No Cash For The Asian Century


It’s very hard to criticise the intent of the Gillard Government’s new white paper, Australia in the Asian Century. Australia’s geography is undeniable. We all know how important the Asian economy will be. The future economic growth of our neighbours means that Australia has little choice but to engage with a reshuffled balance of power in our region. Culturally and socially, the opportunities for enriching Australian life by improving our connections with the region are just as tantalising.

Which is why this White Paper is so disappointing. As a policy document, it’s barely more than a long political pamphlet. There’s plenty of lofty rhetoric and some very ambitious policy goals, but there’s little in the way of detail about how we’re going to achieve them. And much of the White Paper reads like an extended justification for controversial Labor policies, like the National Broadband Network or the Clean Energy Future legislation.

Certainly, there are some important ideas in the document. The scale of Australia’s complacency about our neighbourhood is staggering — as a glance at the dismal statistics about Asian language teaching in our schools and universities shows. The White Paper tells us that fewer year 12 students are learning Indonesian now than in 1972. In 2008, less than six per cent of Australian school students studied Indonesian, Japanese, Korean or Mandarin.

The White Paper is also strong on national security issues. For those who like to read the tea leaves, it is a thorough repudiation of the "China threat" hypothesis advanced by the 2009 Defence white paper. Indeed, in a special box on "China, the United States and Australia", the White Paper addresses what might be called the Hugh White hypothesis head-on (p. 228):

"We welcome China’s rise, not just because of the economic and social benefits it has brought China’s people and the region (including Australia), but because it deepens and strengthens the entire international system… We accept that China’s military growth is a natural, legitimate outcome of its growing economy and broadening interests." 

Statements like this are important, particularly in light of the continued hawkishness of many in the defence establishment concerning the rise of China. It signals an intention to engage with China, and explicitly rules out "anything like a containment policy." It will be interesting to see if these sentiments spill over into the next defence white paper, scheduled for 2013.

The economic side of Australia in the Asian Century is more straightforward. It largely repeats the conventional wisdom that Australia must grow our exports of services to cater for Asia’s burgeoning middle classes. But drill down into these ambitions and you can see how difficult they will be. Objective 17 states that "Australia’s businesses will be recognised globally for their excellence and ability to operate successfully in Asian markets". Objective 14 commits to one-third of the board members of Australia’s top-200 publicly-listed companies having "deep experience in and knowledge of Asia."

An article in today’s Australian Financial Review by Rohini Kappadath underlines the scale of the problem. According to a recent Australian Industry Group and Asialink survey, "less than half of the businesses surveyed reported having any board members or senior executives with Asian experience or language ability."

There’s a long way to go. Kappadath praises the White Paper’s suggestion that we develop a centre for "Asian capability", perhaps modelled on RMIT’s Australian APEC Study Centre. There are also reservoirs of expertise in many Australian universities, particularly at ANU and at Charles Darwin University.

Clearly, to advance on many of these goals, research will be critical; the White Paper makes much of education, research and innovation as the ticket to Australia’s magical Asian mystery tour. But the rhetoric rarely lines up with current realities. Objective 12 seems particularly far-fetched. This is the goal to get 10 Australian universities into the top 100 in the world. As Simon Marginson observes today in The Conversation, this is double the current number of five, and will require a huge increase in high-quality research. "There is a close correlation between the position of universities in the Academic Ranking of World Universities and the level of public research funding," Marginson writes. But only last week, the government cut half a billion dollars from university research budgets.

The White Paper is even more unrealistic about vocational education and training. It states that "by 2020, more than three-quarters of working-age Australians will have an entry-level qualification (at the Certificate III level or higher), up from just under half in 2009." But the VET sector nationally is in crisis, after a series of crippling funding cuts from state and territory governments.

The same is true in innovation. The White Paper mentions some of the Rudd-Gillard government’s largely stalled efforts to kickstart Australia’s innovation system, such as 2008’s important Cutler Review. Unfortunately, the Cutler Review has been gathering dust on a Canberra shelf pretty much since Terry Cutler published it (although some of Cutler’s recommendations were picked up in the government’s Powering Ideas package). One of Cutler’s key recommendations was that the federal government fully fund the cost of research infrastructure. Yet it was precisely this funding that the government wound back in last week’s MYEFO.

Underlying the disconnect between the rhetoric and the policy reality is the issue of how all these goals will be funded. The Opposition is right this time when they say this paper presents little detail and no costings. It is true, of course, that it is not generally the role of white papers to put forward concrete spending proposals. But without concrete funding commitments, white papers can soon be superseded.

Just ask the Defence Department. Only three years ago, the 2009 Defence white paper recommended a huge increase in military spending. What happened? Exactly the opposite: the Gillard government slashed defence spending to try and achieve a budget surplus. Australia’s defence spending has now fallen to its lowest level as a share of the economy since 1938. With no money to implement the ambitious arms race, the government is going back to drawing board and is putting out a new defence white paper next year. Some white papers aren’t worth the glossy paper they’re printed on.

Ben Eltham is New Matilda's National Affairs Correspondent.