The ADF reserve system is obsolete. We need a dramatically expanded force

Australia needs to radically reorganise its reserves system to create a latent military force that is much larger, better trained and equipped and deployable within days—not decades.

Our current reserve system is not fit for purpose. It was designed many decades ago to support distant expeditionary operations, not the prospect of major war in our immediate region emphasised in the 2023 Defence Strategic Review (DSR).

With doubts growing about the reliability of our major ally, we have no choice but to prepare to defend ourselves—if necessary, largely on our own. This requires whole-of-nation preparations that were described in the DSR. The driving needs are to deter and provide effective defence against an aggressive China.

But the Review of the ADF Reserves, quietly released before Christmas, addresses none of this. At best, it is an administrative review that describes how management of the current system can be refined. It is an exercise in deck chair rearrangement, when we need a credible plan to build a far larger latent force that can be mobilised to carry much of the load if we must fight alone with little notice.

Commissioning this review of Australian Defence Force reserves was a key recommendation of the DSR. The DSR said:

The strategic risks we face require the implementation of a new approach to planning force posture, force structure, capability development and acquisition… It is clear that a business-as-usual approach is not appropriate.

The DSR said that the force structure was ‘not fit for purpose’ and that the country needed a larger defence force, greater war-fighting endurance and stronger national resilience.

The review of reserves doesn’t address these issues at all but does describe the current reserve system. It states that in early 2024 some 41,000 people were registered as ADF reserves, but they included 10,000 who had never rendered service. Some of the remaining 31,000 provided specialist skills that were in short supply elsewhere in Defence, some filled gaps in permanent units, and a few served as a base for ADF force expansion in future emergencies.

At best, the reserves review performs a process-reform function, suggesting tweaking of current systems for efficiency and effectiveness. It recommends three categories of reserve service, accelerated entry pathways, adoption of an approach of providing minimal essential training, and a further review of conditions of service. However, the review proposes a recruitment target of only another 1000 personnel by 2030.

This is clearly not what the authors of the DSR had in mind.

There are limits on how many permanent ADF personnel can be recruited short of major war.  However, given our strategic circumstances, a steep increase in part-time personnel should be a priority.

Advanced democracies variously use three reserve force models. The first is an expeditionary one suitable for countries which are not directly threatened but whose militaries periodically deploy to fight in distant wars of choice. Britain, Canada, New Zealand and Australia use this model.

The second type is the homeland and theatre defence model. It is used by countries that face serious threats of direct attack with little warning and therefore need to be able to field a very large defence force to fight wars of necessity within a few hours or, at most, a few days.

Examples include: Finland which, with a population of 5.6 million, operates a force of 24,000 permanent military personnel and 254,000 trained and equipped reservists; Israel, which from a population of 9.8 million, fields 170,000 permanent force personnel and 465,000 active reservists; and Singapore, which, with a population of 6 million, can field 51,000 permanent force personnel and 253,000 trained and equipped reservists.

The third type is a hybrid, such as the US model. From a population of 340 million, the United States it has a permanent military force of 1.3 million supported by 807,000 well-trained and well-equipped reservists.

The reserves review should have asked which model was now most suitable. Our expeditionary model, inherited from forward commitments in Korea, Malaysia and Vietnam, is obsolete. It provides some operational capabilities but generates limited resilience and would require many years to expand the reserves to the size needed for major regional war, which we could face before the end of this decade.

We must rapidly transition to a homeland and theatre defence model or, possibly, some sort of hybrid model. We must quickly prepare a reserve force that is much stronger than what we have: better trained, equipped and organised, and much larger. It must be deployable within days.

We must simplify and accelerate the way we bring people into it and improve ADF access to the national skills pool. Many intelligence, cyber, transport, medical, maintenance and other roles can be filled by qualified civilians following short training periods.

This next-generation ADF reserves system demands big changes in leadership, culture and organisational habits. The government must explain the security challenges Australia faces, why major changes are needed and why people should enlist.

What’s needed now is an action plan to quickly develop a much larger ADF reserve force. We needed it yesterday.

Elbridge Colby’s vision: blocking China

Elbridge Colby’s senate confirmation hearing in early March holds more important implications for US partners than most observers in Canberra, Wellington or Suva realise. As President Donald Trump’s nominee for under secretary of defence for policy—the Pentagon’s chief strategist—Colby gave testimony that is a window into the administration’s approach to China and what that means for allies and partners across Oceania.

Colby commands attention not as a partisan operator but as a genuine analytical thinker. As the chief architect of the 2018 National Defense Strategy, he orchestrated the United States’ pivot to Asia through changes to force posture, acquisition priorities and strategic focus. His 2021 book The Strategy of Denial has become required reading for defence planners. In it, Colby argues that the US must direct its military power to deny China hegemony over Asia, rather than pursue global primacy or retrenchment.

The vision he laid out before the Senate Armed Services Committee was neither the primacy-obsessed neoconservatism of the Bush era nor the strategic restraint and belt-tightening advocated by US progressives and libertarians. Instead, Colby argued for ‘prioritised engagement’—a strategy that recognises the limits of US power while refusing to abandon core commitments.

This ranking is important for Australia and Pacific island nations.

First, Colby’s confirmation suggests strategic prioritisation of the Indo-Pacific. Throughout the testimony, he stressed that China is ‘the biggest, most powerful rival we have faced in probably 150 years.’ While other theatres might command attention, Colby made clear that resources must flow to deter Beijing first. The unfunded $11 billion priority list from the US military’s Indo-Pacific Command is, in his words, a strategic failure that demands rectification.

Colby’s testimony also flashed warning signs for allies hoping Washington would shoulder the burden of regional security. His insistence that ‘we have a one-war military and change’ reflects a hard-nosed pragmatism—a stance that reinforces calls for allies to increase defence spending. These demands may prove challenging even for Australia, which has already committed to defence spending increases, provides key regional intelligence and offers the US military access to Australian ports and airfields. They are probably more challenging for smaller Pacific Island countries or other regional partners with limited resources.

