Tag Archive for: Australia

The role of AUKUS in Australia’s deterrence strategy

Elevated to a military science during the Cold War, deterrence is a relatively new task for the Australian Defence Force.

Traditionally, Australia’s armed forces have lacked the mass, range, lethality and ability to project force to deter a significant military power, except as part of coalition operations. But the Defence Strategic Review of 2023 recommended tasking the ADF with a deterrent role.

Thomas Schelling, a leading thinker on deterrence, defined it in Arms and Influence as being ‘about intentions—not just estimating enemy intentions but influencing them’, which he called the hardest part. The signalling of a credible ‘if x, then y’ statement, in the hope that threatening x ensures y action never has to be taken, is the essence of deterrence. Washington’s deployment of two aircraft carrier strike groups to the Eastern Mediterranean in late 2023 was a textbook deterrent message to any external actor contemplating intervening in the Israel–Hamas war: ‘Don’t, or else.’

As history warns, deterrent messages must always be backed by credible threats. Australia should refrain from issuing hollow threats it does not have the stomach and capacity to act on, lest it shatter the credibility of its future threats and sound as British prime minister Neville Chamberlain did on 31 March 1939 when, haunted by the ghosts of Czechoslovakia and Austria, he made what Hitler interpreted as a panicked and unenforceable vow to defend Poland. Far from deterring the dictator, Chamberlain’s words were ’the precipitating cause’ of his invasion. Nazi Germany was immune to British and French deterrence signals not because Germany was undeterrable but because Hitler accurately dismissed the threat of an allied offensive across the Siegfried Line as a bluff.

Just as a non-credible threat only advertises its own bankruptcy, so a poorly communicated threat can invite dangerous misperception, even if it is backed by real capability and intent. The history of the 5th century BC Peloponnesian War by Thucydides offers a classic example of how a failure of deterrence unleashed one of the most cataclysmic wars of antiquity. At the height of the crisis, a vaguely worded Spartan ultimatum fatally underplayed that continental juggernaut’s unshakeable will to go to war. The Spartan king Archidamus II’s credible threat was tragically garbled, causing the Athenian leader Pericles to underestimate his adversary’s resolve. A hubristic pro-war speech by Pericles framed the Spartans as too weak to fight a naval war, one the Spartans won by destroying the Athenian fleet.

The lessons for Australia’s own deterrence efforts are enduring. Chief among them is that to credibly deter adversaries, Australia must impress on them both its capability and intent to ‘act to meet the common danger’, as the ANZUS Treaty succinctly puts it. And what that means, as uncomfortable as it may seem, is that Australia must be willing to threaten and win the war it earnestly hopes to prevent. AUKUS gives Australia the capability to make the targets of its deterrence campaign take the signals seriously, while it is the task of a broader Australian statecraft effort to ensure that its deterrent message—the ‘or else’—is believed.

Since Australia lacks the United States’ formidable military capabilities and the capacity to project them across oceans, Canberra’s deterrent language will lack much of the range and resonance of Cold War-era practice. This means that the red lines Australia draws and guards with deterrent threats will have to be defined exceedingly cautiously. Building an independent Australian deterrent—a sovereign line of effort separate from its crucial joint deterrence measures with the United States—will demand that Canberra be more clear-headed and disciplined than it has ever been in prioritising our nation’s military strategy.

Given the long timescale of the AUKUS project, an Australian doctrine of deterrence cannot assume a fixed, inter-generational threat as US planners could from the time of George Kennan’s Long Telegram in 1946 to the crumbling of the Berlin Wall. Leaders come and go. Economies boom and bust. Governments rise and fall. Strategic tensions wax and wane. By the time Australia operates its full fleet of nuclear-powered submarines, their first war-time deployment may be in circumstances completely unthinkable today.

That is why critics of AUKUS take the bait of foreign propagandists when they assume that it targets one specific country—call it ‘Musoria’, as I did alongside generations of Australian soldiers fighting that fictitious enemy out bush—in answer to one contingency. It simply does not. Nuclear-powered submarines are a country-agnostic capability that can respond along a broad spectrum of contingencies ranging from great-power war to insidious grey-zone threats. Australia has no fixed enemies, only permanent interests. While military planning must be granular and enemy-specific, the overarching strategy of deterrence needs the flexibility to adapt to multiple shooters.

Scams are now a national security issue

Scams are no longer just a consumer fraud problem. While responsibility for scams in Australia primarily resides with regulators, sophisticated scams have become issues of counter-terrorism (CT) and transnational serious and organised crime (TSOC) that are under-recognised by national security and law enforcement communities.

More must be done to counter scammers’ use of artificial-intelligence technology, which is increasing the volume and sophistication of their crimes. National security and law enforcement communities need to bolster their targeted intelligence collection and coordinated intervention, and they must be supported by robust asset tracing and greater punitive measures.

It seems that everyday we hear of someone who has fallen victim to a scam, a deeply shameful and life-changing experience for many. Scams rely on social engineering and behavioural manipulation to convince the target to act against his or her own interests. Victims are identified and contacted in large numbers through social media and email, with banks used as a vehicle to exfiltrate funds.

In 2023 Australians lost $2.7 billion to scams, with global losses totalling nearly US$1.026 trillion, not to mention unquantifiable social and personal impacts (including suicides) with downstream costs to Australia’s health budget. In the past year, the number of scams reported in Australia increased by 18.5 percent to more than 600,000. Technology helps propagate scams, and losses are likely to skyrocket further with the advent of generative AI, which will test societal resilience, cybersecurity measures and consumer confidence in Australia’s financial and identity systems.

While some scams are still conducted locally by opportunistic criminals, many perpetrators are now making fortunes running industrial-scale scam operations internationally. The magnitude of these operations is stunning, and their impact not constrained to fraud victims. A police raid in the Philippines in March this year against a TSOC-operated, 25-hectare, 36-building complex rescued nearly 900 people forced to work in scams. They came from seven nationalities.

In 2023, Reuters identified over 200,000 employees of TSOC-run scam operations across Southeast Asia, including job seekers who had foreign university education and who had been lured under false pretences. Some were also victims of human trafficking and slavery. In many cases, workers are exposed to extreme violence and law enforcement officials are bribed or intimidated to turn a blind eye.

Asia and Africa are hubs for scams and TSOC, but such large-scale operations can also be found in Australia. In February this year, Queensland Police uncovered an operation on the Gold Coast that had scammed victims of millions of dollars.

Scams are now being used by terrorist groups and countries as highly effective financing vehicles. In 2022, The Times revealed how ISIS was funding insurgencies across Asia by scamming South Africans through fake Tinder profiles. And, this year, financial news outlet CE Noticias Financieras dissected the relationship between Hezbollah and Brazillian TSOC group PCC, outlining how PCC used scams to finance its activities and how Hezbollah associates helped PCC buy and smuggle weapons.

