Explainer: Australia’s military-industrial complex

23 October 2021

Written by: Gianni Francis

The lines are blurred between public and private defence sectors.

Lockheed Martin, the world’s largest weapons manufacturer, made US$47.5 billion from arms sales and military services to governments worldwide in 2018. And that’s just a mere 11.2 percent of the total $420 billion made in weapons sales by the top 100 global weapons manufacturers that year.

Governments need to buy weapons and military hardware to counter (or prepare for) legitimate security concerns. They also need to buy them from someone. This creates a symbiotic relationship between public and private sectors, known as “the military-industrial complex”, which describes the relationship between government and the defence industry—namely weapons manufacturers. The complex also includes any organisation or individual that may profit or benefit from war.

According to the Stockholm Peace Institute, the military tends to be one of the most corrupt sectors of government worldwide, with arms procurement especially subject to corruption. And when there are billions of dollars at play, no door remains shut between state and industry. Emeritus Professor of Peace Studies at Bradford University, Paul Rogers, tells upstart that “a bit of bribery and corruption” is “pretty common right across the world’s arms industries”. In fact, research suggests corruption in the arms trade contributes to roughly 40 percent of all corruption in global transactions.

 

Revolving doors

According to Prof Rogers, major defence companies will endeavour to retain good relations with relevant government departments and build other relationships within institutions where they can develop influence.

“They will also want to link in with think tanks working on international security, particularly ones which are looking at essentially how to win conflicts,” he says.

Investigative journalist, Michelle Fahy, has described this relationship as part of a “culture of cosiness” between government and the private sector, one that is characteristic of the military-industrial complex.

A major player in this relationship are lobbyists. Lobbyists are individuals who meet with politicians and government officials to attempt to influence government policy or decisions on behalf of either a client or their own organisation. Australia has very few checks and balances on lobbying, with an audit finding the Federal Government to be “powerless” to regulate the actions and influence of lobbyists.

In Australia, defence lobbyists want to secure a larger portion of defence spending on behalf of the company they represent and want to promote increases in overall government defence expenditure. This outcome perfectly coincides with the Morrison Govenrnemnt’s desire to achieve “sovereign capability” through a self-sufficient Defence Force, meaning more military hardware. The marriage of these two goals was exemplified in 2021 when Prime Minister Scott Morrison announced a $1 billion dollar investment into missile systems in front of a Raytheon factory in Adelaide, instead of Parliament house.

Transparency International describes the influential relationship between lobbyists and government officials as one of “undue influence”. This influence may be achieved by lobbying through campaign donations, fancy dinners and events, and according to Prof Rogers, by promising decision-makers well-paid future jobs in exchange for support.

“In the closing stages of a career when somebody may have quite important decision-making functions, then they will know full well that if a particular company succeeds in getting a contract, then they may well increase their likelihood that they can be taken on as a consultant in retirement,” he says.

In Australia, more than 56 percent of politicians retire to positions of power in lobby groups or big industry, according to Michael West Media.

“Now that extends from military through to civil service, and indeed to politicians. You see a system in which there are many interconnections, and it is a largely closed system,” Prof Rogers says.

But defence contractors are just one part of a larger system. The “cross pollination” that occurs within the military-industrial complex has been described by Prof Rogers as a “military-industrial-academic-bureaucratic complex” because of the “revolving door” between defence-related institutions.

Arms companies highly value the experience and spheres of influence seasoned public servants can bring to bear on behalf of their companies. The CEO of Thales Australia, a French multinational weapons manufacturer, said she was “delighted” to appoint the head of ASIO, Duncan Lewis to their company board after he retired from running the intelligence agency from 2014-19, because his “insight and experience” would “help guide the company”.

Another high-profile case was former Australian Liberal defence minister Christopher Pyne accepting a consulting job with Ernst & Young nine days after leaving politics in 2019. An investigation by The Guardian revealed that Pyne had discussed defence business consulting jobs while he was still in cabinet. At the time Australia was vastly expanding its defence expenditure, and according to Ernst & Young’s defence industry leader, Mark Stewart, Pyne’s role was to capture a larger share of the defence funding from the Commonwealth and use his experience as a politician and minster to grow Ernst & Young’s private sector defence industry business.

