Tag Archive for: Australia

Australia–Japan security cooperation is about to get much deeper

Japanese Prime Minister Fumio Kishida is set to meet with Prime Minister Anthony Albanese in Perth, Western Australia, this weekend. The meeting, their second face to face since Albanese took office in May, is keenly anticipated to be another groundbreaking event in Australia–Japan relations as the two countries further strengthen their ‘special strategic partnership’ in the face of an ever more challenging security environment in the Indo-Pacific. The choice of Perth as the venue is symbolic; as Japan’s ambassador to Australia, Shingo Yamagami, has commented, ‘Perth is the ideal setting—located at the geopolitical nexus of Australia and the Indo-Pacific, and the economic nexus of our own Japan–Australia relationship.’

Kishida and Albanese are expected to announce an updated version of the Australia–Japan Joint Declaration on Security Cooperation, which has effectively served as the foundational document of the strategic partnership when it was signed back in 2007. Much has changed in the intervening years, and both parties have long considered the need to revise the declaration to reflect shifts in the strategic environment and further consolidate and deepen their bilateral cooperation across a spectrum of activities.

What might we reasonably expect from the new joint declaration?

We can assume that it will codify the efforts at ‘deepening cooperation in the areas of security and defense and economy’ that have taken place within the strategic partnership over the past 15 years, such as the two countries’ agreements on information sharing, logistics and military interoperability (including, most recently, the reciprocal access agreement). The bilateral agreement for transfers of defence equipment and technology, put in place in 2014 to facilitate Japan’s (ultimately unsuccessful) bid to provide submarines to Australia, may gain a new lease of life as the two countries explore ways to jointly develop or produce military hardware. This dovetails with a stated desire to work together on ‘game-changing’ technologies such as quantum computing, artificial intelligence and hypersonics.

Indeed, with joint recognition of the vital importance of ‘economic security’ issues, not only in relation to defence, but also in areas such as energy security and supply-chain resilience, the two countries will likely signal ways in which they will ensure access to critical minerals and hydrogen production. Notably, Japan has instituted a cabinet-level economic security minister to oversee its economic security strategy—something Australia should also seriously consider. Cyber security, space security and an emphasis on countering environmental security issues brought about by climate change will be additional features on the joint agenda for cooperation.

The new declaration will also likely signal both countries’ commitment to multilateral institutions in the Indo-Pacific, with acknowledgement of ‘ASEAN centrality’, but also with a stated preference for the East Asia Summit as the most important venue for regional security dialogue (given the presence of the United States). They will affirm their support for economic institutions such as the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and for engagement with the US-led Indo-Pacific Economic Framework for Prosperity.

But the declaration will also emphasise the new array of ‘minilateral’ institutions—small-group targeted cooperation between select states, such as the Australia–Japan–US security dialogue and the Quad, and possibly noting Japan’s support of AUKUS. This reflects their stated commitment to ‘further coordination with allies and like-minded countries’.

Though it’s unlikely that China will be mentioned by name, Beijing’s actions, including military pressure across the Taiwan Strait and against Japan itself in the East China Sea, and the use of economic coercion as a tool of statecraft, are obvious inclusions. Any direct reference to the security of Taiwan will predictably produce a counterblast from Beijing, as witnessed in its responses to earlier statements by the partners.

Given Pyongyang’s recent missile launches over Japan, North Korea will certainly rate a significant mention, possibly couched in line with an earlier stated intention to achieve a ‘world without nuclear weapons’ and observance of the Nuclear Non-Proliferation Treaty and the Non-Proliferation and Disarmament Initiative.

Russia’s coercive actions also extend to the Indo-Pacific region, despite its war in Ukraine, as it continues military activities close to Japan (where Tokyo has a territorial dispute over the Northern Territories/Kurile Islands) and elsewhere in combination with its ‘no limits’ partner, China.

Given the mounting strategic tensions in the South Pacific as a result of China’s increasing penetration of the region—for example, through the 2022 Beijing–Honiara ‘security agreement’—the Pacific islands will likely feature prominently as an area for renewed cooperation. Australia and Japan crafted a joint strategy for cooperation in the South Pacific in 2016 to coordinate their approaches to development aid and capacity-building in the region. But the recent appearance of the Partnership for the Blue Pacific, involving Australia and Japan alongside the US, UK and New Zealand, will be a further minilateral venue for the two partners to expedite their regional agenda.

The new declaration will further establish the Australia–Japan strategic partnership as a major platform in both countries’ strategic responses to the deteriorating security environment in the Indo-Pacific. As has been repeatedly stated, it is based upon ‘shared interests and values’. Among the two nations’ shared interests is the desire to maintain peace and stability while advancing economic prosperity in an increasingly contested region. Shared values include their mutual championship of a rules-based order, based upon international law and peaceful resolution of disputes, backed by a shared commitment to freedom, democracy and human rights.

As strategic competition in the region intensifies, the strategic partnership mechanism is seen as an important vehicle to jointly safeguard mutual security objectives, both as a supplement to the US alliance system and as a limited insurance policy against a renewed period of American isolationism, as was partly experienced under the Trump administration. That is, it serves both a reinforcing and a hedging purpose with respect to US regional engagement.

Those expecting the new declaration to formalise a mutual military defence treaty will likely be disappointed. While the strategic partnership continues to deepen and expand in the direction of a typical alliance, and is sometimes referred to as a ‘quasi-alliance’ or ‘semi-alliance’ by commentators, these are more characterisations than official policy. Neither side will feel the need for, or be prepared to bear the consequences of, announcing a formal military alliance or treaty at this time. While the Australian government had proposed such a treaty at the outset of the partnership, which was declined by Tokyo, and some in both countries continue to advocate for a treaty, the strategic partnership has served, and will continue to serve, as an effective proxy for advancing their joint vision of a free and open Indo-Pacific.

Strategic advantage, sovereignty and Australia’s geopolitical identity

What does it mean to win? Instinctively, this seems like a straightforward question that should have a correspondingly straightforward answer. But when it comes to developing a national edge or strategic advantage, concepts such as winning and losing may not be so easy to define. In Australia, which has experienced few national existential crises, there appears to be little understanding of, or consideration given to, all the nuanced contours of winning—how to achieve advantage, how to identify gains and, more profoundly, how these things inform an associated theory of victory.

