Leveraging defence investment for nation-building

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By Gill Savage and John Coyne

Nations aren’t built in silos. Nation-building, especially in Australia’s north, requires vision, leadership, cooperation and courage in spades.

The Department of Defence is a significant economic player in northern Australia, and its investments have intrinsic value to the whole nation. Capitalising on Defence ventures is therefore crucial to successful nation-building, particularly in this region. Doing so, however, will require a change in the way defence industries are scaled.

After years of denial, policymakers are coming to grips with the challenges of achieving scalable and sustainable infrastructure investment. Defence planners, understanding that the warning time for a potential major conflict has shortened, know these investments are needed to mitigate vulnerabilities in global supply chains.

But our understanding of how to deliver infrastructure outcomes that respond to a more diverse range of needs is flawed. A more comprehensive view of the community benefit derived from national security and defence investment is required.

Much to the displeasure of a defence organisation focused on warfighting, the public, policymakers and the government are increasingly viewing it as a source for public good. While Defence has sought to position itself at the centre of government, the cost of doing so is increasing demands to perform non-traditional roles.

These demands hit a watershed moment during last year’s bushfire season when around 6,500 defence personnel provided support to emergency services across the country. Over the past several months, more than 3,200 Defence personnel have supported the government’s response to Covid-19.

The community is greatly comforted by the now-familiar sight of defence personnel supporting civil society by making face masks, assisting at state borders and facilitating traveller movements through our airports. But there is a more enduring role for Defence in the economy of Australian communities.

The global pandemic has revealed the fragility of supply chains, highlighting the impacts of fuel security on food security and essential services. The 2020 defence strategic updateamplified this point further.  The bushfires and Covid-19 have exposed painful lessons about the interconnectedness and vulnerabilities of supply chains, including the implications for sovereignty.

It has been clear for a long time that Australia needs a more holistic, joined-up view of nation-building that recognises the role of defence investment. But despite this being the mantra of the last few decades, there’s been little progress on this approach.

Defence necessarily prioritises investments that support its own contingency planning. But it should consider where it sits relative to the supply chain needs of others in the community. This shouldn’t be a matter of prioritising Defence’s direct warfighting interests above others, or the interests of others above Defence.

As we approach the end of 2020, we have a heightened focus on nation-building as a means of accelerating the recovery from the economic effects of the pandemic. In today’s context, nation-building appears to mean fast-tracking infrastructure projects by ‘streamlining approvals, underwriting projects or the establishment of a special purpose vehicle with a capped Government contribution’.

But nation-building is about more than building roads. It’s about improving our economic, social and environmental outcomes through strategic investment. This requires taking a broad, holistic view to not only identify the opportunities but make the connections. For example, to contribute fully to local regions, Defence must address procurement barriers for local small and medium-sized businesses and empower local commanders to engage more meaningfully with regional councils.

In this environment, more transparency is needed on the lines of policy responsibility for national security investments in resilience and infrastructure. Defence should be a collaborative partner in these investments, which will drive whole-of-government economic benefits, including more significant economies of scale and cost-sharing both within and across portfolios.

Defence needs to think bigger, not smaller, and leverage the investment of others in Australia’s northern region in line with the emphasis on capability development in the 2020 update.

A more integrated focus on nation-building and enhancing national resilience would enable Australia to better leverage the combined infrastructure and capability investments of governments and the private sector.

In the past, long lead times meant that Defence could rely on market forces to build its infrastructure, but that is no longer the case. This is why an integrated approach with governments and the private sector is urgently needed. A further challenge for Defence is that its increased capital commitments for infrastructure spending are reducing its operational resources. At the same time, demand for operational facilities is rising.

As part of this effort, leveraging the full suite of Defence’s northern Australia investments is essential. As is ensuring the benefits arising from Defence capabilities in the northern region integrate with the private sector and community outcomes. Bringing forward $190 million of investment in approved infrastructure projects in the Northern Territory is a good start.

However, leveraging investment to deliver national solutions that respond to multiple challenges is more important than local economic sugar hits. This was the case before the Covid-19 pandemic and is now more critical than ever.

Our Covid-19 experiences and responses have demonstrated that market forces alone aren’t enough. We need to shift from reactive responses to pre-emptive solutions and preventive strategies. The pandemic has also shown that the public sector, industry and the community can resolve national challenges most effectively when they work closely together.

We need solutions that foster cross-sector, cross-government, multidisciplinary approaches that position us for an uncertain future of rolling and concurrent crises.

Of course, Defence cannot be the sole funder or the lead developer—a whole-of-region approach is needed. But it can drive the scalability of regional industry by improving alignment with regional infrastructure investment and engaging in longer-term planning in Australia’s north.

First published by the Australian Strategic Policy Institute https://www.aspistrategist.org.au

Gill Savage is deputy director of the professional development program and John Coyne is head of the North and Australia’s Security program and the Strategic Policing and Law Enforcement program at ASPI.

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