Advisers battle over defence spending

The Federal government’s advisers are deeply divided over the future course of defence spending in Australia.

Lieutentant General Peter Leahy, who retired as head of the army last week, is far from alone, in the services, in pressing for the acquistiion of more high tech, high cost  e quipment.

He sees that as nessary, in view of Australia’s heavy defence commitments overseas, both now and in the future.

However, Treasury economists are warning that Australia’s ability to pay for that equipment still “underpins” future acquisition programs.

Leahy warned, in a weekend interview, that further unrest lies ahead in what he called  these “fractured and troubled” times.

He said that if unrest continued, Australia might well need a bigger – and better equipped – army.

At present, Australian forces in Afghanistan, regularly used Dutch helicopters and Dutch artillery, Leahy said.

Australia would have to think very seriously about providing its own fire support, if those facilities should be withdrawn.

The Treasury economists published their conclusions, in the latest issue of their publication Economic Roundup, which was released yesterday.

Their paper proposed alternative methods of projecting likely defence spending, into the future.

It said these approaches “provide some different ways of thinking about future defence spending trends.”

The economists admitted that defence spending has, actually, been declining, when measured as a proportion of Australia’s growth national product.

But they also said that had only happened because Australia’s economic growth rates had been higher than growth in defence spending.

They warned, too, that defence spending must always be balanced against “fiscal constraints.”