The blow-out in Government spending on Defence continues unchecked and unabated despite the coronavirus. The bulk of it goes to multinationals who pay little or no tax in this country. Is nobody watching? Callum Foote looks at the latest analysis of AusTender data by Greg Bean.
Michael West Media has previously highlighted the $80B military splurge in this 2018 article, and other spending extravagances here and here. More recently, we uncovered the Liberal Party spending boobytrap for the 2019 Budget and the lobbying saga of Christopher Pyne joining EY’s defence consulting operation.
There has been an aspect of government defence contracts however which has remained almost reported until now. This is the matter of “new” versus “amended” contracts, large military-industrial spending commitments that is which have not been put to tender but simply extended.
AusTender contracts are open for amendment, like any contract, if both parties deem a change in the terms of the contract to be beneficial. The New vs Amended Contract Commitments are shown in Figure 1.
Figure 1.
Data by Greg Bean
Note that, between 2011 and 2017, the amendments to prior contracts represented a reasonable, rational, believable increase. These considerations were clearly dropped in 2018 as contracted which were previously signed and settled were amended by an additional $39 billion. This aligns with and supports our ‘poisoning the well’ thesis leading up to the 2019 Federal election.
In 2019 there was a decline in amended contracts, however. It seems that defence contractors have seen the profitability, and perhaps the willingness of the Department of Defence, in amending contracts; and for the first time in 2020 the price of contract amendments has outstripped even the contracts themselves!
OVERALL SPENDING
Then there is the broader issue of how government allocates its spending. Spending by the Department of Defence has grown to mammoth proportions of overall spending as shown by Figure 2 below.
Figure 2.
Data by Greg Bean
As you can see, from 2018 onwards, defence spending has ballooned disproportionally to all other spending, raising the question of whether spending on other government services has been suppressed to accommodate military spending.
Defence contract commitments have gone from about 30 percent of spending compared to ALL other Departments in 2013 and 2014, to 40 percent in 2015, 50 percent in 2016 and 2017 until it reached 300 percent in 2018 and 250 percent in 2019. As at May 10 2020, Defence contract commitments are 150 percent of commitments for all other departments combined.
In line with the observations that amended contracts have come to inflate defence spending numbers, so far in 2020, in spite of the shocking coronavirus recession, defence spending has outshone all other government spending.
Figure 3 shows the steady increase in defence spending as a whole over the same period.
Figure 3.
Data by Greg Bean
Initial estimates of the increase in defence spending since this data was released are that an extra billion dollars have been spent by the Department of Defence in the previous 8 days.
Where’d your money go?
So, what is being bought with this massive increase in defence spending?
Approximately 35% of all Department of Defence spending between 2010 and May 2020, $137.6 billion, is classified as Major Vehicle Purchases. The sub-classifications are broken down in Figure 4 and lend weight to the argument that the bulk of defence spending goes towards toys-for-the-big-boys rather than 21st-century defensive gear like drones, cyber-security hardening, chemical and bioweapon defences, etc.
Figure 4.
Data by Greg Bean
ABOUT THE AUTHOR
Callum Foote
Callum Foote is our Revolving Doors editor exposing the links between the highest level of business and government. These links provide well-resourced private interests with significant influence over Australia’s policymaking process. Callum has studied the impact of corporate influence over policy decisions and the impact this has for popular interests. He believes that the more awareness this phenomenon receives the more accountable our representatives will be.
The Darug people are an Aboriginal Australian people who survived as hunters in family groups or clans, scattered throughout much of what is modern-day Sydney.
For one of the first if not the only times Benevolence presents an important era in Australia’s history from an Aboriginal perspective in novel form.
Benevolence is told from the perspective of a Darug woman, Muraging (Mary James), born around 1813. Mary’s was one of the earliest Darug generations to experience the impact of British colonisation.
At an early age Muraging is given over to the Parramatta Native School by her Darug father. From here she embarks on a journey of discovery and a search for a safe place to make her home.
The novel spans the years 1816-35 and is set around the Hawkesbury River area, the home of the Darug people, Parramatta and Sydney. The author interweaves historical events and characters — she shatters stereotypes and puts a human face to this Aboriginal perspective.
Julie Janson is an award-winning poet, playwright and novelist. Julie is a Burruberongal woman of Darug Aboriginal Nation. She is co-recipient of the Oodgeroo Noonuccal Poetry Prize, 2016 and winner of the Judith Wright Poetry Prize, 2019. Her other novels include, The Crocodile Hotel and The Light Horse Ghost.
