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Tag Archive for: Australia

Australia needs greater defence self-reliance, and extra funding

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Reaction isn’t enough. Australia should aim at preventing cybercrime

Australia’s cyber capabilities have evolved rapidly, but they are still largely reactive, not preventative. Rather than responding to cyber incidents, Australian law enforcement agencies should focus on dismantling underlying criminal networks.

On 11 December, Europol announced the takedown of 27 distributed platforms that offered denial of service (DDoS) for hire and the arrest of multiple administrators. Such a criminal operation allows individuals or groups to rent DDoS attack capabilities, which enable users to overwhelm targeted websites, networks or online services with excessive traffic, often without needing technical expertise.

The takedown was a result of Operation PowerOFF, a coordinated and ongoing global effort targeting the cybercrime black market. While the operation has demonstrated the evolving sophistication of international law enforcement operations in tackling cyber threats, it has also exposed persistent gaps in Australia’s cyber enforcement and resilience. To stay ahead of the next wave of cyber threats, Australia must adopt a more preventative approach combining enforcement with deterrence, international cooperation, and education.

Operation PowerOFF represents a shift in global cybercrime enforcement, moving beyond traditional reactive measures toward targeted disruption of cybercriminal infrastructure. Unlike previous efforts, the operation not only dismantled illicit services; it also aimed to discourage future offenders, deploying Google and YouTube ad campaigns to deter potential cybercriminals searching for DDoS-for-hire tools. This layered strategy—seizing platforms, prosecuting offenders and disrupting recruitment pipelines—serves as a best-practice blueprint for Australia’s approach to cybercrime.

The lesson from Operation PowerOFF is clear: Australia must shift its cyber strategy from defence to disruption, ensuring that cybercriminals cannot operate with impunity.

One of the most effective elements of Operation PowerOFF is its focus on dismantling the infrastructure of cybercrime, rather than just arresting individuals. By taking down major DDoS-for-hire services and identifying more than 300 customers, Europol and its partners effectively collapsed an entire segment of the cybercrime market.

This strategy is particularly relevant for Australia. Cybercriminal operations frequently exploit weak legal frameworks and enforcement gaps in the Indo-Pacific region. Many DDoS-for-hire services, ransomware networks and illicit marketplaces are hosted in jurisdictions with limited enforcement capacity, allowing criminals to operate across borders with little fear of prosecution.

Australia must expand its collaboration with Southeast Asian law enforcement agencies on cybercrime, ensuring that cybercriminal havens are actively targeted rather than passively monitored. Without regional cooperation, Australia risks becoming an isolated target rather than a leader in cybercrime enforcement.

Beyond enforcement, Australia must integrate preventative strategies into its cybercrime response. The low barriers to entry for cybercrime mean that many offenders—particularly young Australians—are lured in through gaming communities, hacking forums and social media.

Targeted digital deterrence, including algorithm-driven advertising campaigns, could disrupt this pipeline, steering potential offenders toward legal cybersecurity careers instead of cybercrime. An education-first approach combined with stronger penalties for repeat offenders, will help prevent low-level offenders from escalating into hardened cybercriminals, while helping to ensure that those cybercriminals face consequences.

Australia’s cybercrime laws must also evolve to address the entire cybercriminal supply chain, not just the most visible offenders. Operation PowerOFF showed that cybercrime is not just about the hackers who launch attacks, but also the administrators, facilitators, and financial backers who enable them.

Australian law enforcement should target financial transactions supporting cybercrime, using crypto-tracing and forensic financial analysis to dismantle cybercriminal funding networks. Harsher penalties for those who fund or facilitate DDoS-for-hire services could create a more hostile legal environment for cybercriminal enterprises, ensuring that they cannot simply relocate to more permissive jurisdictions. At the same time, youth diversion programs should be expanded, offering first-time cyber offenders rehabilitation options rather than immediate prosecution, preventing them from becoming repeat offenders.

Operation PowerOFF’s success is a win for international cybercrime enforcement, demonstrating that proactive, intelligence-driven disruption can dismantle even the most entrenched criminal networks.

But it is also a warning: without continuous vigilance, cybercriminals will regroup, rebrand, and relaunch. Australia must act now to strengthen its cyber enforcement, combining international cooperation, legal reform and preventative education to ensure that cybercriminals see Australia as a hostile environment for their activities, not a soft target.

Australia’s defences must be ready in two years. Here’s what to do

Beijing deployed a naval task group to the waters around Australia for three related reasons. First, to demonstrate the reach and potency of Chinese sea power and to put Australia on notice that it is vulnerable to the application of that power. Second, to test our political and military responses. Third, to rehearse for wartime operations against Australia.

Regarding the last, the deployment was most likely a rehearsal run for the conduct of a seaborne missile strike on Australia, with China testing how it might most effectively launch missile strikes on Australian military facilities and critical national infrastructure.

The task group was led by a powerful cruiser that was equipped with 112 missile cells from which long-range land attack cruise missiles could be launched at targets across Australia.

In wartime, such an operation would be conducted by an even larger and better protected surface action task group, most probably consisting of the same type of cruiser, one or two escorting destroyers, one or two submarines and a replenishment tanker. The mission of the task group would be to fight through any opposing, mainly Australian, forces to get into optimal firing positions in the waters around Australia.

China would assume that in any plausible scenario where it might need to launch such an attack against Australia—as part of a broader US-China war—scarce US naval and air units almost certainly would be heavily engaged elsewhere in the broader Indo-Pacific region and therefore its attacking force would be able to fight through light, mainly Australian, defending forces.

This is not to say that our treaty ally, the United States, would not willingly come to our aid in such a scenario. The reality, however, is that in any such war the US would have very little spare capacity to do so.

It is not that we would be abandoned. Rather, the defence of Australia would be prioritised by the US according to the imperatives of the broader fight and we would be expected to do more for ourselves.

China also most likely would undertake air-launched long-range missile strikes against Australia. These would involve long-range missiles being launched by H-6 bombers, which most likely would fire them from the north of Indonesia, beyond the perceived range of Australia’s air defences. Submarines also probably would be sent to attack shipping around Australia, mine our ports and sea lanes and destroy undersea cables.

China’s relatively small number of aircraft carriers means it is unlikely that Australia would be subjected to carrier-borne air raids, but the possibility should not be discounted, especially as the Chinese aircraft carrier fleet grows in strength.

We should not delude ourselves that the deployment was a benign exercise, conducted ‘lawfully’ in international waters—with the underlying imputation being that is simply what great powers do.

Regrettably, this was the theme of the Australian government’s initial response, which could not have been better scripted in Beijing itself.

