Today I launch Australia’s National Security – A Defence Update 2005.

This second Update of Australia’s strategic situation, from a Defence perspective, is a continuation of the Government’s strong leadership in national security affairs that commenced with the Defence White Paper in 2000 and was followed by the Defence Update in 2003.

This latest Update represents the Government’s continued reshaping of the Australian Defence Force as a highly capable and flexible military force able to meet a wide range of strategic and other tasks.

Our commitment to regular Updates reflects the Government’s recognition that making strategy is a dynamic process. We need to constantly revisit our strategic circumstances and adjust our strategic posture accordingly. Our strategic posture is developed in response to our environment, the challenges that face us and in accordance with the resources available to us.

Today, the ADF is a very different military force from that which this Government inherited nearly a decade ago. The path of building a more capable ADF was established by the Government from the start, and it has reaped benefits that can be seen today in military operations in the Solomon Islands, Afghanistan and Iraq; as well as in humanitarian assistance missions in Aceh, Pakistan and the Sudan.

Since 1999, the ADF has deployed 68,000 personnel overseas. Some troops have deployed several times. This series of very successful operations has promoted Australia’s interests in many different environments and conditions. A number of these deployments have been concurrent. This high operational tempo is unprecedented in the modern history of the ADF.

The success we have enjoyed from the professional and dedicated service of the men and women of the ADF both here in Australia and internationally, has won Australia and its military forces respect and acclaim throughout the world.

This Government is committed to continuing development of Australia’s defence forces, so that they can help secure Australian interests well into into the future.

This Update examines Australia’s strategic outlook and presents a plan to provide for both the needs of the present and the possibilities of the future.

It builds upon the White Paper and the previous Defence Update. It confirms the judgments of those documents. It outlines the next phase in increasing the capacity of the ADF to meet the expected heavy demands of the kind we have experienced in recent years, and the measures being taken to ensure that the ADF continues to be a force capable of meeting future, and potentially unexpected, challenges.

The 2003 Defence Update noted the emergence of new and more immediate threats from terrorism, the continued proliferation of weapons of mass destruction, and the consequences of state fragility and failure in our immediate region.

Events in our world continue to demonstrate the immediacy of these threats and their impacts on Australia and its interests. The Government assesses that the risk of convergence between these threats remains one of the most significant challenges to international security.

Despite considerable international effort, terrorists have managed to conduct devastating attacks across the globe, from London to Jakarta, and from Bali to Baghdad. Proliferators continue to look for ways to spread their weapon technologies to eager buyers. The A.Q. Khan network shows us just how easy it is for determined individuals and groups to access and spread such technologies.

The Government is committed to confronting terrorism and the proliferation of weapons of mass destruction head on.

Internationally, we are in Afghanistan and Iraq to support these evolving democracies and create the conditions that will ultimately defeat the insurgent and terrorist forces that seek to undermine them. We also continue to work with like-minded nations to address proliferation threats. Australia helped to establish the Proliferation Security Initiative and we remain an enthusiastic participant.

Domestically, we have created new capabilities and established new relationships that enhance the national response to terrorism. The ADF’s contribution to preparation, prevention, response and recovery arrangements continues to be fundamental to Australia’s counter-terrorism efforts.

The recent introduction of changes to the Defence Act – in Part IIIAAA of the Act that covers Defence Force Aid to the Civil Authority – are a tangible recognition that the ADF role is vital to our nation’s response efforts. The Government has also tightened export controls intended to ensure that Australian materials and technologies do not contribute to WMD proliferation.

Many parts of our region are still characterised by porous borders, weak governance, inequities in the distribution of resources, problems of law enforcement, insurgencies, drug trafficking and transnational crime. Fragile and failing states create security challenges for their neighbours, as the insecurity they face can easily move beyond their borders.

Australia intends to continue to play a leading role in assisting our regional neighbours to deal effectively with these diverse challenges to national and international security.

For the immediate future, this Update confirms the interrelated challenges of counter-terrorism, counter-proliferation and countering the impacts of state fragility as being of the highest priority.

The high demands placed on the ADF in confronting these threats in the present are likely to continue, and our military forces can expect to conduct concurrent operations domestically, regionally and internationally in support of Australia’s interests.