Colby expressed reservations about AUKUS, despite describing Australia as ‘perhaps our closest ally in the world’ that has ‘been with us even in our less advisable wars’. His concern was that the arrangement could potentially reduce the US’s submarine availability during a crucial period.

This concern reflects a common Trump administration line that support for alliance commitments must not come at the expense of the US’s ability to deter China. This tension between alliance building and direct deterrence capability is not new. Colby has consistently emphasised re-assessment and re-organisation of alliances around the paramount goal of preventing Chinese hegemony.

Such an America First position creates both challenges and opportunities for Australia. The challenge lies in potential timeline slippage for submarine delivery; the opportunity comes from Colby’s desire to ‘do everything we can to make this work’ by revitalising the US’s industrial base to produce more submarines for the US and its allies. Australian defence planners understand this dual message from Washington, but Australian taxpayers also deserve an explanation from their government.

For Pacific island states caught between Washington and Beijing, Colby’s approach suggests more direct US engagement. When questioned about regional coalitions, he expressed scepticism of a ‘NATO-like alliance’ in the Indo-Pacific, preferring more tailored bilateral relationships. This points to a strategy of supporting critical nodes in the US’s defensive perimeter, rather than building expansive regional architectures. Colby argued in his book that the US should cultivate and strengthen capabilities among a ‘deny China’ coalition rather than pursue diffuse multilateral frameworks.

The issue underpinning Colby’s testimony is the mismatch between the US’s global commitments and its current military capabilities. He repeatedly invoked the Lippmann gap—a disparity between strategic ends and available means.

Colby presents prioritisation not as a choice but as a necessity, recognising that the US industrial base has atrophied while China’s has bloomed. Noting that China has ‘a shipbuilding capacity over 230 times that of the United States’, he underscored a US industrial deficit that must be addressed.

If confirmed, Colby would seek tailored deterrence approaches for specific contingencies rather than general regional dominance. He would also want better stewardship of US resources and stronger allied defence capabilities. He understands the industrial limitations and recognises that resources—including decisionmakers’ and strategists’ time and attention spans—directed toward one theatre necessarily come at the expense of another.

With Colby at the Pentagon’s strategic wheel, allies should expect more US demands. Australia, with its resources and strategic location, will face increased pressure to accelerate its defence buildup and repeated asks from the US to step into the breach. Pacific island states will need to navigate even more carefully between economic enticements and competing security guarantees that may come with more explicit conditions than in the past.

China’s military spending rises should prompt regional budget responses

China’s defence budget is rising heftily yet again. The 2025 rise will be 7.2 percent, the same as in 2024, the government said on 5 March. But the allocation, officially US$245 billion, is just the public disclosure of what is likely far greater spending within China’s opaque system.

What we do know is that China has the second-biggest military expenditure in the world, behind the United States’. This year’s budget is another demonstration of the high goals that Beijing has set out for itself in military and geopolitical terms.

This should push others in the region to spend more on their militaries. Too many nations fear an arms race in the Indo-Pacific and beyond, whereas in fact it is just what’s needed. Beijing will keep building up its offensive power regardless of what the rest of us do. By holding down defence spending, we only put ourselves at risk.

The 7.2 percent rises in China’s defence budget for 2024 and 2025 imply a rising share of the economy going to the military. In 2024 GDP officially grew 5.0 percent (after adjustment for inflation) and is supposed to do so again this year.  Since China’s inflation rate was just 0.2 percent last year and is forecast by the Organization for Economic Cooperation and Development at 0.6 percent this year, the real rises in Beijing’s defence spending are not much below the nominal (unadjusted) budget increases. And they’re faster than GDP growth.

With conflict and tension across Europe, Middle East and the Indo-Pacific, the Stockholm International Peace Research Institute (SIPRI) estimates global military spending rose a spectacular 6.8 percent in real (inflation-adjusted) terms from 2022 to 2023, reaching US$2.44 trillion in 2023. It was the largest annual rise since 2009—though measuring defence spending is notoriously difficult, partly because the budgets of some countries, particularly China, are opaque.

In its latest China Military Power report, the US Department of Defense said China was spending somewhere between 40 and 90 percent more on defence than the public budget figure. That implies 2024 spending of US$330 billion to US$450 billion. According to the International Institute for Strategic Studies, China’s 2024 defence budget rose 7.4 percent, far outstripping the regional average of 3.9 percent.

Despite Asia’s relatively strong economic growth, the region’s share of global military spending fell from 25.9 percent in 2021 to 21.7 percent in 2024, because of wars and associated spending increases in Europe and Middle East. Additions to China’s spending as well as North Korean developments will likely drive up Asia’s share of defence spending, however. According to SIPRI, China in 2023 allocated US$296 billion to defence, 6.0 percent more than in 2022.

China’s relentless build-up has prompted its neighbours to increase their own military spending. An assessment by a few well-known China specialists last year suggested that China’s 2024 was actually US$471 billion (though their accounting methods also assessed US 2024 defence spending at US$1.3 trillion instead of the official US$825 billion).

Even if China’s neighbours accept its implausible claim to be spending less than 1.5 percent of GDP on defence, they can hardly be reassured as the capability of the Chinese armed forces grows and as that military and supposedly civilian agencies act with aggression in the region. Anyway, 1.5 percent of so large an economy would still be alarming.

As China’s economic growth slows, we should expect the defence share of GDP to continue to rise.

China likes to mention that the 2025 defence budget is the 10th in a row to show single-digit percentage growth. Yet these growth rates are still large by international standards and build on the much larger expansions of earlier years. In 2014, China had a 12.2 percent increase in defence spending, declining to 10.1 percent in 2015 and to 7.6 percent in 2016.

