Australia as a Middle Power: Challenges and Opportunities

Presentation to Defence and Strategic Studies Course, Australian War College, Canberra, 17 June 2025

In global geostrategic and economic terms Australia is best described as a middle power, neither a great or major power, nor a small one. We should embrace that description; be conscious of the opportunities it presents to benefit both ourselves and others; be proud of the way in which we have played that role in the past; and be willing now to do so again, more actively and effectively than we have in recent years.

Defining Middle Powers. There is no standard definition, or agreed international list, of ‘middle powers’, and no lack of continuing argument about not only the coverage of the concept, but its operational utility, and in some cases its acceptability to those so labelled. Although Australia would be on just about everyone’s list, my successor as Foreign Minister, the Coalition’s Alexander Downer, used to insist that we were not a mere ‘middle’, but a ‘pivotal’ power. As he said in 2006, ‘we are not “middling” or “average” or “insignificant”… we are a considerable power and a significant country’.

To me, and I think most in the global policy community these days – and certainly the current Australian government – ‘middle power’ language has no connotation at all of mediocrity or insignificance. But what is it that distinguishes us – and the other twenty to thirty or so countries routinely so described, like Canada, South Korea, Mexico, Turkey and most of the Scandinavians – from, at one end of the spectrum, great powers like the US and China and, although the boundaries here are fuzzier, from what might be described as major powers (like Russia, India and Japan)? And what distinguishes us, at the other end of the spectrum, from small powers?

Focusing on objective measures of physical size – of population, GDP, landmass, defence expenditure or the like – doesn’t take the definitional argument very far. For example, using latest UN and World Bank figures, Australia, which would be on everyone’s list of middle powers, ranks only 54th in the world on population size, although we are 14th on GDP. Norway, which would be on most people’s list (given its visibility, e.g., in brokering the Oslo Middle East peace accords three decades ago, and more recently the Cluster Munitions Convention), is 116th on population, but jumps to 31st on GDP, and 3rd in the world on GDP per capita. In our own region Singapore and, I would guess, New Zealand, would again, like Norway, be on most middle power lists, but all have populations of less than 6 million people, fifty times smaller than Indonesia which would be generally now so regarded (albeit rapidly heading, certainly economically, toward major power status).

For me, there are three things that matter in characterizing middle powers: what we are not, what we are, and the mindset we bring to our international role. ‘Middle powers’ are those states which are not economically or militarily big or strong enough to really impose their policy preferences on anyone else, either globally or – for the most part – regionally. Australia might be perceived by some as a major power in our own South Pacific region, but that description would carry no credibility in the wider world, and even in our own Pacific neighbourhood it would be very unwise to overstate the deference that our relative size automatically commands.

Middle powers are nonetheless states which are sufficiently capable in terms of our diplomatic resources, sufficiently credible in terms of our record of principled behaviour, and sufficiently motivated to be able to make, individually, a significant impact on international relations in a way that is beyond the reach of small states.

And we are states, I would argue, which generally (although this can wax and wane with changes of domestic government) bring a particular mindset to the conduct of our international relations, viz. one attracted to the use of middle power diplomacy. I would describe ‘middle power diplomacy’, in turn, as having both a characteristic motivation and a characteristic method:

• The characteristic motivation is belief in the utility, and necessity, of acting cooperatively with others in addressing international challenges, particularly those global public goods problems which by their nature cannot be solved by any country acting alone, however big and powerful; and
• The characteristic diplomatic method is coalition building with ‘like-minded’ – those who, whatever their prevailing value systems, share specific interests and are prepared to work together to do something about them.

For middle power diplomacy, as I have described it, to be effective requires a number of factors coming together. Practical opportunity, often limited given the realities of great and major-power dominance. Available diplomatic resources, energy and stamina. Intellectual creativity, seeing opportunities which others have missed. And credibility, practising what you preach and being seen as genuinely independent, nobody’s deputy sheriff (a perception that Australia has found it sometimes hard in the past to shake off, and will certainly become harder for us in the future if the AUKUS submarine project, if it survives – a subject to which I will return – enmeshes us with US decision-making to the extent many like me fear).

