With Richard Woolcott, you always had to take the smooth with the smooth.

No rough edges for this wattle-proud Australian who was one of our greatest diplomats. His smarts and his steel always presented in suave and subtle hues.

Woolcott encapsulated Australia’s major diplomatic ambition—then and now—in a single phrase. In Asia, he said, we must be ‘the odd man in, not the odd man out’. Typical Dick Woolcott—the central point offered with an optimistic up beat, accompanied by the broadest of smiles.

On Woolcott’s death in Canberra last week at the age of 95, the plaudits aimed high: a ‘legend’, a ‘diplomat’s diplomat’, a ‘giant’.

As a happy warrior, Woolcott used a jest to open his memoir about his 40-year career from diplomatic cadet to department head. He recalled walking into the Department of Foreign Affairs and Trade in 1988, shortly after he’d been appointed its secretary, accompanying the new foreign minister, Gareth Evans:

Beside me, Gareth asked: ‘How many people work here?’

‘About half,’ I replied. ‘But between us we can change that.’

It was a quip about an institution that defined his life. Woolcott talked of ‘the department’ with a mixture of affection and exasperation and enjoyment.

After the serious business of the memoir reflecting on diplomacy from Joseph Stalin’s death to the Bali bombings, Woolcott produced a second book on the lighter side of international life, Undiplomatic activities, filled with anecdotes and tall tales (and launched by former prime minister Bob Hawke on the sidelines of the APEC summit in Sydney in 2007):

Required not only to sacrifice a settled home life in the service of their country, diplomats must also heroically offer up their livers to booze, their stomachs to endless official dinners, their integrity to dangerous liaisons and the weasel art of spin, and their sanity to the pomposity and weird protocols that are an integral part of the international scene.

In explaining those weird protocols, Woolcott several times quoted to me a maxim of another Australian mandarin, James Plimsoll: ‘A decision not to make a decision is definitely a decision.’ Woolcott’s character, though, pushed against no-decision havering.

See Woolcott’s smarts and steel in the two issues he nominated as the most high profile of his career: the ‘disappointing and negative’ experience of East Timor and the creation of APEC (‘an important foreign and trade policy success for Australia’).

As Australia’s ambassador in Jakarta when Indonesia invaded East Timor in 1975, Woolcott and the Australian embassy were better informed about Indonesian military’s plans than Indonesia’s foreign ministry. Even critics who said that Australia’s close knowledge became silent acquiescence recognised the professional brilliance of the Australian embassy’s work, and its intelligence coup in giving Canberra three days’ advance notice of the time and place of the Indonesian invasion.

On 5 January 1976, Woolcott sent a long dispatch from Jakarta on ‘Australia, Indonesia and East Timor’ that became one of the most notorious leaked telegrams in Australian diplomacy.

No matter how unjust the invasion may seem, Woolcott wrote, ‘Indonesia could not have been diverted from this course by Australia.’ Canberra must accept the reality of Indonesia’s incorporation of East Timor, he advised:

It is on the Timor issue that we face one of those broad foreign policy decisions which face most countries at one time or another. The government is confronted by a choice between a moral stance, based on condemnation of Indonesia for the invasion of East Timor and on the assertion of the inalienable right of the people of East Timor to self-determination, on the one hand, and a pragmatic and realistic acceptance of the longer term inevitabilities of the situation, on the other hand. It’s a choice between what might be described as Wilsonian idealism or Kissingerian realism. The former is more proper and principled but the longer term national interest may well be better served by the latter. We do not think we can have it both ways.

The following month the cable was leaked and was on the front page of the Canberra Times. A former Labor leader and foreign minister, Bill Hayden, commented decades later that Woolcott was guilty of writing too vividly in tendering advice. Diplomats, Hayden observed, need to use more obscure language when dealing in ‘realpolitik’.

The creation of APEC in 1989 played to Woolcott’s vision of the central place of Southeast Asia (and Indonesia) in Australia’s Asia destiny.

For Australia, ASEAN held the crucial cards in the effort to form APEC. The initial omission of the United States from the core membership proposed by Prime Minister Bob Hawke in floating the idea reflected this concentration on East Asia. A masterstroke in the diplomatic dance was the dispatch of Woolcott in April 1989 as the prime minister’s emissary to the (then) six ASEAN capitals, plus Tokyo and Seoul.