This interview was conducted for the Booktopia book blog, Australia’s largest online bookstore.
Please tell us a little about your book.
JJ: This historical novel is about the early years of colonisation of Australia. It is a piece of literary restorative justice and reconciliation. I hope it opens readers minds to truth telling and facing up to Australia’s bloody past. It also has love and lust and is, at times, funny.
It is a First Nations response to The Secret River by Kate Grenville. This is a wonderful book, but I was challenged by the ending where all the Burruberongal Darug people died in a massacre except for one old man. I asked myself the question: if all the Darug died, who were we?
I had researched my (Aboriginal) family history along the Hawkesbury River, and the Darug interpretation of those early days of colonial invasion is entirely different.
I decided to write an historical novel that reflected the lives of Darug survivors and how people struggled to find ways to co-exist with the English invaders. The women tended to work as servants and the men as labourers and both were forced into indentured positions where they were rarely paid and often abused. Aboriginal peoples were treated like dirt, like slaves, by the English who were often ex-convicts or aristocrats and who believed they were superior to, well, everyone else.
What was your motivation for looking to your past?
JJ: There were so many mysteries about my father Neville, the main one being why was he unable to identify as an Aboriginal man. Racism is the answer. In the 1940s and ’50s, to be Aboriginal in NSW was to be dirt. He was called Jedda by his workmates and often went fishing, hunting, and ‘going bush’. Us kids camped with him up on the Hawkesbury River in a cave, sleeping on bracken beds covered with army great coats. I was called ‘a little white blackfella’ and could run like the wind. Now there is pride by many of our cousins in our Aboriginal identity.
Did you do all this research out of curiosity or specifically to write the book? Can you describe how you felt researching something as emotional as your family?
JJ: As any Aboriginal person who came to identify as an adult because of secrecy will testify, it is a difficult path. I was determined to find out about my culture as soon as I graduated as a teacher. I took up a teaching post in a remote Aboriginal community on a Hong Kong consortium-owned cattle station. I encountered racism where the white station manager would set his dogs on the Aboriginal children as they passed his house. I wrote my first novel The Crocodile Hotel about that time.
I then moved to North East Arnhem land, and became a member of a Yolngu family and was welcomed into the community. There was Traditional ceremony every day. I became immersed in everyday life such as catching mud crabs with the women, learning to use plant dyes on baskets and began a journey into knowledge about spirit worlds. The emotional journey of discovering my own past and culture has been at times agonising. However, I am blessed by the sister relationships I have developed with important Aboriginal women from all walks of life, and I have been taught to speak up and be proud of my Darug ancestry.
Julie Ashton. NSW Art Gallery.
Benevolence is an immersive read and deeply emotional. Were you able to feel what your ancestors may have felt whilst writing the book?
JJ: Often a novelist will find the truth for the story in their own lives.
When I was young, I experienced the life of a homeless single mother living on Weetbix. So, Mary’s struggle to feed her children is drawn from my feelings of desperation. Also, as a woman who fought for equality in a male dominated world, I wanted to create a character who would not be a victim, no matter how terrible the circumstances. I found an entry in the Benevolent Society in Windsor that showed my great great Grandmother was forced to give up three children in 1860 because “the mother could not feed them”. Dispossession and invasion had its consequences and as I struggled to find the character of my protagonist, I studied the birth, marriage and death certificates of Dad’s great grandmother. The gaps often gave me clues to her life. No birth certificate was found until I left the father’s name blank in the search and suddenly, I found the evidence of a child born to a famous C of E Reverend in Windsor.
This was a scandalous and surprising development. And had a wonderful storytelling element.
If you could go back in time to the early 1800s, would you have done what Muraging did and run away to discover her roots and try and find her father?
JJ: I have always been a determined person, and I think I would have behaved exactly as she did. However, the romantic aspect of Mary James’s life also reflects my way of believing in finding love and companionship. Mary follows her first love up a mountain in Kurrajong to join his people who were battling English troopers. In my case, I found different husbands at different times, like she did. A supportive male or female partner is a wonderful thing, especially in this time of Covid-19.
What do you hope readers will get out of reading Benevolence?
JJ: I hope people won’t feel too sad. Even in the face of murders and children stolen, some hope can come. I trust readers follow Mary’s journey and learn about the Darug history of early Sydney. I hope people realise that even if Aboriginal people are fair of skin, it doesn’t mean they are less Aboriginal. We are also proud of other ancestry as well. I grew tired of white friends saying, ‘but you don’t look Aboriginal’. I had to take a stand and realise that if I was on this journey of reconnecting to my father’s ancestors, then I had to do it with all my heart.