Looking Back. There are many examples over the years of Australia effectively practising middle power diplomacy as I define it, including:

• the role of Dr HV Evatt in the creation of the UN: his fight for the rights of the smaller powers against the great powers in the respective roles of the General Assembly and the Security Council, and in his faith in the UN as an agent for social and economic reform and as a protector of human rights;
• the role of later Labor governments in initiating the Uruguay round of trade negotiations, Asia-Pacific dialogue mechanisms like APEC and ARF, the Antarctic mining prohibition treaty, finalising the Chemical Weapons Treaty, and initiating the Canberra Commission on the Elimination of Nuclear Weapons;
• the role of an Australian Coalition government in bringing to conclusion the Comprehensive Nuclear Test Ban Treaty;
• the role of Australia and Indonesia working together to craft and drive the Cambodian peace settlement;
• the role of Australia, Canada and New Zealand in leading the global fight against apartheid, with sports, trade and cultural boycotts and financial sanctions; and
• the role of Canada, Australia and South Africa working together to initiate and achieve – at the 2005 World Summit – global consensus for the concept of the responsibility to protect (R2P).

Looking Forward. Being a middle power carries with it both constraints and opportunities in the way in which we can protect and advance our national interests in the future – not only in guaranteeing our physical security and economic prosperity, but also in helping make the world, and our own region, a better place, in all the kinds of ways we have had some justified pride in achieving in the past, as I have just described.

In defining national interests, I should acknowledge that I have had, since my time as Foreign Minister, a rather distinctive approach– followed for the most part by my Labor, but not Coalition, successors. I have insisted that national interests, for us or anyone else, should be understood as embracing not just the traditional duo of security and prosperity, but also a third category: being and being seen to be a good international citizen, or putting it more simply still, a decent country.

This means to me being the kind of country which is, and is perceived by the wider international to be not just wholly inward-looking and self-interested, but one that genuinely cares about poverty, conflict, human rights atrocities, health epidemics, environmental catastrophes, weapons proliferation and other problems afflicting people very often in places far from our own shores, and very often having little or no direct or immediate impact on our own security and prosperity.

And it means translating that concern into action, with meaningful commitments to development assistance, peacemaking, peacekeeping, effective action against the perpetrators of atrocity crimes and major human rights violators, compassionate support for refugees and asylum seeks fleeing conflict or persecution, and creative diplomacy to address big global collective action problems – even if, as with climate change, at the expense of some immediate economic interests of our own.

My argument has always been that such actions are not just a moral imperative, though they are that. I see them not just as optional add-ons to the real business of national government, to be indulged in only if some compelling local interest group demand and budgetary constraints allow. My strong view, rather, is that decent behaviour can generate hard-headed, practical national advantage of the kind that appeals to realists—and political cynics—as well as idealists. It does so in three ways:

• The first return is reputational. Over many decades of active international engagement I have witnessed, over and again, how ‘soft power’ matters– being the kind of country that others admire, trust, want to visit, study in, invest in, and support in a crisis. There can be no clearer case study of the impact of reputational collapse than that now being experienced by the US with Donald Trump’s retreat from decency on multiple international fronts: tourism, overseas investment and the primacy of the dollar are already under acute strain.
• The second return is reciprocity. Foreign policymakers are no more immune to ordinary human instincts than anyone else, and if I take your problems seriously, you are that much more likely to help me solve mine. No practising diplomat will be unaware of the reality, and utility, of this dynamic, and no government policymaker should be oblivious to it.
• The third return is simply getting more stuff done. The more states that have a cooperative good-international citizenship mindset, the better the chance of solving apparently intractable collective action problems.

Against that conceptual framework, in the present very fraught international environment the question is how, realistically, can Australia – as a middle power, with all the strengths and limitations that entails – best protect and advance all three of the national interests I have described, viz. our interests in geostrategic security, economic prosperity and being and being seen to be a good international citizen?

Geostrategic Security. The geopolitical scene, both globally and regionally, is certainly more fragile and volatile than it has been for a long time, with concern in our own region focusing primarily on China. The charge sheet includes:

• Beijing’s international law-defying territorial ambition in, and militarization of, the South China Sea;
• its repeatedly stated determination to unify Taiwan with the mainland, not excluding the use of force, in a context where its repressive actions in Hong Kong have made reunification on a "one country, two systems" basis a nonstarter;
• the dramatic build up of its military, including nuclear arsenal, which makes asuccessful kinetic assault on Taiwan, even against US opposition, more plausible;
• its manifest desire to resume its historical role of regional hegemon, to whom obeisance is due, in South East Asia;
• its continued assertiveness on other territorial fronts with Japan and India;
• its efforts to increase its presence and influence in smaller but strategically significant regional players, including the Solomon Islands, Papua New Guinea and Timor Leste; and
• its transition from a bystander to regular spoiler role in the United Nations Security Council and other multilateral contexts.

