It’s a brutal time to be a Commonwealth public servant working on the budget. Portfolio additional estimates statements—the mid-year budget update for portfolio agencies—were tabled on Friday, yet with the 2022–23 budget brought forward to late March to clear the decks for the election, we’re only a month and a half away from budget night. In essence, the worker bees have been working on the PAES and next year’s budget simultaneously.

So, what can we learn from their hard work? First of all, as we have now become accustomed to seeing, the government has delivered the growing defence funding promised in its strategic documents such as the 2016 white paper and the 2020 strategic update. The issue that we’ll come to is whether Defence can spend it—and spend it in ways that deal with our strategic environment.

The main changes in Defence’s funding are a $463.1 million no-win, no-loss foreign exchange adjustment to maintain buying power in the face of a declining Australian dollar and $91.8 million more for Operation Covid-19 Assist. Defence is also transferring a further $56.5 million to the Office of the Special Investigator next year. Coming on top of the initial $116.5 million moved from Defence to fund the OSI in last year’s mid-year update, it suggests that the investigation of potential war crimes in Afghanistan still has a long way to go.

There’s some good news. There are signs that the long trajectory of de-skilling of the public service and outsourcing of core capabilities has finally bottomed out. There’s provision for an additional 540 public servants—190 this year and a further 350 next year—to implement crucial new programs such as the sovereign guided weapons enterprise and AUKUS. Hopefully the government has acknowledged that you can’t double the size of your capital investment program while gutting your in-house expertise and still hope to be a ‘smart buyer’, to use Defence’s own term. The continuing sorry narrative of project cancellations shows that Defence is far from it.

That gets us to Defence’s capital investment program. If we cast our minds back to the 2021–22 budget, the key question there was whether Defence could spend the substantially increased capital budget the government was providing it with. In 2020–21 Defence did well in the face of Covid-19 to set spending records in its acquisition programs, but it still fell about $1 billion short of the target. With a further increase of around $3 billion planned for this year, there was always going to be a question mark over Defence and its industry partners’ ability to turn that money into capability.

At a high level, the PAES indicate Defence will fall short again. The acquisition program is predicted to come in $815 million under the original budget target. When we consider that the acquisition program should also be spending a big chunk of the $463.1 million foreign exchange adjustment, it looks like it will again fall around $1 billion short.

But it’s when we look under the bonnet that things get interesting—and troubling. The military equipment acquisition program looks like it’s doing very well, actually passing its $11.2 billion target by $120.6 million (noting that it needs to overspend to address the foreign exchange adjustment). But there’s a clear pattern in the top 30 spenders for the year; the big projects are falling well short of their spending goals, and one of the iron laws of project management is when you don’t spend, you don’t get the capability on schedule.

The F-35A project is missing by $175 million, with only 54 aircraft delivered instead of 56 by the end of 2021–22. Two fewer aircraft may not seem like much, but with the classic Hornet fleet now fully retired, the air force needs every plane it can get. The Triton high-altitude UAV program is $98 million short between equipment and infrastructure.

Spending on the Hawkei protected mobility vehicle is $207 million short, due to a delay caused by a problem with its brakes and supply-chain woes. That means it will spend less than last year even though it’s meant to be entering full-rate production. The Boxer combat reconnaissance vehicle similarly is nearly $300 million short of its target and spending less this year than last. Somewhat depressingly, by the end of this financial year the project will still have spent more than $1.8 billion with only the first block of 25 overseas-built vehicles delivered and local construction of the remainder not due to start until 2023.

The list goes on. The troubled Hunter frigate program is $123 million under and will barely spend more this year than last. It’s not the trajectory you’d want to see as design activity ramps up and purchases of long-lead-time items such as combat-system and propulsion-train elements start. And while the government has made a lot of announcements about long-range missiles, they haven’t transformed into spending; the navy’s guided weapons subprogram is falling well short of its planned outlay (from $210 million down to $74 million) and is another big program spending less than last year ($190 million). Even a project that is spending and delivering broadly on schedule, the Arafura offshore patrol vessel, isn’t delivering lethal capability. A vessel that was massively undergunned in the first place is now being delivered virtually unarmed.

And true to form, the MRH-90 helicopter failed to achieve one final time, missing its target by $106 million ‘due to delay in its delivery schedule’. Its cancellation did not come soon enough.

