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Securing Australia's Future: Meeting Geopolitical Challenges

Keynote Address to UniSA Business International Symposium Challenges for Australia’s Future: Seeking Stability and Security, Online, 12 November 2021

Australia’s international geopolitical environment is obviously more challenging than it has been for decades. Towering over everything has been China’s dramatic rise and new assertiveness, America’s equally significant relative decline in economic weight and strategic authority, and the prospect of ever more serious confrontation between them, with Taiwan and the South China Sea the most obvious flashpoints. Elsewhere in our region, in South East Asia ASEAN has been losing whatever remained of its capacity for united and effective action in response to both internal and external challenges, and the South Pacific has been re-emerging as a potential playground for major power contest.

Further afield we have been affected to some extent by Russia playing the role not only of regional hegemon but global spoiler whenever and wherever it could, and by continuing conflict and state fragility in South and West Asia. Europe, an important potential stabilizing force, has been struggling to maintain its collective identity in the face of surging nationalist and populist sentiment – and Britain’s Brexit brain-fade. And multilateral diplomacy is under stress everywhere, with a troubling lack of commitment – faltering at best, and non-existent at worst – to problem solving in the UN, G20 and other major global forums, above all in relation to the three great existential risks to life on this planet as we know it: pandemics, climate change and nuclear war.

The jury is still out on whether the lasting impact of the COVID catastrophe we have all been experiencing will be to serve as a wake-up call as to the absolute necessity for greater international cooperation and collaboration, or rather reinforce extreme nationalist and protectionist sentiment and suspicion of intergovernmental institutions, or – perhaps most probably – be a little of both, leaving us with no more certainty than we have now about the kind of world we will have to navigate in the years ahead.

So how should Australia act to secure its future in this very uncertain world? My view has been for some time, and remains, that is that our best policy response is one built on four pillars: Less America, More Self-Reliance, More Asia and More Global Engagement. I will develop each of these themes in more detail, but in short, they amount to this. ‘Less America’ means being honest not only about the strengths but the limitations of our traditional strategic dependence on the US, balancing appreciation with strong independent judgement. ‘More Self-Reliance’ means being willing to be not only more diplomatically more proactive, but to spend more than our traditional 2% of GDP on defence.

‘More Asia’ means being much more actively engaged in defence terms not just with the US but with other key Asian players like Japan, India, Indonesia, Vietnam and – certainly – South Korea, who can make an important collective contribution to maintaining regional peace and stability. In relation to China, it means being clear-sighted and balanced in our approach, accepting the legitimacy of some of its ambitions while being prepared to push back against others. And ‘More Global Engagement’ means enhancing our general credibility by becoming again a more committed player than we have been in recent years in helping to overcome collective-action problems in achieving global and regional public goods.

Less America. The great benefit for Australia of the US alliance, from which I certainly do not suggest we should walk away, has always been access to intelligence and advanced defence technology otherwise beyond our reach. We have also arguably benefited from the deterrent protection offered by America’s massive military, including nuclear, firepower, though I am not alone in being less persuaded about the reality of that. The AUKUS agreement will unquestionably bind us even closer than we have been in security terms to the US, not just owing to its submarine component, but also in terms of the other highly sophisticated technology – including artificial intelligence, quantum computing, and missile-related systems – that also seems to be on offer. From one point of view this simply represents a difference in degree, not in kind, from what has always been the case. But the AUKUS agreement has also, understandably, re-ignited concerns that we will become so closely enmeshed with the US in security matters that we lose all our remaining effective capacity for independent judgment and action.

We have too often in the past, above all in Vietnam and Iraq in 2003, joined the US in fighting wars that were justified neither by international law nor morality, but because the Americans wanted us to, or we thought they wanted us to, or we wanted them to want us to. But while the ANZUS treaty requires the United States ‘to act’ should we come under attack, it does not require that action to be military. We should be under no illusion that, for all the insurance we might think we have bought with all those past down-payments in blood, or a ‘century of mateship’, the US will be there for us militarily in any circumstance where it does not also see its own immediate interests being under threat. While that was almost certainly also the reality under previous administrations, it has been thrown into much starker relief by Trump’s ‘America First’ approach, and I doubt that anything will be very different under Biden’s ‘foreign policy for the middle class’, or with any future administration. I think the reality is, as my ANU colleague Hugh White has repeatedly put it, that ‘we need to prepare ourselves to live in Asia without America’.