Woolcott went first to Indonesia, showing deference to Suharto as ASEAN’s central figure. He told Suharto that Australia had come for advice and guidance on how a new regional body should proceed. Woolcott wrote that it was essential to get ‘Suharto’s support or at the very least his interest and acquiescence’.

The reward for this proper show of respect to ASEAN’s leader was an expression of Suharto’s willingness to think about the idea. Armed with that relatively neutral Indonesian position—APEC was an interesting proposal worth discussing—Woolcott then travelled through the rest of Southeast Asia building Suharto’s half-nod into a consensus that overcame Malaysia’s strong opposition.

Malaysia’s prime minister, Mahathir Mohamad, had wanted to kill the APEC concept in embryo, seeing it as a challenge to ASEAN. Malaysian officials complained at the skillful way Woolcott played his ASEAN cards, claiming that Suharto’s simple expression of a willingness to listen had been used to leverage stronger endorsements from the rest of ASEAN. Certainly, Woolcott had made full use of the guidance he received from Suharto and the fact that there was no Indonesian veto.

Woolcott’s shuttle diplomacy was a bravura performance of the art he described in his memoir:

The instruments that Australian ministers and diplomats need in efforts to secure our national future are in the main the capacity to persuade and to influence. In other words, we need competent, professional and effective advocacy and diplomacy backed, of course, by public support for the government’s policy, as well as credible defence capability in the background. Diplomacy is really the art of persuasion and accommodation and of building support in other countries for one’s policies. Very rarely can diplomacy be used to impose a purely national pattern of activities on the international community.

Dick Woolcott saw good diplomacy as a key asset for the country he loved to negotiate its place as the ‘odd man in’—Australia must be an integral part of the Asia that he loved.

The language Australia uses today about the centrality of ASEAN to the Indo-Pacific draws on the vision of earlier ASEANists such as Woolcott. That’s an important legacy from a great Australian who was a great diplomat.

From its inception, the AUKUS pact has been wrapped in expectations. Fundamentally, it is a technology and capability agreement—an accelerator.

That may sound mundane but it is incredibly challenging. To realise its promise, three sovereign nations, Australia, the UK and the US, need to align their capability development, collaborative research and respective defence industrial bases.

Let’s leave the submarines to one side—this article concerns pillar two of AUKUS, the technology programs, which are arguably of greater potential value over the long-term.

In the past, a defence technology agreement would be allowed to progress at a measured pace, with committees and considered research proposals in the respective defence science organisations.

But tightening geopolitical circumstances demand urgency: AUKUS needs to deliver. Politicians won’t be able to wait for favourable winds but need to begin today to do the heavy lifting of organisational change, budget prioritisation and making the case to sceptical electorates.

Australia is the smallest partner, the most exposed geopolitically, and the most in need of a technological uplift. It has the most to gain from AUKUS but only if it is prepared to make the greatest effort. Sustained Australian political investment in the program has to be matched by directed, ongoing financial support and structural change.

Funding has one of two sources: supplementation through the federal budget process or from within Defence’s existing budget. Both, of course, mean the taxpayer pays.

Prospects of supplementation from the budget are slim. Though the Labor government has endorsed AUKUS, and concerns are growing over the strategic environment, defence warranted only passing mention in the October 2022 budget. Defence is not where government wants to spend any spare cash.

Not that there’s much to be had. The federal budget is under significant pressure—measured against expectations, it always is. But worsening economic conditions—inflation, rising interest rates and a slowing Chinese economy—are adding pressure just as public sector demand is increasing.

Further, government debt, mostly assumed during the Covid-19 pandemic and at its highest level since World War II, was locked in with comparatively low interest rates (though interest payments are projected to rise significantly).

That’s the good news. Now that rates are rising with the need to control inflation, any further debt will be more costly. And while current levels of debt are manageable, prudence suggests paying it down quickly to allow manoeuvring room for the unexpected in a volatile environment.

Given that, it’s of little surprise that Treasurer Jim Chalmers is looking to the private sector to ‘co-invest’. But let’s be clear: while industry has a role, we should not kid ourselves that industry will pony up to meet shortfalls in defence funding. Companies aren’t charities.