The opaqueness of China’s military spending is a particular cause for concern.

China usually attributes the increase in spending to the various military exercises it is engaged in as well as maintenance and upkeep of its military forces. The implication is that the increments are mostly going to salaries and pensions. It is true Chinese military personnel numbers are very large, but its equipment is improving dramatically. Just this last year, China demonstrated two new stealth fighters; a stealth bomber is in the works. And China is building a nuclear-powered aircraft carrier that will rival the latest US carriers in size.

The government’s Xinhua News Agency justifies China’s defence budget as paying for a ‘national defense policy that is defensive in nature, with its military spending mainly focusing on protecting its sovereignty, security and development interests … and the country will never seek hegemony or engage in expansionism no matter what stage of development it reaches.’

But China’s actions do not suggest a purely defensive motivation. Such claims should be no more truthful than Vladimir Putin’s claims that Russia’s military build-ups on the Russian border with Ukraine in 2021 and 2022 were only exercises.

When China sends its naval forces to intimidate neighbours and engages in military exercises that suddenly force rerouting of commercial flights, more regional countries should speak up. And the type of language that Beijing understands is an increase in our own defence spending.

I, too, got a few things wrong

I agree with Will Leben, who wrote in The Strategist about his mistakes, that an important element of being a commentator is being accountable and taking responsibility for things you got wrong.

In that spirit, I’ve taken up his challenge and have thought back on what I got wrong in a long, long career.

I haven’t chosen easy examples, which are almost a form of self-congratulation. I didn’t think Russian President Vladimir Putin would order the invasion of Ukraine in 2022 because it was not in Russia’s interests. I stand by that. Or that the United States and its coalition of the willing should invade Iraq in 2003 with flimsy evidence. These are good reminders that international relations is not about just rationality.

So, my first mistake is one of tactics. I was wrong to believe that Australia should have tried to repair its relationship with China in 2020. After China imposed trade restrictions, it was better for Australia to hold its position and show that it could weather China’s economic coercion. I stand by my view that the relationship should never have been allowed to get that bad. But once it was, it was the right call to hold firm to show China, other countries and, crucially, the Australian public that Australia had the strength and resilience to survive and even thrive.

The situation would’ve been different had China imposed trade restrictions on iron ore rather than lobsters and red wine—that would have been mutually assured destruction of both economies’ growth. (And on this, we should be watching when China’s African sources of iron ore come on line.) But in the actual situation, affected industries were right to find other markets, showing China that its tactics were counterproductive.

My second is a failure of communication. I’m on the record saying that Australia should not go to war with China in defence of Taiwan. That sounds more definite than anyone can be, given the range of scenarios that might lead to a contingency in the Taiwan Strait. I stated it better when I said Taiwan should not rely on Australia to come to its defence. I regret that I bought into narratives focussing on military options and end games rather than how we can support Taiwan right now.

The starting point for any Taiwan discussion should be the welfare of the Taiwanese people. I worry that some who say they are pro-Taiwan are just raring for a fight and aren’t thinking about the catastrophe this would bring for Taiwan, one of the places I love most on earth. I don’t think they have Taiwan’s best interests at heart.

Being a friend means talking frankly with Taiwanese contacts about risk and the importance of avoiding all-out war. Many in Taiwan understandably want independence. There’s a danger that after 80 years Taiwan sees China as all bluster and bluff and underestimates China’s resolve. I can’t overstate how unwise it would be to take reckless action assuming that Taiwan can rely on external support.

Taiwan’s strategy must remain the same—preserve the status quo and maintain maximum space—in the hope that better options may emerge. I’m a status quo-ist because anything else would be a calamity for Taiwan. But that doesn’t mean acquiescence.

Friends of Taiwan should counter narratives presenting Taiwan as a Chinese province by explaining its history and diversity. I try to explain this in terms of decolonisation. Taiwan is less like Catalonia and more like the Philippines, handed between empires with a distinct identity from a myriad of heritages. Nowhere on earth is quite like it.

My third failure is one of courage. I’m conscious that I have never written anything about Israel or Palestine in all my decades as an international affairs commentator.

The glib answer is that I’m not a Middle East expert. And that’s true. Some people I studied with in Boston have dedicated their entire careers to the Israel-Palestine conflict. They can talk about 1967-this and 1948-that at a level of detail I don’t pretend to understand. As one conflict resolution expert described it to me: ‘you either do Israel-Palestine, or you do everything else’. I chose everything else.

But that’s not the whole answer. I’m happy to do media spots about the NATO Summit, not because I know today’s battlefield details in Ukraine but because I understand conflict concepts such as victory, best alternative and zone of possible agreement.

With Israel and Palestine, the divisiveness of the topic stops me. Whatever I say, I’ll be hated. And I don’t like being hated. This is not something I like about myself.

But if we all stop ourselves, we end up with a shouting match between the absolutely convinced. We lose the opportunity for civil debate that actually changes minds, builds empathy and tries to find solutions. That means understanding both Israel’s sense of insecurity and the hopelessness of Palestinian dispossession. It means taking international law and humanitarian law seriously, whoever breaches it.

So I’ve decided I’ll do something I have never done before. I will speak out, if anyone will publish me. In a decade’s time, I don’t want to regret that I missed an opportunity to be a voice.

Australia needs greater defence self-reliance, and extra funding

Two recent foreign challenges suggest that Australia needs urgently to increase its level of defence self-reliance and to ensure that the increased funding that this would require is available.

First, the circumnavigation of our continent by three Chinese warships in February and March puts in question our capacity to keep even one flotilla under persistent surveillance. To remedy this, we need to re-examine our intelligence and surveillance capabilities. We knew well enough where the Chinese warships were but not what they were doing.