All that said, it should also be acknowledged, unpalatable as this may be to many in our and the US commentariats, that much of China’s far more assertive international behaviour in recent times, and its big military expansion, is no more than can and should be expected of a hugely trade-dependent, now not just regional but global, economic superpower, resentful of any continuing claim by America to unchallenged primacy in regional and global affairs, and wanting to claim its own strategic space, and to generally reassert some of its historical greatness after more than a century of wounded national pride. There is no reason to assume that, Taiwan apart, China would ever contemplate outright military aggression – Hitler, Tojo or Putin-style – against any of its regional neighbours, let alone the United States.

If the argument is that while China might not seek outright military conquest, it does seek regional dominance, and this should be resisted at all costs for fear of what that might entail, the question that must be asked is simply this. What is the absolutely worst-case scenario: living with the reality of China becoming the dominant regional power? Or fighting a massively destructive war to stop it acquiring dominance?

There is not much for Australia to fear from the mere fact of China’s regional assertiveness, and military buildup. Not only has there never been any suggestion of China having designs on our territory, but with Beijing closer to London than Sydney, physical invasion has always been wildly implausible logistically, and will remain so. The ‘Red Alert’ Age & SMH front-pages of March 2023, with their portrayal of Chinese fighter planes headed towards us, was scaremongering of the most irresponsible kind, and the angst generated by this year’s (cheeky but hardly threatening) circumnavigation of our continent by a small Chinese naval task force not much less so.

What does pose a risk to us is a major war erupting between the US and China, which is certainly not inconceivable over Taiwan, and Australia joining in on the US side, under pressure from Washington and out of a misplaced sense of optimism that by doing so we will be buying lifetime insurance protection from our great and powerful ally. Outright invasion of Australia might not be an option, but grey-zone operations, blockade attempts and hit-and-run attacks on particular facilities –the increasing number of major US military installations on Australian soil being obvious targets– certainly would be. And above all, the economic impact of severing overnight all links with our major trading partner would obviously be catastrophic. It is desperately important, not just for us but for the region and the whole world, that such a meltdown be avoided, as I believe it can be by patient diplomacy of the kind that has kept the cross-Strait peace, however uneasily, for decades.

If sanity does not prevail, and war does erupt, this is not a fight it would make any sense for Australia to join. While obviously we should and would deplore any attack on a flourishing democracy, the reality is that Taiwan has always been a special case, not enjoying the same kind of universally recognised sovereignty as Kuwait or Ukraine. Our involvement in a war in its defence would make almost zero military difference, but come at vast cost to us.

Of course it is the case that Australia’s defence planning, like that of any other country, cannot be based on reasonable assumptions about other countries’ current or future intentions: it has to be premised on worst-case assumptions about potential adversaries’ capabilities. And in that context there is very obviously now a real question to be addressed as to whether Australia’s own defence capability – built on expenditure more or less matching in dollar and GDP terms that of other middle powers with which we routinely compare ourselves like Canada, Turkey and the Netherlands – is really fit for deterrent or response purpose, given the enormous size of the continent and maritime surrounds we would have to defend in a worst case scenario.

Until recently, the answer to that question is that our domestic effort was sufficient to cope with any threat contingency because it would always be supplemented by US military force available to us under the ANZUS Treaty, with that commitment reinforced by over a century of rusted-on support for US military operations, wherever in the world and whenever asked. We benefited from access to high-level intelligence and sophisticated military technology, but above all from the assumption that the US would be there for us if ever we needed that support.

But the stark reality is that that support simply no longer can be replied upon, if indeed it ever could be. Whatever the psychological comfort it might have offered us in days gone by, ANZUS has never legally bound the US to defend us, even in the event of existential attack. Washington will, no doubt, shake a deterrent fist, and threaten and deliver retaliation, if its own assets on Australian soil are threatened or attacked, but that’s as far as our expectations should extend. The notion that extended nuclear deterrence justifies our prostration – that the US really would be prepared to sacrifice San Francisco for Sydney — is, and always has been, a ludicrous delusion.

