^[1]

A Pentagon rubric promises, ‘Show me your budget and I’ll describe your strategy.’ It mirrors the dictum Arthur Tange made famous in Canberra, ‘Until you’re talking dollars, you’re not talking strategy’. US Vice President Joe Biden has a version used by his Dad ^[2]: ‘Don’t tell me what you value. Show me your budget, and I’ll tell you what you value.’ (A point made on The Strategist by Henry Ergas in an earlier post ^[3].) Or we can reduce it to basics, as taught by that famous philosopher Jerry Maguire: ‘Show me the money ^[4]!’

Jerry, Tange, Biden and the Pentagon all agree on a hard truth: sometimes promises and policy are no more than gossamer of aspiration, ambition and posturing; to find the reality, see where the money is walking. The ‘dollar test’ is useful in measuring the distance between declared policy and real policy. Applying it to Canberra, what do the budgets say about the real strategy being followed in foreign affairs, national security and defence?

First, consider the long-term and debilitating budget decline of the Department of Foreign Affairs and Trade. DFAT has been doing more with less for so long that bureaucratic starvation has become the default diet in the Casey Building. The Parliament’s Joint Foreign Affairs Committee has just identified ^[5] what it calls ‘chronic underfunding of DFAT over the last three decades.’

DFAT’s chronic state was even more obvious over the 9/11 decade because of the big increase in the dollars being fed into the aid budget as well as the hyper-expansion of the national security agencies. DFAT is in the strange position of overseeing an AusAID which is now several multiples richer than the parent department.

What’s the strategy to be discerned from budget malnourishment for traditional diplomacy while pumping extra billions into aid and the realms of intelligence and spookdom? It’s certainly not a case of following global fashion. Lots of people are lavishing cash on their diplomats, from ever greater great power China to ambitious coming power Brazil to a small revisionist Pacific power like Fiji. From these very different perspectives, each sees a need for lots more diplomatic muscle.

The strategy to be deduced from Australia’s diplomatic budget is that of a content, even complacent status quo country which thinks the existing system is working well. To put an optimistic or ideological tinge on the judgement, it’s the budget of a happy middle power with a strong liberal internationalist bias. The content liberal internationalist interpretation fits with the big increase in international aid and the relatively small splash of cash for the successful bid to win a seat on the UN Security Council. The same tone was central to the future sketched by the Asian Century White Paper ^[6], which takes the view that all’s for the best in the best of all possible regions. We’re all going to trade our way to a glorious future.

The big boost in spending on intelligence and national security can be partly shoe-horned into this interpretation with the argument that in the 9/11 decade Australia’s fear was all about the threat from nonstate actors and radical individuals, rather than potentially hostile states. That’s why the combined budget of the six agencies in the intelligence community went from $325 million in 2000 to $1,070 million by 2010.

The blossoming of the spook budget ^[7] was all about confronting those outside the system. Such an interpretation works better for the 9/11 decade than the era we’re now in. Threat perceptions and priorities are changing rapidly because of the cyber domain and the need for good old fashioned counter espionage work of all types directed at a country with a name that starts with ‘C’ and ends with ‘a’ (and isn’t Cuba).

What do the Tange Test or the Maguire Maxim reveal when applied to Australia’s diving defence budget? The budget test reveals a stark divide between real strategy and declared strategy. On getting out of wars, governments always want peace dividends and the Gillard Government has pre-emptively cashed in. The Defence White Paper being lashed together in the first half of the year has the job of bringing the reality and the rhetoric closer.

One way this might be done is to inject a bit of liberal internationalist optimism. In preparing the Asian Century White Paper, Ken Henry talked about the strategic issues posed by China ^[8] with that majestic insouciance economists often display when moving from the infernal complexities of geoeconomics to the broad upper plains of geopolitics:

A lot of people have observed that Asia’s growth means that, for the first time, Australia is facing a future in which our largest trading partner is not a partner in a close alliance friendship, or even the partner of a close ally. I don’t know that that matters much, but it’s a development that is worth thinking about.

This doesn’t-matter-much perspective will stake a claim in the preparation of the Defence White Paper. The fight over China in the 2009 White Paper was won by the dragon slayers. This time, the panda huggers start on the high ground at Russell if budget and strategy are to be brought into line.

Canberra won’t have to worry too much about asking itself the hard questions in confronting this rebalancing—our major ally will be only too happy to do it for us. The US will be probing to find the real strategy revealed by the Oz defence budget. The Pentagon rubric at the head of this article is quoted from a Foreign Affairs article by Shawn Brimley and Ely Ratner ^[9] on the pivot to Asia as a signature piece of Obama’s foreign policy. In terms that would have come naturally to Arthur Tange, the article argues that the US rebalancing has to be about much more than grand strategy and geopolitical machinations—the critical bits will be budgets, bureaucratic institutions, and personnel decisions:

As it dedicates more of its resources to Asia, the United States should also ask its allies and partners in the region to shoulder additional responsibilities. Asia is now home to a number of wealthy and capable countries, many of which have recently gone from receiving international aid to giving it. Washington should insist that the militaries of countries such as Australia, Japan, Singapore, South Korea, and Thailand contribute to regional security at levels commensurate with their capabilities.

Contribute commensurate with capabilities? Now there’s the basis for a deeply interesting discussion between Washington and Canberra about what the Australian budget reveals about our true strategy. And the US might just detect a certain amount of what the international relations literature (not to mention ASPI’s own Mark Thomson ^[10]) refers to as ‘free riding’.

For the sharpest of descriptions of that judgement, we should turn to the Australian whose powerful pen makes him our most widely read strategist. John Birmingham ^[11] did time as a lowly research grunt in the Defence Department in Canberra but his stature as a strategist stems from his two fictional series, Axis of Time ^[12] and Without Warning ^[13]. His interpretation of what our spending says about our strategy is that the Gillard Government sees the arrival of the US Marines in northern Australia as the perfect excuse to gut our military preparedness. Take it away ^[14], Mr Birmingham:

In classical power realist terms, Australia secured for itself a considerable benefit by convincing its ally to base the better part of a Marine Expeditionary Unit here. It then did that ally a grave disservice by cutting from its budget the money it would have spent to achieve the same benefit on its own. It’s freeloading in American parlance, bludging in ours, and it’s a disgrace.

You can dress up policy lots of different ways. Budgets, though, do have a way of speaking for themselves.

Graeme Dobell is the ASPI journalism fellow.