In short, any new initiatives, or shifts in priorities, to fund AUKUS projects—including the submarines—will need to come from within existing Defence funding.

That’s going to be tough. The defence strategic review is likely to try to prod Defence into shifting some priorities. But the way Defence is funded—managed largely by itself within an agreed envelope—though tactically convenient, can make it hard to turn the ship of strategy. The internal momentum of existing programs and invested constituencies often outweighs any prospect for change.

New capabilities, like missiles, are welcomed—provided they do not upset the existing order. Politicians are wary of being labelled anti-Defence and so are reluctant to force choices, regardless of need. Consequently, the capability equation within Defence is one of replacement and summation, not transformation.

The final concern about AUKUS funding is the role of the Defence budget in the broader budgeting effort. Simply put, the Defence budget functions as a balancing factor.

Defence is the last portfolio considered in the round of expenditure committees that shape the budget. By then the government knows how much it may need Defence to forego from its envelope over the forward years to offset other budget priorities.

When slicing happens, the programs most at risk are those without an internal service constituency, such as pillar two of AUKUS.

What can be done to help realise the promise of AUKUS?

First, independent funding. A fund for AUKUS pillar two needs to be carved out of the Defence budget and administered separately.

Consider it a future fund for Defence—but one concerned with the here and now, drawing on the breadth of government, not simply the Defence portfolio. After all, the AUKUS technologies involved are not the sole preserve of the military but are inherently civilian.

Second, explicitly embrace dual timelines—short- and medium-term.

In the short-term, focus on what can be done now, with existing capabilities and technologies, for deployment in three to 12 months.

Recombination is common in the commercial sector. It is fundamentally an engineering and product, or capability, manager effort. In business, it can be found in fablabs and hackathons and the continual experimentation of lean start-ups.

The medium-term needs to consider translation of current applied research into capability deployable in the 12-to-36-month window, supported by a broader ecosystem.

Last, create new governance arrangements.

There are two parts to AUKUS pillar two: broad exploration and rapid translation. Neither are suited to the existing frameworks and culture of Defence—or the Australian Public Service, for that matter. Keeping pillar two behind the high walls of Defence will drive up costs and starve any prospective innovation system.

A new approach is needed, especially if AUKUS is to be part of a nation-building effort, to help enforce an AUKUS-by-design ethos, and avoid unwarranted taxpayer subsidisation of industry. In an economy built around extractive industries, that task should not be under-estimated.

At a time when the government is seized with social and economic change and debt is already high, the cost of realising AUKUS will be taken from within Defence. We’ve yet to see whether ministers have the stomach for the shaping and sustained effort needed to realise the pact’s potential.

Every review of Australia’s defence policy and capability is imbued with hope for change. The defence strategic review that’s now in its final months is no exception.

Some announcements have already been made, following delivery of the interim report in late 2022. Deputy Prime Minister and Defence Minister Richard Marles has emphasised strike—or, as he puts it, ‘impactful projection’—backing decisions to purchase the Kongsberg naval strike missile (NSM) and, for the army, HIMARS (the US-produced High Mobility Artillery Rocket System). Defence will also replace and ‘extend’ its fleet of 12 C-130J transport aircraft.

And the government continues to commit itself to AUKUS, even as doubts have been expressed about US capability to deliver nuclear-powered submarines for Australia. The next AUKUS milestone will come in March, when the 18-month consultation period ends (which is also when the defence review is due to report).

Defence should be suffused with a sense of urgency, given Australia’s strategic circumstances. The 2020 defence strategic update recognised that the assumption of a 10-year warning time for major conflict was no longer appropriate, a judgement echoed by Paul Dibb and Richard Brabin-Smith. The outlook over the next decade is already much less forgiving than it was in 2020.

The nature of the choices made in response to the defence review’s recommendations will show how serious the government is about making changes, meeting strategic challenges and realising that sense of urgency.

In the meantime, though, the government’s recent announcement recognises that strategic strike is at the heart of Australia’s effort to shape and deter. The Australian Defence Force’s strike capability needs to be credible, sustainable and available.

With the retirement of the F-111s in 2010, Australia lost a key strike asset, increasing its reliance on an ageing, fragile platform, the Collins-class submarine. New submarines won’t be in service for another 10 to 15 years, well outside the less-than-10-year window of 2020.