Donald Trump’s re-election as President puts that conclusion beyond reasonable doubt. He sees allies as free-loading encumbrances rather than assets; has no respect for international law and institutions; has no instinct to push back against the excesses of authoritarian governments; and thinks rather – to the extent he thinks consistently at all – in terms of every major power (including Russia, China and the US itself) within its own sphere of influence having unrestricted license to act as it pleases (politically and militarily, if not economically).

And all that in the context of the US no longer having, objectively, the comparative military power it once had to impose its will on China and perpetuate its leadership in Asia, with its oft-proclaimed “pivot” to Asia so far producing very little in the way of additional hard-power projection. As Hugh White has recently written, “Contrary to Hegseth’s boyish boasts, no one today seriously believes the US can win a war with China over Taiwan. Most likely a bloody stalemate would lead to a nuclear standoff that China would win because its stake is higher, or a nuclear war that neither could survive. No-one in Washington really believes America’s leadership in Asia, or its allies there are worth that."

If all that is true, what is the appropriate response now for Australian defence and security policy? The short answer is less America (not walking away from the alliance, but becoming far less dependent upon it), more Asia, and more self-reliance.

As to more Asia, Australia’s approach to our key Asian regional neighbours – Japan, Korea, India and in South East Asia – should be premised on the assumption that all have strong economic relations with China, none really want to be forced to take sides in the China-US strategic contest, and none want to be collateral damage if things go pear-shaped. But all have an interest in ensuring that China does not over-reach, and in concentrating China’s mind on the prospect that overdoing its hegemonic aspirations in the region will be met with serious push-back, not just individually but collectively, and not excluding – in an extreme case – some military response. There is every reason, in that context, for Australia to be actively pursuing – as we indeed are under the present Government, with Penny Wong as Foreign Minister being particularly diplomatically effective – strengthened political, and where possible military, relationships on both a bilateral and mini-lateral basis.

More Asia also means for me Australia trying to develop with China itself not just a one -dimensional economic relationship, but a more multidimensional one, particularly in the multilateral sphere where Beijing has in recent times often played a more interested and constructive role than has generally been recognised, certainly more than Trump’s Washington. Australia should be actively exploring the scope for cooperation in a whole range of global and regional public goods issues – from climate change to nuclear arms control, terrorism to health pandemics, peace-keeping to responding to mass atrocity crimes, and defending free trade. To do so would be entirely consistent with the mantra often repeated by PM Albanese and FM Wong that in dealing with Beijing we should “cooperate where we can, disagree where we must, and manage our differences wisely”.

As to more self-reliance, it is clear – again on the premise that defence planning must be based on potential adversaries’ capabilities, not their known or likely intent – that (as every pet-shop galah is now saying, as my favourite Prime Minister would put it) we are going to have to get used to doing more, spending significantly more, and prioritising that expenditure more wisely. As Prime Minister Albanese has rightly been saying, the starting point must be the analysis of real need, not the setting of a more or less arbitrary percentage of GDP, but it’s hard to argue that no GDP increase will be necessary.

In shaping our future capability, my own instinct would be to support not a continuation of the forward defence strategy we have more or less explicitly adopted in recent decades, but what Sam Roggeveen calls the ‘echidna strategy …spiky but unthreatening’. Recognising that this particular echidna would need to be able to both fly and swim, such a strategy would focus on making our adjacent seas and skies unsafe to the point of impenetrability for any opposing force, through a combination of air, underwater, missile and cyber detection and destruction capabilities, with significant reliance on autonomous delivery systems. The sudden emergence of drone warfare as a critical battlefield resource in the Russia-Ukraine war has been a wake-up call to militaries everywhere, as Admiral David Johnson made clear in his ASPI Conference appearance earlier this month. The ADF Chief also made clear that our future defence posture would need to be primarily homeland focused.