Second, the aggressive behaviour towards Ukraine’s President Zelenskyy by President Donald Trump in the White House on 28 February raises the question of our need for a higher degree of defence self-reliance. This does not mean abandoning or jettisoning the alliance with the US. But it does mean we need better ability to manage military contingencies in our strategic approaches without depending on the United States.

This will demand greater capabilities in longer-range weapons and supporting capabilities for intelligence, surveillance and tracking. These contingencies raise the need for a significantly greater degree of defence self-reliance. The US under Trump will expect us to manage them by ourselves.

Further, the principle of extended deterrence in the Asia-Pacific—under which the US remains the strategic guarantor for its allies in the region, especially against nuclear attack—has not (yet) been challenged by Trump or his administration officials. That guarantee seems a curious exception to Trump’s transactional approach to other security commitments.

However, short of nuclear war, we need to ascertain whether our strongest ally has transformed overnight into our most immediate problem. Already we see that Russia’s long-standing ambition to divide NATO is several steps closer.

The assumption still reigns in Australia that military threats are something that happen to other people a long way away and will never come to our homeland. With that belief, we have indulged ourselves in the luxury of merely incremental increases in defence budgets, rather than the transformative investment that is now needed.

Such transformation is now needed to ensure, first, that the Australian Defence Force can surge to meet the demands of new, short-warning contingencies and sustain the associated higher rates of effort and, second, that the ADF can continue to be the basis for further military expansion in the event that our strategic circumstances deteriorate further.

Underlying these concerns is the need to understand that the US is undergoing radical change under Trump. As Sir Lawrence Freedman observes, ‘The US is shrinking before our eyes as a serious and competent power.’

Taken together, the observations set out above reinforce Australia’s need for a greater level of self-reliance. These new issues are demanding because of their severe and sudden impact on our strategic environment. They require Defence to revisit its allocation of resources.

Defence must review operational requirements for anti-ship missiles, drones and associated ammunition, sea mines, uncrewed submarines, air-to-air missiles and strike missiles. The review must result in a new allocation of resources to such systems.

In the past few years, it has become quite trendy for defence experts in Australia to assert we need to spend 3 to 4 percent of GDP on defence, compared with barely 2 percent now. That would mean finding an additional $28 billion to $55 billion a year and bringing the overall defence budget to between $83 billion and $110 billion a year, compared with $55 billion now.

On 7 March, the nominated US under secretary of defence, Elbridge Colby, bluntly called for Australia to spend 3 percent of GDP on defence.

Making such arbitrary claims for an additional $28 billion a year is not a responsible approach to defence planning. Instead, what is needed is a much finer-grained definition of the ADF’s needs for such materiel as mentioned above, particularly for long-range missile strike capabilities and their associated deterrence through denial. Australia’s Defence organisation now needs to get on with this as a matter of urgency.

Our focus now needs to be not so much on additional, hugely expensive major platforms, such as ships and crewed aircraft, but giving new priority to surveillance and targeting capabilities, missiles and ammunition and uncrewed systems. Such an approach would be much less expensive, and much more timely.

The fact remains that today’s ADF, together with supporting capabilities, has little ability to sustain operations beyond low-level contingencies. Moreover, assumptions about force expansion made over many previous decades are no longer appropriate, particularly with respect to major platforms. In contrast, a way forward is presented by the government’s 2024 Guided Weapons and Explosive Ordnance (GWEO) plan, which is aimed at establishing domestic supply of advanced munitions. It can significantly increase the ADF’s ability to sustain high-technology operations and credibly support powerful force expansion based on modern long-range precision strike and targeting. Again, this is much quicker and cheaper than buying yet more large and costly platforms.

Despite rising strike ranges, geography is not dead. As the 2024 GWEO plan says, ‘With vast maritime borders and critical northern approaches, Australia must be able to defend against any adversary who may project power close to our territory.’

At present, Defence is spending $28 billion to $35 billion to develop and enhance targeting and long-range strike capabilities out to 2034. These will give the ADF a greater capacity to hold at risk a potential adversary’s forces that could target Australia’s interests during a conflict. But this is just the beginning. There are more expensive investments to be made—for example, in integrated air and missile defence.

Merely asserting that a particular percentage of GDP is appropriate for the defence budget is not adequate. Arguments that say only ‘more is better’ will get us nowhere. Defence needs a story to tell—a conceptual framework, agreed and accepted by the government and by the machinery of government—as the basis for considering more specific issues and initiatives. It must be suitable for public presentation, not just to get public understanding of the need for increased funding but potentially to get acceptance of the need to handle what looks like an extremely worrying emerging strategic situation in the shorter term.

The issues to be confronted include the level of strategic risk that the government is prepared to accept. What options in this respect does it want to consider? How much further down the path of self-reliance and sovereignty does it want to go in this new strategic environment? What would be the right level of reliance on the Trump government for intelligence, operational and combat support and logistics support? What range of options (and at what cost) should Australia now develop for contributing to US-led operations in the Indo-Pacific? This consideration will need to address a wider choice than in the Cold War, when Australia’s need to support the US in the Western Pacific, and US expectations of support, were much lower.

Further, Australia needs to consider its options for working more closely with other countries in the region, such as Japan, especially in the event that the US reduces its commitment to the area.

In many ways, the key point is how best to position Australia’s national defence effort (not just the ADF) to be able to surge in response to short-warning contingencies involving China as a potential adversary and, in a different way, the US, presumably as an ally.

The short-warning contingencies of today’s strategic circumstances will be potentially much more demanding than those of earlier years.

The legacy of five decades of assuming extended warning time is, in effect, an ADF with little capacity today for sustained operations, especially at an intense level. So, positioning Defence to have this surge capacity requires close attention.

It is good that governments have, progressively, recognised most of these issues. But implementation has been slow. The end of the era of extended warning was made clear in the 2016 Defence White Paper, drafted in 2015. This was 10 years ago, the length of time during which previous defence policies assumed we would respond to strategic deterioration and expand the ADF. But in terms of more potent defence capabilities, we have very little to show for it.