I can’t improve on Marcus Hellyer and Andrew Nicholl’s analysis of the options for long-range strike. Their preferred option is the B-21 strategic bomber, arguing that while the cost per aircraft is high—an eye-watering $1 billion—overall a fleet of 12 would be cost-effective when compared with the nuclear-powered submarines. Also, in a sustained conflict, bombers are more likely to be cost-effective than missiles.

Still, missiles are the obvious short-term fix. Marles, it seems, would agree. But there’s an underlying problem: the conflation of area denial and deterrence.

Both the NSM and HIMARS, the acquisitions committed to thus far, are tactical in nature—in strategic terms, they are both short range (up to around 500 kilometres). They are better suited for area denial than for strategic deterrence.

True, area denial can have a strategic effect—if delivery platforms can be positioned, if those positions are sustainable, and if the missiles are directed at—and destroy—the right target. That’s a lot of conditionality.

Positioning ADF platforms for strategic effect implies access, and survivability, across considerable and presumably unfriendly seas and terrain.

Sustainability is tough. The war in Ukraine is demonstrating how quickly the rate of use of munitions rapidly depletes available supply. The NSM alone costs close to $3 million a missile. Extended reliance on missiles is a fast way to burn money, assuming supply is available, and the more capable and longer-range a missile is, the more expensive it is. Ensuring supply will take time—Defence’s guided weapons and explosive ordnance enterprise will take 10 years to reach its ‘sustain’ phase, well outside anticipated windows of need.

Last, there’s the target. Deterrence requires threatening, credibly, something the adversary not simply values, but values enough: ‘Deterrence rests today on the threat of pain and extinction, not just on the threat of military defeat.’

Deterrence may be brought about by military means, but it is essentially a political matter. Subsumption of deterrence into area denial incorrectly implies that deterrence, and by extension strategy, is a military domain, not a political responsibility. It also risks muddying force protection and force projection: both are needed, but they aren’t the same.

It’s not clear that much thinking has gone into what could deter likely or potential adversaries, as opposed to what areas the ADF would like to deny an opponent. In short, the answer to the former is not likely to be a convenient area of ADF operations; more likely it will be deep in unfriendly territory.

So, while any missiles enabling the ADF to act at a distance is a good start—Australia is, after all, starting from a low base and behind the curve—more is needed. That includes a variety of capability options that can be realised in the short, medium and longer term—a mix of missiles, strategic bombers and submarines, to hedge delivery bets as well as help ensure survivability and build credibility.

If Australia is serious about deterrence—defence on its own is immense and most probably unachievable—then the government has to do some deep thinking about purpose, intent and targets. And it will need to build appropriate governance and habits around the application of deterrence. Deterrence’s political equation is not something with which Australian decision-makers have much familiarity, nor can it be simply delegated to military officers.

Time is getting shorter. How the defence review grapples with the political element of deterrence as much as the military capability mix will tell us much about whether the government is prepared to meet the challenges of what Patrick Porter has described as the ‘age of blood and iron’.

Originally published 28 March 2022.

When the draft security agreement between Solomon Islands and China landed in the news cycle on Thursday, we shared a sense of dread. Initial analysis of the agreement in the Australian media was typically narrow and, at times, downright unhelpful.

The most outlandish claim was that Australia should be prepared to ‘invade’ Solomon Islands and ‘topple its government’. Apart from being illegal and impracticable, recommendations like this undermine both Solomon Islands’ and Australia’s security. They can be used both to bolster complex domestic power struggles in Solomon Islands and to fuel narratives of Australian militarisation and neo-colonialism, undermining Canberra’s relationships in the Pacific and raising suspicions of its motives.

Other Australian media responses were more measured. But they viewed the agreement primarily through a geopolitical lens. Although the leaked draft didn’t specifically mention it, all assumed that it would inevitably lead to a Chinese ‘military base’ in Solomon Islands. And they all focused on shoring up Australian leadership in the region. Recommendations ranged from Australia building a naval base in Solomon Islands to pursuing a regionwide agreement to ban non-resident powers from basing or deploying military personnel in the Pacific region. Other suggestions included expanding access to the seasonal worker program and increasing educational scholarships.