I worked in Aboriginal education most of my life. I would stand up to all kinds of racism and sexism and be brave. I was determined to speak up and not accept the terrible prejudice that can pour from any mouth on any day. To stand with Adam Goodes.
By most accounts, China has behaved badly through the COVID-19 pandemic. Fascinating insights can be derived about China’s present behaviour by looking into its past.
An initial cover up. Punishment of whistle-blowers. Permitting international travel out of Wuhan, the origin of COVID-19, even after Chinese domestic travel was banned. Threatening economic sanctions on Australia following its call for an independent, international enquiry into the origin and handling of COVID-19.
How can we understand China’s behaviour? Sulmaan Wasif Khan’s book, Haunted by Chaos: China’s Grand Strategy from Mao Zedong to Xi Jinping, written well before the outbreak of COVID-19, provides fascinating insights into China’s statecraft in this regard.
China may seem all powerful, especially compared with some Western countries which are struggling to manage COVID-19. But according to Khan, all of China’s leaders from Mao to Xi see China as a brittle entity in a hostile world. These men came of age in a violent, unpredictable broken world. These leaders are “haunted by chaos,” having seen China torn apart by warlords, opium wars, the Cultural Revolution, and the Tiananmen Square massacre. They are also haunted by the collapse of Soviet Union and the fall of the communist regimes in Eastern Europe.
Khan defines “grand strategy” as the marshalling of different forms of power — diplomatic, economic, and military — to achieve an overarching objective or set of objectives. What China wants from its grand strategy is to prevent chaos and ensure stability, and fear is the paramount driver.
In his historical narrative of China’s grand strategy, Khan reminds us that in 1920 China did not exist. There were at least six different governments, as well as foreigners with treaty ports. Starting with the Jiangxi Soviet, Mao Zedong progressively cobbled together the China we know today. This was a process that was not preordained — it could easily have gone the way of South Asia, where British India fractured into several countries. Consolidation continued even after the proclamation of the People’s Republic of China in 1949.
Deng Xiaoping, Mao’s successor as China’s paramount leader, dragged China into the modern world through the policy of economic opening and reform, which was actually begun by Deng while Mao was still alive. For Deng, economic modernisation was key to national security. And being pragmatic, he was inspired by the examples of South Korea, Hong Kong, Singapore, and Taiwan, which were all way ahead of China.
For Khan, the Tiananmen Square incident was vintage Deng: he couldn’t have a bunch of students undermining economic modernisation. According to Deng, economic modernisation does not lead to democracy. Rather, you must clamp down politically to have economic modernisation, or risk going the way of former Soviet leader Mikhail Gorbachev. And being haunted by chaos, Deng was suspicious of narratives of the time, like the “end of history” and US President Bill Clinton’s predictions that China’s WTO membership would lead to political freedom.
Presidents Jiang Zemin and Hu Jintao both stuck with the Deng programme of economic opening and reform, although they added nationalist ideology in order to bind the country together following the Tiananmen Square fractures. Rapid economic growth was also important for keeping the citizenry onside, while military modernisation enhanced external security. Overall, they managed the country well as they weathered the Asian and Global Financial Crises, the US bombing of the Chinese Belgrade Embassy, the crisis in the Taiwan Straits, and the Hainan spy plane incident.
According to Khan, President Xi Jinping is very powerful but deeply insecure. His insecurity was born from his own rustication and his father’s purging during the Cultural Revolution. Xi worries that China’s problems could fester and lead to disaster, and believes that he must be in charge to prevent another Cultural Revolution. This has meant a massive centralisation of political power under Xi, and a tightening up on all other centres of power. Khan argues that Jiang and Hu would not have clamped down on Xinjiang or occupied the South China Sea as the more assertive Xi has done.
Under Xi, China has arguably also been suffering the perils of success. It has become so big, powerful, and assertive that neighbours like Japan and Vietnam are terrified enough to increase their defence spending.
China’s management of the COVID-19 crisis has highlighted some of the downsides of its current assertive grand strategy. A highly centralised power structure, where officials feel they must tell superiors what they want to hear, only makes the management of a pandemic worse — as does promoting false domestic narratives in order to bolster domestic support for the regime. And “wolf-warrior diplomacy,” whereby Chinese diplomats are increasingly adopting an assertive approach to any foreign country that questions its handling of the COVID-19 pandemic, only minimises sympathy for China from the international community. There have even been reports of criticism of China emanating from its close friend, Pakistan.