At the time of the AUKUS announcement the US Secretaries of State and Defense gave clear public assurances that the deal will involve ‘no follow-on reciprocal requirements of any kind,’ and ‘no quid pro quo’. The bottom line is that Australia’s political leaders in the years ahead must be unwavering in holding the Americans to those assurances. We are a sovereign nation-state, and must behave like it. Every future contingency, and every future request for our military involvement, must be addressed solely on its own merits. Continued US engagement in our region, as a balancing counter-weight to potentially hostile forces, is certainly highly desirable. But less reflexive support by Australia for everything Washington chooses to do or ask for has been, and remains, long overdue. As we should have learned from past experience, we win no respect or credibility anywhere when we characterize ourselves, or allow ourselves to be portrayed by others, as America’s ‘deputy sheriff.’

More Self-Reliance. Preparing ourselves to rely less on America certainly means being more of a diplomatic free agent: adding to our reputation and credibility with an activist foreign policy that is creative, proactive, value-adding and unconstrained by the constant urge to look over our shoulder to Washington. I will come back later to the question of how capable we currently are to engage in that kind of diplomacy. But more than that, it does entail, in military terms, building defence capability that involves not only more bucks than we are usually comfortable spending but getting a bigger bang for each of them.

While defence expenditure has been increasing – with both sides of politics committed to maintaining it at a credible 2 per cent, or slightly more, of GDP – given the size of our continent, our capacity to defend ourselves against any really existential threat is limited. I am optimistic enough to believe that in the world of today and the foreseeable future the costs and risks of waging war so wildly outweigh any conceivable benefits for any significant player that the likelihood of a major conflict in the foreseeable future is actually very low. For the West to prematurely assume Chinese intent to be generally malign risks being dangerously self-fulfilling. But of course defence planning always has to be based on worst case assumptions. States must prepare for possible war based on potential adversaries’ capabilities, not their known or assumed intent, and in that context we are going to have to get used to doing more, and doing more for ourselves.

In that context, I think the decision to acquire nuclear-powered submarines, however poorly handled its execution might have been, is perfectly defensible. We are an island continent with a massive coastline to defend against threats that, however unlikely now, could arise in the future, as they did in the past with the bombing of Darwin, and the actions of submarines against both Sydney and Newcastle, by Japan in World War II. In an age where surface vessels are ever more vulnerable to missile attack, it is almost universally accepted that highly capable submarines must be an indispensable part of our arsenal.

Technically, a strong case can be made that the submarines most fit for Australia’s purposes, -- given the huge distances involved in traveling from any home port to potential maritime trouble spots in our northern archipelago and beyond – are, and always have been, nuclear rather than conventionally propelled. They are much faster in getting to station, and away from trouble; they can remain underwater for periods limited essentially only by crew endurance; and with the latest technology they are said (although this is contested by some) to be more silent as well. And with the kind of naval reactors being proposed (not requiring refuelling for the whole of their life), and our commitment not to equip them with nuclear weapons, the Australian acquisitions should not raise proliferation concerns.

Of course there are multiple issues still to be resolved about cost, delivery time, bridging the potential capability gap, independent operability and the extent to which they can be locally built – with plenty of reason for doubt, given our past history with major defence contracts in general, and submarine contracts in particular, whether we can get any of this right. But it is hard to argue with the basic proposition that we need more self-reliance when it comes to securing our future, and that effective submarine capability is an indispensable part of that.

I should add, in deference to my ANU colleague Hugh White, and the kind of argument Paul Keating was making at the National Press Club this week, that despite the strong arguments and our military’s clear preference for nuclear propulsion, a good argument can still be made that we would be better off overall with a significantly larger number of smaller, more manoeuvrable conventionally powered submarines with more limited range. This position should be exhaustively tested, and the public fully informed, before Australia becomes finally and irrevocably committed to going nuclear.

More Asia. Some Australian policymakers, and those in sections of the media and elsewhere who try to influence them, still find it difficult to accept that, whatever may have been the case in the past, what matters now and in and future is not our history but our geography. But all the yearning for the Anglosphere that has been reignited by the AUKUS agreement – the sense in some quarters that what matters above all is our relationship with the US and UK – cannot conceal this reality. Asia is the region where our economic interests and opportunities are overwhelmingly now concentrated; the region to which – as the composition of our population continues to change – we are increasingly socially and culturally tied; and the region from which any future threats to our security will emanate.

In the geopolitical and strategic security context on which I am focusing in this talk, ‘More Asia’ means two big things. The first is strengthening our relationships at all levels with key regional neighbours like India, Indonesia, Vietnam, Japan and South Korea, as a collective counterweight to a potentially overreaching China, and the second is getting our relationship with China itself back on a credible and sustainable track.