The deployment was a rehearsal and, at the same time, a menacing attempt at strategic intimidation, designed to increase anxiety in the Australian population about China’s growing military power and fuel domestic doubts about the wisdom of potentially risking conflict with China—for instance, over Taiwan.

This day of reckoning was long coming. Once China decided in the early 2000s to develop a blue-water navy, it was always going to focus some of its attention on our sea-air approaches and our nearby waters. This is because Beijing understands that, as a matter of geostrategic logic, Australia’s size and geographical location would be a valuable wartime asset for the US.

Neutralising that advantage is a key consideration for People’s Liberation Army war planners.

The PLA could not afford to yield to the US uncontested access to such a significant and secure bastion and staging area, where US forces could be concentrated in protected locations out of the reach of most of China’s conventional arsenal and from where devastating US strikes could be mounted on Chinese forces and bases in the littoral areas of East Asia, the Western Pacific and the Indian Ocean.

While it has not taken a definitive decision to go to war, China has moved into a rehearsal phase for such a conflict. It is determined to give itself the option of fighting and winning a war against the US and its allies. It therefore has to test all of its operational plans, including the neutralisation of Australia’s wartime utility.

We are not special in this regard. China is rehearsing its war plans across the entire Pacific—including in relation to establishing sea control in the littoral rim of East Asia, from Japan to Indonesia, denying US sea and air access to that littoral rim, holding at risk US carrier strike groups and bases, such as Guam, and striking at more distant US staging areas, such as Alaska, Hawaii and Australia.

PLA war planning calculations have nothing to do with the tone or the content of the bilateral Australia-China relationship. They are a function of the hard-headed judgments that PLA war planners need to make. We could have a perfectly ‘stabilised’ relationship, with copious quantities of Australian wine and lobster flowing into Chinese ports, and still be on the PLA’s strike list.

Unfortunately, our response to the deployment was shaped principally by those whose focus is obsessively fixed on the state of the bilateral relationship rather than by those who are paid to think and advise in geostrategic terms.

We should expect more such demonstrations of power projection by China, using not only surface vessels but also submarines, carrier strike groups and H-6 bombers. Such power projection is commonplace around the rimlands and littoral regions of Eurasia, where Chinese, Russian and, increasingly, combined Chinese-Russian operations are mounted frequently against the US (including around Alaska and off Hawaii), Canada, Britain, Japan, Taiwan, The Philippines and others. We have much to learn from these allies and partners in terms of how they deal with such frequent and persistent Chinese and Russian visitors.

Until now Australia has been located safely away from this contact zone of Eurasia, with only Imperial Germany before WWI and Imperial Japan in the early years of the Pacific war of 1941-45 darkening our frontiers.

Today we are no longer protected by distance. Thankfully, there is a ready-made solution to this geostrategic problem. Ever since Kim Beazley commissioned Paul Dibb in February 1985 to conduct a review of Australia’s defence capabilities, the cardinal importance of defending Australia’s sea-air approaches has been at the core of defence planning, even if the requisite capabilities and level of funding required to carry out the resultant military strategy have never fully materialised.

For 40 years, Australian defence planning has been founded on the idea of defending our area of direct military interest, which extends well beyond the continent and the immediate waters around Australia. This means seeking to deny to an adversary the ability to successfully move into and through the sea-air approaches to Australia.

It also means achieving and maintaining sea control in key areas in the waters around Australia. Our strategy is to turn the vast archipelagic arc that extends from the waters to the west of Sumatra to those around Fiji into a great strategic barrier through which any adversary would have to move to attack Australia.

Once this geostrategic logic is understood, much else falls into place—for instance, why it is that Australia could not allow itself to be outflanked to the northeast by the establishment of Chinese bases in the South Pacific, which would represent a catastrophic penetration of the barrier.

In the same way that US president John Kennedy could not tolerate Soviet missiles in Cuba in 1962, we could not tolerate Chinese missile units or bombers having access to bases in the South Pacific.

The geography of this barrier is such that the sea-air approaches to Australia naturally funnel ships and submarines into a small number of chokepoints. When exploited well, chokepoints favour the defender. They create killing zones where attacking forces can be destroyed before they can do harm.

Australian defence planning also has to contemplate more distant operations, forward of the barrier, including in the South China Sea and in the southern portions of the Central Pacific (for instance, in the Guam-Bismarck Sea corridor) to attrite advancing adversary forces even before they reach the chokepoints.

While we have the strategy, which was given its clearest expression in the 1987 and 2009 defence white papers and has been honed across 40 years since Dibb’s landmark report, we do not have the full suite of capabilities or the mindset to execute the strategy in the face of the gathering storm.

We need to be ready by early 2027—which appears to be the earliest time that China will be ready to launch a military operation against Taiwan, which in turn may trigger a wider war.

Of course, assumptions about whether and when China would do such a thing need to be kept under constant review. In strategy, everything is contingent and nothing is inevitable. If it is to come, war will break out whether we are ready or not. Having missed our chance more than 15 years ago to properly start to prepare—when dark prophesies of a possible war first emerged—we now have to do what we can in the time we have. We should urgently do the following things, which are over and above what has been decided by successive Australian governments, most recently in response to the 2023 Defence Strategic Review.

1. Enhance surveillance

First, we must enhance the continuous wide-area surveillance of our area of direct military interest. We must be able to pinpoint the precise locations and track the movement of Chinese (and Russian) ships, submarines and aircraft of interest as far from Australia as possible. This will require the more intensive use and meshing together of the sensor feeds from national intelligence systems, space-based sensors, the Jindalee radar network, P-8 Poseidon maritime surveillance aircraft, MQ-4C Triton surveillance drones, E-7 Wedgetail airborne early warning and control aircraft, undersea sensors and other assets.
A fused situational picture of key Chinese and Russian movements in our area of direct military interest should be developed and shared in real time with US Indo-Pacific Command in Hawaii in exchange for its fused picture of the same. This will require more resources to support 24/7 operations in the Australian Defence Force and the relevant intelligence agencies. Wide-area surveillance of our area of direct military interest cannot be a business-hours activity.

2. Lift operational readiness

Second, we must enhance ADF operational readiness, which means having more forces standing ready to undertake quick alert missions, such as air interceptions and maritime surveillance flights.

This will cost money and drain crews as they will fatigue more rapidly when kept at higher states of readiness. More assertive rules of engagement should be authorised by the defence minister to allow for the close shadowing of Chinese and Russian units in our area of direct military interest. This would be done in a safe and professional manner, as it is being done nearly every other day by our allies and partners who are being probed regularly at sea and in the air.