The low-risk, high-reward nature of scams means that more pervasive, sophisticated adversaries have displaced opportunistic low-level criminals—and are largely remaining off the radar. Money mule schemes divert funds from victim to criminal-controlled accounts, often using cryptocurrency to evade anti-money laundering and sanctions controls. In 2023, Canada’s financial intelligence agency, Fintrac, reported that Russian parties had received a disproportionate share of all cryptocurrency-enabled crime, including online frauds, raising the prospect of orchestrated sanctions evasion.

While there is no evidence in the public domain to support this, there is likely a connection between scams and large-scale data or identity breaches. Persistent data breaches provide information that can be used in advanced scam campaigns to inform targeting and customise victim selection. Scammers can use biographical information as well as data on social interactions and relationships to trick potential victims. As social media becomes increasingly prolific and its data easier to harvest at scale via AI, we may see even greater personalisation of scam communications. Already, data breaches help perpetrators of some scams initiate friendships with victims before luring them into trading money on a fake platform.

Against this threat landscape, anti-scam responses by governments across the world are inadequate. They are skewed towards costly taxpayer-funded band-aid solutions that treat the symptoms rather than cure the disease. The sophisticated, highly adaptive criminal and terrorist networks operating lucrative global scams cannot be disrupted through reactive programs and internal controls alone.

Scam networks now require attribution and carefully targeted disruption, ideally using a combination of cyber, financial, enforcement and international-development capacity. As the US Department of Defense said in 2016, ‘defeating transnational threats requires the synchronization, coordination, and integration of all the instruments of national power in cooperation with regional and multinational partners’.

The global scams epidemic is at a tipping point. Law enforcement and national security communities need more resources for targeted intelligence collection and coordinated intervention against scam channels, scam infrastructure and illicit businesses. This should be supported by robust tracing and forfeiture of financial assets where criminal funds interface with the legitimate global economy. This would reduce criminal incentives and allow seized assets to be diverted to pay for prevention measures and community awareness initiatives.

These changes should happen now, as the latest versions of AI will have a dramatic impact on the threat landscape and likely reverse recent gains made through improved technology and awareness campaigns. Make no mistake, this is a battle which can be won only by altering the status quo back in our favour.

Defence’s electromagnetic spectrum challenges

The Australian Defence Force is ill prepared for a modern conflict. It is not doing nearly enough to ensure dominance of the electromagnetic spectrum (EMS), the kind of energy used in communications and by many sensors.

The ADF must fully exploit the EMS to command forces, to direct weapons and to know what’s going on, and it must be able to prevent an enemy from doing the same.

In some areas, it is well equipped for these tasks but in others far too weakly. The biggest gaps are in maritime, air and space sensors and effectors; spectrum awareness; and communications. Some projects to improve capability are publicly disclosed, though not in any detail, and maybe a few more are proceeding behind the scenes.

But we know that, overall, not enough is happening and certainly not soon enough. We know because Defence’s 10-year acquisition plan, the Integrated Investment Program (IIP), includes only $720 million in approved funding for electromagnetic warfare, just 0.78 percent of the $92 billion in all approved acquisition funding for the period.

$720 million usually doesn’t buy much defence capability, especially when spread across the three services.

Cyber warfare, rightly, has become an important focus for defence, which is putting significant spending into it. But if a country loses the competition in the EMS, it will lose the war.

Defence depends entirely on EMS transmission and reception for situational awareness (with radars and other sensors); command, control and communications; weapon data links; navigation; and collecting information from remote sensors such as sonobuoys. Many missiles rely on EMS energy for homing, either using onboard radars or focusing on the target’s transmissions. Defence also delivers military effects non-kinetically with EMS energy.

To win in the EMS, the ADF needs to be well equipped to jam or confuse the other side’s EMS activity, collect and pass data smoothly despite enemy EMS countermeasures, and, overarchingly, monitor what is going on in the EMS.

Whichever force can control the use of the EMS and deny it to the opponent holds a distinct military advantage. Lethal and non-lethal effects employed to deny capabilities to an adversary all rely on it. If the ADF can’t manoeuvre within it, or dominate its use with electromagnetic attack, then most of Australia’s major spending in the IIP are worthless.

Some EMS related projects must be accelerated, including modernised Joint Data Networks under Joint Project 9347 and Tactical Communications Networks under Land 200; the latter will incorporate manoeuvring within the spectrum (hopping between frequencies and transmitting in a wide band of frequencies, called spread spectrum). To better monitor what’s going on in the EMS, we need to fast-track and synchronise Joint Project 9321 Electromagnetic Battle Management, the navy’s Sea 5011 Maritime Electromagnetic Manoeuvre Warfare, and Joint Project 2248 Spectrum Management. These capabilities also need to be extended down to the tactical level. Other important additions would be Next Generation Jammers for Growler aircraft, more Land 555 Phase 6 electromagnetic-warfare protected mobility vehicles, new maritime capabilities or even high power directed energy weapons. With such systems, we would have a strong ability to manoeuvre and fight in the EMS.

In response to the release of the Defence Strategic Review, the updated IIP has just one paragraph dedicated to electromagnetic warfare. The 10-year plan for mostly unapproved funding for electromagnetic warfare out to fiscal 2033–34 totals $2.7 billion to $3.7 billion, just 10 percent as much as the space and cyber investments or less than 1 percent of the total IIP.

And most of this unapproved funding for electromagnetic warfare is to be delivered towards the end of the decade. In 2021 the then commander of the US Indo-Pacific Command, Admiral Phillip Davidson, said conflict over Taiwan could occur by 2027. Yet we have all our EMS capability eggs in the post-2027 basket.

China and Russia have both spent heavily on capabilities to dominate the EMS. In the South China Sea, China’s efforts apply to the maritime, air, land and space domains. Its focus is on ensuring surveillance and control near contested waters and its mainland, while countering coalition weapons, radar, communications and space capabilities.

Russia brags about its ability to interfere with the use of the spectrum. It has, however, had mixed success in countering Ukraine’s small drones, other weapons and communications. Australia should be looking closely at that experience.

The US is spending heavily in EMS-enabled capabilities. Meanwhile, the US Department of Defense Electromagnetic Spectrum Superiority Strategy 2020 and the US Joint Electromagnetic Spectrum Operations publication provide guidance and direction on operating in a congested, contested and constrained EMS environment.

The EMS has attracted enough concern to be included in AUKUS Pillar 2; it’s in the technology partnership’s inaugural project for the Advanced Strategic Capabilities Accelerator effort, with strong words and tight timeframes. Capitalising on these emerging technologies will require bold action and early money to come to fruition and have any impact.

