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Last week’s National Security Strategy ^[2] has attracted a mixed reaction, with many commentators focussing (rightly) on the vagueness of the document and the lack of any concrete spending commitments.

But the PM’s speech ^[3] on launching the paper was rather more concrete. In particular, she emphasised three big changes in Australia’s strategic environment: a swing back to focusing on states rather than non-state actors, on our region rather than the world, and on diplomacy over other alternatives.

I think she’s right on each of these. The tensions between China and Japan over the Senkaku Islands, and between China and almost everyone in the South China Sea, are good examples. Both are all about states, all about our region (and particularly maritime sea lanes and freedom of passage, perhaps the most crucial security issue for Australia) and (hopefully) both can be resolved diplomatically. If not, we’re in trouble.

This also suggests to me that it will be the intelligence agencies, which have grown hugely in the post-9/11 era, that will bear the brunt of any funding cuts this time around. The ramp-up in spending in intelligence over the past decade has been very much driven by the ‘war on terror’. But the PM was unequivocal in declaring the war won: ‘Osama Bin Laden is dead. Al Qaeda’s senior leadership is fractured. Jemaah Islamiah has been decimated in our region’.

The other major beneficiary of the loose funding of the past decade, AusAID, could also get a haircut. Given that its now $5 billion annual budget has come largely at the expense of defence and foreign affairs, a serious look at the opportunity costs and national interests inherent in Australia’s emergence as a major aid donor is well overdue. If Australia’s sea-lanes of trade and communication are threatened, it won’t be the aid industry that comes to the rescue.

Ultimately, a swing back to a more realist rather than liberal strategy for Australia is overdue. But hard power requires hard decisions on spending. As they say in the Pentagon, ‘show me your budget and I’ll show you our strategy’.

On this point, the PM’s speech did include one ludicrous clanger—a claim, since amended on the official draft, that Australia is the world’s second largest defence spender per capita. According to 2012 SIPRI figures ^[4], we are not even in the top 10 on this measure, falling behind the US, Israel, Singapore and even Norway, amongst others.

Benjamin Reilly is professor of political science at the Crawford School of Public Policy, Australian National University. Image courtesy of Flickr user backpackphotography ^[5].