Ironically, one of the few big projects that’s still forecast to hit its spending target for the year is the future submarine program that was cancelled less than a quarter of the way into the financial year. It’s hard to know what to make of that. The PAES says that funds are being transferred to the nuclear-powered submarine taskforce and to cover costs ‘associated with transitioning out of contractual arrangements’, but will that really use up $981 million this year? In any event, we’re still some way from knowing the final cost of the Attack-class saga. If that full amount is actually used up, it will get us perilously close to $3 billion.

The top 30 projects are a combined $1.9 billion under their planned budget for the year. No doubt the pandemic is playing a major role, but overall it’s not the sort of narrative that’s consistent with the one laid out in the government’s 2020 defence strategic update of evaporating warning times and a pressing need for new capabilities delivered faster, not slower than previously planned.

That huge shortfall is offset by some degree by an $860 million increase in spending in the rest of the military equipment program (those projects outside the top 30). That would suggest a significant amount of opportunity spending, but there’s nothing in the PAES to say what we’re getting for that sum. Is it new stuff like additional Seahawk Romeo helicopters, or is it simply bringing forward spending on things that were already in the plan like tanks? Or something else entirely?

A final admission of my inability to make sense of the document. Table 9 states that the estate and infrastructure program will underachieve by $682.5 million. Yet when one looks at the program in more detail in table 66, it appears to be spending $593.7 million more on individual infrastructure projects than planned in the budget. A large part of that is flowing into the Northern Territory, no doubt providing a welcome Covid-19 stimulus. Defence hasn’t responded to my request for an explanation on how you can spend nearly $600 million more than planned but end up nearly $700 million short of what you planned. Perhaps at estimates hearings this week senators can elicit a plain-English explanation.

One of the strengths in Australia’s relationship with Japan is our shared ability to deliver substance as opposed to verbal bombast unmoored to practical outcomes.

Australia claims to have strategic partnerships with many countries, usually linked to detailed plans for deepening cooperation—but, looking under the bonnet, often the longer the ministerial communiqué, the fewer the results.

Prime Minister Scott Morrison’s virtual meeting with Japanese Prime Minister Fumio Kishida this week will show the opposite is true for Australia and Japan. There is deep substance to the relationship based on a shared strategic outlook and values and a platform of trust built across decades.

On the face of it, the reciprocal access agreement designed to enable closer defence cooperation may seem as if it’s just tidying away practical details of how our forces interact but, to two countries that take the rule of law seriously, these details matter.

With the specifics agreed on how we can access each other’s military facilities, secure port access, landing rights, logistic support, security arrangements and legal regimes, we should expect that there will be an expansion of practical military cooperation.

That could mean we’ll see Japan Self-Defense Forces personnel in significant numbers exercising and training with their Australian counterparts and the US marines out of Darwin.

Japanese F-35s could access our training ranges to practise missions over land, Australian submarines and warships could operate out of Japanese military bases, our special forces could build expertise together working with Southeast Asian partners.

This is a powerful expression of how two like-minded democracies can cooperate to shape regional security outcomes. The message to the region is that we have better options than simply trembling and obeying Beijing’s wishes.

Why is this a priority for Japan? First, like Canberra, Tokyo realises we can exercise a stronger influence on regional security by working together rather than separately.

Southeast Asia is a vital strategic zone for both Australia and Japan. China is engaged in a full-on but thus far unsuccessful effort to break ASEAN members away from the world’s democracies and to weaken their regional cooperation. By aligning our diplomatic efforts in Southeast Asia, we strengthen our chances to stop Beijing turning the region into a series of isolated client states.

A second shared Australian and Japanese interest is to make sure we keep the US engaged in the Indo-Pacific. President Joe Biden is clear that Washington wants its allies to step up their own security efforts.

In this case, Australia and Japan are choosing self-help over alliance free riding. The more we can shape an aligned diplomatic and security approach, the more likely it is that the US will stay engaged.

While the aim is to keep the US active in the Indo-Pacific, Australian and Japanese policymakers are alive to the risk that Washington’s isolationist mood might deepen. If that happens, the Australia–Japan relationship becomes the linchpin of security against authoritarianism.

For those critical of deeper Australia–Japan ties (surprisingly, such people exist), the idea of a bilateral pushback against Beijing’s regional domination is simply absurd because nothing can stop Chinese power.