For Defence to gain any real military advantage from the $280 billion allocated to advanced platforms, weapons and sensors in the IIP, it must invest in capabilities that can assure their access to the EMS and prevent adversaries from dominating it. Advancing Australia’s ability to dominate the spectrum also provides Defence with escalatory non-lethal options, which enhances its ability to achieve its strategy of defence by denial. But to have any real impact, these investments need to be made now.

Australia’s most pressing defence challenge: skills

The evolution of warfare in the 21st century has ushered in an era of cyber conflicts, artificial intelligence  and autonomous systems. Those technological advances have fundamentally altered the nature of military engagement, demanding a profound shift in the skills and capabilities of modern armed forces.

For the Australian Defence Force, this paradigm shift presents a daunting challenge: a widening skills gap that threatens to undermine its ability to fulfil the ambitious objectives outlined in the 2023 Defence Strategic Review and the 2024 Defence Portfolio Budget Statements. The ADF is haemorrhaging skilled people to the civilian sector. It must rebrand itself as a modern, technologically advanced organisation that offers challenging and rewarding careers and use targeted recruitment to get the tech skills that it needs.

Competitive remuneration must also be part of the solution. So should career flexibility and, for people already in the services, training to meet new technological challenges.

While the 2016 Defence white paper acknowledged the need for technological adaptation, the ADF’s response has been sluggish and insufficient.

The white paper accurately predicted the rise of cyberwarfare, AI and autonomous systems. However, its vision for a technologically adept ADF has not been realised. A 2021 report by the Defence Science and Technology Group revealed a ‘critical shortage’ of personnel with qualifications in science, technology, engineering and mathematics (STEM), particularly in cybersecurity and software engineering. That lack of expertise hampers the ADF’s ability to leverage emerging technologies and leaves it vulnerable to sophisticated cyberattacks.

The traditional military model, with its emphasis on hierarchical structures and long training cycles, is ill-suited to attract and retain highly skilled tech talent, so the ADF is losing skilled people to the civilian sector. The talent drain is exacerbated by the increasing demand for those skills in the civilian sector, driven by the rapid growth of Australia’s digital economy, which is projected to reach A$315 billion per year over the next decade.

The war in Ukraine highlights the need to adapt to the technological realities of modern warfare. The effective use of commercial off-the-shelf technologies, such as drones and satellite imagery, by Ukrainian forces underscores the need for a military workforce that’s agile, adaptable and proficient in rapidly integrating new tools and tactics. The war has also highlighted the devastating impact of cyberattacks on critical infrastructure and the importance of information warfare in shaping the narrative of conflict.

The AUKUS pact, with its focus on advanced capabilities such as nuclear-powered submarines and hypersonic weapons, further intensifies the pressure on the ADF to close its skills gap. The pact’s success hinges on the seamless collaboration and technological interoperability of the three partners. However, if the ADF lacks the necessary expertise, it risks becoming a liability, hindering the pact’s full potential. As John Blaxland, professor of international security and intelligence studies at the Australian National University, succinctly puts it, ‘AUKUS is a wake-up call for the ADF to invest in the skills and capabilities that will be essential for the future of warfare.’

Many of our allies and like-minded nations are making significant strides in military technology and innovation. The US invests heavily in attracting top STEM talent and fosters a culture of innovation within its armed forces. Israel, renowned for its technological prowess, has seamlessly integrated cutting-edge technologies into its military doctrine.

In contrast, Australia’s progress in adapting to the digital age has been slow and incremental. The ADF’s chief, General Angus Campbell, acknowledged that in a 2021 speech, stating, ‘We are not moving fast enough in embracing new technologies and ways of operating.’ That lag could undermine Australia’s ability to effectively collaborate with allies and deter potential adversaries. A 2022 report by the Australian Industry Group noted that 83 percent of businesses in the defence industry sector are experiencing skills shortages, further emphasising the depth of the challenge.

The rapid rise of China, combined with the ADF’s reliance on advanced technology for everything from communications and intelligence gathering to the operation of sophisticated weapons systems, makes the skills gap an existential threat to Australia. In a conflict, the lack of technical expertise could severely hamper the ADF’s ability to operate effectively, leaving the nation vulnerable to cyberattacks, disinformation campaigns and other forms of asymmetric warfare.

If the status quo persists, the consequences for Australia’s defence posture are dire. The ADF’s operational effectiveness would be severely hampered, its ability to deter potential adversaries would be weakened, and its capacity to respond to emerging threats would be compromised. The growing skills gap could erode public confidence in the ADF’s ability to safeguard the nation, leading to a loss of morale within the ranks and a decline in recruitment.

The ADF’s image problem is a significant barrier to attracting the tech-savvy talent it desperately needs. The traditional perception of military service as primarily focused on combat roles is outdated and unappealing to many young Australians with the skills that the ADF requires. To compete with the private sector, the ADF must rebrand itself as a modern, technologically advanced organisation that offers challenging and rewarding career opportunities in a variety of fields, including cybersecurity, data science and AI. The rebranding effort should emphasise the its commitment to innovation, its role in protecting Australia’s national security and the opportunity to make a meaningful contribution to society.

The way forward: a bold call for action

The ADF’s skills gap is a complex challenge that demands a bold and comprehensive response. This includes:

—Targeted recruitment: Actively seek out people with in-demand skills, not just those who fit the traditional mould of a soldier. Cast a wider net and look beyond the usual recruitment channels, including by targeting universities, tech companies and even the gaming community.

—Flexible career paths: Create more flexible career paths that allow for lateral movement and specialisation, enabling personnel to develop their skills in areas of interest and relevance to the ADF’s evolving needs. This could involve offering shorter, more focused training programs, as well as opportunities for sabbaticals and external training.

—Competitive compensation and benefits: Offer competitive salaries and benefits packages that are commensurate with the skills and expertise required in today’s military. This includes not only financial incentives but also flexible work arrangements, professional development opportunities and a supportive work environment.

—Upskilling and reskilling: Invest in comprehensive training programs that equip existing personnel with the skills needed to thrive in a technologically advanced environment. This includes partnerships with industry and academia to leverage their expertise and resources. It also requires a commitment to lifelong learning and a culture that values continuous improvement.

—Culture of innovation: Foster a culture of innovation and experimentation that encourages personnel to embrace new technologies and develop novel solutions to complex challenges. This involves empowering individuals to take risks, tolerate failure and learn from mistakes.

The time for complacency is over. The ADF must act decisively and urgently to bridge its skills gap and ensure its relevance in the 21st century. The stakes are too high to ignore.