As the strategic landscape changes, and as adversaries’ use of the grey zone threatens to compromise citizens, infrastructure and the cognitive domain, this complacency may be the nation’s undoing. How can Australia turn the strategic environment to its advantage if it doesn’t have the intellectual frameworks to understand what winning looks like?

Part of the problem is Australia’s insistence on situating itself in the middle-power paradigm. Certainly, Australia doesn’t possess all the tools necessary to secure the breadth of its stated strategic objectives. It might punch above its weight in a limited operational scenario, but developing the capacity to go it alone for an extended period and realise ‘victory’ is a different challenge altogether. This reflects the kind of Goldilocks predicament middle powers often find themselves in; they’re not large enough to be able to dominate others with the sheer force their own instruments of military and economic power, but not so small that they can be easily dominated by a major power. Australia has arguably let its middle-power status come to mean that it must think about how not to lose rather than what it means to win.

Australia may need to develop the knowledge and confidence to hold its own, in intellectual and strategic terms. Established theories of asymmetry and deterrence, which are based on great-power dynamics, do not map neatly onto Australia’s context. And Australia’s middle-power mode is different from that of other middle powers with interests in the region, such as South Korea, the UK and Vietnam. Australia’s specific characteristics, as they are expressed both internally and externally, are what determines its competitive standing and the dynamic space in which strategy is devised. But identifying the opportunities this affords requires rigorous agitation of what Brendan Sargeant has termed Australia’s ‘strategic imagination’.

It is not Australia’s middle-power status that’s important in how it conceptualises the strategic levers that are available. Rather, it is understanding the dynamic and relational nature of advantage and identifying how Australia can capitalise on its particular national circumstances to enhance its strategic presence.

And now could be the moment. With increasing strategic competition in the Indo-Pacific, Australia has, at least, recognised that it must re-evaluate its regional role and its strategic identity. The 2020 defence strategic update underscored the need for Australia to adapt to a challenging strategic environment, emphasising regional partners and the US alliance as key enablers. The recognised need to understand Australia’s position relative to others in the region, whether they be ally, potential adversary or invested third power, could be critical to creating a strategically advantageous security environment. But the strategic update fell short of articulating how to develop these relationships so that Australia can attain a winning position or strategic advantage. Certainly, it has become limiting to think of strategic advantage in strictly military terms. The proliferation of grey-zone threats may require a broader conceptualisation of the levers for strategic advantage than those mitigated by Australia’s current defence strategy.

Perhaps it’s time for Australia to reject the conventional conceptualisation of the middle-power paradigm and commit to the difficult task of self-creation and a tailormade theory of victory. Australia may need to reframe its strategic identity in terms of competition and cooperation and start to conceptualise its security policy much more broadly in terms of where strategic advantages can be achieved relative to others in the region. Australia may need to focus more on its national and societal propensity for strategic advantage (that is, its ability to translate underlying potential into beneficial outputs) than its overall potential, (that is, its raw capacity in terms of resources, population, territory and so on). But because strategic advantage is relational and dynamic, the real challenge could be to determine how the Australian conceptualisation of competition in the Indo-Pacific differs from, or aligns with, that of key allies and partners, and what unique levers Australia possesses.

Australia may need to critically assess its strategic traditions to develop a broader conceptualisation of how to secure the safety and wellbeing of the nation and position itself advantageously. As Sargeant argued, it may be time to ‘imagine ourselves into what we might be, but also what the world might be’ and to develop a distinctive, gainful and effective presence in the region.

In this moment of strategic disruption, Australia needs to do the intellectual hard yards or risk forgoing the ability to shape its national destiny. The field could be left open to those who are more determined and who have a greater dedication to self-determination.

Parliament ponders the way Australia goes to war

When Australia became a nation on 1 January 1901, it was at war in South Africa and China.

The six Australian colonies had sent militia and bushmen contingents to the Boer War (1899–1902) and dispatched troops and ships to the Boxer Rebellion (1900–01).

The Commonwealth of Australia was blessed with its own continent and the most peaceful act of national creation. The federation was formed by agreement and referendum. Yet the Commonwealth inherited a foreign military tradition at its birth.

The first military unit established by the new federal government was the ‘Australian Commonwealth Horse’, which served in the final stage of the South African conflict. They were the first Australian troops to wear the rising sun badge, clipping the brim of the slouch hat. One of Australia’s most questionable fights, the Boer War, has one of Canberra’s most striking memorials—a patrol of four mounted soldiers edging their bronze horses down a slope to Anzac Parade.

The memorial has a verse from the journalist-poet Banjo Patterson, who served as a correspondent in South Africa:

When the dash and the excitement and the novelty are dead,
And you’ve seen a load of wounded once or twice,
Or you’ve watched your old mate dying—with the vultures overhead,
Well, you wonder if the war is worth the price.

Patterson’s ‘worth the price’ question often recurs in considering the nine times Australia committed to war in the 90 years from 1914 to 2003. What he reported as an imperial war would become alliance wars. The distinction between wars of choice and wars of necessity is fraught, yet the Boer War counts as our first war of choice—Vietnam and Iraq are later additions to that column.

Australia goes abroad to fight for its alliance, to help set the central balance, and for what we now call the rules-based global order. We send our diggers offshore. Statecraft meets strategy as the expeditionary force sets out.

Australia has spent much of its history, as Coral Bell masterfully recounted, as a ‘dependent ally’, but it is a finely calculated reliance. Dissecting Australia’s strategic culture and way of war, Michael Evans observed that our pragmatic politics meant this ‘dependency has always been clever, cynical and calculated’.

The Boer War heralded another constant in the way the nation goes to war—the lack of any initiating role for the federal parliament. When Australian troops first sailed for South Africa, parliament didn’t even exist. In every war since, it has been the ghost with no formal voice in the most fundamental choice a nation can make. The executive has almost unfettered war powers.

The prime minister declares the deployment or announces the conflict and the military march. This is the leader’s most profound prerogative. The prime minister confident of cabinet and party can act without any authorisation or resolution from the parliament.

All this frames the just-announced parliamentary inquiry into ‘how Australia makes decisions to send service personnel into international armed conflict’. The review will wrestle with issues that echo down our 120 years of federation.