Largely missing were nuanced analyses that acknowledged the primacy of domestic Solomon Islands politics and the complexity of its geopolitical relationships. This was mostly because few Solomon Islander voices were heard in the initial Australian media storm.

Australian understandings of the Pacific will always be partial unless more space is provided for Pacific voices to participate in robust and nuanced public—and private—debate.

This suggests an urgent need for opportunities for deepening mutual understanding, building relationships and elevating the profiles of Pacific thinkers in Australia and elsewhere. Creating opportunities for Australians and their Pacific counterparts to engage in private discussion is essential to widening and deepening knowledge and relationships.

Track 1.5 dialogues offer one (although not the only) way to provide these opportunities.

Track 1.5 dialogues are informal conversations that include government officials and non-governmental experts all sitting around the same table. In Asia, they are an accepted—and, in the case of the annual Shangri-La Dialogue defence summit, institutionalised—part of the region’s multilateral framework.

But track 1.5 security dialogues comprising Australian, New Zealand and Pacific island officials and non-governmental experts are underutilised. This is despite the fact that they could provide critical opportunities for open and frank closed-door conversations to deepen understanding of the issues at stake and the perspectives of other actors.

We frequently participate in track 1.5 regional security dialogues with Australia’s and New Zealand’s major partners at which Pacific issues are discussed. They are rich and valuable experiences. But Pacific participants are seldom involved. Notably, when Australia asked China to revive a dialogue on the Pacific earlier this month, the proposal didn’t include participation by any Pacific state.

One notable exception was in 2020, when one of us co-hosted the Track 1.5 Pacific Security Dialogue held to inform the Australia–New Zealand–United States Pacific Security Cooperation Dialogue. It was deliberately set up to ensure that the majority of speakers and participants were from the Pacific, which was partly enabled by its being held online due to Covid-19 travel restrictions.

Post-dialogue feedback reflected the value of providing a platform for Pacific voices. Participants appreciated the opportunity to hear from, and exchange views with, Pacific participants. Australian, New Zealand and American participants commented that they hadn’t been aware of the depth of Pacific expertise before the dialogue.

There are several contexts in which track 1.5 dialogues could be held in the Pacific.

Universities could be engaged to facilitate dialogues. For example, later this year, funded by a Defence strategic policy grant, our universities and the Australian National University will host a track 1.5 dialogue between Australian, New Zealand, American, Japanese and Pacific officials and academics on enhancing security cooperation in the Pacific.

In the region, the Pacific Islands Forum has considerable convening authority and could partner with, for example, the University of the South Pacific. The forum’s draft 2050 strategy for the Blue Pacific, which aims to design an effective regional architecture to respond to security and political challenges, provides the imperative. Establishing a Suva dialogue, for example, would embed multitrack diplomacy in both regional security practice and architecture.

Institutionalising a program of track 1.5 dialogues between officials and non-government experts from Australia, New Zealand, other partners and the Pacific would build understanding of the region, enhance relationships, deepen trust and provide a platform for Pacific voices and perspectives. It would provide a forum for uncomfortable conversations and for solutions to be offered to the challenges facing the Pacific and its partners. It would require genuine investment and commitment.

The ‘success’ of these dialogues would probably be difficult to define or identify in the short term. Dialogues don’t carry the same weight at the ballot box or catch as much media attention as rumours of military bases, but the dividends of track 1.5 diplomacy—such as open communication during times of crisis—would be invaluable.

Australian Foreign Minister Penny Wong is leading a bipartisan delegation in the Republic of Palau, an island nation of around 18,000 people that sits just north of the equator in the western Pacific Ocean. What Palau lacks in size it makes up for in strategic importance: as the island furthest to the west in the second island chain between the United States and mainland Asia, it stands to play a critical logistical role in any military conflict that may occur in the region. Until very recently, Australia largely ignored the north Pacific. Last December, Australia opened an embassy in Palau.

Since gaining its independence in 1994, Palau has remained steadily pro-Western in orientation. It has maintained a compact of free association with the United States, which grants the US the right to prevent foreign military forces from entering Palau’s 600,000-square-kilometre exclusive economic zone. It is one of just 13 nations that recognise the democratic Republic of China (Taiwan) rather than the communist People’s Republic of China. Still, it’s no secret that Beijing has sought to pry Palau away from the US and its democratic partners. Wong’s visit is thus an important reminder that, in this increasingly contested region, every island matters.

