The recent publication of the Defence White paper, with its
announcement of an extra $20 billion to be spent on the military over the next
fifteen years, has not raised a huge amount of controversy. With the exception
of a small number of critical commentators, the reception of this massive
funding increase has been on the whole fairly positive. None of the major
political parties have come out against the major thrust of the paper. Phil
Goff, the Labour Defence spokesman, has criticised the paper for its lack of specifics, but clearly supports the idea that our military forces need much
more money. Ron Mark from New Zealand First complains that $20 billion is not
enough, and worries about the military effectiveness of the spending decisions
to be made. No one questions the received wisdom: New Zealand spends a pittance
on its military forces, they are well over due for some extra funding.
The statistic that gets trotted out repeatedly is the
(supposed) fact that New Zealand spends just 1% of its GDP on defence. Compared
to other countries this is very small. Our nearest neighbour and ally Australia
spends closer to 2%, the United States spends around 3.5%. As an ally and
trading partner, New Zealand should ‘pull its weight’ and share a proportional
military burden. Putting to one side the important and controversial question
of whether New Zealand should ally itself with these or other much bigger
international players, is it true that we spend just 1% of our GDP on
defence? Is this the most appropriate
way to measure our military spending?
The claim is almost true for the past decade. Following an
international trend beginning at the end of the cold war, New Zealand decreased its military spending over the course of the 1990s. Whereas the United States
drastically increased its military spending in the wake of 9/11, New Zealand’s
spending (as a % of GDP) decreased gradually to a level of around 1.1 – 1.3% of
GDP, where it has floated steadily since around 2005. Two points need to be made
about this statistic. First, it doesn’t mean that New Zealand has been spending
roughly the same amount of money each year on defence. As the economy grows,
even tiny looking percentages grow proportionally. In 2012 for example, New
Zealand spent 1.2% of its GDP on defence, just under $2.586 billion dollars. In
2015 it spent the same 1.2%, which was then worth $2.956 billion. That’s an
increase of $370 million. Inflation accounts for some of this, but we are
looking at huge increases over and above basic inflation rates year by year
nevertheless. Secondly, tiny looking increases in percentage figures are huge
when they are taken from gigantic sums such as national GDP figures. According
to Statistics New Zealand, New Zealand’s GDP for the 2015 year was $245 billion.
One percent of this sum is $2.45 billion. Each 0.1% increase is worth $245
million. It is not pedantic or obsessive to look closely at these apparently
minor differences, these hundreds of millions of dollars would have a massive
impact in any area of New Zealand’s small economy.
The claim that New Zealand spends just 1% of its GDP is
absolutely false for the year 2016. According to the official budget statistics, New Zealand will spend a total of $3,695,573,000 on defence in 2016.
This figure does not contain any of the $20 billion mentioned in the white
paper, so the true total will be much higher. Even if we ignore the extra $20
billion, this amount works out to 1.46% of GDP. Not too far behind Australia’s
figure for 2015, 1.92% of its GDP. If we try to take the extra $20 billion over
fifteen years into account, we get a much bigger figure. No details about when
and exactly what the $20 billion will be used for have been released, so we
don’t know how much, if any, will actually be spent in 2016. Although
assumptions can be dangerous, if past history is anything to go by the safest
assumption to make here would be that the planned $20 billion will in reality
blow out to a much larger sum. I’ll make the conservative assumption that it
doesn’t, and also that it will be evenly spread out over the fifteen years.
That results in an additional $1.333 billion for 2016, bringing the grand total
military expenditure to over $5 billion. As a percentage of GDP, that is 1.99%.
Should we focus on military spending as a proportion of GDP?
Although this statistic is useful when you are comparing different countries
with each other, it does not help us understand the impact military spending
has on our domestic economy. A much more relevant statistic for this purpose
would be military spending as a proportion of total government expenditure.
Five billion dollars is a chunky 5.59% of total government expenditure.
Comparing this to what we spend on health and education, the impact of preparing
for war is very apparent: defence spending is almost one third of the entire
health budget, and just under a half of the entire education budget.
Now
that we have a sense of the scale and impact of the massively increased
military budget, we can turn to the question of why it has been so drastically
increased. The Defence white paper itself lists a number of ‘strategic challenges’ for New Zealand in the years ahead up to 2040:
- The rising sophistication, range and number of actors operating within New Zealand's EEZ, Southern Ocean and South Pacific
- The increasing likelihood of a terrorist attack in New Zealand since 2010
- A more rapid evolution and spread of cyber attacks than anticipated
- Heightened tensions in the East and South China Seas
- Increases in military spending across South East Asia
- Intensifying turmoil in the Middle East and North Africa
- Degraded relations between Russia and the West
There are two types of justifications used by the
legions of media commentators who heartily approve of New Zealand’s increased
military budget. The first is a liberal- humanitarian green tinted justification,
which emphasises local responsibilities in the Pacific region. We need bigger
and better planes for disaster relief, better boats to defend against illegal
fishing in the Southern Ocean. In a recent Stuff
article, Stacey Kirk writes about the need for New Zealand’s Defence Force to “target sights closer to home”. The picture just below the headline shows a group of
Adelie penguins on an iceberg in Antarctica, with the caption “If it's not
scientific research and conservation, then New Zealand has to play a part in
looking out for these little guys”.