Remarkably, though, the creation of the AUKUS security pact between Australia, Britain and the US, the strengthening of the Quadrilateral Security Dialogue, the emergence of US–Australia–Japan trilateral cooperation, South Korea’s closer engagement with Canberra and the deeper linking of European countries to the Indo-Pacific all show that countries will not bow to Chinese domination.

This is the one unambiguously positive outcome from last year. Through Covid-19 and lockdowns and unrelentingly threatening rhetoric from Beijing, the world’s consequential democracies increasingly are resisting the Chinese Communist Party’s demand that their global leadership come at the price of our subordination.

Could this year be a turning point in Xi Jinping’s political future? He is the architect of the party’s turn to ‘wolf warrior’ aggression, which has done China immense damage globally.

A third Japanese interest in Australia is its need for long-term assured energy supplies. When Shinzo Abe, the Japanese prime minister at the time, visited Darwin in November 2018, media reporting emphasised the symbolic importance of acknowledging the anniversary of the bombing of the city in February 1942, rather obliquely noted in the visit communiqué as ‘the loss and sacrifices of World War II’.

Perhaps just as important to Abe’s visit was ‘the first gas production and LNG shipment from the Inpex-operated Ichthys Project which illustrates the development of bilateral energy cooperation’.

By 2019–20, liquefied natural gas was Australia’s largest export to Japan at just over $19 billion. Coal exports, although planned to reduce across time, were $14.3 billon, while Australian-produced hydrogen remains a future energy possibility. LNG, now accounting for about 40% of Japan’s electricity generation, will remain critical to Japan in coming decades. Australian planners should understand that what is clearly essential to Japan’s energy security is something we need to protect. It escapes no one in Tokyo that the Inpex LNG facility is adjacent to the Port of Darwin, leased for 99 years by Chinese company Landbridge.

The reciprocal access agreement is a treaty-level agreement but doesn’t offer mutual security responses like the ANZUS Treaty of 1951 if either country is threatened. Should Japan be invited to be a formal ANZUS ally? That probably won’t happen soon. It’s unclear that the US Congress and the always unpredictable Japanese Diet would agree on a new formal alliance arrangement.

The ANZUS Treaty does allow the allies (now the US and Australia after New Zealand’s anti-nuclear sidelining from the treaty in the 1980s) ‘to maintain a consultative relationship with states … in the Pacific area in a position to further the purposes of this treaty and to contribute to the security of that area’.

It would be valuable for Canberra and Washington to agree to a formal ANZUS consultative relationship with Japan—meaning, for example, that after the annual Australia–US ministerial consultations, a trilateral Australia–US–Japan meeting would follow.

Japan, Australia and the US are not seeking confrontation with China. Last Saturday, the trade agreement known as the Regional Comprehensive Economic Partnership came into force.

RCEP includes China, Japan and Australia but not the US. The agreement’s 15 members produce about 30% of the world’s GDP. The potential for all countries in the region to benefit from trade cooperation remains enormous, but Beijing’s economic coercion of Australia hardly suggests that China is looking to cooperate.

In the face of such threatening behaviour, Australia and Japan will continue deepening security cooperation, as will others in the region.

Australia is ending the year in much better shape than we ended 2020.

That’s so even though our region is still a dangerous place, and an aggressive China under Xi Jinping continues to be the primary driver of this nasty circumstance. Covid-19 too remains a changeable, unpredictable threat to the health and social functioning of the world.

Last year ended with these two nasty truths providing some intrusive and damaging effects for Australia.

Back then, we felt more lonely, with less of a plan, than we do now. It’s worth noticing that a lot has changed in a good way over 2021: on the pandemic, with the economy, and in big strategic and security ways.

On Covid, 2020 ended a bit like now—a new strain from India, Delta, was proliferating globally. Early data showed it was more contagious than the original Covid strain from Wuhan, but also that it caused high hospitalisation rates for the unvaccinated. That was a problem because Australia’s vaccination levels lagged much of the world, meaning most of our population was vulnerable.

In December 2021, Omicron is more contagious than the Delta variant it’s displacing, although we don’t yet know how many hospitalisations it will cause or at what speed. But one big thing that looks like it’s really making a difference from 2020 is that Australia’s national vaccination level of 90% of people over the age of 16 is among the highest in the world (the US and much of Europe are bogged at about 60–70%). On top of this, we’ve got all the tools we had in 2020 for managing Covid—social distancing, masks and contact tracing, along with improving treatments. We also have a ready supply of booster shots to maximise our safety in an Omicron world while we build our own national mRNA vaccine production facility—something that just wasn’t true in late 2020.