Although it’s commendable that Wong has made it a point to personally visit Palau (as well as other Pacific island countries), to ensure China’s efforts remain futile Australia should do more than provide a photo op. Luckily, there are several areas where Australia might assist Palau, including many that stand to create new opportunities for Australian businesses and people.

For example, although Australia helped Palau obtain its first submarine fibre-optic cable and has recently helped secure the funding for a second, the island’s high-speed internet capability largely stops at the water’s edge. There remains a dearth of infrastructure within Palau’s archipelago to capitalise on the potential of these cables. If Australia committed to supporting the development of necessary infrastructure, it would help Palau create a solid backbone for economic growth. To twist an old adage: rather than just handing Palau a fish so it could eat for a day, Australia would be providing a fishing pole so Palau could fish for its future.

In addition to helping lay the groundwork for the development of new economic sectors, Australia can help Palau further develop what was, until the pandemic, its primary economic activity: international tourism. In recent years, the main source for tourists has been China, followed by Japan and Korea. The failure to see and promote Palau as a unique tourist destination is the failure to leverage one of Australia’s greatest strengths: its people. The development of people-to-people ties through activities such as leisure tourism is an ideal way to reinforce Palau’s pro-Western orientation. Australia should promote tourism to Palau by establishing a direct flight from northern Australia, providing hospitality training opportunities and providing funding specifically for upgrading tourism-related facilities and creating a relationship between tourism authorities.

Relatedly, Palau has only a single public high school and just one community college. Students typically go to the US for higher education and remain there after graduation. This leads to brain drain, depriving Palau of needed skilled labour. Australia should join Japan and Taiwan in offering scholarships to students, as well as opening up additional skills-training opportunities for working professionals, that provide first-rate experiences but require Palauans to return to their country at the end of the programs.

When these newly trained professionals return, they need to be able to succeed in opening new businesses. However, a lack of collateral often makes it difficult for Palauans to secure the capital necessary to fund the development of a business. Australia might make small-business loans or grants available to individuals who want to develop new businesses in the country, as well as foster links with business incubators in Australia so that Palauans can receive support and mentorship, and funding, to start new businesses.

Of course, even if new educational and skills-training opportunities can facilitate additional economic activity in the country, there will still be a need for access to external labour markets. Here, too, Australia can help. The government has already announced that it is expanding available visas for Pacific islanders to work in Australia. It should ensure those visas are available to Palauans as well.

There are also many areas beyond economics in which Australia could make a big impact. One is in the development of new, high-quality housing. A lack of domestic capacity and resources means that there are limited options for new housing that is energy-efficient and that can withstand a typhoon—an increasingly frequent occurrence due to climate change. Australia could provide grants to the National Housing Commission so that it can retain expert consultants who can provide advice on urban planning and sustainable development.

Palau’s lack of domestic capacity extends to other areas as well, including the island’s Foreign Investment Board (which still keeps all of its records on paper), its ability to patrol its EEZ (with only two vessels, one of which is an Australian-donated Guardian-class patrol boat) and even the ability of its government lawyers to do basic legal research (the database they use was created in the early 2000s). Australia should work with the US to provide more assistance and resources in law enforcement; for example, there are very limited human resources in the Attorney General’s Office to prosecute felonies.

Like other Pacific island countries, Palau requires assistance with climate-change mitigation (including relocating its only hospital to a less flood-prone area) and moving to renewable energy. Australia is extremely capable of helping in each of these areas, and has usefully financed a solar project.

Perhaps most importantly, though, Australia should continue to increase its participation in discussions with the US, Japan and Palau’s other allies about supporting Palau’s relatively new National Security Coordination Office, ensuring that Palau can protect itself, its people and its resources—whether on land or at sea—from those who would try to take advantage of a small country, extort or coerce a small government, or abuse the goodwill of a proud Pacific culture.

In all this, Australia stands to receive a benefit from its assistance, be it from a new tourism market for its people, new economic opportunities for its businesses, or a new place for its navy to visit and train. That’s surely better than just writing another cheque.