The ADF’s Joint Operations Command should be reconfigured along the lines of the original vision of defence force chief General John Baker, who in 1996 established the Australian Theatre Command, or COMAUST. Baker’s logic was that the ADF should be postured, and commanded, principally to conduct operations in Australia’s area of direct military interest. While operations farther afield would be undertaken from time to time, they should not be the main focus of the ADF. After 9/11, the ADF adopted a globalist orientation. Mastery of the area of direct military interest started to fall away.

It is time for the ADF to focus zealously once again on the defence of Australia’s area of direct military interest, and our national military command arrangements and systems should reflect this.

3. Acquire longer-range anti-surface warfare capabilities

Third, we must urgently acquire longer-range anti-surface warfare capabilities. A radical suggestion would be to acquire rapidly six to 10 B-1B Lancer bombers from the US Air Force’s inventory. B-1Bs have been configured in recent years for anti-ship strike missions. Each is now able to carry 36 Long Range Anti-Ship Missiles (24 internally in bomb bays and 12 externally), which is a fearsome anti-surface capability. While the RAAF already is acquiring the LRASM weapon for use by its F/A-18F Super Hornets, having a platform in the order of battle with the range and payload capacity of the B-1B Lancer would severely impair PLA options for mounting surface action missions against Australia.

4. Acquire longer-range air superiority capability

Fourth, we must urgently acquire a longer-range air superiority capability to deal with the threat of stand-off attacks by PLA Air Force H-6 bombers operating north of Indonesia. Again, a radical suggestion would be to acquire rapidly the air-to-air version of the SM-6 missile to equip the RAAF’s F/A-18F Super Hornet fighters. Facing such fighters, especially if they were operating forward of the barrier, would make PLA planners think twice about mounting long-range bomber missions against Australia.

5. Remediate naval warfare capability

Fifth, we urgently need to remediate our naval warfare capability, to ensure that our battle fleet of six Collins-class submarines and 10 major surface combatants (the Hobart and Anzac classes) are fully crewed and ready for action.

This will require crewing, training, inventory and maintenance issues to be addressed. The RAN’s replenishment tankers need to be fixed and returned to the fleet as soon as possible. Across time, the RAN battle fleet will need to grow in size, given the rapid growth in the PLA Navy’s battle fleet.

Ideally, we should be aiming across the longer term for a battle fleet of 12 submarines, 20 major surface combatants and 20 smaller offshore combatants, the last of which could be used as missile corvettes and naval mine warfare vessels. To further enhance the RAN’s battle fleet, our large landing helicopter dock vessels should be re-purposed as sea control carriers, with embarked anti-submarine and airborne early warning helicopters and long-range naval drones.

6. Ensure RAAF is battle ready

Sixth, we need to ensure that the RAAF is battle ready, with its squadrons fully crewed and its air bases well protected and fully functional. It is relatively easier to expand an air force, as compared with a navy, given the vagaries of naval shipbuilding. The RAAF is therefore the better bet in terms of a rapid expansion that could be achieved soonest.

More F-35 Lightning II fighters should be acquired, along with the B-1B Lancers mentioned already. The latter could serve as an interim bomber, pending reconsideration of the acquisition of the B-21 Raider strategic bomber. Crewing ratios should be increased quickly, such that the RAAF has more crews than aircraft, which could then be flown more intensively. The extraordinarily rapid expansion of the RAAF’s aircrew training pipeline in World War II should be its guiding vision.

7. Push forward army’s maritime capability

Seventh, the army should continue to develop its increasingly impressive maritime warfare capabilities and readiness. Consideration should be given to the rapid acquisition of the ground-based Typhon missile system, which would give the army a long-range anti-ship and land strike capability. As we barricade the sea-air approaches to Australia, we will have to be vigilant in relation to stealthy commando raids and sabotage operations. The army will need to be postured to deal with such attacks.

8. Address capability gaps

Eighth, we need to remediate a number of other capability gaps where we have no or virtually no capability. Of particular concern is integrated air and missile defence. We will need to acquire some combination of Terminal High Altitude Area Defence (THAAD) and Patriot interceptors on land and SM-3 interceptors at sea. Naval mine warfare capability also needs to be addressed.

There are likely to be other gaps that would impair our ability to execute the strategy. Given the urgency of the situation, rapidly acquired interim solutions will have to suffice to fill many of these gaps. Such interim solutions can be refined and built on. That is the lesson of the Russo-Ukrainian war.

9. Negotiate PNG alliance

Ninth, a military alliance should be negotiated with Papua New Guinea to provide for the establishment of ADF bases in locations such as Manus, Rabaul and Lae to support the conduct of maritime surveillance, anti-surface, anti-submarine, and air superiority missions. For instance, a forward-deployed composite RAAF wing, consisting of F-35A Lightning fighters, B-1B Lancers armed with LRASM, F/A-18F Super Hornets armed with SM-6 missiles, and P-8 Poseidon maritime aircraft could operate from the Bismarck to the Celebes seas and beyond with the aim of denying access into our northern sea-air approaches. A similar alliance should be negotiated with The Philippines. This would extend our coverage north of the barrier into the South China Sea.

We need to better appreciate the significance of PNG and the Philippines as Pacific watchtowers of the sea-air approaches to Australia. Our Indian Ocean territories are our western watchtowers.

10. Develop a war book

Tenth, we should urgently reinstate the practice of developing a war book that would deal with civil defence, national cyber defence, the protection of critical infrastructure and the general protection, and sustainment of the population during times of war.

 

While the likelihood of war in the foreseeable future is low, perhaps 10 to 20 per cent, it is enough to warrant action. This will cost money and divert resources from more agreeable activities. That is the nature of war, which drains societies even when it does not occur. Against this must be weighed the costs of being unprepared.

While this worsening strategic environment is very confronting, there is an even darker scenario. Imagine if we had to face a coercive, belligerent, and unchecked China on our own. That would require a very different military strategy and a significantly larger ADF.

That is a grim story for another day—and one that may require us to pursue our own Manhattan Project. In that world, we would look fondly on this relatively benign age.

Indonesia steps up defence relationships, but stays non-aligned

Indonesia has recognised that security affairs in its region are no longer business as usual, though it hasn’t completely given up its commitment to strategic autonomy.

Its biggest step was a Defence Cooperation Agreement (DCA) signed with Australia in August 2024. The agreement acts as a de facto status-of-forces agreement, providing for the presence of foreign forces in Indonesian territory, traditionally an uncomfortable idea for the country.

