AUSTRALIA'S DEFENSE WHITE PAPER UPDATE

S E C R E T CANBERRA 001172


NOFORN
SIPDIS

STATE FOR PM AND EAP
PACOM ALSO FOR POLAD

E.O. 12958: DECL: 11/18/2028
TAGS: MARR MOPS PREL AS
SUBJECT: AUSTRALIA'S DEFENSE WHITE PAPER UPDATE

REF: CANBERRA 1027

Classified By: Deputy Chief of Mission Daniel A. Clune. Reasons: 1.4 (a
)(b)(c)

SUMMARY
--------------

1. (S/NF) Defence Minister Joel Fitzgibbon has directed that
Australia's Defense White Paper be completed no later than
April 2009, despite internal pressures to delay its release
owing to the global financial crisis, according to the senior
Department of Defence official heading the White Paper team.
While there were no major surprises, he disclosed that the
White Paper argues for Australia to maintain its previous
level of engagement with the U.S. missile defense (MD)
program, while seeking to enhance MD collaboration through
its Aegis weapons system. On force structure, the Australian
Army would not undergo radical restructuring, but would need
to increase the capacity of regular forces to take on more of
the tasks previously assigned to special forces, freeing up
the latter to undertake more difficult missions. End summary.


2. (C) At a November 18 lunch hosted by the DCM, Deputy
Secretary of Defence for Strategy Michael Pezzullo and the
three-member White Paper Ministerial Advisory Panel --
Professor Ross Babbage, Major General Peter Abigail (ret'd)
and Dr. Mark Thomson -- provided an overview of the White
Paper's development that closely tracked with that provided
in the October 9 U.S.-Australia Pol-Mil Talks (reftel). The
DCM queried Pezzullo on timing of the report's release, in
light of press accounts that Defence Minister Fitzgibbon had
convened a seven-hour meeting of senior defense officials and
the Ministerial Advisory Panel on November 14 to address ADOD
concerns that more time was needed to assess the impact of
the global financial crisis on the White Paper's cost
figures. Pezzullo said the Minister had directed that the
paper be completed as originally scheduled in the March-April
timeframe, expressing confidence that the paper would be
delivered by the deadline. The March-April timing was driven
primarily by the GOA budget cycle, he added. Unlike previous
white papers, he said, the current product was fully costed,
to include not only the cost of the defense items themselves,
but costs for personnel, training, maintenance, warehousing
and all other associated costs. Pezzullo and Abigail noted
that the White Paper would not recommend against any major
weapons system because of cost considerations.


3. (S/NF) Pezzullo confirmed that the White Paper contained
sections on space and missile defense. On the latter, the
White Paper recommended continuing engagement with the U.S.
MD program, at least at the level maintained during the
former Howard administration. Moreover, Australia would seek
to employ its Aegis weapons system, selected for the Air
Warfare Destroyer (AWD) to further its MD collaboration with
the United States. Pezzullo noted that ministers understood
the importance and benefits of MD cooperation but the
Australian Labor Party had outdated perceptions of missile
defense dating from the Reagan "star wars" concept that
impeded the GOA's ability to move forward at a faster pace.
A "redline" for the Labor Party and the Rudd government would
be the development of the capacity to eliminate Russian or
Chinese "second strike" capability.


4. (S/NF) Deputy Secretary Pezzullo, noting China had
Q4. (S/NF) Deputy Secretary Pezzullo, noting China had
expressed its displeasure with Prime Minister Rudd's
September 9 speech on Australia's long-term defense,
predicted Beijing would be "very unhappy" with the White
Paper's identification of China's military modernization as a
potential threat and with its endorsement of MD cooperation
with the United States. He added that Russian diplomats had
approached him on different occasions during the Howard
administration to bluntly complain that U.S. plans to deploy
MD in Europe were aimed against Russia. He responded that he
accepted the U.S. explanation, but even if the accusation was
true, Russia should be talking directly to the United States,
rather than trying to "peel off" Australia.


5. (C/NF) Dr. Thomson gave an overview of China's military
modernization, arguing that it sought to develop the
capability not only to have its way with Taiwan, while
blocking a U.S. response, but also to assert its hegemony
over the region. The annual U.S. DOD Report to Congress on
China's Military Modernization failed to make this point
clearly and strongly enough, he observed. In Thomson's view,
"transparency" is not the issue. China's intentions are
transparent, but problematic.


6. (C) Turning to force structure, Maj. Gen. Abigail said the
recommendations for the Australian Army were neither to lean
toward heavy mechanization nor to move towards a more special
forces-type army. Instead, the report called for a package
of changes, including additional light armor, but increasing
the capability of regular ground forces to assume more
traditional roles that had been assigned to special forces by
risk-averse Australian politicians in recent years. This
would free up special forces to perform more difficult, risky
missions.

MCCALLUM