Paul Dibb is Emeritus Professor at the School of International, Political and Strategic Studies, ANU. This two-part article is a longer version of a piece published in The Australian on 27 July.

The drafters of the Defence White Paper 2013 face two options: attempt to rework the 2009 Defence White Paper while accepting its key policy and force structure judgments, focusing on fixing the resourcing issues that have arisen; or they can acknowledge that the 2009 Paper was far too ambitious and has lost all credibility. 

The former involves facing up to financial shortfalls, now exceeding $25 billion, and would probably result in a large number of major projects being pushed back, probably well beyond 2020. The latter would involve refocusing Australia's post-Afghanistan defence policy on its own region of primary strategic concern. The 2009 Paper's preoccupation with major conflict and its lack of focus on everything short of this would require heavy redrafting.

We don't know if the Minister for Defence believes the first alternative will work. However, in the current economic climate, money is going to continue to be very tight and, indeed, Defence may face further budget cuts. If financial cuts do continue, Defence probably needs to plan for a smaller Australian Defence Force than now.

In two parts, I will look at the alternatives in more detail.

Option 1: Defence White Paper 2009 mark II

This would be the easiest but most disastrous outcome. Given the massive cuts and deferrals since the 2009 White Paper, it's difficult to see how reprogramming the now devastated Defence Capability Plan could produce anything like a credible result.

Not only would major force structure elements, such as the Next Generation Submarines and the Joint Strike Fighter, have to be shifted well beyond 2020 but the ADF would face a major problem of keeping a seriously ageing legacy force in operation. The Collins class submarines are already costing close to $700 million a year to maintain and it is hardly credible that they could last for another 20 years without major costly upgrades.

Moreover, there must be questions surrounding the maintenance and fatigue life of the remaining 'classic' F/A-18 Hornets fighter jets. Such concerns could undoubtedly be applied to other ageing ADF equipment, if their life-of-type is to be seriously extended because of budgetary reasons.

In other words, a 2009 Defence White Paper Mark II that refuses to face up to the horrendous budget challenges and simply pushes everything to the right will end up with an ageing and very costly defence force that will be difficult to maintain and keep operational. It would also mean that the defence policy priority of keeping a clear margin of technological superiority in our region would be seriously undermined.

All this needs to happen in a resource constrained environment. The defence budget is in real difficulty now and, given falling government revenues, it may well be some years before substantial increases can occur. The new White Paper, if it is to be at all credible, must be centred on much more affordable and realistic financial guidance than the 2009 Defence White Paper.

This makes it all the more imperative that the 2013 Defence White Paper be based on a more realistic future force structure and on revised plans for the size of the ADF.

There seems to be an unrealistic expectation that, just because defence spending as a proportion of GDP has fallen to its lowest level since 1938, at 1.56% of GDP, some magic new number should fix the situation. However, those who are calling for defence spending to rise to 2% of GDP need to argue where the additional $7 billion a year is going to come from. Is it from health or education?

Moreover, there is no sign that the Opposition, if it comes to power, is going to propose any radical departure from a tight defence budget in the foreseeable future. The weasel words used by the Opposition are that it will restore defence funding to 3% real growth 'as soon as we can afford it'. So, let's not pretend that there is going to be a rapid return to lavish defence budgets any time soon. Some hard decisions are going to have to be made. In many ways the best way to do that will be to start again with a fresh approach. That's the subject of the next post.

 Photo Australian Defence Force Image Library.