DFAT cuts show our foreign policy's khaki tinge

The news this week the Department of Foreign Affairs and Trade will slash 60 jobs and cut its operating budget has sent shivers down the spine of Australia’s diplomatic community.

This comes in sharp juxtaposition to the Morrison government’s commitment two weeks earlier to spend more than $270 billion in new defence capabilities over the next decade.

With Australia’s defence, Home Affairs, and intelligence budgets all skyrocketing while our diplomatic and development budgets hit all-time lows, Australian foreign policy is taking on a disturbing khaki tinge.

The cuts this week at DFAT reflect a long trend of lopsided investment decisions favouring deterrence over our proactive instruments of foreign policy engagement.

Announcing the new defence spending, Mr Morrison made clear that our region is in the midst of “the most consequential strategic realignment since the Second World War”. With economies across the region being decimated, “we need to also prepare for a post-COVID world that is poorer, that is more dangerous, and that is more disorderly”.

The government clearly appreciates our rapidly deteriorating geopolitical and economic context, as do the Australian people. The starkest figure in this year’s Lowy Institute Poll is that only 50 per cent of Australians now say they feel safe when reflecting on world events, a 28-point drop from 2018.

In this environment it is only sensible for the Australian government to be investing heavily in our instruments of foreign policy – defence, development and diplomacy – to help shape the world around us and protect our interests at home and abroad.

Australia will never have enough power or wealth to coerce other nations to do what we want. A delicate balance of persuasion, through development and diplomacy, and deterrence, through defence, is crucial for Australia to play an effective role in shaping the world around us to serve our interests. Following the numbers, this balance is coming askew.

Aid in worse straits

For decades DFAT has suffered from punishing "efficiency dividends" and funding freezes. Adjusting for inflation its budget has been not just frozen but in decline and by 2022 will be smaller than it was 15 years earlier. The merger of AusAID into DFAT in 2014 gave the department a staffing shot in the arm that put off the need to cut staff alongside their budget, but the squeeze has now become unavoidable.

While cuts have been avoided, our diplomatic footprint in the world has progressively shrunk. We have the world’s 13th-largest economy but only the 27th-largest diplomatic network. There are fewer Australian diplomats posted abroad today than there were 30 years ago, spread across a much larger network of countries.

Some may argue that with Zoom meetings and leaders engaging directly over WhatsApp, the role of the diplomat has become redundant. This fails to appreciate the true role of the modern diplomat – to build relationships, intimately understand culture and context to help inform strategic decision-making, and to prosecute Australia’s interests on a daily basis. The clear efficiencies gained by technology are also more than offset by the much more complex set of foreign, trade and consular challenges facing our diplomats in 2020. The repatriation of 26,000 Australians this year – the largest consular operation in our history – reveals just how important our presence abroad is in times of crisis.

Australia’s aid program has fared even worse. Since 2014, through successive budget cuts, a hasty merger of AusAID into DFAT, and the consequent attrition of development professionals, the Australian aid program has become a shell of its former self. The Coalition government has cut the aid program by almost a third from its $5.5 billion peak in 2013-14, adjusting for inflation. The aid program, when measured as a portion of Australia’s Gross National Income (GNI), is now the least generous it has ever been.

Over the same period, the nation's defence expenditure has been rapidly scaling up. A robust defence program with effective deterrence capabilities is Australia’s primary foreign policy objective. The commitment to spend 2 per cent of GDP on defence rightly enjoys bipartisan support. While development and diplomacy budgets flatline, defence is expected to grow by close to a third over the forward estimates period.

A lot of the blame for this state of affairs sits with the department itself. While our diplomats are very effective at prosecuting Australia’s case abroad, they have failed terribly at prosecuting their own case in Canberra. The aid industry has failed even worse. Despite 17 of Australia’s closest 20 neighbours being aid recipients, the political class sees aid as charity, rather than a critical instrument in prosecuting foreign policy. The national security establishment has clearly been far more successful in showing its value to the political class, in building champions in cabinet, and in influencing strategic decision-making.

DFAT also isn’t perfect. It is exceptionally hierarchical and risk averse, putting far too little trust in its staff. The generalist continues to be favoured over technical and regional specialisations. While excellent in a crisis, it can find it difficult to think strategically and long term, and its "hire from within" recruitment is antiquated and restricts diversity.

Regardless, we are clearly shifting to a more securitised foreign policy, revealing a nation far more eager to defend ourselves from a more dangerous and disorderly world than to proactively help shape and rebuild it. Australia often claims to be a middle power punching above its weight. A shrinking overseas reach at a time of historic uncertainty is not the signal of an ambitious middle power, but a scared one.