All things considered, the time has arrived for Xi Jinping to abandon his assertive and combative approach to implementing China’s grand strategy for state security. With an increasingly well-educated and prosperous population, dialling down on authoritarianism might actually improve public support for the regime, while more serious attempts at fostering soft power would only improve Beijing’s reputation in the eyes of the international community.
In reality, China’s grand strategy may not be quite as consistent over time as Khan suggests. And sometimes his message can get lost in his detailed recounting of events. But for this reader Khan does provide very useful historical context for understanding China’s actions through the pandemic and is thus well worth reading.
The average seasonal flu has a fatality rate of 0.1%. On 5 March, based on the early data from Wuhan in China which had the first cluster of infections and deaths, the World Health Organisation (WHO) published a fatality rate of 3.4% for the novel coronavirus. Not surprisingly, this alarmed public health authorities everywhere but it also badly misled epidemiologists in their modelling of the likely infectiousness and lethality of the virus under different response scenarios.
By now we have better and more reliable data. A report from the US Centers for Disease Control and Prevention (CDC) on 20 May estimated the most likely case fatality rate (CFR or the percentage of known infected cases who die from the disease) of 0.4%. Its estimate of asymptomatic cases is 35%, giving an overall infection fatality rate (IFR) of 0.26%. The president of the Yamaneko Research Institute writes that the fatality rate in Tokyo is also 0.26%.
The Imperial College London (ICL) model of 16 March predicted up to 510,000 UK and 2.2mn US deaths in ‘an unmitigated epidemic’ (p. 7). The model’s assumption was that without intervention, 80% of the people would be infected and the IFR was 1%. On this basis 500,000 is the figure the model came up with in its ‘reasonable worst-case scenario’ (which is an oxymoron).
In a subsequent interview Ferguson revised this to ‘the most likely scenario’. ‘But as information has been gathered in recent weeks, from particularly Italy but other countries, it has become increasingly clear that actually this is not the reasonable worst case – it is the most likely scenario’, he said. The ICL model has been proven just as spectacularly wrong in its best case scenario of a maximum of 20,000 deaths over two years with school and university closures, case isolation and social distancing, going down to 15,000 with home quarantine thrown into the mix as well (p. 14).
The seductive numerical precision of the ICL model provoked a herd-like panic across the world with its grim forecasts of tens of millions dead. Yet, it was undermined by data collected in the following weeks that progressively reduced its policy usefulness.
ICL ignored best practice to release the codes behind their model late and reluctantly. Chris von Csefalvay, an epidemiological specialist in the virology of bat-borne illnesses, including coronviruses, examined the code and concluded its flaws fall ‘somewhere between negligence and… grave scientific misconduct’.
Drawing on data from the early outbreaks in Wuhan and Italy, the model made critically flawed assumptions on infectiousness and lethality that led it to massively overstate the mortality risks. Professor John Ioannidis of Stanford University’s School of Medicine dismissed the coronavirus data as ‘utterly unreliable’ and dubbed the ICL model ‘speculation and science fiction’.
Michael Levitt from the same School won the 2013 Chemistry Nobel Prize for ‘the development of multiscale models for complex chemical systems’. Although not an epidemiologist, presumably he knows something about complex modelling. He argues the growth of coronavirus infections is never exponential ‘forever’. Although the growth rate is very rapid at first, it also decreases at an exponential rate. He therefore describes the coronavirus infection curve as ‘self-flattening’. The mortality plateaus around one month of natural deaths, not one year as Ferguson had projected.
Levitt’s argument mirrors that of Sunetra Gupta, Professor of Theoretical Epidemiology at the University of Oxford. Her team produced a competing, far more sceptical model to that of ICL back in March that has stood the test of time a lot better. In an interview with UnHerd TV on 21 May, she believes many people who have been exposed to the virus likely have other kinds of pre-existing immunities to related coronaviruses such as the common cold. According to her, the strikingly similar patterns of the epidemic across countries is better explained by this hidden immunity than by lockdowns or government interventions:
In almost every context we’ve seen the epidemic grow, turn around and die away — almost like clockwork. Different countries have had different lockdown policies, and yet what we’ve observed is almost a uniform pattern of behaviour which is highly consistent with [our] model. To me that suggests that … the build-up of immunity … [is] a more parsimonious explanation than one which requires in every country for lockdown … to have had the same effect.
Conversely, a prolonged lockdown increases ‘the vulnerability of the entire population to new pathogens’.