It also looks like the public understands that Covid’s now a shared risk nationally and want it managed that way, ending the state-by-state adventure we’ve lived through. It’s up to our federal, state and territory leaders to take this cue and respond accordingly.

Overall, despite the feeling now that we’re all heading back into the Covid tunnel, Australia is as well placed as anywhere to manage the next twists and turns of the pandemic. The main risks are political complacency or parochialism and public weariness, not national capacity.

On economics and China, back in late 2020 Beijing’s $20 billion hit on Australian trade in lobsters, coal, barley, timber and wine was still fresh and echoing around the economy. We’d told ourselves China was indispensable for every export for so long that we seemed ready for the damage from Beijing’s vindictive measures to be huge.

A year on, we know that’s not what happened. Despite Beijing’s deep desires, the Chinese economy can’t do without Australian iron ore or coal, and prices are good. For other exports, the world has other wealthy markets that want quality Australian exports. Only those that had made no plans for a real alternative to China—like lobster exporters and universities—are still taking time to adjust to the new normal of the high-risk China market.

As Treasurer Josh Frydenberg said in handing down last week’s mid-year budget update, the Australian economy is in rude health compared with most of the world. Public debt is low relative to most advanced economies and the economy is resilient to the combined shocks of Covid and China. Companies are diversifying their market risks away from the all-in China bet that was the old conventional corporate wisdom, particularly since the now dead parrot that is the China–Australia free-trade agreement came into force in 2015.

In 2022, Australia’s economy is likely to see greater diversification as we take advantage of neglected free-trade agreements with Japan and South Korea, maximise the benefits of the US and new UK agreements and build deeper economic links with India—and, despite the cancellation of the French submarine contract, with the EU. It’s smart to deepen trade and supply chains with partners who won’t use them as economic weapons to bludgeon you.

In the international security realm, 2020 marked five years of largely defensive policy resetting to deal with Xi’s China, instead of the benign China we’d all hoped for—a mutually beneficial trading partner whose different strategic interests didn’t matter because they were quietly resting in the background. Xi’s aggressive use of Chinese power has brought the strategic differences jarringly into the foreground for Australia and for many other nations that are now busily reassessing and resetting their own China policies.

As we ended 2020, Australian domestic policy was in place to cope with an aggressive Xi. Foreign investment laws were strengthened following the 2015 Port of Darwin lease. Rules to counter espionage and foreign interference in Australia’s political and public debate were all in place. Australian cyber capabilities were increased, including through an acknowledged offensive cyber capability to hack back at those who attacked Australia. And we’d excluded high-risk Chinese vendors from our 5G network to protect that key digital backbone’s security and integrity.

Other governments have been looking to Australian policy for guidance in these areas as they reset their own national policies to face the systemic challenge of China.

However, Australia was an outlier in 2020, by virtue of being ahead.

That’s been perhaps the biggest shift. Over the course of 2021, Australia has gone from being the canary in the coalmine on China to being in the centre of the two powerful ‘minilateral’ groups that in combination are doing the most to reset the economic, technological and strategic balance away from China. This is essential to protect the Indo-Pacific from conflict and to not have Beijing dictate others’ choices, including ours.

But maybe we don’t really understand how uniquely positive for Australia’s wellbeing, prosperity and security being in the middle of the Quad partnership with India, Japan and the US and in the middle of the AUKUS technology partnership with Britain and the US is for our nation of 25 million people at the hinge of the Indo-Pacific. And maybe we don’t really get the phenomenal speed with which these two new groupings have come together and started to act with common purpose.

This is an extraordinary development from March 2021 when US President Joe Biden called the impossible, unthinkable leaders’ meeting of the Quad that simply wouldn’t happen but did. And it was only six months later that another rolled-gold ‘unthinkable’ happened: the US and UK agreed to share nuclear submarine technology with us, and we agreed we needed it.

Next year will be one of delivery for these two fast-moving minilaterals, because each nation in each of the two groupings needs this for itself. And they all see the benefit of working with each other at a pace we aren’t used to but which must quickly become standard. We can hear this already with news about the rapid implementation underway in the three months since the announcement. Expect to see UK AUKUS announcements with Australia and the US early in the new year, to demonstrate to any doubters that the UK in AUKUS has substance and value.