Even with intended reforms, US defence trade rules threaten AUKUS cooperation

Recent efforts by Australia, Britain and the United States to harmonise their defence trade controls are welcome, if long overdue.

But there are reasons to worry that AUKUS Pillar 2 may be carved out of the very regulatory framework intended to facilitate it. This is a problem if the development of advanced capabilities is to be a truly collaborative effort.

Indeed, If AUKUS technologies cannot be insulated against long-standing issues associated with the reach of US defence export controls, Australian and British companies will continue to encounter longstanding disincentives to participating in advanced capability projects with the United States.

Granted, Australia would certainly benefit from these harmonisation efforts. The sum of the three countries’ respective export control reforms would see approximately 70 percent of defence trade made eligible for license-free movement between the three countries, fast-tracking everyday defence industrial cooperation between verified entities in Australia, Britain and the United States.

It has been a longstanding Australian objective to accelerate defence industrial integration with the United States. In that sense, these AUKUS-inspired reforms may yet succeed where previous efforts failed.

But, worryingly, the potential benefits for AUKUS technology collaboration are currently far less clear. This is due to two interrelated factors.

Firstly, AUKUS defence trade control harmonisation efforts should not be mistaken for fundamental reforms to the US International Traffic in Arms Regulations (ITAR).

This is an essential distinction, given that the creation of an AUKUS platinum standard for export controls is premised on the comparability of Australian and the British defence trade controls to America’s own defence trade control regulations, including the ITAR. The explanatory memorandum accompanying Australia’s recently passed Defence Trade Control Amendment Bill makes that much clear.

Though the harmonisation efforts include licensing exemptions for each country from one another’s regulations, these are not blanket in coverage. This is crucial with respect to the ITAR, for what has been proposed in Washington are limited licensing exemptions for certified AUKUS entities, not fundamental reforms to many of the ITAR’s well-known flaws.

This means that those items not covered by the AUKUS exemption involving substantive US input will remain subject to the ITAR’s more problematic aspects, including extraterritorial jurisdiction and broad definitions of defence ‘articles’ or ‘services’. Particularly problematic is the so-called taint, arising from the use of American defence articles or services in joint capability development projects which requires operators or owners to acquire licenses from the State Department for defence articles made with certain US parts or knowledge, even when the final products are predominantly allied-made.

As detailed by former US ambassadors and charges d’affaires to Australia, the ITAR taint has historically created months of delays to routine repair work on US air force and naval assets in Australia, including by preventing easy transfer of even the most mundane of defence materials like bolts and screws.

But as William Greenwalt, former US undersecretary of defense for industry, and I wrote in our report on ITAR reform last year, the taint has also frequently seen US-origin defence material and services designed out of allies’ capabilities and supply chains. It has also prevented Australian companies from delivering made-to-order product variants for US war fighters, because they’ve  wanted to avoid risk of US regulatory capture due to the inclusion of what could be interpreted as US intellectual property.

This leads to the second factor: the scope of the excluded technologies list (ETL), a list of items and services ineligible for the so-called AUKUS exemption.

Comprising the 30 percent of intra-AUKUS defence trade not captured by the licensing exemption, the ETL is based on a combination of the three countries’ commitments to international non-proliferation regimes, particularly the Missile Technology Control Regime (MTCR; 25 percent), as well as national-level policy decisions not to make these technologies more freely available to AUKUS partners for legal or political reasons (5 percent).

Many of these technologies will be essential to the development of advanced capabilities through AUKUS Pillar 2. In fact, officials have presented the ETL as explicitly intended to capture Pillar 2 technologies, citing the need to safeguard shared capability advantages, though they have also stressed that these technologies remain attainable with an appropriate export license.

This is understandable, but still problematic. Put simply, the ETL in its current format could amount to the exclusion of AUKUS technologies from the AUKUS country exemption. This means that these technologies would remain subject to standard defence trade licensing requirements in all three countries—including the ITAR.

And that would mean that the well-known issues with US export controls would continue to apply to the very technologies which these regulatory harmonisation efforts were intended to minimise. The practical result would be that, even if more than 90 percent of componentry found in a future AUKUS advanced capability were eligible for a license waiver, the ITAR would still taint that capability if any of the remaining 10 percent of components were on the ETL and were US-made or featured notable US design input.

In the absence of structural reforms to the ITAR or further amendments to the contents of the ETL or the conditions for their transfer between users, the well-known problems associated with US defence trade controls would almost certainly continue to impede high-end defence technology cooperation. This is problematic if co-innovation and co-development leveraging the best technologies available from all three countries is a desirable end-state for AUKUS Pillar 2.

To be clear, defence trade control harmonisation is absolutely required. I have argued previously that developing trilateral protections is as essential as developing trilateral capabilities.

But without immunising the ETL against the ITAR taint, AUKUS risks moving slower than the speed of strategic relevance. Consider, for example, that the three countries trail their chief competitors in several Pillar 2 categories, such as hypersonics. Encouragingly, government officials working on AUKUS see the ETL as a starting point, while industry is also alert to the need to amend the ETL to facilitate both pillars (Pillar 1 being focused on nuclear submarines). Doing so is no enviable task, and will not be straightforward. For instance, reinterpreting the three countries’ obligations under the MTCR with respect to discrete technologies would be a heavy political lift, considering the three governments’ commitments to the highest non-proliferation standards and enduring negative perceptions across Asia of AUKUS Pillar 1 as a proliferation risk.

But realising the potential, and the spirit, of AUKUS will require creative thinking and a willingness to countenance greater risk-taking across the three systems. That approach must include in technology sharing, lest regulatory harmonisation efforts produce an arrangement that is AUKUS by country, not by technology.

ADF needs more presence with Australia’s northern partners

The Australian Defence Force should foster a deeper presence with partners in our near north, especially Papua New Guinea. This would enable joint training in littoral warfare to master new technologies, facilitate recruitment of PNG personnel into the ADF and allow for greater contribution to regional security.

Described as Australia’s ‘security shield’, PNG is a key partner in the ADF’s task of defending Australia and contributing to collective security in the Indo-Pacific, part of the strategy of deterrence through denial outlined in the 2023 Defence Strategic Review and the 2024 National Defence Strategy. We must leverage and expand on existing ADF presence in the region, starting with PNG.

PNG needs to be a priority because it is considered by some to be the next Pacific battleground for US-China competition and influence, with China signing a mining agreement with PNG earlier this year. if Australia doesn’t seek further ties, someone else will.

Close to Australia, PNG has long been intimately linked with Australian security. The 1942 PNG Kokoda campaign was crucial in halting the advance of Japan through the Pacific, and the Battle of Milne Bay saw the Allies deliver the first defeat of Japanese forces on land. The New Guinea offensives of 1943-44 were the single largest series of interconnected military operations in Australian history, and the 1943 operation at Lae represented Australia’s first major amphibious landing since Gallipoli. When Australia’s defence strategy refers to littoral warfare in our northern approaches, it is referring to this region.