This creates a need for high levels of preparedness, sustainability and endurance within our military forces.

The Government is confident that the investments already made in the preparedness and capability of the ADF since the 2000 Defence White Paper and its supporting Defence Capability Plan have set in place the foundation for continued success in the immediate future.

Looking at the longer-term, this Update assesses a wide range of potential future strategic challenges likely to impact upon Australia and its interests.

The Update notes the changing relationships between the major states in the Asia-Pacific region, notably the so called relationship ‘triangle’ between the United States, China and Japan. It also recognises the emerging power of India. These four nations and their inter-relationships will define the strategic environment of the Asia-Pacific well into the middle years of the twenty-first century. Australia has an interest in helping mould these changing relationships as a force for stability and security.

New uncertainties are also emerging with respect to the capabilities and intents of both state and non-state interests. The diffusion of technologies, the increasing asymmetrical nature of threats, and the impacts of globalisation mean that the value of traditional defences built around geographic advantage or traditional military practices are less relevant than in previous times.

This Update notes that we may well face challenges that cannot be anticipated or planned for today. The timing of such events is unpredictable and their cumulative effects hard to gauge. Globalisation means that Australia may well be influenced by events well beyond our shores.

For the ADF of the future, success against the uncertainty and unpredictability I have described will not come from rigid adherence to the structures and capabilities that have served in the past. As the Update states, threats will be increasingly interrelated across both national and international environments, and across organisational and jurisdictional boundaries. A threat to our neighbours must be treated as a threat to us.

This means that the contribution the ADF will be called upon to make to future national security will go far beyond traditional warfighting against traditional types of adversaries.

So decisions about the use and development of defence capability must be concerned as much with forestalling future threats and shaping the choices of potential adversaries before they become threats, as they will be with responding to specific contingencies.

The Government’s Defence Policy therefore aims to firstly shape and build an ADF that is versatile and adaptable. And one that operates easily with other arms of Government. Secondly, it is to build a strong set of security relationships - regionally and globally - that allow the ADF to continue to help shape the international environment towards Australia’s interests and to lead, contribute, support and enable military coalitions as appropriate.

To meet all these strategic and policy needs, this Government is committed to the development of future forces that are versatile, robust, joint and integrated. We intend to continue the capability developments begun in the 2000 White Paper, aimed at increasing the ADF’s combat weight, mobility, and sustainability.

For the Royal Australian Navy, this Update confirms the direction laid out in the White Paper and the previous Update – a substantial investment in new amphibious ships and air warfare destroyers, an upgrading of the capability of the frigate and submarine forces, new helicopter fleets and communications capabilities and a substantial increase for Australia’s border security provided by the new fleet of Armidale class patrol boats.

This will give the Fleet the capability for extended and assured reach and for the deployment of larger and heavier forces.

For the Australian Army, we are announcing a new phase in the Army’s development. Through the current Defence Capability Plan, the capabilities of the Australian Army are already being enhanced. But in the face of the strategic environment I have described, further improvements are required for continued success and in protection of our forces.

These improvements will be delivered under the banner of the Hardened and Networked Army, a ten year plan that will allow the Army to be more capable, more survivable, and more able to provide a broader range of options that can be employed for longer and if necessary, in more lethal scenarios.

The Government has accepted the Chief of Army’s proposal to transition the 3rd Battalion from a light parachute battalion to form the basis of a second mechanised battlegroup from 2011. This will contribute to a heavier and better protected force.

The Army will also become more capable of sustaining its deployed forces through the addition of 1,500 new personnel over the next ten years. The majority of the additional personnel will be provided to Army’s front line deployable units.

The Army Reserve will be re-focused to provide a smaller number of high readiness forces - at the individual and small team level to add depth to the front-line force.

Furthermore, to enable fast deployment of larger and heavier forces, the Government has decided for the first time to consider acquiring a heavy air transport capability, such as provided by Boeing C17 aircraft.

My launch of the Defence Update 2005, and these announcements of increased capabilities, highlight this Government’s commitment to strengthening the Defence’s contribution to Australia’s national security, and the continued development of the capabilities and capacities of the Australian Defence Force.