Even so, Defence’s adoption of net assessments (modelling likely enemy capabilities against ours, including both sides’ logistics support) is a powerful tool contributing to decisions about the force structure, preparedness, and strategic risk. Decisions on communications, surveillance and targeting capabilities reflect the importance of Australian sovereignty in these vital areas.

Defence is grasping the opportunities presented by the new technologies of remotely operated uncrewed platforms (combat aircraft, small submarines and surface ships). Such platforms offer a more expeditious and less expensive mode of force expansion than the acquisition of major crewed platforms, just as local manufacturing of modern long-range precision strike missiles does.

The matters set out above would contribute to the basis for estimating the costs of defence policies, including the costs of different policy options such as different levels of self-reliance and strategic risk, more or fewer options for contributing to US-led Indo-Pacific operations, greater or lesser reliance on the US for sustainability stocks of spare parts and munitions during contingencies.

Other factors include the need to address workforce issues, including the difficulties that the ADF has in attracting and retaining its personnel. If the latter difficulties persist, there may well be a need to consider radically different approaches to the ADF workforce, including some form of national service, an increased focus on the Reserves, or both.

Arguments for increased funding based on the above analysis would be much more likely to carry the day than mere assertions that a particular arbitrary fraction of GDP should be the target for the Defence budget.

Finally, the authors of this article are of the view that Defence’s decision-making abilities are not adequate, even for peacetime governance. It is, therefore, but a short step to be concerned that the arrangements for decision-making in the event of the more serious contingencies that have now to be part of the defence planning basis would be even less adequate. This also needs attention.

Japan and Australia can fill each other’s defence gaps

Japan and Australia talk of ‘collective deterrence,’ but they don’t seem to have specific objectives. The relationship needs a clearer direction.

The two countries should identify how they complement each other. Each country has two standout areas: Japan has strengths in air and missile defence and in shipbuilding, whereas Australia needs help in both; and Australia has strengths in cybersecurity and its distance from China, both of which offer advantages for Japan.

It’s true that both nations have recently strengthened their special strategic partnership to the point where it has begun to show alliance-like characteristics, such as commitments to consult during regional crises. Yet practical coordination has barely begun. Discussions on bilateral cooperation often end at increasing interoperability—but to what end?

During the Japan-Australia Dialogue and Exchange program, hosted by the United States Studies Centre and the Japan Foundation from July to August last year, I engaged with many Japanese and Australian experts on security issues, including a Taiwan contingency. While many underscored the need for the two countries to deepen defence ties and prepare to fight together should a crisis erupt, there was little clarity on how exactly they should coordinate.

Although some studies are conducted behind closed doors, the overall lack of discussion stems from several factors. Japan has a limited understanding of Australia’s defence capabilities, and the Japanese defence community primarily focuses on implementing established policy. These factors have contributed to stagnation in finding new strategic opportunities.

In Australia, a shortage of Japan-focused security expertise and a preoccupation with the trilateral framework that includes the United States as well as Japan have constrained deeper thinking around bilateral cooperation.

Japanese and Australian foreign and defence ministers said in November that the countries were refining the scope, objectives and forms of their cooperation, a development that will help shape bilateral defence relations. This was in support of what they called strengthening collective deterrence. But all this work is still general rather than specific in nature, and discussion among strategists has been minimal.

Defence cooperation between nations with comparable military power and a reciprocal security relationship typically takes two forms: force aggregation, which enhances overall military capacity through joint operations; and complementary cooperation, which mitigates vulnerabilities by leveraging respective strengths.

Japan and Australia have primarily focused on force aggregation by emphasising interoperability, but this has limitations. China has an overwhelming numerical advantage, with about 1100 fighter aircraft and more than 140 major surface warships. Conversely, Japan has 300 fighters and 52 surface combatants, while Australia has about 100 fighters and plans to expand its fleet from 9 to 26 ships. Given this disparity, simply combining forces would do little to shift the strategic balance without further integration with US forces. Even then, the military challenges would remain immense.

Complementary coordination is needed, too. Both countries face the challenge of China, but their operational priorities differ. While Japan focuses on the East China Sea and the western Pacific, Australia can secure sea lanes of communication in the Indian Ocean and the South Pacific and disrupt adversary lanes. This would help ensure Japan’s access to vital resources and ammunition, sustaining its ability to keep fighting while weakening China’s. Japan’s combat endurance is important for managing the Chinese navy’s threat to Australia.

Functionally, Australia and Japan have distinct strengths, as well as vulnerabilities that the other can help mitigate. Japan faces challenges in cybersecurity and logistical sustainment, while Australia lacks integrated air and missile defence (IAMD) and efficient shipbuilding.

Fortunately, Japan has a strong foundation in IAMD and shipbuilding, while Australia excels in cybersecurity and benefits from a geographically resilient logistical basis. By addressing each other’s weaknesses through increased bilateral exercises, common equipment and systems, and joint defence industry investments, Japan and Australia can build a more resilient defence posture.

Japan-Australia defence complementarity is already taking shape to some degree. Geographic cooperation has been an indirect but longstanding feature for both nations due to US naval strategy since the early Cold War. Functional cooperation has advanced further in recent years. At the Trilateral Defence Ministers’ Meeting in November 2024, Australia, Japan and the US discussed cooperation on IAMD systems. Shipbuilding collaboration will likely begin if Australia chooses a design based on the Japanese New FFM class for its new general-purpose frigates. Cybersecurity cooperation is also advancing through joint exercises between Australia, Japan and the US.