In recent times, Australia and PNG have drawn even closer as regional neighbours. Australia supported PNG through Covid-19 and development assistance, the Defence Cooperation Program and disaster response. The two nations signed a bilateral security agreement in 2023, and Prime Ministers Anthony Albanese and James Marape walked the Kokoda Track together to commemorate Anzac Day this year.

Australian presence in PNG could emulate the existing engagement at the Royal Malaysian Air Force (RMAF) base at Butterworth. The air force base hosts an Australian Army company and air force squadron plus a joint health command, and allows for regional aerial surveillance and intelligence gathering. A PNG version of this arrangement could specialise in littoral warfare training for Australian and PNG soldiers, and in building joint capability in the littoral battlespace.

Joint training in the new and emerging technologies of littoral warfare could also help strengthen local security, if new skills in aerial surveillance could be applied to tackling illegal, unreported and unregulated (IUU) fishing and instability in the highland region. ADF reserves could participate in this effort. Army reserves already rotate through RMAF Butterworth and conduct domestic amphibious training. This would follow the recent trend of the military co-opting civilian expertise: commercial drone operators are now being used by military contractors in the Middle East.

ADF littoral training in PNG could take place at the Igam Barracks at Lae, constructed in 2022, and the Lombrum Naval Base, currently undergoing redevelopment. Supporting ADF capability would complement and expand on the bases’ existing roles in maritime and regional security. Australian presence at these bases may also support recruitment of PNG personnel into the ADF by facilitating entry pathways. PNG soldiers could form part of a Pacific Battalion, aligning with ADF workforce changes that allow for non-citizen enlistment.

A stronger partnership with PNG should be complemented by multilateral training exercises in littoral operations with other near north partners including Indonesia and Timor-Leste, and even those further afield such as the United States, Japan and South Korea. Joint training could take place at Shoalwater Bay in Queensland and in the littoral and jungle areas of PNG, as well as the archipelagic environment around Indonesia and Timor-Leste.

The Australia-PNG model could be applied to other partners in the region to further boost Australian presence and capability. Each arrangement should cater to the political, security and economic climates of the partner nation, and utilise its strengths. For example, Timor-Leste and Indonesia could offer avenues of increased cooperation and presence in the littoral domain, as well as further north into Southeast Asia.

A deeper Australian presence in the Indo-Pacific would allow for a greater contribution to regional security. For instance, Australia could support Thailand, Vietnam and the Philippines in their efforts to modernise maritime military operations to combat piracy, IUU fishing and territorial encroachment. Australia could utilise its naval shipbuilding capacity or invest directly in related industries in the affected countries to address the economic factors that underline piracy and IUU fishing. Other ways to increase Australian presence in the region could include establishing a new maritime security program for Southeast Asia or developing dual-use ports at strategic points such as Thailand’s Kra Canal.

By building stronger defence ties, Australia can contribute to the strength of the region, helping partner nations tackle urgent issues such as domestic insecurity and climate change. Deterrence by denial relies on shifting the calculus and cost-benefit analysis of an adversary. A key aim in Australian security should be to boost our presence in our near north, not only through personnel and infrastructure, but through deeper regional relationships and interoperability.

The house always wins: how to boost ADF recruitment

The Australian Defence Force needs bold, creative initiatives to attract and keep enough personnel to reach expansion targets.

Ask Australians in their 20s what matters to them right now, and housing will rank high. The response from Defence should be ‘Well, do we have a deal for you.’

Defence should be making strikingly good housing offers.

There has been a lot of talk about innovative ways to attract the best Australian talent to Defence but not much action. At the Air and Space Power Conference in Canberra in May, Defence Secretary Greg Moriarty admitted that ‘attracting people to the ADF is proving challenging‘, and he tasked his department to ‘think really creatively‘. The 2024 National Defence Strategy also underlined this challenge, reinforcing the priorities laid out in the 2023 Defence Strategic Review and announcing a workforce review to be tabled in 2025.

Part of the problem lies in the language used by uniformed and civilian leaders when discussing the issue: they don’t emphasise the enormity of the task.The ADF doesn’t just need to be competitive by the ordinary standards of the labour market; it must lead the competition at length. Jobseekers applying for a uniformed position are signing up to the possibility of losing their lives on the job, so they make decisions far more cautiously than those considering civilian employment.

Current salary and conditions from the ADF are clearly not persuasive enough in their weighty decision-making. The ADF needs something else to convince possible candidates for service.

The government has formerly made attractive housing offers to recruit the best talent to the ADF. In 1918 it established the War Service Homes Scheme, which helped servicemen who returned from World War I and later World War II and the Korean War. The government handed out Defence Force Retirement and Death Benefits pensions to the baby boomers. And it launched the Home Purchase Assistance Scheme (HPAS), Home Purchase Sale and Expense Allowance (HPSEA) and the Defence Home Ownership Assistance Scheme (DHOAS) for Generation X. These tangible benefits were decisively better than those offered by other potential employers.

The existing support schemes, however, are not enough to win over those currently considering a military career. The HPAS, HPSEA and DHOAS have not kept pace with the increases in cost of living or housing prices, and no longer provide a significant incentive to join the ADF.

Now, Defence needs to offer something more in its promise of housing support. It could provide super-cheap living-in accommodation, better and cheaper married quarters, increase rent allowance for those living off base, and increasing HPAS and DHOAS payments. These initiatives can be paid for with the salaries of the 5000 people whom the ADF has budgeted for but failed to recruit. The initiatives would also have second order effects of injecting more federal funds into construction and the property market.

Increasing the size of the ADF is a daunting problem when the unemployment rate is low and many industries are competing for the best talent. The ADF isn’t even in the same class as those industries. The perils of military service put it out on its own.

For the ADF to win over potential recruits, it needs creative ideas that would land a knockout blow on Millennials and Gen-Z. Give them what they want—strong support on housing—and it might just win them over.

China’s control and coercion in critical minerals

This is the first of two parts of an article on coercive threats to critical minerals supply and what Australia and its critical minerals partners are doing and should do to counter them.

 

Markets for critical minerals are no longer shaping up to be the next components of the global economy to be dominated by China. They already are.

While Western nations were sleeping, China built vertically integrated supply chains for several critical minerals vital to the energy transition and high technology applications, including defence equipment.