This is not unusual, according to Prof Rogers. Besides offering lucrative private sector positions in retirement, during their career a civil servant might get seconded to an arms company “to see how things are done the other side of the table”. But the revolving door also works in the other direction – from private to public.

“You may get a very experienced armaments manufacturer who may actually be seconded to a ministry to advise them on various aspects. So, it’s quite a closed system,” he says.

This was the case when former CEO of BAE Systems Australia and then BAE Saudi Arabia, Jim McDowell, transitioned to a public sector career after 37 years working in the defence industry. He then went on to become the South Australian Premier’s right-hand man as Chief Executive of the Department of the Premier and Cabinet from 2018-2020 – where he received a $550,000 taxpayer funded salary – before returning to the private sector.

Then in 2018, BAE went on to be awarded the $35 billion Future Frigates contract which was up for grabs while Pyne was Minister for Defence. Pyne said he had a “spectacular working relationship” with McDowell around armament procurement while he was BAE Boss. BAE was also a founding partner of Trusted Autonomous Systems, a research centre designed to make unmanned defence tech that will receive $50 million tax-payer dollars – which McDowell was Chair, and Director of between 2017-18.

The Department of Defence (DoD) is very open about this culture of cosiness between the defence industry and government, with the DoD’s Defence Industry Policy Statement espousing the intention to “take the partnerships between Defence and industry to new levels of cooperation, with a focus on stronger, more strategic partnerships and closer alignment between industry investment and Defence capability needs.”

 

The economics of war

But Professor Allan Patience, whose research focus is Australian foreign policy and international relations at Melbourne University, tells upstart that the partnership between government and the defence industry is not just about achieving “capability” to combat external threats. He says, the military-industrial complex, which is a substantial proportion of all Western advanced economies, is deeply invested in keeping the threat of war simmering, and therefore, the demand for weapons maintained.

“Today, the private sector in America and its offshoots in places like Australia, has got a huge stake in keeping fear going – the fear of enemies, the need, therefore, to produce weapons and military paraphernalia that gives them great profits,” he says.

During Pyne’s time as Minister for Defence, Australia’s defence exports were worth about $2 billion a year, but Pyne wanted a bigger piece of the $1.5 trillion global arms trade. The Turnbull Government invested $3.8 billion in the arms manufacturing industry in 2018 in order to propel Australia into the world’s top 10 weapons exporters. By 2019-20, Australia’s arms exports grew to nearly $5.5 billion.

“We can talk about it as the economics of war and the profitability of war – to hell with the consequences. It’s an example of how the private sector can be extremely dangerous,” Prof Patience says.

“When you give a huge power to the private sector, handing over lots of things that ought to be a public good, they use it for profit making, and they don’t care. Their sole interest is in the profit motive, not in what is what is the real strategy for guaranteeing security and peace in the world.”

 

Enter the ‘think tanks’

Another issue is that large weapons companies may commission research on what is happening in other countries, analysing perceived external threats that require capability based specifically on military force, according to Prof Rogers.

This is where policy institutes, or “think tanks” come in. According to Britannica, think thanks are interdisciplinary research institutes that are designed to provide alternative policy advice for government and private sector clients. They often operate as NFP’s and can receive funding from commercial contracting, government funding and private donations from organisations. Think tanks are often involved in the development of defence and foreign policy.

But a conflict of interest arises because these think tanks will be largely staffed by former military personal – like McDowell being on the Council of Australia’s most influential think tank, the Australian Strategic Policy Institute (ASPI) – with funding coming from the defence department and weapons manufacturers. Moreover, ASPI’s independence has been called into question due to the tendency of the think tank’s policy to recommend increased government expenditure on contracts with their weapons peddling corporate sponsors.

“And the risk is that you may get the requirement for research set up in such a way that it will tend to produce results, which suggests there’s going to be a future problem,” Prof Rogers says.

“So that makes it easier for companies to say, ‘look, this research suggests you’re going to have a real problem with such a country who are developing these particular weapons, you’ve really got to think very carefully about this, and then develop weapons to counter those’.”

During the Cold War, Australia’s looming enemy was the USSR, but today it’s China. Prof Patience says by provoking China, which the Australian government has been doing a lot, it’s creating the very conditions that play into the military-industrial complex.