Previous pushes to give parliament a voice over war powers have come from minor parties in the Senate—the Australian Democrats and the Greens. This time, the discussion has been set in motion by a new government.

Prime Minister Anthony Albanese’s government is acting on the platform it took to the May election. Under the heading ‘Armed conflict’, the Australian Labor Party’s national platform conference resolved:

that an Albanese Labor Government will refer the issue of how Australia makes decisions to send service personnel into international armed conflict to an inquiry to be conducted by the Joint Standing Committee on Foreign Affairs, Defence, and Trade.

The terms of reference set by Defence Minister Richard Marles ask the inquiry to consider:

  • the approach of similar Westminster-system democracies around the world
  • parliamentary processes and practices, including opportunities for debate to provide greater transparency and accountability on the deployment of the Australian Defence Force
  • the security implications of prenotification of ADF deployment that may compromise the safety of ADF personnel, operational security or intelligence and/or have unintended consequences
  • any related matters.

The terms of reference point to the inevitable tensions: secrecy and security versus what a democracy needs from its parliament. I’ve written a series of columns on the prime minister’s profound prerogative and the Australian way of war. My minimalist solution is not to push against executive powers, but to formalise conventions to ‘parliamentise’ the war powers.

Aim for a checklist if not a legal check when war is launched. And use the checklist for greater parliamentary oversight of the way war is waged. Over the past two decades, prime ministers as diverse as John Howard, Tony Abbott and Julia Gillard have offered footholds on which parliament could build conventions.

A greater role for parliament will respond to seismic shifts in Australian politics. The two ‘parties’ of government—Labor and Liberal–National—must adjust to the change in the way Australians vote.

John Howard defines that shift in his new book:

When I first became active in politics in the early 1960s, what I described as the 40–40–20 rule obtained. This meant 40% always voted for the ALP, 40% for the Coalition, and 20% floated between the two, or voted for minor parties or independents. In recent years, I have commonly remarked that the old 40–40–20 rule has been replaced by a 30–30–40 rule.

At the May election, Howard’s new equation ‘came remarkably close to reality’—one-third of the primary vote went to Labor, one-third went to the Coalition, and the rest went elsewhere. The preferential system means ‘Australia remains firmly with the two-party paradigm’ in forming government, as Howard notes.

In that 30–30–40 world, the relationship of the executive to parliament will alter. We will have more minority governments in the future than we’ve had in the past.

In that future, the prime minister’s prerogative for war must, at the least, nod to the views and voice of the parliament.

An Australian-funded safe ferries program would save lives in the Pacific

Marine safety and sea transport are major concerns for the Pacific islands region. The island states have a high level of dependence on inter-island transport for the movement of both goods and people. All Pacific peoples benefit from their access to affordable, safe and reliable sea transport.

As Sam Bateman argued many years ago, maritime safety is a neglected aspect of maritime security. Taken as one nation with a total population of about 12 million, the Pacific Islands Forum countries (excluding Australia and New Zealand) have suffered the highest rate of ferry fatalities per capita of any countries globally. In the past 30 years there have been eight known fatal ferry accidents in five island countries, resulting in 613 fatalities. There have been many more involving smaller craft. These tragedies shouldn’t happen.

Many Pacific islands are recognised archipelagic states. They’re largely reliant on ‘sea highways’: many of their outer islands have few roads, no rail and very expensive aviation. Most of the island nations can’t afford safe, modern but expensive ferries.

Most domestic ferries in the Pacific are operated on minimal budgets by sometimes unscrupulous people, not government marine departments. The vessels are usually old, poorly maintained and badly modified. They’re not well equipped with safety and communications equipment. Generally, they’re not very safe.

Australia is a world leader in small ferry building. Our naval architects and shipbuilders lead the world in the design and construction of safe, comfortable, efficient and economical roll-on, roll-off passenger and cargo ferries and dedicated passenger vessels. We’re renowned for our ship repair and maintenance skills and maritime crew training expertise.

The latter is critical. While hardware, in the form of safe ferries, is very important, the vast majority of ferry accidents have human error as their root cause. High-quality training in operations and management is vital. Australia has several companies and educational institutions, such as the Australian Maritime College, capable of offering that training.

Australian-designed FastCat passenger, car and cargo ferries have revolutionised ferry safety, comfort and service in the Philippines. Similar, but slightly smaller and slower, vessels would be ideal for the Pacific. Harwood Marine is completing two very similar boats for ferry company SeaLink to operate around Moreton Bay in Queensland.

Australia has several excellent free-enterprise ferry operators that have safely and profitably managed significant fleets of ferries for many years. One or more of them could be contracted to establish and initially manage Pacific safe ferry services and train personnel to the highest international standards prior to passing established businesses to national government control. They could then be managed in a similar manner to successful Pacific islands airlines, such as Fiji Airways and Air Niugini.

An Australian program of donating safe ferries along with associated logistical support and maritime training would be a logical development of our Pacific Maritime Security Program, under which we’re donating 21 Guardian-class patrol boats to 12 Pacific island states and Timor-Leste.

A few years ago the New Zealand government handed over a new ferry to Tokelau to allow for easier travel between the territory’s atolls and Samoa. Another recent example of gifting a vessel to a Pacific island country was the donation by Japan of US$10 million to Tonga in September 2021 for the provision of a new tugboat for the Port of Nuku’alofa.

The costs of a safe ferry program wouldn’t be huge. If we included nine Pacific countries in the program, plus Timor-Leste, a donation of two 40-metre vehicle and passenger catamaran ferries, ideally suited to tropical conditions, to each country would total 20 ferries. The current price of such vessels is around $12 million each. So that’s a total of $240 million for 20 vessels.

Berthing and loading facilities would require simple, cheap concrete structures. Operator, mechanic and marine-ticket training could be provided economically. The total cost for infrastructure and training support for the ferry program would be around $26 million.

The total cost of $266 million for a Pacific safe ferries program could be spread over five years. Our island neighbours would receive a useful sea highway providing them with safe, efficient and reliable transport of people, goods, vehicles and liquids, including drinking water. The ferries would be particularly useful for disaster relief. As recommended in a recent ASPI report examining ANZUS and the Pacific islands region, a ‘program of developing and upgrading a system of ferries, wharves and navigation infrastructure would contribute significantly to meeting national security needs in responding to natural and human disasters across the region’s major archipelagic states’.