Jakarta has also stepped up specific defence cooperation with other countries over the past five years, notably with Australia. The United States has also become a closer partner.

While China’s strengthening presence in Southeast Asia is an obvious factor in Indonesia’s diversification of defence relationships, Jakarta declares no policy of trying to counterbalance Beijing. Moreover, it is still far from tying itself down in close and permanent security relationships. Instead, Indonesia adopts a more nuanced approach.

Indonesia lacks a formal strategy to navigate great power competition. However, its impartial stance—rooted in what it calls its ‘free and active’ foreign policy—has resulted in a hedging strategy, balancing economic ties with China and strong political relations with the US and its allies. Meanwhile, Indonesia is expanding its global engagement through active participation in regional and international organisations, including the Association of Southeast Asian Nations and the United Nations, and through south-south cooperation.

Following its cautious foreign policy, Indonesia avoids alliances with great powers. This approach has allowed it to maintain neutrality and stay ‘defensively active’ for decades. Yet, Indonesia has begun to break from this tradition.

Indonesia’s Ministry of Defence aims to increase the defence budget from 0.8 percent to 1.5 percent of GDP. In recent years, Indonesia has signed several arms acquisition deals. These include buying 42 Dassault Rafale fighters from France for $8.1 billion, 12 drones from Turkey worth $300 million and 24 Sikorsky S-70M Black Hawk helicopters from the US.

In the past five years, Indonesia has deepened various bilateral defence relationships. Australia has become a prominent partner, engaging in 48 defence diplomacy activities. These activities saw steady growth throughout the past five years, with the 2024 DCA as the pinnacle of their cooperation.

The 2024 DCA between Indonesia and Australia is their greatest commitment yet to enhancing defence collaboration and addressing shared security challenges. For Indonesia, it is historic as it allows military drills and mutual force operations within each other’s territories. For Australia, this agreement offers better operational proximity to potential flashpoints, such as the South China Sea.

Although yet to be a status-of-forces agreement, the DCA reinforces previous arrangements. It establishes a legal framework to enhance military cooperation and joint activities between the two countries. The agreement also includes provisions for enhanced educational exchanges and closer maritime operations.

However, this agreement does not signal Indonesia’s alignment with any bloc. The country continues to balance its relationships with major powers, staying true to its principle of strategic autonomy.

In 2023, Indonesia elevated bilateral ties with the US to a comprehensive strategic partnership, expanding defence cooperation, including joint exercises such as Garuda Shield. Simultaneously, Indonesia reinforced diplomatic ties with China and the two countries issued a joint statement in 2024 claiming ‘common understanding on joint development in areas of overlapping claims’ in the South China Sea. This sparked controversy among maritime law and international relations experts. It appeared to contradict Indonesia’s long-standing policy of strategic denial regarding China’s territorial claims in the South China Sea.

Additionally, Indonesia has sought to diversify its defence partnerships by engaging with other Global South middle powers, including Turkey, India and Brazil. Indonesia’s recent decision to join BRICS is also motivated by its willingness to enhance cooperation and collaboration with other developing countries.

The depth of the Indonesia-Australia DCA reveals several key aspects of Indonesia’s approach. First, as great power competition increases, Indonesia is moving beyond its ‘defensive-active’ strategy. Indonesia is now integrating bilateral strategies alongside multilateral approaches to better navigate the evolving security landscape.

Second, Indonesia’s deepening ties with Australia through the DCA serve as a regional safety net in its hedging behaviour. Consequently, Indonesia must reassure other countries that the DCA with Australia aims to enhance cooperation and doesn’t signal alignment with the West.

Finally, while it has shown adaptability in recent years, defence capacity remains crucial for Indonesia to maintain its independence and increase its bargaining position in the geopolitical landscape.

The DCA, alongside global engagement and enhancing defence capacity, indicates Indonesia’s shifting strategy to face the increasingly competitive environment while maintaining its strategic autonomy.

When dealing with China, Australia must prioritise security over economics

China’s economic importance cannot be allowed to supersede all other Australian interests.

For the past couple of decades, trade has dominated Australia’s relations with China. This cannot continue. Australia needs to prioritise its security interests when dealing with Beijing, and it shouldn’t overestimate or overstate its vulnerability to China’s coercive trade practices.

Prioritising security is particularly important as we confront escalating global competition and China’s increasingly assertive behaviour. China’s live-fire exercises in the Tasman Sea have once again brought attention to the growing threat of aggressive Chinese military actions in the Indo-Pacific.

The exercises were conducted in international waters and violated no international law. But the behaviour broke norms and was less than ideal: usually, such exercises are preceded by adequate early warning to affected countries. In this case, neither Australia nor New Zealand was informed, and early reports suggest that passenger aircraft that were already enroute were forced to reroute because of the exercises. This is unacceptable international behaviour, and the Australian government should not be shy in saying so.

Australia has been more than accommodating of China. In response to press questions on live-fire exercises, Prime Minister Anthony Albanese said China ‘could have given notice but Australia has a presence from time to time in the South China Sea’. This framing was unwise, to say the least. Albanese no doubt wishes to avoid escalation, but it is unnecessary to provide such false equivalence, which Beijing could exploit. The comment offers China a free pass.

Economic issues are important for political leaders, especially in democracies, where everyday issues take precedence even over discussions about national security. This is probably why Albanese highlighted the government’s success in boosting trade and addressing disputes with Beijing—even though many of these disputes were of China’s doing, rather than Australia’s.

But Australian leaders should also recognise that China is not simply doing us a favour by trading with us. It benefits from the goods and services that Australia offers and the revenue from what it sells. This is a mutually beneficial relationship, and disruptions will affect China too.

While China may be able to source its mineral and other resources from other parts of the world, Australia can similarly find other markets for its resources, as it has in response to previous Chinese trade obstruction. China buys from Australia for a variety of reasons, including price, quality and the predictability of supply. These are not values it can get from anywhere. In many countries, resources are in conflict zones that are difficult to access.

Any trade disruption would likely hurt Australia more than it would hurt China, but it would still damage China’s economy. There is a reason why previous trade punishments have targeted a few niche products, such as wine. China has not targeted critical items, such as mineral resources, precisely because it knows that its own economy would face difficulties if it did so. As China’s economy slows, the cost of transitioning away from Australian goods and services rises.

China has repeatedly used trade sanctions against smaller economies—such as Norway, Canada, Sweden and Mongolia—for perceived slights and other political reasons. But it has never really benefited from doing so, instead gaining a reputation as a bad and unreliable actor. Its trade threats in the past few years have been more bark than bite, with most targeted countries, including Australia, standing their ground and China eventually backing off.

