Defence !

One of the biggest items of expenditure in the national budget is what we spend under the title of " Defence ".  Broadly speaking, that is the money we spend on the army, the navy and the air force in both salaries and the purchasing of the expensive equipment they need to be ready to resist invasion if we are ever attacked.

We are termed a " middling world power " which means we need to have the support of a super power to ensure our safety.  In the distant past we looked to Britain in that role during the years of the British Empire, but that changed to America during the second world war.  Our relation with America has been cordial and we have sheltered under that country's nuclear umbrella and not developed our own nuclear weapons.

America is fast retreating from world military dominance and China is the new rising world power.  These countries clash on economic policy and China's  virtual annexation of the South China sea makes a military clash almost inevitable. If and when that happens we will be judged on which side we support.

The safest option would be Australian neutrality, but that is unlikely to be a choice available to us.  Both China and America are important trade customers underpinning the Australian economy and we will have to make a choice. That choice will be critical to our place in the rest of the world.

It is interesting to compare our position with that of New Zealand.  Our neighbour recently reached the conclusion that maintaining a credible defence force was beyond the financial capacity of its small population.  It virtually abolished its air force, stopped its navy updating its fleet and reduced the army to a strength only capable of undertaking its United Nations obligations.   In essence, New Zealand became an undefended nation.

The Kiwi's do have a valid point.  To try and defend a country with an inferior defence establishment is to  ensure a humiliating defeat with heavy loss of life.  New Zealand relies on the goodwill of the world and its economy is relieved of the onerous defence burden.

That is not an option that would be considered in this country.  Australia has long remained the dominant military power in the lower South Pacific and has the strength to resist invasion from any of its near neighbours.  Our population growth ensures an adequate defence budget to meet those needs.  There is no discernible threat to Australia at present on our defence horizon.

What is important is that we accurately evaluate emerging trends.  It seems that NATO is losing cohesion and a new alliance in possible in Europe.  India - with its huge population - is fast emerging as a new power in Asia and America is an enigma as its internal politics evolve in new directions. Despite the Communist party's relentless hold on power in China there are signs of popular unrest in that country as a vast middle class emerges. The power of the Communist party seems absolute, but that may be more illusion than reality.  The regime may pay a heavy price for opening its doors and letting its citizens travel the world.

This is a time we need to read the tea leaves and discern the future - and how we place our bets will determine how we stand in a changing world. The chess board of power is ever in play and the outcome is not obvious.  A skilful diplomatic corps  goes hand in hand with a contemporary defence establishment  !