Our current aid programs to the Pacific aren’t always given the credit they deserve locally. They’re not always obvious or prominent. For a comparatively small investment in a safe ferries program, Australia would be rewarded with significant kudos and appreciation at a time when the region is increasing geopolitically contested.

End to excise discount highlights Australia’s fuel-storage vulnerabilities

One of the significant challenges with commodity investments is knowing when to buy and sell. Some view such investments as a form of institutionalised gambling. However, an understanding of the market, and a firm plan for return on investment, usually underpin investor decisions. Two years ago, the Australian government made such a commodity investment when it purchased $94 million worth of oil and stored it in the US Strategic Petroleum Reserve.

When Australia joined the International Energy Agency back in 1979, it was still a net exporter of oil with enough leverage to control the volatility of the price of fuel in Australia. At the time of joining, Australia was exempt from IEA’s requirement to stockpile at least 90 days of daily net imports. A decline in refining capacity and increased imports over the years have meant that Australia became non-compliant with IEA’s stockpiling requirement in 2012 and has remained so ever since.

In February 2020, Australia held 25, 20 and 22 days of consumption cover for petrol, diesel and jet fuel, respectively. In April 2020, five months into the Covid-19 pandemic, the government officially recognised what countless economists and strategists had warned for over a decade: Australia’s just-in-time approach to fuel supplies and the gradual decline in onshore refining left the nation vulnerable. In response, the government announced the establishment of a national oil reserve. Australia bought roughly 30 million barrels, or three days of national supply at the current usage rate, at the historically low price of US$20 per barrel. It was a sound economic decision, given the dramatic fall in global oil prices. But it also exposed Australia’s lack of bulk storage capacity.

The government signed a 10-year lease agreement to store the oil in the US, arguing there was no more secure place than the US Strategic Petroleum Reserve. There’s no doubt that this is true from a US context. However, the other and more pressing reasons for this arrangement were the rising geostrategic tensions in Australia’s region and a bulk storage problem at home.

But storing oil thousands of kilometres away from Australian shores didn’t make strategic sense then or now. A more secure place would have been on Australian soil had it not been for the lack of commercial storage facilities. In this context, the government’s purchase seems more akin to a wise commodity investment than a means to increase fuel resilience.

A few weeks later, the government announced a three-part fuel security package. The first part of the package was a recommitment to establishing a government-owned oil reserve for domestic fuel security in the US. The second was a commitment to work with the private sector to develop options to increase local storage as quickly as possible. The third involves the government considering a temporary change to fuel standards. Just over two years later, despite the best efforts of the private and public sectors, there’s been no real improvement in fuel resilience.

The expiration next week of the government’s fuel excise discount has brought the issues of fuel prices and energy security again front of mind. The excise cut was always going to be a short-term solution.

The hope was that during the six months when it ran, the oil price would decline from its stratospheric heights. Unfortunately, the effects, albeit well intended, didn’t last long, and the scheme’s benefits have been eaten away by more oil price rises.

The challenges the scheme was trying to tackle are baked in with no easy solution. As of June 2022, Australia had a net import coverage of 58 days and remains non-compliant with the IEA requirement even if we were to count the oil that’s on vessels on their way to Australia. The issue is about more than fuel prices; it is directly associated with Australia’s sovereign fuel production and storage capacity and the effects of those factors on long-term energy security. The government must address an enduring problem at the core of Australia’s access to liquid energy, which fulfils more than half of Australia’s energy demand.

There can be no doubt that in the future, perhaps within a decade or two, Australia’s reliance on fossil fuels will be reduced. But as the country transitions to renewables, liquid energy will still play a role for some years. Australia should therefore increase its liquid-fuel storage capacity in these strategically uncertain times. Of course, such investments are challenging in an environment of economic uncertainty and increasing national debt.

The good news is that the 30 million barrels of oil the government bought in 2020 are worth a lot more today. The economic opportunity cost of the oil Australia has in the US Strategic Petroleum Reserve in the current market, trading at around US$85 per barrel, is easily quantifiable. Harder to measure is the strategic opportunity cost of not having that oil on Australian soil if it takes up to a month for it to arrive here on ships.

It seems that Australia’s commodity investment, which brings little in the way of fuel resilience, has matured. If we sell that oil on the open market and make a profit, what do we do with the money? Of course, there’s the argument that the government should put it towards repairing the budget, which is the reason for halting the fuel excise discount. The other idea is perhaps selling this oil and resolving the real problem by investing in onshore strategic storage.

Australia’s semiconductor moonshot

Semiconductors are the single most important technology underpinning leading-edge industries. They’re essential for the proper functioning of everything from smartphones to nuclear submarines and from medical equipment to wireless communications.

Australia’s notable lack of participation in the global semiconductor ecosystem has put it at a geopolitical disadvantage. As a nation, with some niche exceptions, it’s almost entirely dependent on foreign-controlled microchip technology, making it increasingly vulnerable to global supply-chain shortages, shutdowns and disruptions. Such occurrences have become all too common, either because of events such as the Covid-19 pandemic or because of other governments’ attempts to weaponise supply chains for geopolitical reasons.

Having unfettered access to microchips is a matter of economic and national security, and, more generally, of Australia’s day-to-day wellbeing as a nation. In an increasingly digitised world, policymakers must treat semiconductors as a vital public good, almost on par with basic necessities such as food and water supplies and reliable electricity.

By some calculations, Taiwan manufactures 60% of the world’s semiconductors and 90% of the most advanced chips. That alone should focus our minds on how we might shore up our future supplies of this critical resource.

The best solution is for Australia to build its own semiconductor manufacturing capability in selected areas matched to its research and development strengths and key markets. To do otherwise will expose Australia to significant risk, severely constrain our growth as a technological nation and consign us to second-tier status.

Granted, it would be an enormous undertaking—as many well-informed observers including Chief Scientist Cathy Foley have stated. Indeed, we call it a ‘moonshot’ in a report we are releasing today through ASPI.

However, there is a viable pathway that includes pursuing public–private partnerships from an existing R&D foothold, embedding Australian enterprises in friendly and reliable value chains, attracting talent and investment, and leveraging our relationships with strategically aligned and technologically advanced partners. Our report sets out the global context and key elements towards a national semiconductor plan, in which a $1.5 billion government investment through a combination of grants, subsidies and tax offsets could mobilise $5 billion in manufacturing activity.