As to our regional neighbours, as much as one would welcome Australia developing an even closer relationship with ASEAN as a whole – with all its potential for harnessing the region’s collective middle power energy and capacity –for the foreseeable future internal divisions, and the organization’s culture of extreme caution, make that unlikely. Our efforts in South East Asia should be focused on its two heaviest players, Indonesia and Vietnam, as well as our traditional partners Singapore and Malaysia.

I am particularly keen, as I argued at a similarly-sponsored forum at this University three years ago - that Australia should work ever more closely with South Korea to strengthen the many bonds we already share. Middle powers like us with the credibility, resources, and energy to follow through – at least when we have leaders with a sense of where they want to go – can have a major impact in making this region and the wider world safer and saner: through bringing new agenda-setting ideas to the table, bridge-building between developed and developing countries (as we are already trying to do with the MIKTA group), and building critical masses of support for the delivery of regional and global public goods. As to raising our defence cooperation to another level, maybe it is a bridge too far right now to contemplate South Korea joining the evolving Quad – alongside Australia, India, Japan and the US – but I think that is an option for the longer term that should be kept open.

Getting our currently deeply fraught relationship with China back on track does not mean Australia becoming Beijing’s patsy, any more than we should be Washington’s. We should not hold back in making clear our own commitment to democratic and human rights values, and should be prepared to push back strongly when China overreaches externally, as it has in the South China Sea, or domestically as in Xinjiang, Tibet and Hong Kong. And of course we have to resist strongly any undermining of our national institutions.

But we do need to rein in some of the counter-productive stridency of some of our public rhetoric, to recognize the legitimacy of many of China’s own security and economic national interest claims, and to acknowledge the provocativeness of some of our own self-interested actions (for example, our very heavy reliance on anti-dumping trade rules). We should be looking for reasons to support, not block, Beijing’ stated interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). We should acknowledge the essential legitimacy of the scale and ambition of the Belt and Road Initiative, and while being right to be cautious about its governance, be a little less anxious about its regional security implications. And we certainly need to recognize the legitimacy of China’s demand to be now not just a rule-taker but a seriously participating rule-maker in global policy-making institutions.

Australia needs to be particularly careful about talking up, as so many now are, the prospect of Taiwan becoming the likely trigger point for war. China’s new assertiveness under President Xi Jinping is a given, with China making no secret of its ambition to match the United States as a global player, to carve out its own strategic space in the Western Pacific, and to become a regional hegemon to which all its neighbours pay deference. But Beijing also fully understands, and wants to avoid, the catastrophic horror and misery its people would suffer in any major modern war. While Xi’s commitment to reunification with Taiwan is absolute, and he would no doubt want to achieve this in some form during his tenure – and certainly by the 2049 anniversary of the founding of the People’s Republic – no Chinese political or military preparations suggest an invasion is remotely imminent. If Xi’s patience does run out and he chooses to force the issue, it is far more likely — given the difficulties of mounting any cross-water invasion and the risks of triggering wider war – that it will be by ‘all measures short of war’, blockades, cyber-sabotage and the like. Bad enough, but not the full kinetic repertoire.

What has rightly been described as, the ‘delicate balance of ambiguities’ of the One-China policy has long served everyone’s interests and, if cooler heads prevail, can do so for a long while yet. If that prediction proves too optimistic, and it did come to a fight – and one unprovoked by Taiwan – it would be a tough call for Australia, if pressed hard by Washington, not to join in the defence of a fellow thriving democracy. But Alexander Downer, as Australian foreign minister in 2004, was right to say – not a concession I often make – that on Taiwan the ANZUS Treaty does not apply. Australia has little or no capacity to influence the outcome, but a great capacity to suffer if drawn into war at any level.

When a relationship is under the kind of strain ours has been with China, the smart diplomatic course is to focus hard on potential shared interests, issues that can unite rather than further divide. I have long argued that one of the most productive ways of building new content – not just economic – into our presently very one-dimensional relationship is for Australia to play both on what's left of our reputation as a good international citizen, committed to finding effective multilateral solutions to global and regional public goods issues, and China's recognition, I think gradually becoming evident again, that its national interest will be much better advanced projecting soft power than ‘wolf-warrior’ stridency. I think we can be encouraged in this respect by the much more emollient language we have heard from Xi and his government over the last two days in the joint statement on climate at Glasgow and in Xi’s speech at the APEC CEO’s summit on the need to avoid cold war and ‘build a shared future’. I think we also need to recognise that in areas like international cooperation on peacekeeping, counter-terrorism, and – for the most part, if not wholly – climate policy, response to pandemics, and arms control, Beijing has been playing a more interested and constructive role than has generally been recognised.

