Defence gap will hurt NZ, strategist warns

By PAULA OLIVER

Australia's move to dramatically increase its spending on defence and national security has prompted local critics to warn that a worrying gulf is opening between New Zealand and its neighbour in defence.

Australia's purse strings were opened during Tuesday night's Budget when Treasurer Peter Costello boosted security and defence spending by A$6.71 billion ($8.02 billion).

The Australian boost to its forces came a year after the New Zealand Government made its controversial decision to scrap its Skyhawk-led air combat wing and refocus the country's defence forces.

Critics then said the decision to give the Army new armoured vehicles and the Navy vessels other than frigates would hurt relations with Australia.

Yesterday, defence analysts agreed that Australia's extra spending would open a bigger gulf between the capabilities of the two defence forces.

But responses differed on the effect that it would have.

Dr David Dickens, the director of Victoria University's Centre for Strategic Studies, said Australia had shown itself to be far more serious about defence, and that could bring benefits in areas such as trade with the United States.

"Australia has faced up and got serious about defence. It's doing it properly. We are persisting with band-aid solutions.

"If we stood alongside Australia's approach, we too might be lining up for a free trade deal with the United States."

The Government boosted spending for its three spy agencies and other departments after the September 11 terrorist attacks, putting together an anti-terrorist package worth an extra $30 million over three years.

Dr Dickens said it was not a cohesive or well thought-out approach.

"The damage to our defence relationship has already been done before Australia announced its spending. The relationship has been downgraded, and we're lucky Australia has been kind to us in public."

But a leading international relations expert did not think the difference in defence capability was yet at a critical stage.

Dr Steve Hoadley, associate professor of political studies at Auckland University, said there were several examples around the world of neighbours having vastly different defence budgets.

One was Canada and the United States. And Britain's budget was double that of some of the smaller Scandinavian countries.

"The disparity in [transtasman] defence spending is not as critical as some might think. The difference is not too bizarre as long as Australia is willing to work with New Zealand no matter how modest the capabilities are."

Dr Hoadley said it was often thought that an approach like Australia's would reap rewards from allies, but evidence of that was scarce. Australia had been exempted from recent US steel tariffs, but that was later shown to be because a US company that bought Australian steel lobbied on its behalf.

nzherald.co.nz/defence