While Australia should not pursue trade confrontation, it may be similarly unwise to emphasise or exaggerate its vulnerability, as this will only invite pressure. Rather, Australia should initiate talks with its European and Indo-Pacific partners, as well as the US, to present a united front against such threats.

China can make threats and apply sanctions only against countries with smaller economies, and only because it thinks they will have to face such sanctions alone. Even if sanctions are ineffective—as indeed they have been—we cannot let China assume that it can get away with such behaviour without consequences. A united response to China’s trade bullying is needed to deter and, if deterrence fails, punish China for such aggressive actions.

Political leaders in democracies no doubt have a hard time balancing economic and security requirements in foreign policy. But they should avoid over-emphasising trade and economic factors—Beijing will assume these are pressure points when leaders talk as if they are. Australia must instead emphasise that it will not bend to such tactics.

Overseas investment is getting riskier. The government needs to step up

Australian companies operating overseas are navigating an increasingly volatile geopolitical landscape where economic coercion, regulatory uncertainty and security risks are becoming the norm. Our growing global investment footprint is nationally important, and the Australian government must support it more strongly.

The government needs to do this above all to counter market manipulation by China and even its seizure of Australian assets, but other risks are piling up, too.

Australia’s outward foreign investment is not just about business; it is a strategic imperative, with the country’s superannuation funds, trade stability and national security all tied to the success and resilience of its companies operating in high-risk environments around the world.

Many Australians understand the importance of inward foreign investment in driving economic growth, but far fewer appreciate the scale of Australian capital flowing overseas. Australia’s total investment abroad now stands at $3.8 trillion—82 percent as large as the stock of foreign direct investment in Australia.

Manufacturers, financial institutions and miners lead our outward foreign direct investment (FDI), the establishing or buying of businesses in other countries. It embodies Australia’s deep economic integration with global markets. Yet, as geopolitical risks intensify, Australia can no longer take the security of these investments for granted, especially in the mining sector.

Australian minerals companies have built a huge global footprint. S&P Global data shows that Australian-headquartered and ASX-listed companies operate 331 mines and downstream processing plants domestically and that 120 Australian companies manage 212 mining and processing facilities overseas.

In 2024 alone, Australian companies invested $4.6 billion in exploration, of which 53 percent spent in Australia and the rest on all other continents except Antarctica. The $195 billion in outbound mining FDI recorded in 2023 further illustrates the scale of this global presence, alongside $215 billion in manufacturing FDI, much of which is tied to minerals processing.

Australian miners have a long history of navigating complex global environments. However, rising geopolitical tensions, economic coercion and regulatory instability make risk management increasingly difficult. The sector’s dependence on foreign capital and markets leaves it vulnerable to supply chain disruptions, trade restrictions and political interference, which threaten profitability and long-term strategic resilience.

Front of mind here is China’s increasing economic coercion. China’s actions serve to reshape global minerals markets, creating risks that extend far beyond trade disruptions. Through market manipulation, aggressive acquisition tactics, and political interference, China is systematically undermining competition. It is attempting to seize control of critical minerals projects and even emboldening hostile regimes to detain Australian mining executives as leverage for financial gain.

Chinese-linked companies have used coercive tactics and state-backed influence to try to take control of Australian-owned mining operations, particularly in some African countries with weak governance in minerals. In 2024, an Australian company was awarded US$90 million in compensation after the Tanzanian government unlawfully seized a nickel deposit, highlighting the unstable regulatory environment Australian firms can face abroad.

Meanwhile, Russian-backed military regimes in Mali and Niger, combined with jihadist insurgencies in key West African mining regions, are increasing security risks for Australian businesses. The closure of US military bases in Niger in 2024 further complicated the security landscape, raising concerns about the long-term viability of Australian investment in these regions.

While the Australian government sponsors the West Africa Mining Security Conference, tangible support for Australian companies operating in high-risk regions is minimal. Unlike Canada, which maintains 17 trade offices across Africa, Australia has just one, in Nairobi. Despite Australia’s large mining and petroleum investments in West Africa, there is just one diplomatic post to service nine countries. This lack of diplomatic and commercial representation leaves Australian companies at a significant disadvantage in security and investment advocacy.

Meanwhile, escalating tariff disputes between the United States and China and retaliatory trade measures from Canada, Mexico and the European Union further complicate Australian companies’ investment and trade outlook. The full impact on Australian-controlled production at home and abroad remains uncertain but potentially severe.

Australian mining depends heavily on foreign investment and financial mechanisms, including cash-backed offtake agreements. China dominates the financing and sales mix, making it an essential partner and a strategic risk. China’s deliberate manipulation of mineral prices, particularly in rare earth markets, and its covert and coercive attempts to acquire key mining assets directly threaten Australia’s economic sovereignty.

Multiple takeover attempts of Northern Minerals and allegations of similar activities around control of Global Lithium Resources demonstrate China’s ongoing efforts to increase control over Australia’s critical minerals industry. This threatens national security and broader supply chain diversification efforts.

The Australian government must take decisive action in response to the rapid escalation of geopolitical risks.

First, a dedicated task force led by the Department of Foreign Affairs and Trade should provide real-time risk assessments and direct assistance to companies navigating complex security and regulatory environments. Second, the Australian Securities and Investments Commission must collaborate more closely with the Foreign Investment Review Board to detect and counter corporate coercion threatening Australia’s national interest. Third, Australia must prioritise deeper engagement with like-minded partners, including the US, Canada, Japan, the EU and South Korea, to accelerate the development of more secure, diverse and sustainable critical minerals supply chains.

While Australia has made cooperation commitments under multiple critical minerals agreements, implementation has been slow and inadequate. With global competition intensifying, there is no time to waste.

In case we forgot, Typhoon attacks remind us of China’s cyber capability—and intent

Australians need to understand the cyber threat from China.

US President Donald Trump described the launch of Chinese artificial intelligence chatbot, DeepSeek, as a wake-up call for the US tech industry. The Australian government moved quickly to ban DeepSeek from government devices.

This came just weeks after the Biden administration stunningly admitted on its way out of office that Chinese Communist Party hackers were targeting not just political and military systems but also civilian networks such as water and health. The hackers could shut down US ports, power grids and other critical infrastructure.

These incidents remind us that China has the intent, and increasingly the capability, to seriously challenge US and Western technology advantage. Australia will be an obvious target if regional tensions continue to rise. It must be well-prepared.

As ASPI’s Critical Technology Tracker highlights, China’s advances in critical technologies have been foreseeable for some time. US and Western confidence is manifesting as complacency.

