Counterintuitive at first glance, investing in military infrastructure can promote both peace and economic prosperity for Australia and our region. Alison Howe explores the basics.

Image: EdNurg (Adobestock)

So, Australia will spend up to $368 billion by 2055 to build a new fleet of eight nuclear-propelled submarines. To those of us juggling the spiralling cost of living, escalating cost of debt, and no end in sight to the pain, this might seem an announcement so out of place and time it leaves us reeling. Already the Greens have stated:

“We hold grave concerns that this procurement, and the trilateral AUKUS agreement facilitating it, will undermine peace, stability and safety in the Indo-Pacific region and indeed globally.”

Many citizens would agree that the sub-narrative of a geopolitical threat is an unwelcome stressor at a time when many families are facing a day-to-day economic struggle at home. You don’t have to be a pacifist to object to, at scale, defence spending. But here’s the twist; although counterintuitive at first glance, investing in military infrastructure can promote both peace and economic prosperity for Australia and our region.

According to a report by the Stockholm International Peace Research Institute (SIPRI, 2021), there is a pacifist argument to be made that investing in military infrastructure can help to prevent conflict and promote global stability.

This argument is grounded in the belief that a strong military can act as a deterrent to potential aggressors, making them think twice before taking hostile actions. As the Australian Department of Defence notes in its 2021-22 Defence Budget Brief, "a credible military capability can contribute to deterrence and reduce the likelihood of conflict by signalling Australia's preparedness to defend itself and its interests" (Australian Department of Defence, 2021).

Moreover, investing in military infrastructure can have significant economic benefits. As the Lowy Institute notes in its report on the Australian defence industry, defence spending can create jobs and support the growth of local businesses, as well as promote economic growth and stability (Lowy Institute, 2019). The announced investment in locally manufactured submarines is set to have a positive growth and stability outcome.

Australia's sovereign naval shipbuilding industry requires an enhanced workforce with advanced skills and knowledge, as well as the adoption of new manufacturing techniques and processes. Whilst the broader manufacturing sector also plays a disproportionate strategic importance to Australia's economy. According to a report by the Australian Industry Group, manufacturing is the most important source of innovation in the economy, using more technology, robotics, and advanced knowledge than any other sector (Australian Industry Group, 2019). This makes it a critical driver of economic growth and job creation. According to the Australian Bureau of Statistics the manufacturing sector spent $4.7 billion on research and development in 2019-20, the second biggest business expenditure on R&D (BERD) by sector in the economy during that period.

Investing in the manufacturing sector, particularly in naval shipbuilding with the specialist skills required, can accelerate the development of advanced skills and innovation needed to maintain Australia's competitive edge in the global economy. This can position Australia as a leader in the global manufacturing industry, with potential benefits for the economy and national security, particularly given growing and emerging competition in the sector. Additionally, such investment can create high-skill jobs, drive economic growth, and support critical technology development with cross-sectoral applications, ultimately strengthening Australia's position as a key player in the global economy.

For those citizens confronted by the idea of the AUKUS investment, it’s appropriate to remember that Australia is not alone in seeking a defence capability uplift. Japan, with its stance on ‘pro-active pacifism and international cooperation’, has boosted its defence spending with a %GDP target set to double. Even with this spending increase, Japan retains its commitment to ‘strictly defensive national defence’.

Australia, like Japan, must now find the funding for its ambitions. The Green’s statement talks of other priorities, those at the forefront of the minds of many struggling citizens. The challenge for the Australian government is how to convert the AUKUS promise of enhanced regional stability and prosperity into tangible outcomes, without adding to the pain of the day.

Alison Howe

Co-Founder and Interim Chief Executive Officer

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