Critical mineral supply chains are increasingly subject to Chinese government manipulation focussed on creating and maintaining monopolies and monopsonies. The scale and scope of this competition is presenting Australia and its partners with significant economic and security challenges. The Australian government’s 2 June divestment order to China-linked entities with shareholdings in rare earths developer Northern Minerals is an example of what will be needed to counter China’s domination of critical minerals supply.

Stricter foreign investment oversight may mitigate some of the more egregious attempts to grab control of minerals projects in Australia. Meanwhile, various coercive behaviours are directly affecting Australian mining interests at home and abroad and threatening growth of more diverse, secure and sustainable critical mineral supply chains. Several recent developments have highlighted the growing intensity of these threats.

The situation is becoming acute in several countries in resource-rich Africa, where Australian companies contributed 29 percent of the continent’s exploration spending for all minerals in 2023. (Canadian companies contributed another 29 percent.) Russia-influenced deterioration of security in several mineral-rich African nations is supporting China’s aspirations.

Two Australian companies, operators of world-scale lithium properties that are being developed into mines in the Democratic Republic of the Congo (DRC) and Mali, have been edged out by China-based joint-venture partners amid disputes with national governments, plummeting share prices and suspensions from the ASX. Control of the resources will consolidate China’s role as effectively the world’s central banker for lithium: it already controls around 80 percent of processing and an increasing share of global mine production.

The DRC property is the Manono Project, which has the largest hard-rock lithium resource in the world. A dispute with China’s Zijin Mining Group over the project’s ownership has resulted in Australia’s AVZ Minerals being delisted from the Australian Stock Exchange. AVZ said in September it believed China and Congolese companies, including state-owned Cominiere, were ‘acting in concert to crystalise disputes with AVZ and disrupt and delay the development of the Manono Project with the aim of seizing control’. The International Center for Settlement of Investment Disputes made orders in AVZ’s favour in January, but the company says the DRC government has failed to comply with them.

In the situation in Mali, Australian company Leo Lithium Ltd agreed in May to sell its stake in the large-scale Goulamina lithium project under development there to China’s Ganfeng Lithium, relinquishing project management. That followed a dispute with the government of Mali and its September 2023 suspension from the ASX. Leo Lithium’s shares were valued at 51 cents at the time of suspension, down from a high as $1.25 in mid-2023, shortly before the dispute emerged. Ganfeng Lithium paid Leo Lithium the equivalent of 43 cents a share. Leo Lithium said the sale was in the best interests of its shareholders in light of ‘challenging’ sovereign and security risks in Mali.

Australia, through its mining companies, has been the largest foreign investor in Mali and neighbouring Burkina Faso. Russian influence in recent years has worsened Mali’s longstanding political instability and driven further deterioration in security for the population and businesses there. Security of mines in West Africa, which the Australian Department of Foreign Affairs and Trade has sought to support through its annual mine security conference there, has become ugly.

On 30 May, the US government sanctioned companies linked with the Kremlin-controlled Wagner Group operating in Mali and the Central African Republic (CAR), saying ‘Wagner Group personnel have engaged in an ongoing pattern of serious criminal activity, including mass executions, rape, child abductions, and other brutalities against innocents in the CAR and Mali.’ The Wagner Group has taken over several of Mali’s gold mines and allegedly is producing gold to fund the Russian regime.

Market manipulation is another method of coercion. China’s supply chain dominance for several critical minerals gives it the market power to crush competition, as industry leader Angus Barker points out.

China’s investment in low-cost but environmentally harmful nickel laterite mining and smelting in Indonesia has delivered cheap nickel for batteries and stainless steel made in China. This has driven down global nickel prices, threatening the viability of higher-cost but more socially and environmentally responsible nickel production. China’s investment in new lithium mining capacity in Africa and Australia and its domination of processing could distort the market for that battery mineral.

China-linked supply also dominates markets for several other minerals and metals, including rare earths needed for both the global energy transition and defence equipment. Australia’s Iluka Resources highlighted the situation at its recent annual general meeting, with managing director Tom O’Leary saying, ‘There are clear, ongoing efforts, including by Chinese state-owned entities, to extend their nation’s monopoly by controlling Australia’s rare earth deposits.’

China has used its virtual monopoly in rare earths to apply geopolitical coercion. In 2010 it withheld rare earths supply to Japan amid a territorial dispute. This helped to trigger Japanese investment in the Weld Range rare earths project of Lynas Rare Earths in Western Australia.

Recent Australian government crackdowns have targeted the use of some coercive actions. In 2023 the Foreign Investment Review Board (FIRB) rejected a bid by the Chinese company Yuxiao Fund for a higher stake in the Browns Range project in Kimberley, Western Australia, of ASX-listed Northern Minerals. In early June the government sanctioned associates of Yuxiao Fund after discovering they had tried to circumvent FIRB rules in taking up further shares. Just before this order to dispose of shareholdings, Yuxiao Fund had successfully petitioned for removal of Northern Minerals’ executive chairman after he reported the share buying by Yuxiao Fund’s associates.

It has now emerged that Northern Minerals suffered a malign cyber security breach and data theft in March. Coincidence? Possibly. But why was this particular small mining company targeted?

One explanation is that the output of heavy rare earths from Browns Range will be processed at the under-construction Eneabba rare earths refinery operated by Iluka Resources, also a heavy rare earths producer. This will be the only non-China production of this scarce product used in high performance permanent magnets essential to components of defence equipment such as guidance systems.

Rare earths mining and processing proposals in the United States, including the Lynas Rare Earths processing plant in Texas, have been subjected to fake social media attacks in recent years, seemingly designed to stir up local opposition.

Supply chain allies, including Australia, the United States, Britain, the European Union and Canada have taken some steps to counter coercion, but as part two of this article will explain, more concerted action is needed to assure more diverse and secure minerals supply.

Paying for A Future Made in Australia

Australians want a bold vision for their future economic prosperity. They want not just to create new opportunities but to align them with our values and international commitments, not the least of which is the clean energy transition. Critical minerals should be central to this vision, and dig-and-ship is no longer the answer. The government’s 2024–25 budget outlines the vision and commits new funding to it, but more is needed to address commercial, technological and economic fundamentals.

More will need to be done, and we’ll have to pay for it. The government should invest more broadly in the sector via small loans at the early stages of project development. Demand-side investments are also needed. One option is to pay for it by improving taxation of the oil and gas sector.

The budget is bullish on critical minerals, squarely locating them in the $22.7 billion Future Made in Australia program. The nation’s mineral sector will feature significant upstream and downstream mineral production and even end-use manufacturing: $836 million to the Solar Sunshot program and $549 million for battery manufacturing through to the early 2030s.

In that vision, Australia’s extractive sector is more complex, the sector dovetails into advanced domestic manufacturing, and our economy is better integrated with those of our Indo-Pacific partners. Australia would capture greater value from our natural resources, play a bigger role in the international clean energy transition and have a greener domestic economy.

