America Pivots, Australia Cuts Defense Budget

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Australia, more than most, loves to have its tummy tickled by the Americans and will go to extravagant lengths to secure this. The Gillard government has virtually begged the Americans not to utter any public criticism of its defence budget cuts. Broadly, the Americans are complying.

But privately they are extremely disappointed and concerned at the Australian action, the infinitely fatuous denials of Defence Minister Stephen Smith notwithstanding.

The proposals for 2500 US marines to rotate on annual six-month deployments through northern Australia, for increased US access to Australian northern air bases and eventually to naval bases, especially HMAS Stirling in Western Australia, were all US proposals. They were not Australian ideas. Canberra had a vague idea the Americans might make more use of our military facilities for decades, but the moves announced last year by President Barack Obama all came from Washington, from 2010 onwards.

The overwhelming context of these moves is China's massive military expansion.

Within the Australian government, the strongest advocate for accepting the US ideas was Kevin Rudd, then foreign minister. The most nervous and hesitant figure was Smith. There was considerable bureaucratic resistance, especially within the Prime Minister's and foreign affairs departments. Although Gillard herself came on board fairly early, insiders believe it would never have happened without Rudd.

Since Rudd left the government the momentum has stalled. The first rotation of marines numbered a paltry 250. The air and naval base issues are off in the never-never. This weird delay gives the impression of a patient reluctantly building up its chemotherapy dose.

The Americans would like to do more with Australia, but the government is too timid. The Obama administration was deeply shocked that after the marine announcement, which involves an enhanced US commitment to Australian security, the government then slashed the Australian defence budget by a staggering 10 per cent in one year.

Anyone familiar with the US-Australia relationship knows the Americans are appalled by this.

One of Smith's least attractive features as a politician is his determination never to acknowledge difficult or unpleasant facts that contradict his fantasy narratives about the US, Afghanistan, his own relations with senior defence figures and other subjects. He is convinced that simply repeating, word processor like, the studied tediousness of his prepared cliches is a better approach than dealing with difficult facts.

This week he has energetically denied any US concern over our defence budget. Americans at many levels have voiced grave worries about our defence budget. Admiral Samuel Locklear, the US Pacific commander, in June expressed concern about the defence spend and hoped Canberra had "a long-term view" of military spending. In July, in an exclusive interview with me, former US deputy secretary of state Rich Armitage, honoured by the Gillard government with an Order of Australia, warned Canberra not to use the US "pivot" to Asia as an excuse for "a free ride" on US defence efforts. Smith airily dismissed this gravely serious intervention because Armitage is a Republican and not in government. But as anyone with the remotest knowledge of these things understands, Armitage remains an intimate member of the US national security establishment and was voicing its consensus view.

Then this week in an interview with the Fairfax Press's Peter Hartcher, Kurt Campbell, the Assistant Secretary of State for East Asian and Pacific Affairs, was quoted confirming his concern over the Australian defence budget and saying it would be discussed at AUSMIN. Smith went into meltdown at this intrusion of reality. Whether under pressure from Canberra, or independently, Campbell since then has been telling everyone that Hartcher's interview misrepresented what he said.

It's difficult to imagine Campbell retreating so comprehensively from something he said on the record. So there is a mystery. Let me offer an adjudication. Whatever Campbell said to Hartcher, he is certainly of the view that the Australian defence cuts are a grave mistake with serious implications for the US. In saying this I am not breaking any off-the-record undertakings. Campbell has said to a number of people, to whom I have spoken, that Australia is making a big mistake in cutting its defence budget so savagely, that other key defence budgets in the Asia-Pacific are rising (especially China's) and that Australia could afford a responsible defence budget if it wanted.

In 1998, when Australia's defence budget was a significantly larger share of its gross national product than now, I interviewed then defence secretary William Cohen. (The deputy assistant secretary of defence at the time was the same Campbell). Cohen told me the US was concerned Australia was not spending enough on defence to be credible.

This did not cause the Howard government a nervous breakdown, nor to furiously lobby the Clinton administration, begging it not to speak frankly to Australian journalists. Instead it began increasing the defence budget.

We have an impoverished national debate on security because of the Gillard government's desperate spin compulsions.

Why are the Americans still so considerate of this government's feelings that they say so little publicly about our defence budget? They don't want to be seen interfering in our politics. The Gillard government also promises them the defence cuts are a one year aberration and the budget will be restored in time.

The government also makes a range of payments on the alliance account. It will keep our tiny military presence in Afghanistan until the bitter end. This is marginal, but useful to the Americans. And while it won't fund defence, it also won't cut the foreign aid budget, so it will use hundreds of millions of dollars of the aid budget to indirectly fund the alliance by promising aid to Afghanistan after the US withdrawal.

The US alliance is overwhelmingly in Australia's national interests. But the politics surrounding it are needlessly untransparent and should not be an excuse for abandoning our own defence effort.

Greg Sheridan is the Foreign Editor of the Australian.
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