More Global Engagement. This should be a defining theme of our overall foreign policy, not just a core element in our relationship with China. Australia has been at its best, and our standing in the world highest, when we have projected ourselves effectively on to the world stage as a country deeply committed to our common humanity and determined to do everything we can to make the world safer, saner, more prosperous and just – advancing what I like to call our national interest in being and being seen to be a good international citizen (and about which I will be publishing a new little book, in the Monash National Interest series, next February). But it has to be said that in recent times, when it comes to addressing a whole variety of global and regional public goods problems, Australia has been nowhere near its best. That has particularly been the case with our contributions – paltry at best, and lamentable at worst – to resolving the most serious security risks our planet faces, the three great existential threats of pandemics, climate change and nuclear war.

In the case of global pandemics, Australia cannot realistically be expected to be more than a bit player. Our one big effort to become more than that, trying in 2020 to lead the charge to establish an international inquiry into the Chinese origins of COVID-19, was a counterproductive mess: ill-thought-out operationally, underprepared diplomatically, having no impact institutionally on the terms of the final WHO resolution, and serving only to make our already fragile bilateral relationship with China a good deal worse. But we do have a voice in multiple relevant international organisations, and we should be using it more responsibly than we have been. We have dragged our feet in the WHO in backing a waiver of patents and other intellectual property rights on vaccines, diagnostic tests and devices needed to fight the current pandemic. Our financial contribution to COVAX – the global program for distributing vaccines equitably, which is way behind its 2021 target – has been among the least generous of any developed country.

In this context, it has to be said that our bilateral performance has been no more impressive than our multilateral contributions. Despite our announced commitment to making vaccines available to our neighbours in the South Pacific through our aid program, Australia has been as responsive or generous as we could and should be. With Papua New Guinea in particular in real crisis, by the end of last month we had delivered just 8 per cent of our promised donations to the region. Nor have we shown any commitment to the long haul, announcing that supply contracts with manufacturers will not be renewed once the donation target of 50 million doses has been met.

Unlike our capacity to make a major international contribution on pandemics, Australia is, and is seen to be, anything but a bit player on climate. We are a huge presence in global energy markets. The largest exporter in the world of liquefied natural gas, the second-largest exporter of thermal coal, and overall the third-largest fossil fuel exporter, behind only Saudi Arabia and Russia. We may, with our small population, contribute only around 1.3 per cent to total domestic global greenhouse emissions, but that puts us among the top dozen polluters in per-capita terms. Beyond that, we are the twelfth- or thirteenth-largest economy in the world, a member of the G20 (who played a recognised central role in formulating its policy response to the global financial crisis), and have a long record of punching diplomatically—when we choose to—well above our weight on economic and security issues. What we say and do on global warming matters.

But it is all too obvious that what we have said and done so far in meeting this huge global challenge has impressed almost nobody. The Rudd and Gillard Labor governments tried but lost their way. After the Greens, making as so often the best the enemy of the good, made the catastrophically wrong-headed decision to join the Opposition in striking down Rudd’s Carbon Pollution Reduction Scheme, it was downhill all the way. Abbott was a rampant climate denialist, and hopes that Turnbull, who deposed him, might steer Australia back to a more responsible position were soon dashed when it became clear that the price of his elevation was a commitment to the Coalition party room not to change its climate policy. Morrison, who deposed him in turn in 2018, had, by contrast, no convictions on the subject which he needed to betray.

Now, with a national election looming, public opinion moving overwhelmingly in favour of more decisive and effective action, business leaders becoming much more outspoken about the need for decisive government leadership, and facing fierce international criticism at this month’s COP26 Glasgow climate summit, Australia has at last adopted the current globally accepted target of net-zero emissions by 2050. But Morrison’s announced ‘plan’ to get there has been legitimately attacked as embarrassingly substance-free – magic pudding stuff. And on the even more critical issue of strengthening the short-term 2030 target, his government, captive to the troglodyte majority of its National Party Coalition partner, has refused any further concession. Australia’s current position is seen internationally as grudging, minimalist, and will do nothing to redeem our now well-established reputation as a climate laggard.