Other like-minded nations have recognised the urgency and are moving quickly.

The United States and the European Union have both introduced ‘CHIPS’ Acts this year, which deliver subsidies for semiconductor sectors and support for areas that depend on advanced chips, such as 5G wireless, artificial intelligence and quantum science. Japan, South Korea, India and China are all stepping up their efforts. There is a race on, and Australia needs to move decisively.

The fact is, we are no longer in a period of economic liberalism and unrestricted free trade. Rather, nations have found it necessary to adopt the practice of ‘managed trade’ with a pragmatic techno-nationalism. This has been driven by geopolitics, most obviously by China’s mercantilist approach, but also by factors such as the Covid-19 pandemic and climate change, which is encouraging shorter supply chains in efforts to decarbonise economies.

Australia has some important strengths: strong institutions, a network of universities and R&D bases, an enterprising business sector, and good friendships with other leading technological nations with whom we share strategic interests, such as the US, the UK, Japan and South Korea. We need to use deft tech diplomacy and get ourselves into global value chains that are made up of reliable, strategically aligned countries—so-called friend-shoring.

Australia already has an important R&D base upon which it can build its new capabilities, in the form of the Australian National Fabrication Facility (ANFF) network under the National Collaborative Research Infrastructure Scheme, which with a modest investment could become more commercially relevant and attract and anchor real commercial foundries.

The ANFF, with eight nodes across Australia, enables researchers to innovate and fabricate advanced products including semiconductors, but not currently at any scale beyond research. Doubling the cumulative investment in the ANFF with a further $400 million in catalyst funding would enable selective key nodes to escalate from one-off R&D to develop pilot production lines geared to volume and yield, closing the gap to producing chips commercially.

They could then create a pipeline of talent and form commercial partnerships. Companies that see this activity are more likely to invest in Australia because they can locate a foundry close to one of these key nodes, rather than build from scratch. Several national and international examples are outlined in our ASPI report.

Significant subsidies and tax concessions would attract semiconductor firms to invest here as part of public–private partnerships. The arrangements set out in the US CHIPS and FABS Acts are a good guide and could be scaled to Australia’s comparative stage of development. Such a commercial foundry partnership would be in the order of a $2 billion investment at a tailored entry point.

The ANFF network already has strength in the research-scale fabrication of compound semiconductors, which use two or more elements and are important in areas such as 5G, photonics and electric vehicles, and we should sensibly start there.

We can then work towards establishing a commercial silicon complementary metal-oxide semiconductor foundry, initially at mature process scale for which there are important markets, and over the longer term, progress to develop leading-edge chips requiring more investment.

We need to ensure that a local talent and innovation pipeline reinforces Australia-based commercial foundries by working with Australian universities and government R&D agencies, and via semiconductor-oriented degree and technical qualifications from universities and technical colleges. We should work with other trusted nations to strengthen this talent pipeline through coordinated research and training among key research universities.

We believe the plan we are putting forward, outlined in detail in the ASPI report, constitutes an implementable blueprint for Australia, not just a pie-in-the-sky idea. Nobody thinks it will be easy, but the strategic imperative is clear.

There are sceptics who will argue we are too small, and that our near-absent commercial chip fabrication capacity means we should concentrate instead on chip design and leave manufacturing to others.

That might be fine in a perfect, rules-based world, but in the real world of supply-chain uncertainty and darkening strategic horizons, we have to address this centre of gravity to avoid being forever a bit player, totally reliant on foreign chips.

Understanding AUKUS

Since its announcement a year ago, the AUKUS agreement linking the US and the UK to Australia’s ambition to acquire nuclear-powered submarines has divided opinion.

Critics have portrayed the pact as an alliance that could destabilise the security architecture of the Indo-Pacific region. The notion is that a proliferation of nuclear-powered submarines could invite a regional arms race and leave the door open to the eventual arming of future Australian subs with nuclear weapons.

One year on, are the critics right in their concerns about AUKUS? This question can be answered only by understanding what AUKUS is, and what it is not, and why this agreement matters beyond its immediate technical provisions.

AUKUS is not a security alliance. It holds no provision to suggest such a notion, nor were any of the steps undertaken so far aimed at making it an alliance.

AUKUS is a technology accelerator agreement for the purpose of national defence, no more, no less. It is designed to allow three countries to work closely together to translate the promise of today’s maturing technologies, such as quantum computing and artificial intelligence, into tomorrow’s military edge.

Last April, the three participating governments said that the implementation of AUKUS would be overseen by senior officials and joint steering group meetings that would define different lines of effort.

These areas would be developed through 17 technical working groups. Nine of them are focused on the submarine program, while eight relate to advanced capabilities. This is not an alliance-building policy process, though the sensitive nature of the technologies in question demands a commitment to sharing highly classified information.

This clarification leads to a second observation. AUKUS is not about achieving stability through a form of deterrence delivered by nuclear-armed submarines.

Rather, the themes in the working groups on advanced capabilities suggest that the main aim of the pact is to elevate the intelligence and deterrent value of conventional capabilities.

In this regard, one of the most striking assumptions about AUKUS is the belief in technology as the key to unlocking the full potential of conventional undersea capabilities through enhanced early warning and, if needed, unmatched targeting precision.

Moreover, AUKUS has revealed how leaders in the three national capitals view the maritime domain as a central pillar to the stability of the Indo-Pacific and the wider international order.

This is why understanding what AUKUS is about matters strategically. It matters because it sheds light on a worldview in which the sea is vital to international affairs and, as a consequence, technology that allows for better operation in, and from, this domain has critical value.

AUKUS’s worldview is one that stems from the recognition that the maritime foundations of the international order stand vulnerable to state coercion. Safe and secure shipping lanes and intact undersea cables are engines fuelling economic prosperity and political stability. This is true in the Indo-Pacific as elsewhere.

The recent Russian blockade of Ukraine’s Black Sea access and China’s military manoeuvres across the Strait of Taiwan are reminders of the risks of disruption to global prosperity at the hands of states willing to exploit the maritime order to exert political pressure.

AUKUS is, therefore, a down payment to prevent one of the most critical components of the international order from being further destabilised.