DeepSeek has emerged as a cheap, open-source AI rival to the seemingly indomitable US models. It could enable Chinese technology to become enmeshed in global systems, perhaps even in critical infrastructure.

Meanwhile, Chinese hackers have stealthily embedded themselves in US critical infrastructure, potentially enabling sabotage, or the coercive threat of sabotage, to extract something Beijing wants. The two main perpetrators of these operations are Salt Typhoon and Volt Typhoon. The Chinese government backs both.

Salt Typhoon’s infiltration of at least nine US telecom networks has enabled CCP-sponsored hackers to geolocate individuals and record phone calls, directly threatening personal privacy and national security. This devastating counterintelligence failure includes the identification of individuals that US agencies suspect are agents working for China. It also enables CCP surveillance and coercion of US nationals and Chinese dissidents.

If anything, Volt Typhoon poses a greater threat, with covert access to critical infrastructure networks. Each reinforces the dangers of the other.

Some US officials involved in the investigation have said the hack is so severe, and the networks so compromised, that the United States may never be sure the intruders have been fully rooted out.

Both operations demonstrate sophisticated stealth. In particular, Volt Typhoon’s technique of living off the land—in which they sit at length in the systems, using its own resources—made detection harder. It could gain outwardly legitimate access without the requirement for malware. This reveals an intent to map and maintain access to critical systems, not for immediate destruction, but for whenever best serves Beijing’s interests. In this sense, it can be seen as a precursor to war.

The focus on critical infrastructure underscores how malicious cyber operations can undermine national resilience during peacetime and crises and sow doubt on a government’s ability to safeguard the people. Through these operations, adversaries could influence a target country’s decisions as leaders avoid taking any action that might provoke a disruption or sabotage.

Australia’s intelligence agencies are aware of these risks. Australia’s director-general of security, Mike Burgess, warned in his 2024 annual threat assessment that ‘the most immediate, low cost and potentially high-impact vector for sabotage [by foreign adversaries] is cyber’. This was reinforced in his 2025 assessment when he declared that ‘foreign regimes are expected to become more determined to, and more capable of, pre-positioning cyber access vectors they can exploit in the future.’ He warned that we’re getting closer to the threshold for ‘high-impact sabotage’.

The Australian Signals Directorate has been improving preparedness and resilience. It has helped Australian organisations to defend themselves and mitigate prepositioning and living-off-the-land techniques. ASD has also been building offensive capabilities needed to impose costs on attackers.

We must avoid the traps China sets as it seeks global information dominance. First, we can’t be complacent. It’s unsafe to assume that the US and its allies will remain decisively better than China, and that we can counter whatever Beijing can do. Second, we must reject the viewpoint that ‘everyone spies so it would be hypocritical to condemn China’, as it is a false moral equivalence. Third, we must avoid arguing that there isn’t present threat just because Beijing doesn’t have the intent to go to war today. This wishful thinking is a dangerous mistake. If we fall into these traps, we present Beijing with more time and render ourselves incapable of advancing our interests.

Chinese capabilities are strong and growing, and the way they are being used by the CCP demonstrates clear malign intent. This should be pushing elected governments to take the protective action and prepare for future cyber operations.

The reluctance to see the threats in the information domain as equal to traditional threats is a decades-old mistake that must be corrected. We need to minimise our dependence on China for technology.

China’s naval deployment should invigorate Australia’s election debate

The Australian government’s underreaction to China’s ongoing naval circumnavigation of Australia is a bigger problem than any perceived overreaction in public commentary. Some politicisation of the issue before a general election is natural in a democracy—and welcome if it means Canberra’s defence and China policy settings feature more prominently in debates ahead of the election due by May.

How times have changed. Fifteen years ago, Australia was worried that the quadrilateral partnership with India, Japan and the US would spook China, making it worry that it was being strategically encircled by the US and its regional allies and partners. Wind the clock forward to 2025 and China’s navy is off Perth, circumnavigating Australia with a potent surface action group.

This is the furthest south that a Chinese naval flotilla has ventured. This one is composed of a cruiser, a frigate and a replenishment ship—above the surface, at least.

Naval analysts have urged Australia to temper its reaction to the deployment because Canberra has a reciprocal interest in freedom of navigation in China’s maritime periphery. This is certainly a factor, and to some extent puts the government in a bind. The Chinese navy has a clear legal right to operate in waters close to Australia, even if it is going very far out of its way to make a point. That includes the right to conduct live-fire exercises.

But what point is Beijing making? Even while noting legal reciprocity in freedom of navigation, ordinary Australians are quite entitled to read hostility in China’s intentions. The flotilla was not invited here, and China didn’t notify us it was coming. Carrying out live fire exercises in the Tasman Sea with little or no notice, as the flotilla did on 21 February, wasn’t just unprofessional; it sent an unmistakably coercive signal to Australia and New Zealand.

By sending its navy all the way around Australia, the Chinese Communist Party is signalling that all of Australia lies within reach and is part of its area of direct military interest. It is showing it can project combat power and potentially hold Australia’s maritime communications at risk even though it lacks a base close to the continent. (And we should not think that Beijing has given up on getting one.)

The initial response from Australia’s government was muted and, on the issue of whether China had given warning of its live fire drills, muddled. This, and Prime Minister Anthony Albanese’s evident desire to downplay the significance of the deployment will have been noted by Beijing, which with the deployment is testing and comparing reactions in Canberra, Wellington and Washington.

The United States, under new political management, has so far stayed silent on the deployment, despite the concurrent presence in Australia of the chief of its Indo-Pacific Command and a US nuclear submarine at HMAS Stirling, near Perth. There is still time for the US to show its support this week, before the task group completes its tour of Australia and returns to the South China Sea through the Indonesian archipelago, as it can be expected to do.

New Zealand’s initial response was conspicuously better than Australia’s. Defence Minister Judith Collins linked China’s motivations to its strategic quest for greater influence and access to marine resources in the South Pacific, uncomfortably underscored by a recent deal between Beijing and the Cook Islands that blindsided Wellington.

A firmer Australian government reaction could have set the tone for a less divisive political debate. Canberra’s contention that it has stabilised bilateral relations with China looks increasingly questionable in light of the unsubtle ‘or else’ message trailing in the Chinese navy’s wake as it sails around Australia. China’s coercion of Canberra since 2020 has never stopped; it has simply taken different forms.