AUKUS? Where does all this leave AUKUS? As to its Pillar II, there is no reason, in my judgment, to be anything but supportive, involving as it does Australia, the UK and US trilaterally developing advanced new military technologies – including cyber, AI, quantum, hypersonic, and underwater – with the only real question being as to whether the achievement reality will match the expectational hype. But Pillar I, involving our acquisition of a fleet of at least eight nuclear-propelled but conventionally armed Collins-replacement submarines, is a completely different story. There are three knockout arguments for Australia abandoning this wildly misconceived project, and doing so sooner rather than later, before it falls over – as it is increasingly likely it will – on the US or UK sides.

The first is deliverability. There has been from the beginning zero certainty of the timely delivery of the AUKUS boats – three, or possibly five, Virginias from the US, and then another five newly designed AUKUS class mainly from the UK – and the Pentagon’s just-announced review of the whole project has dramatically now compounded that concern. Both the US and UK have explicit opt-out rights, and the industrial capacity in both is already under huge stress in meeting their own national boat-building targets. It should not be assumed that the US review is just another Trumpian extortion enterprise, designed to extract from us an even bigger financial commitment to the project: there is very real concern in Washington that even with more Australian dollars devoted to expanding shipyard capacity the US will not be able to increase production to the extent required to make available three – let alone five – Virginias to us by the early 2030s.

Even in the wholly unlikely event that everything falls smoothly into place in the whole vastly complex enterprise – transfers of US Virginias, British design and build of the new boats, human resource availability, manageable costs and all the rest – we will be waiting decades for the last boat to arrive, posing real capability gap issues.

The second is cost-benefit. Even acknowledging the superior capability of SSNs, and making the heroic assumption that their undetectability will remain immune from technological challenge for their lifetime, the final fleet size – if its purpose really is the defence of Australia – appears hardly fit for that purpose. Just how much intelligence gathering, or archipelagic chokepoint protection, or sea-lane protection, or even just “deterrence at a distance”, will be possible given usual operating constraints – which would here mean having only two boats deployable at any one time? Moreover, the eye-watering cost of the AUKUS submarine program will make it very difficult, short of a really dramatic increase in the defence share of GDP, with all that implies for other national priorities, to acquire the other capabilities –in particular, state-of-the-art drones, missiles, aircraft and cyber capability – that we are now becoming acutely aware will be the assets that matter most in future warfare.

The third big objection, and to me in many ways the strongest of all, is the impact of this acquisition on Australia’s sovereign agency. It was perception of the US’s own strategic advantage that drove Washington’s agreement to the deal – best summarised by Kurt Campbell’s indiscreet observation at the time that “we have them locked in now for the next 40 years”. It defies credibility to believe that this incredibly sensitive technology would be transferred to us – with all the associated emphasis on the “interchangeability” of our fleets and new basing arrangements in Australia – other than on the assumption, whatever the public denials, that these boats would be available at the flick of a presidential finger to join the US in any future war, however misguided, it might choose to fight. It will be the same story when it comes to operational decision-making: I have had personal ministerial experience of being a junior allied partner of the US in a hot conflict situation – the first Gulf War in 1991 — and my recollections are not pretty.

All that AUKUS and its associated new alliance commitments have done for Australia’s defence is paint more targets on our back. Not only Pine Gap, which has always been the case, but now Perth with the Stirling base, Northern Australia with the marine and B52 bases in Darwin and Tindal, and a possible future east coast submarine base as well. The crazy irony is that we are spending an eye-watering amount to build new capability to meet military threats which are most likely to arise simply because we have that capability and are using it to support the United States.

It is hard to contest Hugh White’s conclusion that AUKUS “commits us to spend immense sums of money on nuclear submarines we do not need and will never receive, all to prove our loyalty to a US alliance that is already, if we only knew it, passing into history”. It would make eminent sense for our Government to bail out now and not wait for the whole project to fall over. But, if it does continue to limp along on the US and UK side, I fear that it’s also hard to contest James Curran’s unhappy conclusion, in a recent message to me, that “when push comes to shove, whatever government here will just push on with it, with the support of the public service, the intelligence community and the armed forces. And the electorate will sigh and probably be persuaded.” The quality of public debate on defence and foreign policy in this country is not what it should be.

To move on now, much more briefly, from national security to the other two national interests I have described…

Economic Prosperity. On the question of how Australia, as a middle power, can best protect and advance our national interest in economic prosperity, the obvious first point to make is the connection with geostrategic security. China is by far Australia’s biggest trading partner, constituting some 26% of our total trade (30% of our exports, and 20% of our imports), with an annual surplus our way of around USD80bn: it would be catastrophic for us if those links were severed in the context of us being sucked into outright conflict.