The government is taking steps in the right direction—even if it’s uncertain whether Australia’s end-use manufacturing is viable—but we need to do more and to pay for it, particularly where we aim to compete against immense international industrial policies, such as the United States’ US$369 billion Inflation Reduction Act.

Central to the government’s critical minerals measures is the Critical Minerals Production Tax Incentive, a 10 percent tax credit on processing and refining beginning in 2027. It will cost the government an estimated $7.0 billion over the next decade (and potentially $16 billion by 2040–41).

In any regular market, that incentive should create strong outcomes for some existing projects in lithium, nickel and rare earths that already integrate processing capacity. It should also attract greater capital investment and incentivise integrated domestic processing for future projects. And those projects are vital for the clean energy transition. For example, 90 percent of lithium demand in 2040 will be driven by clean energy technologies.

But this is a manipulated market. Subsidies alone won’t overcome the challenges facing the sector, and industry alone can’t overcome state-backed market manipulation.

In 2023–24, the government committed significant investments into major critical minerals projects ($400 million in loans to Alpha HPA; $840 million in loans and grants to the Arafura Nolans project) and conditionally approved $185 million in loans for Renascor’s Siviour graphite project (although that may be revised).

Those are huge loans, and we can expect only a few more in the near term. The budget indicates that the government’s critical minerals investment agencies—the Critical Minerals Facility, the Northern Australia Infrastructure Facility and Export Finance Australia—are approaching their limits.

In a capital-intensive sector, the government has committed more than $1.2 billion to a small number of projects, but massive loans alone can’t build this sector and quickly diversify supply chains.

The government will need to invest more broadly through smaller loans at the earlier stages of project development. Those projects are riskier but could more quickly attract private capital. That would also link to other government initiatives, including $566 million in exploration funding and $182.7 million (over eight years) to speed up regulatory approvals.

On the demand side, we need to continue to invest in Australian end-user solar or battery industries (and research and development) and expand Australia’s integration into existing markets in the United States, Japan, South Korea and Taiwan. Notably, this budget commits $5.8 million to a critical minerals trade-enhancement initiative run by the Department of Industry Science and Resources and the Department of Foreign Affairs and Trade.

Areas where government can commit to critical minerals investments in coming years are plentiful, but funding is not. To properly fund the Future Made in Australia policy, we must find a new source of serious revenue, and improving taxation of the oil and gas sector may be the best option.

As argued by the Australia Institute, Australia’s petroleum resource rent tax (PRRT) is lacking compared with international standards. Many liquefied natural gas projects expect never to pay the tax. There is a counterargument here that the second-order impacts of LNG projects, including direct jobs and broader industry activity, compensate. But, at a time when we need to create resilient supply chains and invest in our future economic prosperity, someone must pay the bill.

Australia’s LNG exports generated $92.8 billion in revenue in 2023, up from previous years. However, the government expects to collect less PRRT this year than in previous or future years. Our LNG production tripled from 53 billion cubic metres in 2010 to 154 billion cubic metres in 2022, but we aren’t seeing commensurate economic or government revenue impacts. Other leading global LNG supplier nations, such as Qatar, collect far more from their oil and gas sectors.

Until recently, Australia has been an attractive destination for LNG investment, and we’re near to major customers—Japan, China, South Korea and Taiwan. The government’s new Future Gas Strategy, which commits Australia to LNG through to 2050 and aims to reduce regulatory approval lag time, as well as the forthcoming revision of the National Hydrogen Strategy, are strong political signals that will counter growing concern about our regulatory environment.

The government’s vision for critical minerals and a Future Made in Australia boldly attempts to move Australia’s economy forward amid slowing global growth and recent domestic economic stagnation. Future budgets will need to build on that investment and identify new income sources to do so.

The facts about Australia’s nuclear submarine program

Australia’s planned acquisition of nuclear-powered submarines is undoubtedly ambitious and risky.

But the frequent negativity among Australian commentators is detached from the reality of the success to date of the plan’s progress and the wider strategic reasons for the project.

More than a year since the announcement of the Optimal Pathway for Australia to get its submarines, the agreement is largely on track. So far, it has hit every major milestone, the latest being the announcement of the partners that will build and sustain the submarines. This doesn’t mean it will stay on track. But it is time we stopped jumping at shadows and acting so insecure as a nation.

Discussion in the media of Australia’s nuclear-powered submarine acquisition has taken on an odd fervour. It often centres on gotcha reporting that frequently misinterprets signals from our AUKUS partners.

This approach is unhelpful. It should lead Australians to ask when they stopped believing in themselves as a nation. Why are we so convinced that acquiring the world’s best submarine capability in an era of heightened global tensions is beyond Australia’s abilities? Why don’t we think the women and men who will be asked to put their lives on the line in a conflict deserve a submarine in which they are more likely to survive?

Among the litany of criticisms, there is a spectrum of positions that range from former politicians and academics seeking to defend their legacies, to the easy assumption that something that is justifiable but risky is not going to work.

There are many valid concerns around the opportunity cost and risk. Do the strategic circumstances justify such a massive acquisition? What are the risks of Australia’s nuclear-powered submarine project failing? So, it is important to lay out some facts.

AUKUS is a technology capability pact

AUKUS is not an alliance of mutual obligation. It is not a commitment to support the US in a conflict over Taiwan. It is a technology capability pact that aims primarily to support Australia in the acquisition of the world’s most technologically advanced submarines.

There are, of course, other elements that have now been grouped under AUKUS Pillar 2, but its genesis is in Australia’s acquisition of nuclear-powered submarines. Australia may already be obliged to be involved in a conflict over Taiwan, but this is not because of the acquisition of nuclear-powered submarines.

What is the strategic justification for this capability? The world, and more specifically the Indo-Pacific region in which we are located, is changing dramatically. While comparisons to the 1930s are almost always unhelpful, what we do know is that states such as Russia, China, Iran and North Korea, which seek to challenge the existing global rules-based order, are feeling emboldened. Nowhere is this more apparent than in Russia’s invasion of Ukraine.

But this is also happening in the Indo-Pacific; China’s regular aggression towards the Philippines within that country’s exclusive economic zone is one example. Others are the rapid acceleration of China’s military modernisation alongside its demonstrations of military power in the waters and air off Taiwan, the militarisation of the South China Sea through China’s artificial islands with their missile batteries and surveillance radars, and the near-constant cyberattacks. The list goes on.

These changes do not mean conflict in the region is probable. But the barriers that have prevented it are eroding. They include the United Nations Charter and UN Convention on the Law of the Sea, underpinned by a US capability advantage in the region. This deterioration does increase the likelihood of conflict, and therefore the risk to Australia and its strategic interests.