AUKUS is a statement about why such a specific technology agreement has wider strategic relevance. It does not destabilise regional security because no other piece in the regional architecture is designed to ensure that the sea remains open to business and unchallenged by revisionist states.

Yet, like any investment in future capabilities, AUKUS is likely to change over time. The sensitive nature of the advanced capabilities explored in the collaboration, from submarines to hypersonic missiles, will invite greater proximity and strategic convergence among the partners. The recent news that Australian submariners will train on British boats implies the understanding of such a demand and the willingness to pursue it.

This is the second reason why AUKUS matters strategically. In a context in which advanced technology will matter increasingly more to maintain a military edge, only trusted partners will be able to achieve the most from defence collaborations.

In AUKUS’s case, renewed conversations about cooperation between Australia and France, and among Japan and the AUKUS partners, indicate that AUKUS is not an exclusive club but one with a membership defined by high standards of innovation and information security.

This doesn’t mean that AUKUS won’t face challenges along the way before Australia deploys nuclear-powered submarines in 2040. Implementing the agreement will put national industrial capacity under pressure. Recent comments from senior American officials suggest that the idea of building the initial submarines for Australia in the US could be problematic.

On the other hand, until the propulsion system is chosen, the design and building of the boats remain an open question. When considered against the impact of technology on future changes in systems and sensors, the division of labour is likely to remain a major changing variable.

What is certain is that one year on, AUKUS has started to chart a clear path as to what it is and why it matters. AUKUS is set on a path about a maritime-informed worldview in which accelerating advanced technology cooperation might very well make the difference in how strategic advantages can be secured and maritime stability can be maintained.

AUKUS will deliver the potent military Australia needs: Marles

The prospect of the Royal Australian Navy’s promised nuclear-powered submarines (SSNs) being built in Australia is firming up, along with a determination that they will be of a design shared with the United States or the United Kingdom and not a uniquely Australian ‘orphan’.

Deputy Prime Minister and Defence Minister Richard Marles has left no doubt that the government strongly backs the submarine project—including development of the massive industrial base and highly trained workforce required—and the need for Australia to have potent military capabilities.

‘We need a highly capable defence force which has the rest of the world take us seriously and enables us to do all the normal peaceful activities that are so important for our economy,’ Marles said while briefing journalists on the progress of the AUKUS program launched a year ago by Australia, the UK and the US.

A flow of goods was fundamental to an island trading nation, he said, so ensuring freedom of navigation of the seas and of the air above them was central to the economy.

The 300-strong taskforce examining how Australia will acquire its submarines is to make its recommendations to the government in March next year.

That will include what submarine design should be chosen and how these complex boats will be crewed and maintained.

Options include the US Virginia-class and British Astute-class boats. But The Strategist understands that planned new generation of submarines, the American SSN(X) and the British SSN(R), will be considered.

ASPI has released its second update on the AUKUS defence and technology-sharing agreement and makes the case that its focus should be on developing new capabilities that can be acquired rapidly and will significantly boost deterrence. It stresses that need is more pressing even than 12 months ago given the steady deterioration in the strategic environment illustrated by the behaviour of Moscow and Beijing.

It states that while much of the focus has been on the development of SSNs, the other areas of technology cooperation, such as cyber, hypersonics, undersea capabilities, electronic warfare, artificial intelligence and quantum technologies, will be vital in the coming years.

‘Beyond the SSNs, the immediate priority should be long-range strike and deploying critical and emerging technologies to counter Beijing’s own rapidly developing capabilities. Achieving that may require making some difficult choices and trade-offs in the Defence Strategic Review in March,’ the ASPI report says.

It concludes that while innovation and information-sharing as stated areas of technology collaboration sound hackneyed, they are in fact critical for overturning traditional Defence mindsets about research and procurement in order to obtain much-needed capabilities more quickly—an issue that has been identified particularly acutely in Australia.

At his media briefing, Marles said the work of the SSN taskforce task was on track for an announcement early next year and ‘there is a power of work being done to meet that timeframe’.

The optimal pathway was taking shape, Marles said. ‘We can now begin to see it.’

The minister made it clear that Australia is unlikely to end up with a unique SSN design of its own. ‘It’s obviously much better if you are operating a platform which other countries operate as there is a shared experience and a shared industrial base to sustain it.’

And he said all three nations in the partnership are likely to be involved. ‘While the outcome it is yet to be determined, it would be better if we’re in a position where what we’re doing is genuinely a trilateral effort.’

Marles stressed that there was much more to AUKUS and the advanced technology it could produce than submarines. ‘With AUKUS there’s a really huge opportunity beyond submarines of pursuing a greater and more ambitious agenda. This is a large part of what I did in July when I was in the US and subsequently when I was in the UK. We’re very hopeful about the potential that AUKUS represents in respect of that.’

On the issue of how Australia produces the expertise to build, sustain and crew the submarines, Marles said that would involve creating pathways to a workforce with those skills.

‘To that end, it’s really clear that we will have to develop the capacity in Australia to build nuclear-powered submarines. Sovereign capability is part of the story, but so is building up our workforce and industrial base.’

To rely solely on the US and the UK for this work would delay the submarines’ arrival, he said, and he conceded that it would ‘be a while before we get them’.

‘That is why, in terms of getting these submarines sooner, we need to develop our own contribution to an industrial base here at home.’ That would mean the RAN would get its submarines sooner, and it would also provide economic benefits in terms of workforce and productivity.

‘A significant industrial base is going to need to be built here, skills need to be acquired, and so there’s a human dimension to all of that and a workforce which needs to be built up.’

Marles said the goal would be for AUKUS to help develop a genuinely seamless defence industrial base across the US, the UK and Australia.

He said AUKUS would not only deliver SSNs for Australia, but also guide the development of trilateral initiatives where they would have most impact—both for deterrence and operational effectiveness.

‘AUKUS partners are working together to pursue near- and longer-term initiatives that will align our respective priorities and amplify our collective strength, to support a safe and secure Indo-Pacific region.’

In addition to the previously announced AUKUS quantum arrangements and the undersea robotics autonomous systems project, Marles said efforts were focused on artificial intelligence and autonomy, advanced cyber, hypersonics and counter-hypersonics, and electronic warfare. ‘These efforts are being augmented with work on information sharing and innovation to significantly enhance pathways for joint capability development by AUKUS partners.’