The US, by contrast, has a much smaller share of our total trade, just 8%, but with a surplus its way of around USD 30bn, one of the few things Donald Trump seems to like about us. That affection, of course, has not stopped him slugging us, along with everyone else in the world – including for a time the penguins of Heard Island – a so-called ‘reciprocal’ baseline tariff of 10% on everything we export, along with an additional impost for aluminium and steel. All without rhyme, reason or economic logic, and profoundly counter-productive to America’s own interests as well as all those he is attacking.

Given the scale of the presidential mania involved in this enterprise, it would be ludicrous to suggest that Australia’s middle power weight by itself could do anything to tip the scales back toward sanity, although we may prove to have some unique bargaining power with our proposed critical minerals strategic reserve proposal.

All we can really do in response accelerate our efforts to negotiate bilateral and minilateral free trade agreements with other players in the region and beyond, as the Government is now doing. And, drawing on our longstanding credentials as a champion of free and open trade, and our demonstrated capacity in this space to build international coalitions of the like-minded, accelerating our advocacy, globally through the WTO and regionally through existing mechanisms like the RCEP and the CPTPP, to encourage collective pushback against the Trump administration’s protectionist assaults. This effort may not be immediately effective, but will at least keep the flame alive.

Being and Being Seen to Be a Good International Citizen. There is a lot more Australia can and should be doing to advance our soft power, starting by explicitly restoring the concept of good international citizenship to centrality in our foreign policy. Foreign Minister Penny Wong says she doesn’t disagree with the sentiment but prefers to talk of Labor’s commitment to “constructive internationalism”. But I remain to be persuaded that that kind of language gets the job done.

Against the decency benchmarks which I think are most relevant, our overall record in recent decades has been patchy at best, and lamentable at worst. On overseas aid, we have been the worst-performed of any rich-country donor in terms of the decline in our generosity over the last five decades. On human rights, where what happens at home is crucial to the effectiveness of our advocacy – nobody likes a hypocrite – our record has been at best mixed, sometimes ahead of the game, but sometimes, particularly on Indigenous issues, lagging badly behind.

Our contributions to international peace and security in recent decades have been patchy. In peacemaking diplomacy, and responding to mass-atrocity crimes, we have played some important positive roles in the past, notably in Cambodia, but since have largely gone missing. As international peacekeepers we have always done well, but accepted far too few such obligations in recent years: at last count we have just 60 peacekeepers – not the hundreds, or sometimes thousands, of the past – engaged in UN and related operations. In meeting our responsibilities to refugees and asylum seekers, our record has been at times in the past a very proud one, but in recent years little short of shameful.

And as to helping meet the three great existential risks to life on this planet as we know it, our international performance has been underwhelming: a bare pass in the case of pandemics, and at best a bare pass again on climate change, where the lack of bipartisanship has been a serious policy inhibitor. Our aspiration on climate change – I know shared by Minister Chris Bowen, who is campaigning mightily for Australia and our Pacific Island neighbours to host the next COP Summit in 2026 – is becoming an acknowledged global leader, not just bit player, in the crusade against global warming, putting our green energy transition money where our mouth is.

On nuclear weapons, we have played a useful role in the past, and can again, in advancing both risk reduction and the ultimate goal of elimination, but our voice for the last decade has been largely silent. We can make a particular contribution – by focusing on the nuclear risk reduction measures we have championed in the past – in bridging the gap between those who, on the one hand, will settle only for the kind of absolutism embodied in the Nuclear Ban Treaty, and on the other hand, the nuclear armed states and those sheltering under their protection who want essentially no movement at all on disarmament.

It is never easy to craft coalitions across geographical, cultural and ideological divides, and the current global and regional tensions being generated by some of the world’s most powerful players has made the task no easier. But the need, will and capacity to do so is as well recognised as ever, and with strong leadership progress can be made.

Raw economic and military power will always count for a lot in international affairs. But it does not count for everything. Middle powers with a sense of where they want to go and with the credibility, resources and energy to follow through can have a major impact in making the Asia Pacific region and the wider world safer, saner and more prosperous. That is the challenge for Australia and all those who think like us.