CANBERRA, Oct. 9 (Xinhua) -- Australia's defense capacities remain underfunded and this will have serious consequences for both the nation's strategic edge in the Indo-Pacific and the U.S. alliance, a new study from the Lowy Institute for International Policy said on Wednesday.
According to Lowy Institute Military Fellow and report co- author James Brown, Australia's military edge in its neighborhood is slipping and the new Abbott government faces tough decisions in defense policy.
"It must either increase funding to pay for a modernized military or consider drastic cuts to defense capability," he said. "Despite the best bipartisan intentions to the contrary, defense capacities remain seriously underfunded."
The analysis recommends that the government's planned defense white paper needs to be a first-principles review that critically assesses the balanced defense force structure which has essentially remained unchanged for the past 60 years. It also advocates that the Abbott government takes the initiative in shaping the trajectory of the U.S. alliance.
In the 2013 election campaign, both Labor and the coalition promised to lift defense funding from its current low of 1.6 percent of GDP to 2 percent. And both sides also committed to what 's termed Force 2030, the modernized defense force outlined in the 2009 Defense White Paper.
However, the study report said clearly that deferral of equipment acquisition and underfunding is making that look more like a mirage.
"There is a clear disconnect between Australia's expansive strategic interests in an increasingly complex environment, and the low political priority that has been attached to defense policy and funding. The country's political leaders need to level with the public about the defense challenges and choices ahead," said Lowy Institute International Security Program Director and report co-author, Rory Medcalf.
The study also warns that the government needs to start restoring defence spending soon. Failing that, the government will need to consider such controversial and risky cuts as temporarily freezing the salaries of civilian and military staff, reducing the Army's planned fleet of armored vehicles, reducing fighter aircraft and flying hours, building fewer future submarines, and shrinking the Defense Materiel Organization.