Japan’s ability to sustain a protracted conflict remains a challenge, as its shipyards and ammunition factories are in range of China’s missiles and can be easily targeted. For both nations to make credible contributions to regional deterrence, robust defence-industrial cooperation must be a foundation of effective contingency and operational planning. Beyond shipbuilding, the two countries should look to collaboration on ammunition production to reinforce war endurance capability. They should also consider storing mothballed assets in Australia, such as aircraft that have been retired but are still worth keeping for a while, in case they’re needed.

Deeper ties will need dedicated advocates. Both countries’ strategic communities must define the desired end-state of cooperation and identify opportunities that advance this goal.

Eggs in more baskets: protecting Australian agricultural exports from US tariffs

Australia’s export-oriented industries, particularly agriculture, need to diversify their markets, with a focus on Southeast Asia. This could strengthen economic security and resilience while deepening regional relationships.

The Trump administration’s decision to impose tariffs on Australian steel and aluminium has caused doubts about the strength of the relationship between Australia and the United States. While the US has not yet imposed tariffs on Australian beef and other agricultural products, the current unpredictability of US trade policies means these industries could soon be on the chopping block. This would harm Australian primary producers and have significant social effects on rural communities, including in the strategically important north.

The rumblings of a shifting world order are impossible to ignore. We cannot pretend that the post-Cold War order, in part defined by the US’s championing of trade liberalisation, is still healthy and intact. Middle powers, perhaps the chief beneficiaries of the rules-based order, bear a particular responsibility and capacity to preserving it. The shakeup of the global trade system may require us to re-evaluate our export posture; Australian governments and businesses must prepare for this.

Australia exports approximately 70 percent of the agricultural, fishery and forestry products it produces. The US is the second-largest market for Australian agricultural goods, taking $6.8 billion of them in 2023–24, with beef, lamb, dairy and wine among the most valuable. The loss of this market would deal a great blow to many agricultural businesses and communities across Australia.

These economic challenges are clear, but agricultural export tariffs would also have concerning social ramifications. Economic loss leads to disillusionment, unemployment and scapegoating, fuelling political and social discontent.

The development of northern Australia, vital for Australia’s strategic position and foreign policy, would be at particular risk if trade barriers curtailed agriculture—one of the region’s key economic engines and forces of community life.

Australia has recent experience in diversifying markets for our agricultural exports. In the face of trade barriers erected by the Chinese government beginning in 2020, Australian officials and agricultural industries did well to find other destinations for some affected products. Even when the Chinese market reopened, these other markets remained favourable.

Southeast Asian markets are particularly promising for a variety of reasons. One is that together they already buy more Australian agricultural products than the US does.

The region’s largely tropical climate makes it unsuitable for the kinds of products grown in Australia’s mediterranean, sub-tropical and semi-arid zones. Australian exports can play a more prominent role as Southeast Asia’s population rises and consumer preferences change, with both factors driving the demand for greater volume and diversity of food products, especially animal protein.

Furthermore, the US is also a significant agricultural exporter to the region. It shares six of its top 10 export markets with Australia, all in East and Southeast Asia. Should the Trump administration continue to impose tariffs, and should regional nations introduce reciprocal tariffs, Australia could fill some of the US-shaped holes.

South and Southeast Asia’s textile industries are also markets for Australian natural fibres such as cotton and wool. Currently, 60 percent of clothing is made with petrochemical fibres. But campaigns aimed at reducing this amount could drive global demand for natural fibres, benefitting Australian producers and the environment. Southeast Asia also presents a fantastic market for raw goods to be processed and exported, even back to Australia, due to moderate labour costs, lower utility costs and proximity to markets. This provides mutual economic and social benefits.

Other markets should also be considered. While Southeast Asia’s tropical produce is plentiful, New Zealand’s is not. Australia is the largest exporter of tropical fruits to New Zealand, but there is still room to grow this profile. This would particularly benefit northern Australia, where many tropical fruits are grown.

In East Asia, Australian high-quality agricultural products are particularly prized. Australia should boost agricultural-product promotion campaigns in the region, which are already quite creative.

Australia’s agricultural sector will continue to be important, yet vulnerable to trade insecurity. Through multilateral groups such as the Cairns Group and MIKTA—Mexico, Indonesia, South Korea, Turkey and Australia—Australia should continue to reinforce the benefits of open trade, while also being alert to the challenges it can create for communities large and small.

As we see in the US, serious public grievances arise when negative domestic effects of international trade aren’t addressed. Governments and civil society must manage economic transitions effectively and develop adequate supports during the process. This must be supported by responsible corporate governance, alive to the ethical effects of economic change.

Trump’s tariffs challenge India’s economic balance

US President Donald Trump’s tariff threats have dominated headlines in India in recent weeks. Earlier this month, Trump announced that his reciprocal tariffs—matching other countries’ tariffs on American goods—will go into effect on 2 April, causing Indian exporters to panic at the prospect of being embroiled in Trump’s escalating trade war.

Trump’s unpredictability offers little solace. While he recently suspended tariffs on cars and automobile parts from Mexico and Canada for one month—ostensibly to give US automakers time to ramp up domestic production—any hope that India might receive similar exemptions is, at best, wishful thinking.

During his February visit to the United States, Indian Prime Minister Narendra Modi did achieve an important goal: a nine-month negotiation process, set to conclude by autumn, on a new bilateral trade deal. But this timeline has no bearing on the reciprocal tariffs set to take effect next month. In his 4 March State of the Union address, Trump singled out India as a major tariff abuser and reiterated his commitment to imposing reciprocal duties.

The economic impact on India, which runs a trade surplus with the US, could be significant. India exported goods worth nearly $74 billion to the US in 2024, and estimates suggest that Trump’s new tariffs could cost the country up to $7 billion annually.

But the implications could be much more far-reaching. One analysis estimates that India effectively imposes a 9.5 percent tariff on US goods, while US levies on Indian imports are only 3 percent. If Trump follows through on his pledge of full tariff reciprocity, that imbalance will vanish—along with the cost advantages many Indian exporters currently enjoy. Indian products will become less competitive, leading to a decline in export revenues and job losses, especially in labour-intensive industries. Critical sectors—including chemicals, metals, jewellery, automobiles and auto parts, textiles, pharmaceuticals and food products—are expected to be hit the hardest.