Australians and New Zealanders should not fall into the trap of viewing China’s naval deployment to their neighbourhood in isolation and adopting a defensive mindset. In fact, the Chinese military is mounting concurrent drills at several locations, including near Japan, Taiwan and the Gulf of Tonkin, close to Vietnam. Beijing is ramping up its military presence across the Western Pacific to calibrate regional reactions, most likely with an interest in probing the strength of US alliances and security partnerships early on in the second Trump administration.

The more Australia and other countries speak with one voice on China, the harder it will be for Beijing to exploit potential wedges.

This will not be the last time a Chinese surface action group undertakes a three-ocean deployment around Australia. But the current deployment may turn political debate to defence spending increases, the hollowed-out state of the Royal Australian Navy’s surface capabilities and the government’s supposed stabilisation policy settings. If it does, we may owe a debt of gratitude to the Chinese navy.

China drops flares ahead of RAAF plane, sends ships to Australia’s northern approaches

Highly provocative and unprofessional action by the Chinese military has again put the Albanese government’s approach to relations with Beijing under pressure. So has deployment of a powerful Chinese naval flotilla close to Australia.

China’s aggressive actions in the South China Sea and beyond make it much harder for the government to stabilise the relationship with Beijing—under its formula of ‘cooperate where we can, disagree where we must, and engage in the national interest’.

On 11 February, a Chinese air force J-16 fighter released flares just 30 metres in front of an Australian P-8A Poseidon surveillance aircraft, in what the Department of Defence has described as an ‘unsafe and unprofessional’ interaction. Such interactions with China’s military are now becoming normal. The flare release, reported on 13 February, was the fifth known incident of unsafe behavior by the Chinese military towards the Australian Defence Force since 2022.

It should reinforce the need for caution by the current, and indeed any future Australian government, in approaching its relationship with China.

In another statement on the same day the department said a Chinese naval task group was operating in Australia’s northeastern maritime approaches. Among the ships was a Jiangkai-class frigate, a Fuchi-class replenishment vessel and a Type 055 Renhai cruiser.

Deployment of the cruiser is important. It is likely the first ship of its class to have operated so close to Australia. Renhais are among the most formidable warships afloat. Each has 112 vertical-launch missile cells and can carry a large load of weapons, including anti-ship cruise missiles, surface-to-air missiles, torpedoes and anti-submarine weapons. Although it’s not yet clear whether China is incorporating land-attack cruise missiles in the Renhai class, room for them could easily be found in a vessel with so many launch cells.

It is important to emphasise that the flotilla is operating within international law, just as it’s important to note that Australian warships and aircraft in the South China Sea operate in international waters and airspace—as they have done for decades.

The two developments announced on 13 February send important signals regarding China’s future military posture. Firstly, deployment of the cruiser-led flotilla sends a message to Australia that China can and will project power and presence into our maritime approaches. As the Chinese navy works towards becoming a global force, it will continue to perform more missions beyond the First Island Chain, the string of islands from Japan to Indonesia. Since the Covid-19 pandemic, we have seen the Chinese navy operate off the West Australian coast and through the Torres Strait in 2022, sit off north-eastern Australia during the Talisman Sabre military exercise in 2023 and sail a Renhai and an advanced destroyer through the Coral Sea on their way to Vanuatu in 2024.

Moreover, the Chinese military seems to be applying its unsafe and unprofessional South China Sea tactics closer to Australia. Indeed, its first publicly reported unsafe incident in relation to Australia occurred in our northern approaches on 17 February 2022.

This global ambition by the Chinese navy means that the Department of Defence cannot assume that Australia will always have a degree of isolation across a strategic moat, epitomised by the notional sea-air gap that an adversary supposedly cannot cross. The Renhai deployment reinforces the shrinking relevance of geographic isolation in Australian defence planning. The ship could, in a crisis, hold at risk any Royal Australian Navy warships within range of its YJ-18 anti-ship missiles, and Royal Australian Air Force aircraft could be threatened by its HHQ-9 air-defence missiles.

Australia must expect more aggression by Chinese fighter pilots against RAAF maritime patrol aircraft in international airspace over the South China Sea. Beijing has a reputation for such provocations, especially against US allies. Defence needs to think about a response if an incident leads to the loss of an aircraft and crew or forces them to land on a Chinese-occupied feature in the South China Sea.

In relation to the new Trump administration, China probably wants to keep its powder dry, seeking to minimise an impending trade conflict and to manage a deteriorating economy that relies heavily on exports. However, we should expect that China’s military will continue to target smaller countries, such as Australia, to end their long-standing military presence in the First Island Chain.

Thus, even though China’s military has recently softened its approach towards the United States, it continues to target the militaries of smaller countries exercising freedom of navigation and overflight in the South China Sea. In addition to Australia, Canada, the Netherlands and the Philippines have all been subjected to unsafe actions from China’s military in the past 18 months.

Notice the contrast between how China treats foreign military forces operating in its vicinity and how others treat China when it approaches them. China engages in dangerous intimidation and invariably blames the other party.

But when China deploys a powerful naval flotilla close to Australia, Canberra’s response is cautious and subdued. After all, there’s no indication that the Chinese ships were not in international waters.

‘Australia respects the rights of all states to exercise freedom of navigation and overflight in accordance with international law, just as we expect others to respect Australia’s right to do the same,’ the department said.

But it must be asked whether anyone in the Chinese leadership listens to Australia’s polite statements?  These incidents over the South China Sea keep on happening, suggesting that our current approach to deterring future incidents simply isn’t effective.

What Donald Trump can learn from allies on foreign aid

There are smarter and more effective ways to streamline and re-strategise US foreign aid.

The Trump administration is not the first Western government to envision a stronger, safer, and more prosperous country by integrating foreign aid with strategic objectives. The experiences of the United States’ Five Eyes partners, particularly Australia and Britain, offer encouraging evidence for reform, having achieved tightly targeted development programs supporting diplomatic and strategic priorities. They also offer sobering lessons about implementation pitfalls, including the abrupt disruption of established programs, especially those already aligned with strategic policy, loss of critical skills among government personnel and heightened unease among international partners.

The logic driving aid integration is compelling. In an era of great power competition, maintaining separate tracks for diplomacy and development is an unaffordable luxury. China has harnessed development, along with trade and financial investment, as an instrument of strategic influence through both soft and hard means. Both Australia and Britain recognised this reality, merging their aid agencies into their foreign ministries to create more strategically coherent development policies. Having made clear its intent to fundamentally reshape USAID, the Trump administration has the opportunity to learn from its allies in the pursuit of the American national interest.