“It all relies on having an enemy – you’ve got to have an enemy to convince voters to allow huge amounts of their governments budgets to be poured into military activities,” he says.

“This notion that somehow China is interfering in our businesses, in our universities, in our political parties, and so on, creates the idea that China’s an enemy that we’re going to be ready to go to war against. And that plays right into the hands of the private sector, that are producing [weapons].”

Michael West Media alleges that ASPI is an “enthusiastic supporter” of US foreign policy with a distinctly anti-China bias. ASPI has been criticised by senior government officials, like Labor Senator Kim Carr, for war-mongering within the national conscious through the mainstream media as if having the “intent of fighting a new cold war”.

Director of Defence, Strategy and National Security at ASPI, Michael Shoebridge, declined to speak to upstart on how arms companies can influence government policy through lobbying. Shoebridge, who was previously employed by the DoD as deputy director of the Australian Signals Directorate and the Defence Intelligence Organisation, suggested that questions were “best addressed by defence industry companies”.

According to its annual report, ASPI received $4 million in “core funding” from the Australian DoD in 2020. ASPI also took over $1.8 million from foreign government agencies, who according to Independent Australia are aligned with US foreign policy. Moreover, ASPI received $200,000 from weapons manufacturers Lockheed Martin, Naval Group, Northop Grunman, Rafael, Saab and Thales. According to independent journalist, Marcus Reubenstein, ASPI’s 12 weapons manufacturing sponsors have gone on to receive over $51 billion in defence contracts from the Australian DoD since the think tanks inception in 2001.

But it’s not just DoD-funded think tanks generating war-like policy, the university sector is involved too. Melbourne University has close ties with Lockheed Martin through the $13 million STELaRLab. The university has received criticism over ethical implications of the partnership by students and faculty. According to a CNN investigation, Lockheed Martin sells bombs to Saudi Arabia that have been used to commit war crimes in Yemen, slaughtering thousands of Yemeni civilians – including a school bus of 40 children – during Saudi airstrikes in Yemen.

But it’s not just Lockheed Martin, BAE funds a “research network” of Australian universities which includes the University of South Australia where previous BAE CEO Jim McDowell was Chancellor from 2016-2018. There are also 32 Australian universities partnered with the DoD under the Defence Science Partnerships program “to work in a coordinated way with Defence and national security agencies on collaborative research projects”.

“So, we see not just the private sector now, but public universities are increasingly drawn into the production of warmongering,” Prof Patience says.

“The consequence of the increasing links between universities, and independent research institutes, is the military industrial complex is getting stronger.”

This kind of funding and partnership has raised multiple ethical concerns among the academic community, including a potential threat to academic freedom, with universities potentially expected to produce results that hold “military value” to justify funding.

“It’s very worrying that a lot of it is commercial in confidence contracting, which makes it very difficult to know exactly what the hell is going on here,” Prof Patience says.

 

The consequences?

As the Australian military-industrial complex grows, then future foreign policy could take on a more “hawkish characteristic”, or war-like, Dr Megan Price, PhD in international relations at the University of Queensland tells upstart. That means the government will be somewhat incentivised to lean towards employing force, to use the guns they’ve been paying for.

“Through processes that happen largely in the shadows – an arms industry in the future could influence our decision to do things like engage in humanitarian interventions or to go to war itself … it will get counted as another factor in favour of deploying force,” she says.

This can lead to contradictory foreign policy, Dr Price says, with Australia talking about the importance of rules-based international order and democracy, while being involved in the export of arms in a foreign context where they’re likely to be misused.

“On the one hand, we might be supplying, say, Saudi Arabia or the United Arab Emirates with weapons, which we know might potentially be used to bomb civilians in an indiscriminate fashion.”

“Then we talk, on the other hand, about the importance of the rules-based international order. It’s contradictory and it lessens our credibility.”

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Article: Gianni Francis is a third-year Bachelor of Media and Communications (Journalism) student at La Trobe University. You can follow him @GianniFrancis6

Photo: USAF Thunderbirds Fly-by, by UX Gun is used under a creative commons licence and is available HERE. The image has been resized.