The impact of reciprocal tariffs also depends on their structure—specifically, which products they target and how broadly they are applied. Will tariffs be imposed on entire categories of goods, such as fruit, or specific items, such as apples, which India does not export to the US? If the tariffs apply to broad categories or single out major Indian exports such as mangoes and oranges, they could significantly restrict India’s access to the US market.

This would put India in a difficult position: negotiate an exemption or urgently seek alternative markets. While Indian officials have rushed to Washington, hoping to gauge the Trump administration’s intentions before the reciprocal tariffs kick in, it appears they have found little clarity.

Trump’s 25 percent tariff on automobile parts would undoubtedly hurt India, a major producer. But Indian exporters are no more vulnerable than their counterparts in Mexico and China. If US tariffs are applied to all countries, they will drive up costs for everyone.

The greater risk for India lies in the potential long-term impact on the US automotive industry, which relies heavily on imported parts. If Trump’s tariffs lead to a massive resurgence of domestic manufacturing and a sharp decline in imports, Indian suppliers will inevitably suffer. But such a shift would take time, and given existing wage disparities, US-made parts will likely remain more expensive than Indian imports.

With projections suggesting that lower exports could cause India’s annual GDP growth to slow significantly, Modi’s government has scrambled to placate the Trump administration with pre-emptive concessions. The 2025–26 Union budget cuts tariffs on US-made bourbon, wines and electric vehicles. Even Harley-Davidson motorcycles, a frequent point of contention for Trump, will now cost less in India.

Will that be enough to placate Trump? If the US matches India’s 10 percent tariff on US pharmaceutical imports, it could eliminate Indian manufacturers’ current cost advantage. This is no small concern, given that pharmaceutical exports to the US account for about 31 percent of India’s total exports. That reflects India’s significance as a producer of the generic drugs sold in US pharmacies. If Trump’s tariffs drive up consumer prices, would US companies start producing generic drugs domestically, potentially undermining India’s most lucrative export sector?

Then there are the unknown unknowns. Will the Trump administration impose even higher tariffs on other countries that compete with India for the US market? And if Indian exporters lose access to the US market, could they find alternative buyers?

Trump has already touted his success in dealing with India. During a recent White House briefing, he declared, ‘India charges us massive tariffs, you can’t even sell anything into India. It’s almost restrictive’. But he claimed that India had ‘agreed to cut their tariffs way down now because somebody is finally exposing them for what they have done’.

Modi’s government has been quick to downplay the perception that it yielded to US pressure. But Trump’s remarks are bound to trigger intense soul-searching among Indian policymakers. India has long used tariffs to protect its domestic industries, particularly agriculture, automobiles and electronics. Reducing tariffs could expose these industries to fierce import competition, threatening local businesses and jobs.

India’s deep-seated preference for protectionist policies, rooted in its colonial past, will not be easily abandoned. Given that tariffs also serve as a vital source of government revenue, a sudden reduction could disrupt fiscal stability, especially when India must juggle competing economic priorities, such as infrastructure investment and funding essential welfare programs.

Some concessions, of course, will be unavoidable. In the coming months, India will have little choice but to explore strategic tariff reductions in select sectors while negotiating broader trade benefits and improved access to the US market.

Admittedly, preserving India’s economic sovereignty while making meaningful concessions to maintain strong trade ties with the US will require a delicate balancing act. With the October deadline for a bilateral trade deal looming, the stakes of striking the right balance could not be higher.

People matter—especially when frigate crews are too small

People are getting carried away with the virtues of small warship crews. We need to remember the great vice of having few people to run a ship: they’ll quickly tire.

Yes, the navy is struggling to recruit and retain enough people, so needing fewer on each ship is superficially attractive. The wages bill will be lower, too. But the experience of Royal Australian Navy people, including me, tells us that a ship’s endurance is measured in the size of its crew more than almost any other data point.

Moreover, overloading people with work will only worsen the retention challenge. It almost certainly is doing so already.

In a 28 February article in The Strategist, Eric Lies expounds the virtues of the Mogami-class frigate, a derivative of which is being offered to Australia for its requirement for up to 11 general-purpose frigates. Among its advantages, he says, is that the ‘design needs a smaller crew’.

Even US aircraft carriers, with crews of more than 5,000, are limited by people. Each carrier has only one flight deck crew.  When those people need rest, it’s not negotiable. A carrier captain will husband the ship’s flight deck and air crews every bit as carefully as each other.

No amount of automation will change the dependency of ship endurance on crew endurance. Getting the endurance requirement right for a warship is one of the most vital capabilities to set. It’s simple: a navy’s ability lies in its people.

It follows that the small crew of the offered Mogami derivate, probably similar to the 90 in the original design that’s in service with the Japanese navy, would be a major limiting factor for a frigate in Australia’s sea conditions and enormous operating area. We need substantial endurance if our ships are going to be on station where we want to sustain a presence.  No presence is no deterrence.

A Mogami with a crew of 90 or so (presumably including an embarked helicopter flight of six aircrew and nine maintainers), will be exhausted after a fortnight on operations, even at low intensity and in good weather.

Trying to solve the navy’s recruitment and retention problems with small crews misses the essential point. If a ship is not designed with enough endurance to deliver the capability requirement sought, especially crew size and all the supporting facilities to sustain that crew, such as food storage, then the demand placed on each person aboard will be excessive.

I have no doubt that shrinking crew sizes has contributed significantly to the Royal Australian Navy’s recent poor retention. My experience tells me that we have been asking more of our people than is reasonable and that they pass judgement in the only way they can.