That said, I’d be curious to know what Professors Levitt and Gupta make of the India case, as discussed in my previous article on Monday, where cases and deaths have not ‘self-flattened’ but are still rising more than two months later.
Among other contenders, the US lockdown intervention strategy may have its origins in a high school science experiment by a 14-year old girl named Laura Glass whose father worked as a complex-systems analyst with the Sandia National Laboratories. When the strategy of quarantine-cum-forced separation made its way into the policy bureaucracy in 2006–07 at President George W. Bush’s request to look for ways to deal with the next pandemic, it was rejected with the recommendation that the measure should be eliminated from serious consideration. Instead, a pandemic should be allowed to spread, people falling sick should be treated, and a vaccine developed to prevent it from coming back.
There are two striking European examples to date of observational data that contradict the dominant epidemiological model on which the lockdowns have been based. Belarus has been ruled by a dictator since 1994. President Alexander Lukashenko has dismissed Covid-19 panic as a ‘psychosis‘, rejected lockdown and social distancing measures, and refused to close schools and cancel football matches. On 1 April, a WHO official warned it was entering a ‘concerning’ new phase and urged the imposition of new measures to control the infection but was rebuffed. By 22 May, Belarus had just 190 Covid-19 deaths.
The best-known example of a country bucking the model is Sweden. Without compulsory lockdowns and with much of activity as normal, 99.998% of Swedes under 60 have survived. Applied to Sweden, the ICL-like model projected that, without a lockdown instituted by 10 April, between 70,000-90,000 people would die by mid-May. The actual total on 22 May was 3,925 – significantly higher than its Nordic neighbours but far lower than most of Europe. The two points of comparison are likely to be among the most watched over the next year. Figure 1 is visually stunning in dramatising the discrepancy between two epidemiological models on either side and the empirical reality in the centre chart.
For all the flurry of domestic and international criticism directed at it, Sweden held its nerve and the results are there to see (Figure 2). Sweden is hardly alone in the vastly inflated projections of the epidemiological modellers. On 29 March New York-based Columbia University projected 136,000 hospital beds would be needed in the City; the peak demand stayed below 12,000. Levitt is on the mark with his caustic comment: ‘It seems that being a factor of 1000 too high is perfectly OK in epidemiology, but being a factor of 3 too low is too low’.
In two complementary articles for TheMail on Sunday on 3 May and then The Sunday Times two weeks later, Lord Sumption, retired judge of the UK Supreme Court, made two important observations:
The original justification for the lockdown was to save the National Health System (NHS) by averting the ICU capacity from being overwhelmed by ‘flattening the curve’. The policy does not reduce the number of cases but spreads them more slowly so the health system can cope. In the event the nation’s hospital system never approached peak capacity. The infections peaked around 10 April, at which time only 60% of ICU beds were occupied;
When the initial lockdown period ended, it was extended on an entirely new rationale: suppression or elimination of the virus. However, the rhetoric of second wave of infections seems to be an invention to justify a policy that politicians have become too invested in and are afraid of reversing. Lockdowns are continuing, that is, to protect ‘politicians’ backs. They are not wicked men, just timid ones… But it is a wicked thing that they are doing’.
It’s ironic that new pharmaceutical products must undergo rigorous testing for side-effects and collateral harm before being approved for public use, but lockdowns were mimicked by one country after another with little apparent consideration of the unintended and perverse health, economic, educational and other human consequences.
By now we also have some preliminary data from jurisdictions that have eased lockdown restrictions to varying degrees. Figure 3 is from a study by JP Morgan of the impact of countries and US states easing various lockdown measures. In both charts, what is immediately striking is that ‘R’ has mostly gone down, not up, suggesting that the virus might evolve according to its own internal logic.
‘The fact that re-opening did not change the course of the pandemic is consistent with studies showing that initiation of full lockdowns did not alter the course of the pandemic either’, the report concludes. The report’s author Marko Kolanovic said: ‘virtually everywhere infection rates have declined after re-opening even after allowing for an appropriate measurement lag … This means that the pandemic and Covid-19 likely have [their] own dynamics unrelated to often inconsistent lockdown measures that were being implemented’. While failing to alter the course of the pandemic, lockdowns have destroyed tens of millions of livelihoods.
It will be a year or two, perhaps more, before we know how many lives Covid-19 took in individual countries and worldwide, how many lives were saved by lockdowns, and how many were killed indirectly from the unintended, perverse and long-term consequences of the lockdowns.
This story was originally published in one of Australia’s leading social policy journals Pearls & Irritations and is reproduced here with their kind permission.