There will be more surprises and twists in 2022, so don’t be lulled by anyone telling you they know the future. But Australians should at least notice we remain the lucky country (actually, and not in the snide way this term can be tossed around). That’s because we’ve made a lot of our own luck over 2021 and we’ve got willing partners to face the years ahead.

ASPI celebrates its 20th anniversary this year. This series looks at ASPI’s work since its creation in August 2001.

Australia built a triangular security relationship with Japan and the US in the first decade of the 21st century.

In the second decade, at the second attempt, the triangle became the Quad with India. China’s anger helped sink Quad 1.0, while China’s actions revived Quad 2.0.

Japan was the most cautious in accepting the trilateral, but became the cheerleader for the Quad.

The shape of Australia’s trilateral with Japan and the US was prematurely revealed in the main committee room of the Australian Parliament in July 2001.

Concluding the annual AUSMIN with a press conference, US Secretary of State Colin Powell was lobbed a final question about linking the separate US alliances in Asia: Could the US join together its bilateral alliances with Japan, South Korea and Australia? Powell delighted and surprised the journalists by giving a revealing answer:

Interesting, we were talking about this subject earlier in the day, as to whether or not we might find ways of talking more in that kind of a forum. I don’t think it would lead to any formal arrangement of the kind you suggest. But there might be a need for us to seek opportunities to come together and talk more often. So yes, we’ve talked about that, but not in the form of some formal kind of new organization. We just began speaking about that today.

Foreign Minister Alexander Downer, sitting beside Powell, glimpsed a diplomatic flashing light.

Downer confirmed that Australia had held informal discussions with Japan while issuing a caution: ‘So as not to allow a hare to rush away here, we obviously—I think it must be obvious—wouldn’t want new architecture in East Asia which would be an attempt to kind of replicate NATO or something like that. We are talking here just about an informal dialogue.’

Downer walked back to his office telling staff he’d headed off a diplomatic explosion.

On the contrary, his denial of an Asian version of NATO created an instant label that has echoed ever since in China’s strategic community.

The foreign minister had triggered the Henry Kissinger rule on denials. Kissinger said that when a state denies it intends to do something it sends two signals. One message is that, for the moment, the country will not do something. But the second is that the denial is a statement that the country has the capacity to take such action if it chooses.

NATO was about opposing the Soviet Union, just as Asia’s non-NATO is about China. At every stage of the process that created a trilateral—and then the Quad—Canberra has denied that it’s about China. The ‘doth protest too much’ line works as well from Hamlet as Kissinger.

The denial of a NATO-style unification of forces and single command is patently true. That bit of denial fits the facts. The demurral about responding to China, though, became increasingly disingenuous. What were once barbed questions about China’s real intentions in the trilateral became responses to China’s actions in the second version of the Quad.

The absence of South Korea from the joined-up alliance structure mooted in 2001 points to China’s magnetic abilities, as well as the continuing schism between Seoul and Tokyo.

Looking back at the triangle creation, Downer said China ‘objected right from the word go when we started the diplomacy of trying to set up the trilateral strategic dialogue’. The US was interested in the trilateral, but he got a dismissive response from Japan’s foreign minister (presumably Yohei Kono). Downer recalled:

I took it up with the then Japanese Foreign Minister, very unsuccessfully initially. He said to me, ‘Minister, why would we bother to have a trilateral security dialogue with a country like Australia. You’re not a very significant country compared to the US.’ I thought this was not terribly diplomatic. I remember when I am crossed. He passed as the Foreign Minister and others came. The Japanese Foreign Ministry was pretty supportive.

By 2005, John Howard was hailing the coming together of three great Pacific democracies to work ‘more closely than ever’ on shared security challenges:

Our Trilateral Security Dialogue has added a new dimension to the value all sides place on alliance relationships … This quiet revolution in Japan’s external policy—one which Australia has long encouraged—is a welcome sign of a more confident Japan assuming its rightful place in the world and in our region.

After the lost decade of the 1990s, Japan began to redefine its regional role and itself, with the idea that it would become a ‘normal nation’.