Taskforce chief Vice Admiral Jonathan Mead said that in the 12 months since the AUKUS announcement, the resolve of Australia, the UK and the US had strengthened as the strategic environment continued to deteriorate.

‘This is truly a trilateral partnership. We have a shared mission, further confirmed by a very significant delegation here in Australia this week from the UK and US,’ Mead said. ‘We continue our work together towards the decisions that need to be made as part of the optimal pathway for the acquisition of nuclear-powered submarines.’

AUKUS partners were not just focusing on the submarine, he said. ‘Our work to identify the optimal pathway includes many elements that all need to come together to deliver the capability needed to protect Australia and the sea lanes our economy relies so heavily upon.’

Mead said the taskforce was addressing workforce needs from an already strong base because Australia had been operating conventional submarines since the 1960s. ‘Our partners are helping us to understand the discrete skills and workforce numbers required to build, operate, sustain, regulate and safely steward nuclear-powered submarines.’

That will involve developing career pathways for Australia’s submariners that include attendance at UK and US nuclear schools, experience operating UK and US nuclear-powered submarines and secondments in UK and US nuclear agencies.

‘The exchange of these personnel will be both ways and won’t just involve our submariners. Exchanges will also include personnel in headquarters, technical labs, shipyards and sustainment sheds,’ Mead said.

Urgent change needed in Defence’s processes for major acquisitions

The $1 billion failure of the Super Seasprite helicopter project was a low point in Australian government procurement. It seems incomprehensible that the Department of Defence could ever replicate it.

In detailing a rapid deterioration in regional security, the 2020 defence strategic update highlights that Australia can’t afford to spend time or money on projects that don’t deliver the required warfighting capability efficiently and effectively. The scope and complexity of the capabilities required for Australia’s security are expanding, while the timeframe for procurement is decreasing. Supply-chain issues are bringing new pressures to design and manufacture more in Australia. Defence must be an effective ‘smart buyer’ as envisaged by the first principles review, which considered it critical that decision-makers assess ‘whether risks and interdependencies have been identified and managed’.

Test and evaluation (T&E) is a key systems engineering tool to identify risk across the capability life cycle, and Defence has long had dedicated policies outlining why it’s important and detailing how it should be used in acquisition, sustainment and force generation.

Following multiple reviews, there have been periodic ‘new’ pathways to establish (or recover) and sustain an effective T&E capability. As the various defence procurement and capability manuals have been updated, a consistent theme has been the vital role of T&E in informing risk-based decisions.

In recommending a smart-buyer approach, the first principles review assumes that Defence can use a T&E process to assess whether risks and interdependencies have been identified and managed. T&E has more recently been recognised as one of the 10 initial sovereign defence industry capability priorities.

Given this consistent emphasis, it should surprise taxpayers that almost every review into defence procurement delivers a negative assessment of how Defence deals with T&E. Concerns include difficulties in defining, creating and sustaining an experienced workforce; the lag and surge of experience on a project-by-project basis that makes it difficult to apply effective T&E early in the capability life cycle; a lack of coordination between the various entities that are stakeholders in defence T&E (including industry); a lack of coordinated investment in T&E infrastructure; and a lack of accountability to ensure that projects engage T&E and take meaningful account of any subsequent reports.

The first principles review highlighted the need to strengthen and place at arm’s length a continuous contestability function that operates throughout the capability development life cycle from concept to disposal.

It transferred accountability for setting and managing requirements to the vice chief of the defence force and the service chiefs within a regime of strong, arm’s-length contestability.

For contestability to be effective, the risk-identification function must be independent so that assessment is made without bias or influence, intended or unintended. Independence also ensures that the assessor of risk has a voice—not a veto—that is heard at each decision-making level of the capability life cycle. Defence and ultimately the National Security Committee of Cabinet should always make the final risk-based decisions as they are responsible for providing military response options to government.

The first principles review recognised that Defence must ensure that committed people with the right skills are in appropriate jobs. Competence is a matrix of qualifications and experience relevant to the task at hand. Those who performed competently as operational commanders or maintenance engineers may not be competent to assess technical performance, integration and certification risk.

Risk assessors working within Defence face various barriers, individual or organisational, that influence whether their voices are actually heard. Risk must be assessed and the results considered by decision-makers. Given the costs and national security implications, the taxpayer deserves to know that this is occurring, despite the commercial and security considerations of full transparency. There’s already a good model for this. The Office of the Inspector-General of Intelligence and Security conducts regular audits of the national intelligence community as well as specific investigations and reports to the relevant minister and the Parliamentary Joint Committee on Intelligence and Security.

Measures to identify and manage risks and interdependencies must be professional and appropriate to needs across the capability life cycle. This is also true for off-the-shelf products that may be used by an ally. In the Australian mission and environment, an allied capability may be the best option to buy, but those operating and managing it, the government and the taxpayer deserve to know that what is being bought may not be capable of everything hoped of it. It could require additional funding, or a supplementary capability may be required for some tasks. This knowledge is important for operational planning, forecasting funding, and even reputation management.

Facing similar issues, the US Congress legislated for independent T&E providing mandatory annual reporting to Congress on all major defence acquisitions. A UK company, Qinetiq, provides technical support to Britain’s Ministry of Defence, including T&E. This model provides independence and highlights that industry can take a lead in determining competence and training requirements, providing training, and managing test ranges and infrastructure.

The defence strategic review should bring a different approach embracing these principles.

It should recommend establishment of a defence capability assurance agency (DCAA), an independent statutory body to assess risks associated with materiel procurement and sustainment, which may include technical risk, systems integration risk, force-integration risk, contractual risk, process risk or even reputational risk. It would be led by a director appointed by a board and its workforce would be qualified and experienced T&E practitioners drawn from defence and industry. The agency would report to the defence minister and parliament.

The DCAA would be required to evaluate risk at agreed points across the capability life cycle and its recommendations would be included in briefs to project managers, assurance bodies, the defence investment committee and the NSC. The agency wouldn’t have a veto but it would ensure that risk-based decisions have a credibly informed basis.

The agency should have a long-term agreement with an Australian industry partner to provide depth of domain expertise and a consistent comprehensive approach to T&E through the life of multiple platforms, environments and systems. The industry partner wouldn’t necessarily conduct all T&E, but as a minimum would oversee the qualifications and professional standards of the workforce conducting T&E.

