Spy chiefs cross swords over China as Kevin Rudd backs defence hawks

DEFENCE strategists have ignored the advice of Australia's most senior intelligence chiefs and rejected the view that China's military expansion poses little threat to the nation's long-term security.
AUDIO:  Cameron Stewart 
The standoff between the intelligence doves and defence hawks has gone all the way to Kevin Rudd personally.
But the hawks have won, and Australia will spend more than $100 billion over the next two decades to boost its naval and air war-fighting capacity.
The rise of China will shape Australia's defence planning for a generation.
The Rudd Government's defence white paper, due out later this month, will call for a more potent and costly maritime defence for Australia.
The expansion of Australia's sea and air defences will include a doubling of the submarine fleet, 100 joint strike fighters, new spy planes, as well as powerful new surface warships.
The divisions between the defence chiefs and Australia's top intelligence assessment agencies, the Office of National Assessments and the Defence Intelligence Organisation, were so strong that ONA chief Peter Varghese felt compelled to write to the Prime Minister late last year expressing his concern about the China debate and how it could distort Australia's national security priorities.
Mr Varghese's concern was that the white paper drafting team led by Defence Department deputy secretary Mike Pezzullo appeared to ignore comprehensive assessments prepared by the intelligence agencies on China.
The deep rift inside the defence and intelligence community - kept secret until now - reflects strong differences over how to assess China's long-term capabilities and intentions, including plans to acquire long-range submarines and aircraft carriers.
The bruising debate over whether China's military build-up could eventually threaten the regional security order resulted in a clear win for Defence hardliners led by Mr Pezzullo.
Tipped as a future Defence Department chief, the hard-driving Mr Pezzullo shares Mr Rudd's view that Australia should adopt a "hedging" strategy on China's future strategic trajectory. This view admits the possibility of Beijing eventually exercising its growing military might and challenging the long-held primacy of US military power in East Asia.
The classified intelligence assessments prepared last year by ONA and DIO played down the risk of a major conventional war involving China and the US over the next two decades.
Both agencies interpreted China's military build-up as largely a defensive response to the perceived threat of US naval power in the Pacific.
This, coupled with a desire to have a military commensurate with its status as an emerging global power, was the driver of China's military spending rather than any hegemonic expansionist ambitions, they argued.
But the white paper's chapters on Australia's strategic outlook and the planned defence force structure - including the case for a bigger and stronger navy - is squarely focused on Beijing, even if China is not cited in the document as a possible long-term threat.
Senior government sources said DIO had come under strong pressure to alter its China assessment to accommodate the contrasting views of Defence chiefs and the white paper team.
But DIO declined to revise its position, with the result that its key analytical judgments on China have not underpinned the white paper's core force-structure decisions.
"If they (the Government) see China as the primary threat, this is not underpinned by the intelligence assessments," observed one Defence source.
The ONA and DIO assessments agree that the least likely, but the most dangerous, long-term threat to Australia's security was the prospect of war between the US and China.
"Even if China stays on its present trajectory and its economy goes gangbusters, in 2030 there will still be only one country with a capability of mounting an expeditionary force to threaten Australia and that's the US," observed one Canberra insider.
"We (the agencies) are not saying China isn't going to challenge the US in the western Pacific. We are not saying that China is a benign power. We agree their role will change in military terms, but a more powerful China doesn't necessarily make it the No1 threat that you build your force structure around."
ONA and DIO agree that Australia's strategic environment out to 2030 will be dominated by two broad challenges.
The first is failed and failing states in Australia's areas of primary strategic interest, including East Timor in the Indonesian archipelago and others stretching across the southwest Pacific to Vanuatu and Fiji.
A second is the likelihood of conflicts further afield, including transnational insurgencies such as Afghanistan, which could see the deployment of Australian forces in coalition with US or UN forces.
Senior Defence officials argued privately that the ADF needed to be structured to enable it to play a key support role alongside US forces in any future conflict with Beijing. "They saw the rise of China as the new Cold War and decided that this needed to be the focus of future strategy," said one Defence insider.

We shouldn't replace the F-111, we should upgrade it. It's an amazing aircraft capable of long range, low altitude, supersonic flight. Can carry a massive payload as well.

Can they replace the worn out parts and keep it serviceable? We need a supersonic long range bomber.