A unified strategy: Australia 

The Australian government integrated the Australian Aid Agency (AusAID) with the Department of Foreign Affairs and Trade (DFAT) in 2013 with the stated goal of better aligning Australia’s development, foreign policy, trade priorities, strategies and objectives while bringing an enhanced focus on the Indo-Pacific. The integration accompanied a reduction of Australia’s development funding. After reaching a peak of more than $5 billion in 2013–14, or 0.33 percent of gross national income, Australia’s development budget has progressively declined. In 2023-24, the budget was $4.8 billion, or 0.19 percent of gross national income. This change is also stark in terms of the slice of the Australian budget spent on foreign aid compared to defence expenditures.

An independent review of the integration in 2019 found that 90 percent of the Australian government’s strategic targets for the integration had been met, driving development allocations towards infrastructure and the Pacific. The review also found ‘examples of development goals being more strongly advanced through joined-up, whole-of-department efforts.’

These initial efforts—such as the Pacific Seasonal Worker Scheme and the Australian Infrastructure Financing Facility for the Pacific—have since grown to enable more ambitious and innovative integrated development and strategic initiatives. Key among these are the Falepili Union with Tuvalu (which provides Australia with strategic denial rights and Tuvalu with climate resilience monies and opportunities for migration), the agreement between Australia and Papua New Guinea (which encompasses development and security elements) and Telstra’s acquisition of Digicel Pacific, the largest mobile provider in the Pacific, with the Australian government’s support amid rumors of interest from China Mobile. While the review stepped carefully around the issue, it found integration had increased Australia’s ability to counter efforts to overshadow Australia’s influence, like China’s Belt and Road and Digital Silk Road initiatives.

However, the review also found several areas of concern. Early morale problems among staff arising from the abrupt way the integration was implemented had largely dissipated by 2019, but a ‘pronounced deterioration in skills and systems’ remained. The review found that ‘almost 1000 years of experience left [government service] shortly after integration.’ Additionally, ‘estimates suggest another 1000 years of experience’ left the department in the five years before 2019 due to the department underestimating the capability needed to design and deliver development programming.

This loss of know-how continues to hamper effectiveness over a decade later. While development is now firmly accepted as a tool of statecraft, best wielded as part of a whole-of-government strategy, an article by the review’s author 15 months ago suggested DFAT still had room to improve in terms of fully harnessing its development delivery.

Strategic prioritisation: Britain

The merger between Britain’s Department for International Development and its Foreign and Commonwealth Office occurred in 2021. The principal intention behind the merger was to better align Britain’s development activities with its wider diplomatic, trade and geopolitical interests, both in strategic terms and in terms of in-country representation. The merger coincided with a decision to reduce the Britain’s development funding commitment from the 0.7 percent of GDP enshrined in law to 0.5 percent of GDP. Notably, the integration occurred while Britain was experiencing the economic slowdown of the Covid-19 pandemic, which resulted in a double blow to funding in absolute terms, constituting a 30 percent reduction overall.

Alongside the budget reductions, a strategic prioritisation of development initiatives was pursued, in which Britain focused on bilateral funding to a smaller group of countries where measurement of effect is often easier to determine, but at the expense of some wider bilateral and multilateral commitments which were deemed to deliver less tangible value to Britain.

In addition, Britain identified a select set of issues for its development focus, namely climate investments, girls’ education, and global health, where it had demonstrated expertise and where funding would have constructive spillover effects. For example, improving girls’ education is found to reap positive dividends for local security, prosperity and governance. These initiatives, concentrated in Africa, the Indo-Pacific and South Asia, are all areas in which Britain’s adversaries were harnessing development as an instrument of influence, dependence and coercion.

Britain’s National Audit Office (NAO) review of the progress of the merger in 2024 found positive evidence ‘of where a more integrated approach has improved the organisation’s ability to respond to international crises and events, which has led to a better result.’

Two such examples were Britain’s coherent humanitarian, diplomatic, and military response as the leading European power supporting Ukraine after Russia’s invasion, and the joint humanitarian and political response to the Ebola crisis in Uganda. The findings supported the rationale for the merger and the modernisation of the department as fit-for-purpose in sharpening the Britain’s geopolitical interests. However, the NAO also noted that ‘the indirect costs’ of the merger ‘in terms of disruption, diverted effort and the impact on staff morale should not be underestimated.’

The NAO also reviewed the effect of the overseas development aid reduction and found that while the prioritisation compelled in the government’s activities had some positive dividends, ‘the speed and scale of the budget reduction, and the lack of long-term planning certainty, increased some risks to value for money.’

What can the US learn?

These cautionary tales suggest some considerations for the Trump administration:

First, pace matters more than may be immediately apparent. While decisive action has its advantages, too rapid a transformation risks institutional damage that could take years to repair. Recipient partners need to be assured about the value of the relationship, as reputation matters when development partners have the luxury of choice. A phased integration that maintains critical expertise while gradually aligning strategic direction would likely prove more effective in the long term.

Second, capability preservation requires active management. Both Australia and Britain learned the hard way that development expertise isn’t quickly or easily replaced. The technical knowledge required for effective commissioning, procuring, financing and managing of development programs, while not unique to the aid world, is distinct from traditional diplomatic and geostrategic policy skills. Any US reforms must include concrete plans for retaining and developing each of these specialised capabilities and empowering them to work together to deliver coherent whole-of-government priorities.

Third, funding stability enables strategic coherence and builds influence with partners. Britain’s experience shows that simultaneous organisational and budgetary upheaval can undermine even well-conceived reforms. While efficiency gains are desirable, treating integration primarily as a cost-cutting exercise risks strategic self-harm. With strategic competitors snapping at our heels, such interruptions cannot always be remedied.

Fourth, clear metrics for success must encompass traditional development indicators and strategic effects. Australia’s focus on its immediate neighbourhood and Indo-Pacific infrastructure and Britain’s emphasis on areas of demonstrated expertise and reputational value offer useful models for linking foreign aid and development assistance to broader national interests.

The stakes for getting this change right are immense. China has outflanked the West in harnessing foreign aid as a strategic tool of statecraft, having learned from the experiences of Western development agencies. The US cannot afford to unilaterally disarm in this arena and sacrifice its many areas of retained advantage through poorly executed reforms.

Secretary of State Marco Rubio’s framework of strength, safety and prosperity provides useful guideposts. Development programs should demonstrably enhance US security partnerships, expand trade relationships that benefit US workers, or strengthen allies facing authoritarian pressure. Programs that cannot do this should be reconsidered.

Achieving these goals requires maintaining the US’s development capabilities even as they are more tightly aligned with strategic objectives. The experiences of Australia and Britain suggest this balance is achievable but demands careful attention to ensure areas of national strength and influence are strengthened, not squandered.

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