASPI event about the prospects of the IIP being updated publicly, the Minister for Defence did not give a concrete yes or no.

“I’m not sure how much more transparent we can be than these two documents,” Minister Reynolds replied in response to ADM’s question. “I think you’ve got more information and certainty in terms of the numbers.

“As I’ve said, this is a journey. Yes, we are looking at ways that we can deliver more information out there. I think we’ve got a great start in those two documents.”

I have been asking this question at every opportunity since the release of the 2016 White Paper and IIP as the plan was to update the public version every six months in line with the internal update schedule.

In over four years since its release, the public IIP has not been updated once. Not once. The internal document has gone through at least half a dozen major iterations if not more over that period.

Since I’m a hoarder, I still have all my old Defence Capability Plans on hand. I have a favourite even: 2012. There are some programs where it is more useful than its current cousin.

The bands appearing in both the IIP, and now FSR, are not entirely helpful; $2-3 billion across a decade for a program is great but what is the scope? The requirement? The schedule? Where does it rest in CAS, DST, E&I Groups or service framework? Let me trawl the wonders of AusTender, environmental working groups, and tap on my network of people who talk to other people to find out what’s really happening.

Industry is the only Fundamental Input Capability in Defence that is not controlled by either the APS or uniformed personnel in a meaningful way. And yet there still seems to be an expectation that Defence Industry can be turned on and off like a tap by parts of the government and Defence.

There is no single point of truth when it comes to these metrics. Companies, usually primes, that are in constant contact with the program offices and service headquarters are able to get ahead of the game when it comes to when RFIs, tenders and the above-mentioned program variables. Imagine you’re an SME that does not have access to the Canberra bubble and the difficulties they face in identifying future work.