‘Towards being a more normal nation’ was the title of the speech by the director of the Japan Institute of International Affairs, Makio Miyagawa, at ASPI’s 2005 Global Forces conference: ‘Anxiety about China’s military build-up has heightened the sense of urgency inside Japan for re-evaluating its defence strategy and addressing new security realities.’

What started as dialogue between senior officials in 2002 shifted up in 2006 to the foreign ministers of Japan and Australia and the US secretary of state.

In 2007, Howard flew to Tokyo to sign the Joint Declaration on Security Cooperation with Japan’s Shinzo Abe.

Howard said the agreement meant Japan would have a closer security relationship with Australia than with any other country except the US. The briefing line to Canberra correspondents was that Howard was willing for a more ambitious alliance treaty, but Tokyo was cautious.

Australia would have preferred to sign a formal defence treaty, Aurelia George Mulgan wrote, but ‘settled for the declaration in the hope of moving to a formal pact at some time in the future. The end game is, therefore, potentially much more momentous: a profound shift in the security architecture of the Asia Pacific.’

Whatever the spirit Howard intended, the agreement had no provisions for the parties to come to each other’s aid if attacked, instead stating that ‘Japan and Australia will, as appropriate, strengthen practical cooperation’ between defence and security forces.

Howard said the declaration built a ‘strategic dimension’ to the partnership: ‘Japan had become, to most Australians, a key partner, economically, and now strategically.’ In his memoir, Howard wrote that ‘China’s great power ambitions’ meant that ‘one of the shrewdest foreign policy thrusts of the Bush Administration was to encourage the trilateral security dialogue between the United States, Japan and Australia. The possibility of extending it to include India, thus creating a quadrilateral dialogue, was raised during the Bush presidency.’

The trilateral was ‘an unexceptional way of providing a democratic counterbalance to China’, Howard said, and was a ‘democratic riposte’ quietly welcomed by some of the smaller nations of the region.

ASPI’s Rod Lyon said the 2007 Australia–Japan declaration confirmed that the Asian security order was moving into a new phase:

Although the pact is limited in its scope, it heralds an age when Asian great powers will be more engaged in the regional security architecture, both as players in their own right and as ‘partners’ to other regional countries. This phase of Asian security will probably take ten to twenty years to run its course. But when it has finished, the age of US hegemony in Asia will have ended. The US might well still be the strongest player, even then, but Asian security arrangements will have taken on many more of the characteristics of multipolarity.

The security agreement and the start of negotiations for an Australia–Japan free trade agreement were both surprises, according to George Mulgan. Since the 1970s, this had been a relationship of ‘rather dull predictability’. Much, though, was shifting. In May 2007, she noted, China had assumed Japan’s position as Australia’s largest trading partner.

Japan was hedging against China, George Mulgan said, but also the danger that the US would swing towards China and downgrade the importance of Japan:

Japan fears being isolated by the US and China on East Asian strategic issues. Hence, it wants to create a Japan‑centred economic and security system in which it can exercise influence independently of both China and the United States. Building a direct security link with Australia (and India) provides a convenient vehicle for Japan to exercise greater strategic autonomy.

In December 2007, the 1.5-track dialogue conducted by ASPI and the Japan Institute of International Affairs discussed a ‘maritime coalition centred on the Japan–Australia–US trilateral alliance’, how to respond to ‘strategic shocks in Asia’, the ‘impacts of China’s rise on the Asian international system’, the role of the two nations in the emerging Asia–Pacific security architecture, and prospects for the Australia–Japan security relationship.

Apart from Japan and Australia, speakers at the two-day conference mentioned the US 62 times, India and the Indian Ocean 116 times, and China or the East China Sea got 466 mentions.

Drawn from the book on the institute’s first 20 years: An informed and independent voice: ASPI, 2001–2021.

Australia’s Prime Minister Scott Morrison has used a keynote address at ASPI’s Sydney Dialogue to add important detail to what’s known about Australia’s AUKUS agreement with the United States and Britain.

In his speech delivered online today, the prime minister makes it clear that AUKUS is intended to enable the three allies to develop and share advanced technology to give them an edge in an uncertain future.

‘AUKUS is a broad and adaptable partnership that will drive our technology and capability cooperation to meet the challenges of the 21st century in the Indo-Pacific region,’ he says.

‘Our trilateral efforts in AUKUS will enhance our joint capabilities and interoperability, with an initial focus on cyber capabilities, artificial intelligence, quantum technologies and additional undersea capabilities.’