Defence already has a good model for this approach—the technical airworthiness system. The Defence Aviation Safety Authority (DASA) provides assurance, through assessment of candidate suitability and ongoing audit, that anyone working in this mission-critical and safety-critical area have appropriate qualifications and experience. DASA also provides a range of specialised support services where deep domain expertise is required, such as in aircraft structural integrity.

The industry partner should provide a regulatory function analogous to DASA, in essence acting as the DCAA regulator, and it would be required to sustain an expert workforce providing the capacity to surge, mentor, support and develop T&E practice in support of defence capability. The industry partner could also be responsible for the quality and operation of T&E infrastructure and efficacy of training. Subject to an assessment of probity measures, the industry partner may be limited to selecting, auditing and managing contracted training providers or may also provide a range of in-house T&E training for defence and industry stakeholders.

Scale and flexibility would be achieved by the DCAA drawing on defence personnel or industry providers that meet the qualifications and experience required by the DCAA regulator. This T&E domain expertise would be complemented by the recent operational experience of defence force operators or engineers with relevant T&E training being embedded within DCAA. They could also audit the compliance with qualifications and experience requirements for defence or civilian T&E staff who may be external to the DCAA to comply with operational regulatory requirements.

Defence should be audited to ensure appropriate engagement of the DCAA and transparency of subsequent reporting of identified risks. This should be conducted by a small team with security clearances and subject to protections for commercial-in-confidence information. It would work as part of an independent assurance office.

There are units and individuals within Defence who are professional and competent technical risk assessors, but the organisational inability of Defence to generate, sustain, consistently task and transparently respond to a credible assessment of risk in procurement and sustainment is well known.

The defence strategic review shouldn’t seek to initiate yet another review of T&E within Defence. The strategic imperative for Defence to be a smart buyer, now, should compel the government to instigate legislative reform to establish an independent capability assurance agency.

The certainty of uncertainty: why Australia needs a flexible defence force

A key task for those carrying out the government’s defence strategic review is to consider the ability of the Australian Defence Force to engage in a high-intensity, state-on-state conflict in our region. Such a conflict would leave Australia no choice but to fight. It could reset the balance of power and potentially change the strategic alliance framework that has guaranteed Australia’s security for 70 years.

The review is intended to inform the Defence planners who must ensure that the ADF’s posture and force structure is relevant, capable and optimised to meet the range of security challenges facing the nation.

It might be enticing to attempt to predict the precise nature of future conflict but history shows that this is seldom achieved. The only certainty about such a war is that it will be characterised by uncertainty, and that nations are poor at predicting what is required. In February 2011, US Defense Secretary Robert Gates famously told West Point cadets: ‘When it comes to predicting the nature and location of our next military engagements, since Vietnam, our record has been perfect. We have never once gotten it right’. Determining the military capabilities required to succeed in future conflict means understanding what will be needed to resolve a conflict regardless of its character—what will bring victory, and what will lead to defeat.

Much of the recent analysis of the ADF’s force structure requirements focuses on high-end air, maritime and long-range strike capabilities to maximise the advantage afforded by Australia’s geography. These capabilities are essential to deter a potential adversary. Integrated with effects from space and cyber, they will help the ADF hold an enemy at risk from afar and, if necessary, degrade that adversary’s anti-access/area denial (A2/AD) envelope. While essential, these capabilities are incomplete and lack the capacity to compel an adversary to submit. Relying on high-end technologies where adversaries exchange destructive weapons from afar would be no more than attrition warfare by more modern means.

The trap for force structure planners is to be enticed by the concept that future conflict can be won by focusing on technologies that provide the opportunity to empty the battlespace, negating the requirement for forces to manoeuvre so that they can close with and destroy an enemy. History reminds us that to succeed in conflict it’s essential to apply land power to be able to threaten or, if required, destroy an adversary. During the first Gulf War, the overwhelming superiority in stand-off weapons was insufficient to force Iraqi forces to withdraw from Kuwait. It was only when the US-led coalition was able to manoeuvre a ground force to close with and engage in joint land combat that Iraqi forces were evicted from Kuwait. Conversely, the conflicts in Vietnam and Afghanistan demonstrated that superiority in technology and firepower cannot guarantee victory against an enemy that is afforded a haven away from ground combat, where it can regenerate despite aerial bombardment and attacks with stand-off weapons.

Some commentators argue that the lethality of A2/AD capabilities makes the manoeuvre of land forces, especially heavy armoured vehicles, through our region impossible. Critics of armoured land forces also argue these capabilities are no longer relevant due to their vulnerability to advanced anti-armour capabilities and unmanned aerial platforms, as evidenced during the Azerbaijan–Armenia conflict of 2020 and the Russian experience in Ukraine. A detailed analysis of these conflicts reveals that these vulnerabilities result from poor tactical employment and training, and not inherent capability deficiencies.

Conflicts must be seen as evolving campaigns with different mixes of capabilities required at different times. As in the past, future conflict will evolve based on the changing fortunes of the belligerents. Force structure planners must consider the requirements of the ADF through a broad campaigning construct that will evolve over time. The ADF must be able to operate effectively in all domains, adjusting its mix of force as the nature of the campaign evolves. It must maintain and enhance its ability to manoeuvre through the sea, air and land gap to Australia’s north. While this will require continued investment in capabilities to engage adversaries at extended range, conflict has always been, and will always remain, a contest of human will inevitably requiring forces to close and engage in violent and brutal land combat. Accordingly, the ADF will require the capacity to tactically manoeuvre land combat power to close with and destroy the adversary or defend against an adversary’s manoeuvre.

With this understanding, the ADF must continue to invest in land forces. An ADF with ready land combat forces ensures it can meet a key principle of war, flexibility. This will enable it to respond with credible military force to a range of challenges as a military campaign evolves. Given the emerging security environment, now is not the time to limit Australia’s force structure options. Whatever the character of future conflict and however it may unfold, it will only be resolved by people. To compel an adversary into submission, the ADF must develop the capacity to manoeuvre a truly integrated joint force, including lethal, protected, mobile and connected land forces, capable of fighting aggressively and winning conclusively in joint land combat.