The second approach emphasises the dangers facing
New Zealand in the international arena, and the need to protect ourselves from
a wide range of threats. In a recent interview with Paul Henry, a visibly
excited and somewhat swivel-eyed Patrick Gower declares that “New Zealand has a
new enemy”. China has developed a 100,000 strong army of cyber soldiers, who
regularly attempt to hack the computers of the New Zealand government. To play
its part in the “global war games” New Zealand must spend a “small fortune” on something
called “cryptographic infrastructure”. Neither Paul Henry nor Patrick Gower
know what this is exactly, but speculate that it is “some kind of software”.
A more sober and serious
example of this right wing imperialism can be found in Nevil Gibson’s recent piece for NBR, in which he downplays the importance of cute penguins and
tropical tornadoes, and emphasises instead the dangerous and violent world of
21st century power politics: “the White Paper outlines the
new dangers that have emerged since 2010 – China’s expansion into the East and
South China Seas, increased military spending in Southeast Asia, ‘degraded’ relations
between Russia and the West; and, of course, the threat of terrorism (still
rated as low-risk) and “intensifying turmoil” in the Middle East and North
Africa.”
Gibson’s article also contains this
very insightful sentence: “This will be welcomed by New
Zealand’s allies, such as Australia and the US, who may detect a stronger
commitment to defending this country’s wider interests than just the immediate
maritime environment.”
Underneath all of the spin, this is the most significant and convincing reason for New Zealand’s increased
military budget. Cute penguins, illegal fishing, tropical cyclones and even
Gower’s army of Chinese cyber warriors provide comfortable and predictable click-bait
for the superficial observer of New Zealand’s military spending. The real
reason has to do with the New Zealand state’s relationship to its much bigger
imperial partners, Australia and the United States. The crucial and complex
question of how these historical loyalties relate to the overall geo-political
situation, in particular the question of how New Zealand has an ambiguous and
contradictory stance regarding China, I will put to one side and refer to
Gordon Campbell’s excellent recent article.
Returning instead to those
percentage-of-GDP statistics discussed above, there is something apparently
quite magical about that 2% of GDP figure New Zealand is now so incredibly
close to. Australia’s recent Defence white paper also heralded a massive
increase to its military spending, on a scale far more vast and lethal. Nuclear
submarines, drones, helicopters, satellites, planes and a list of other new
military items will be purchased by the Australian military in the coming
years. These billions of dollars of increased spending are partly the result of
intense and vigorous lobbying by people such as Tony Abbott, who pushed for a
2% of GDP target for military spending. Although consistently higher, Australia’s
military spending has been hovering around 1.7 – 1.9% of GDP since the mid
1990s. The same considerations I outlined above apply even more so to
Australia, as its economy is more than seven times the size of New Zealand’s,
the effect of small percentage increases will be even more massive. Interestingly,
Australia has actually de-coupled its projected military budget from any
constraint to do with a % of GDP target. This is to ensure against the
possibility that Australia’s economy might shrink, and with it the 2% of GDP
military allowance. As Ben Eltham observes in a recent New Matilda article, “the White
Paper sets out a concrete timeline of spending, committing to the budget no
matter the external economic circumstances.”
The 2% of
GDP target is also a political hot potato for the European countries in the
NATO coalition. Only five of NATO’s 28 countries spend more than 2% of their
GDP on military expenses: United States, Britain, Poland, Estonia and Greece.
In 2006 all of the NATO countries agreed to a 2% target, with the United States
pushing the hardest for member countries to increase their military spending.
In more recent years, especially since the conflict between Russia and the
Ukraine, pressure from the US has increased. Obama has been particularly vocal
on this issue, which has managed to strain even the ‘special relationship’
between Britain and the US. Hillary Clinton, Bernie Sanders and Donald Trump
all agree with Obama on this issue, and urge NATO countries to spend more money
on their military forces.
This pressure to spend more and more money on 'defence' is part of a broad international pattern of increasing military expenditure. Although there is no explicit publicly announced pressure on New Zealand to meet a 2% of GDP target, with Australia striving for and surpassing that goal, and the US putting pressure on European countries to meet that same goal, it is easy to imagine New Zealand political leaders worrying about what Obama thinks of their military contribution. When the government of the day is one which clearly could not care less about things like the housing crisis, refugees or paid parental leave, and slavishly fails to depart from its allegiance to US imperial interests and entanglements, it is not surprising that New Zealand is following the crowd in spending more money on its military.