Morrison says nations at the leading edge of technology have greater economic, political and military power and greater capacity to influence the norms and values that will shape technological development in the years to come. Nowhere is this more powerfully illustrated than in the Indo-Pacific region, which Morrison says is the world’s strategic centre of gravity.

The agreement is about much more than nuclear submarines, Morrison says. ‘AUKUS will see Australia, the United Kingdom and the US promote deeper information sharing, foster greater integration of security- and defence-related science, technology, industrial bases and supply chains, and strengthen our cooperation in advanced and critical technologies and capabilities.’

Morrison used the event to release a ‘blueprint for critical technologies’ designed to balance the economic opportunities of critical technologies with their national security risks.

Its goals are to:

• ensure Australia has access to, and choice in, critical technologies and systems that are secure, reliable and cost-effective
• promote Australia as a trusted and secure partner for investment, research, innovation, collaboration and adoption of critical technologies
• maintain the integrity of research, science, ideas, information and capabilities so that local industries can thrive and maximise sovereign intellectual property
• support regional resilience and shape an international environment that enables open, diverse and competitive markets and secure and trusted technological innovation.

At the event conceived by ASPI’s International Cyber Policy Centre, the prime minister notes that ASPI has written perceptively: ‘The real potential of AUKUS lies in how the new grouping can be leveraged in the long term to help Australia deal with the profound technological disruption about to sweep the world.’

He says officials will soon report back to leaders with a proposed AUKUS work plan involving exchanges of information, personnel, and advanced technologies and capabilities; joint planning; capability development and acquisitions; collaboration in science and technology; and development of common and complementary security- and defence-related science and industrial bases.

Morrison says Australia is also deepening its technology relationships with its Quad partners, India, Japan and the US, to develop resilient supply chains and foster an open, accessible and secure technology ecosystem. That will include development of advanced communications and harnessing artificial intelligence, deploying and diversifying 5G technology, and ‘horizon scanning’ for advanced ideas and ways to bolster critical infrastructure resilience against cyber threats.

He will be joined at the dialogue by India’s Prime Minister Narendra Modi, Japan’s former prime minister Shinzo Abe, and former Australian prime minister John Howard.

Morrison says there’s much to be done with India in this area under the Quad partnership and the two countries are already cooperating on cybersecurity, critical and emerging technologies, critical minerals, the digital economy, and much more. There will be an immediate focus on supplies of semiconductors and their vital components, and on exploring opportunities for cooperation on advanced biotechnologies.

The Office of Supply Chain Resilience is working to ensure access to essential goods. ‘As a country of around 25 million people in a world of some 7.8 billion people, most of our technology is, and will continue to be, imported,’ Morrison says.

With the blueprint comes a critical technologies list to signal to governments, industry and academia the technologies slated as critical for Australia today and those expected to become so within the next decade.

There are 63 critical technologies on the list, with an initial focus on nine, says Morrison.

A key one is quantum technologies, applying quantum physics to explore ways to acquire, transmit and process vast quantities of information. ‘Quantum science and technology has the potential to revolutionise a whole range of industries, including finance, communications, energy, health, agriculture, manufacturing, transport and mining,’ Morrison says.

‘Quantum sensors, for example, could improve the discovery of valuable ore deposits and make groundwater monitoring more efficient; and quantum communications could provide for secure exchange of information to better secure financial transactions.

‘Quantum technologies will also have major defence applications, as in enabling navigation in GPS‑denied environments and helping to protect Australia from advanced cyberattacks.’

Morrison says Australia is already a global leader in several areas of quantum technology, and that needs to be taken to the next level.

Chief Scientist Cathy Foley will lead the development of a national quantum strategy to better integrate industry and government activities, building on the recommendations of CSIRO’s quantum technology roadmap. She will chair a national committee on quantum with commercial, research and national-security expertise.

The government will invest $70 million over the next decade in a quantum commercialisation hub to guide this research into global markets and supply chains. The first step is an agreement with the US, and more will come with other nations.

‘We cannot shy away from the ethical implications of new technologies,’ Morrison says. ‘We need to be asking ourselves what should be done with technology, not just what can be done.’

In the face of great challenges, Morrison says, Australia’s goals are clear: ‘to uphold our liberal democratic traditions, to keep Australia prosperous and to keep it strong and safe’.