This matter is critical to the sustainability of naval power. Our history has useful pointers. The 4500-tonne Perth class destroyers built in the 1960s, one of which I commanded, had crews of 330. My Adelaide-class frigate, of much the same size and completed in 1993, had a crew of 220 plus an embarked helicopter. That is, it had a mission the destroyers did not have. My frigate crew became tired much more quickly than my destroyer crew.

In my frigate, everything we did as part of normal business—such as replenishing fuel at sea, launching and recovering the helicopter, firing weapons, myriad mundane domestic tasks,  plus simulated fire fighting, plugging up of holes and patching up of people in the event of battle damage—very quickly consumed everyone available. In navy parlance, almost everything was a whole-ship evolution, requiring the entire crew be put to work. No one except the captain had the luxury of having just one job. There was no redundancy.

The smaller Anzac class frigates have essentially the same set of missions as the FFGs, although with less capability overall. As fleet commander, I saw that fatigue in their crews of around 180 was a sharper problem than in earlier ships.

With the same suite of missions as an Anzac but half the crew, the endurance of a Mogami-derivative ship would be even more limited.

The smaller the crew, the more a ship can do things in only sequence because there are just not enough people to do them in parallel. Commanders may not have a choice about that. And, even when they do, the crew will always need rest sooner if the ship, for want of people, has no redundancy.

History shows starkly what has been happening.  Australia’s future Hunter-class frigates will reportedly be around 10,000 tonnes, with crews of 180. The heavy cruiser HMAS Australia, which served in World War II, also displaced 10,000 tonnes but her crew was greater than 800. In many respects, Australia was a much simpler ship, equipped for fewer missions, albeit more labour intensive to operate.

Reducing crew numbers is incompatible with increasing the size of ships, the number and complexity of their missions, their technological complexity and the variety of their systems. Our experience already tells us this.

Unity is the answer to Europe’s defence woes

US President Donald Trump’s hostile regime has finally forced Europe to wake up. With US officials calling into question the transatlantic alliance, Germany’s incoming chancellor, Friedrich Merz, recently persuaded lawmakers to revise the country’s debt brake so that defence spending can be boosted. European Commission President Ursula von der Leyen has called for an €800 billion fund to strengthen the EU’s hard power. And British Prime Minister Keir Starmer has pledged to increase defence spending to 2.5 percent of GDP by 2027, hoping to hit 3 percent by 2030.

All of this is long overdue. As Polish Prime Minister Donald Tusk put it in early March, it is absurd that ‘500 million Europeans are asking 300 million Americans to defend them against 140 million Russians’. Tusk meant that Europe has enormous defence potential, much greater than Russia and even greater than the United States, which has been guaranteeing Europe’s security since the end of World War II.

Tusk is right, of course: EU countries, plus Britain and Norway, are home to more than 500 million people. And if we add Turkey, Ukraine and Canada, the figure approaches 700 million. These countries have about three million active soldiers and another 1–1.5 million reservists. Mathematically, therefore, Europe has nothing to fear even if Trump were to withdraw the US from NATO, or condition the US’s response to aggression against an ally on, say, the ally’s elimination of tariffs on imports from the US.

That is hardly a far-fetched scenario. Poland must take seriously Elon Musk’s rude remarks to our foreign minister. Nor can we afford to dismiss the incoming US ambassador’s threat of ‘retaliation’ if our government introduces a tax on Google and Apple. It is not lost on us that other countries with such a tax—but which do not share a border with Russia, Belarus and Ukraine—have faced no similar threat by the US.

Today, no one can guarantee that Trump will honour Article 5 of the North Atlantic Treaty, according to which an attack on one NATO member is an attack on all. Will the leader of an EU or NATO country attacked by Russia be publicly berated and bullied by Trump and Vice President JD Vance in the Oval Office, as happened to Volodymyr Zelensky?

Fortunately, European politicians are recognising what needs to be done. French President Emmanuel Macron’s idea of extending France’s nuclear umbrella to cover all European NATO countries is a good starting point, as are discussions about constructing a European arms industry, which is virtually non-existent in many EU countries today. For example, the weapons and ammunition Portugal produces every year could pay for the purchase of only six or seven Abrams tanks.

The problem lies in the lack of genuine market unification in Europe. Imagine that I run a one-man company in Poland. To operate in another EU country, I would have to go through so many formal procedures—registration, opening a bank account, learning about national regulations (the labour code, workplace safety rules, environmental protection, personal data protection and more)—that it doesn’t make economic sense to try. In practice, a small company from one EU country cannot operate in another country.

The EU itself recognises this, which is why it has created a special corporate status, officially called the European Company. Such a company can operate according to a single set of regulations throughout the EU, but it must be large, with subscribed capital of at least €120,000. The giants can operate from Madeira to Bratislava, but for most companies the single market is still an unattainable goal.

The F-35 fighter jet and the Abrams tank are produced by many companies and subcontractors in different states across the US. In Europe, by contrast, politicians in individual countries protect entire industries, because their re-election hinges on the national economy, not the EU-wide economy. This is why Poland buys tanks from South Korea, even though Germany, Britain, France and Poland itself also produce tanks.

The subordination of Europe’s interests to the national interests of its member states is clearly visible today in the nuclear industry. Poland’s government wants a US-designed nuclear power plant in Poland, Hungary wants a Russian nuclear plant and Germans want no nuclear power at all. On paper, however, the EU is a leader in this field—the world’s second-largest producer of nuclear-generated electricity after the US, with China far behind.

Europe can be a global power. But as long as the governments of EU countries are accountable only to their own countries’ voters, that will not happen. Instead, Europe will continue to discuss the need for joint munitions production or research projects, but artificial intelligence will continue to be developed separately in centres in France, Britain, Poland or Germany.

We can then be happy that European countries have several million soldiers and a combined research budget exceeding that of China. But it will still be a paper tiger.