Investment in a defence force that can respond to regional aggression that impacts on us is a central part of the deterrence strategy outlined in the Defence Strategic Review.

Investment in capabilities that would cause China to think twice about impinging on Australia’s interests is essential to conflict prevention. Should Australia’s deterrence strategy fail, having a capable defence force to respond and protect Australia’s strategic interests will be essential. Think of it as our insurance policy. So, there is a clear strategic reason for bolstering Australia’s defence capabilities.

The best investment?

Why are eye-wateringly expensive nuclear-powered submarines the most effective investment for, first, deterring aggression and, then, defending Australia if the deterrent fails?

The first point is that this is not a one-size-fits-all approach. The government is investing in the delivery, and potential acceleration, of many capabilities that bolster defence, including missiles, ships, and cyber capabilities, while enhancing its application of diplomatic statecraft within the region. Whether the government is investing enough, given the greater risks of conflict, is a longer conversation.

Australia’s strategy is not solely contingent on submarines. But the acquisition of nuclear-powered submarines is the most complex, and the most expensive, part of it.

So, why nuclear-powered submarines? It’s not, as some commentators have suggested, to supplement US forces in a conflict over Taiwan or to support a strategy of deterrence by punishment that would enable Australia to launch cruise missiles into the Chinese mainland.

While theoretically capable of this, neither of these explanations make much sense when you think about the numbers of nuclear-powered submarines Australia is acquiring: three in the 2030s and five more buy 2054.

The discussion about Australia acquiring nuclear-powered submarines is not new, but it has become more urgent due to the strategic circumstances. The nuclear-powered submarines discussion began in Australia in the 1960s. The key to it is that Australia has a vast maritime domain and depends heavily on maritime trade.

Australia’s geography means that we need to be able to position our limited number of submarines quickly and leave them on station longer to protect our maritime trade.

Submarines, especially nuclear-powered ones, have many roles from intelligence collection and surveillance to hunting other submarines, hunting ships, and striking land targets with missiles. Their versatility is part of the allure.

When you think about Australia’s vulnerabilities, its dependence on maritime trade to keep the economy going is one of its biggest. Would our maritime trade be interfered with should China ever choose to teach Australia a lesson?

This is not a far-fetched scenario, as interfering with Australian trade is exactly what China attempted to do with its campaign of trade coercion against Australia from 2020 to 2022. It makes sense that in a crisis or conflict, Beijing would take the same approach. And remember that China has numerically the largest navy in the world with more than 350 ships, including over 70 submarines, to enforce such action.

Australian nuclear-powered submarines, with their speed, endurance and ability to remain submerged for lengthy periods, dramatically changes the calculus for any country seeking to interfere with Australia’s maritime trade.

Nuclear-powered submarines can position faster to respond and generate greater uncertainty in a potential adversary’s mind as to where they might be operating and the danger they might pose. The speed and stealth involved in nuclear-powered submarine operations mean that their impact is disproportionate to the number of submarines we might have.

The ability to reduce the risk of interference with Australian maritime livelihood, and the ability to make an adversary stop and wonder about the safety of its own trade at the hands of Australian submarines, is a significant advantage. Although we have significant maritime vulnerabilities, so does China, with more than 60 per cent of its trade coming via the sea.

Opportunity comes at a cost

The acquisition of nuclear-powered submarines comes with significant costs, not just financial. There are workforce implications, and implications for Australia’s defence industrial base.

Because of the lack of a nuclear industry in Australia, and the nature of the agreement, there is a high dependence on the US submarine industrial base for the delivery of three Virginia-class nuclear-powered submarines in the 2030s. Australia must also depend on Britain to provide the design of the follow-on submarines for delivery beginning in the 2040s—the SSN-AUKUS boats—and to build the self-contained nuclear reactors that will power them. But we are already largely dependent on others for most of our high-tech defence capabilities. This isn’t much of a change.

But why can’t we do this with conventional submarines and accept a higher degree of risk. Conventional submarines are slower and have less endurance. That means you need more of them to achieve the same effect, though it can be achieved.

The greatest issue is that conventional submarines need to snorkel, coming to just below the surface of the water and raising a hollow mast to respirate their diesel engines while they recharge the batteries they use for running fully underwater. The faster they manoeuvre, the more frequently they need to do this. When they do this, they are subject to detection. Detecting conventional submarines in this period of vulnerability will be greatly assisted by artificial intelligence, which helps surveillance operators pick out the sound and visual traces from background noise.

Not only are conventional submarines increasingly likely to be detected, but we must remember that detection puts at risk the lives of the crew. In the event of conflict, detection for a submarine means almost certain sinking, and escaping from a submarine is not often a realistic prospect for the crew.

When you consider the increased likelihood of conflict in the region, the ability of potential threats such as China to interfere with Australia’s essential maritime trade, the ability of submarines to influence this outcome by either deterrence, or disproportionately engaging an adversary’s maritime capabilities, coupled with the likelihood of a conventional submarine being detected and sunk while trying to do this with a significant loss of Australian life, the strategic reasoning becomes clear.

Often missed in the conversation is the deterrent impact of the AUKUS agreement itself, an impact that should not be understated. The fanfare surrounding the original announcement in 2021 and the announcement of the nuclear-powered submarine Optimal Pathway in 2023 were staged specifically to send a message to China.

That message was that China’s aggression in the Indo-Pacific region had reached such a level that the US and Britain were willing to transfer their most sensitive technology to Australia, something they had declined to do in the 1960s.

A strategy of deterrence is built on three key principles: capability, credibility and communication. The signal that came from the formation of AUKUS is in many ways just as important as the nuclear-powered submarine capability itself.

When commentators and the media express alarm about the demands of a submarine industrial base, they miss the point that AUKUS is not just about the capability. It is equally about the communication and credibility that underpin deterrence.

Should the US withdraw from AUKUS following a return of Donald Trump to the presidency or because its own submarine construction program is lagging, it would be fundamentally undermining its own strategy of deterrence in the Indo-Pacific.

In a region of states now hedging their bets, a failure by the US to deliver on its AUKUS promises would see it lose all influence within the region, and it would lose the strategic competition for the western Pacific itself. It’s not that AUKUS is too big to fail, but there is much more at stake for the US than three Virginia-class submarines. When viewed in this light, Australia should not be so nervous.

When it comes to AUKUS, it’s time for Australia to believe in itself. Our value proposition in this deal is significant. We are not simply being given submarine capability. We are an essential element of the US deterrence strategy.

The plan, despite its risk and complexities, is on track, and the Australians who put themselves in harm’s way deserve a capability that increases their chance of surviving.

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