On the remaining big existential risk issue, avoiding the threat of nuclear war, Australia is again on the face of it a fairly marginal player, but one who has played in the past a major role in global agenda setting – not just on nuclear non-proliferation but disarmament – in particular with the major international commissions sponsored by the Keating and Rudd Governments. We can play such a role again in the future, if those on the non-Labor side of politics, and some on my own, can overcome their lovesickness with nuclear deterrence, and the joys of sheltering uncritically under whatever nuclear umbrella we believe the United States might be inclined to hold up for us in a crisis.

One especially important contribution would be to support the growing international movement for the universal adoption of ‘No First Use’ doctrine by the nuclear-armed states. President Obama was keen to go down the functionally equivalent path of a ‘sole purpose’ statement (namely, that nuclear weapons were held only to deter or respond to nuclear, not other kinds of, attack) but was dissuaded at the time by his North-East Asian, Central and Eastern European—and Australian—allies, all of whom wanted to cling tenaciously to an all-embracing nuclear security blanket. Another opportunity has now arisen with the Nuclear Posture Review being conducted by President Biden, who has made clear he personally shares Obama’s view, but is facing the usual strong push-back from the Pentagon. I hope this time round Australia will both support No First Use and be less timid about saying so. But that will need not only the election of a Labor government, but one that has recovered its mojo on these issues.

Revitalising Australian Diplomacy. If Australia is to meet the many international geopolitical challenges we are our now facing, there are a number of players who are going to have to recover their mojo – their capacity, confidence and persuasive influence. I’m referring in particular to our political leaders generally, and to our professional diplomatic establishment.

Intelligent and effective foreign policymaking and implementation starts, as always, with a country’s political leadership. We have had in the past prime ministers who have combined substance, style, imagination, personal persuasiveness, and an ability to avoid harmful mistakes: Whitlam, Hawke. Keating and Rudd were all in that class, and Turnbull had the potential to be. I’m trying hard not to be partisan, but those who would put Menzies and Howard in the pantheon have to reckon on the scale of some of their outright mistakes, including support for Suez and apartheid, and taking us into war in Vietnam and Iraq. And now we have Prime Minister Scott Morrison, described last week by journalist Nikki Savva –nobody’s idea of a left-wing zealot – as having performed the extraordinary diplomatic feat of somehow managing to have three major world powers offside simultaneously: ‘It’s an outstanding trifecta, when the Chinese refuse to talk to you, the American President thinks you are a boofhead and the French President calls you a liar.’

The other really critical player, if we are to meet our international challenges, is our professional diplomatic establishment, currently lacking both effectiveness and influence on a scale I can never previously recall. While I know there are many hugely capable officers still within the system at all levels, their morale and confidence have for too many years taken a battering as a result of Australian foreign policy, and its most capable practitioners, being in recent years domesticated, securitized, under-resourced and generally unappreciated.

Australia may not be alone in having its international policy driven largely by domestic political preoccupations – think just of President Biden’s ‘foreign policy for the middle class’ – but in recent times our leaders have taken indifference to what the rest of the world thinks of us to extremes, ignoring ample survey evidence from the Lowy Institute in particular that when governments do take strongly principled and far-sighted positions they have had little difficulty in taking the community with them.

What is very clear is that there is a lack of respect within the government for independent diplomatic judgment, with frank and fearless advice from public servants carrying more career risks than rewards. When the government does take advice on foreign policy it has increasingly obviously been from the defence and intelligence establishment, leaving DFAT marginalized. It is hard to believe that the obvious mishandling of the AUKUS announcement, not only with France but our regional neighbours, was not a product of that bias, although having a newly appointed departmental head with military but no previous diplomatic experience cannot have helped.

The under-resourcing of DFAT is reaching almost scandalous dimensions, with its budget in 2022 not only a small fraction, as always, of Defence’s, but smaller than it was fifteen years ago, with our diplomatic network ranking in size now 27th in the world, one of the smallest in the developed world – outranked by Greece and Portugal among others – and way below our needs given our place in the region and the world, and the number and complexity of the international challenges we face. I am glad to note that Penny Wong has made it clear that as Foreign Minister she would make the restoration of DFAT’s capability and morale one of her very highest priorities.

A country with Australia’s general record and reputation as an energetic, creative middle power which has on many occasions in the past played a world-leading role in international diplomacy—in institution building, and on peace and security and other issues— should be doing better than we are now, both in protecting our own direct and immediate security interests, and in making the wider world a safer and better place for all its peoples. I am optimistic that we can meet all these international challenges, but we have a lot of ground to recover, and for that to happen a necessary condition is sharply focused, principled and intelligent political leadership from both sides of national politics.