Skilled and unskilled labour is already scarce in the Northern Territory construction-project sector, and it will soon get scarcer. With the Australian and US defence departments well into upgrading bases in the territory, two big gas projects are also about to go ahead. 

Immediate action is needed to alleviate the Northern Territory construction-labour shortage. The rest of Australia is hardly in a position to supply the people, so we must accelerate arrivals of foreign workers and train more apprentices in the territory. 

The largest Defence projects are upgrades of Royal Australian Air Force base Tindal, near Katherine, and RAAF Darwin, both partly to meet US requirements and partly paid for by the United States. Australia’s Defence Strategic Review of 2023 called for an urgent program to improve the readiness and robustness of bases across northern Australia and on the Cocos (Keeling) Islands, so more defence projects are coming to the territory soon, putting yet more pressure on its constructor sector. 

Meanwhile, Santos is going ahead with development of the Barossa gas fields off the Northern Territory coast, with construction due to begin as soon as possible, while work on the Beetaloo Basin coal-seam gas project of Empire Energy, 500km south of Darwin, is expected to begin this year. Both are very large gas deposits and will feed demand in Australia and Northeast Asia. 

The territory has often been through booms and busts, but coming under pressure to simultaneously support two huge natural-resources projects and also several large-scale defence developments is unprecedented. Tradespeople and unskilled staff, especially, will become extremely hard to find. 

The existing shortage of skilled and unskilled labour in the territory has already caused significant delays to the work at Tindal. 

Many of the skilled workers at the gas projects will probably come from elsewhere in Australia, employed under fly-in, fly-out arrangements. But that’s hardly a complete solution, because most of the rest of the country is also suffering a shortage of building workers amid extensive infrastructure construction projects, notably for wind and solar electricity generation and railways. 

For the Northern Territory, coordinated action is needed. To work through solutions to the problem, the territory government and Defence must bring together the resources and heavy construction firms, the federal departments responsible for home affairs and energy, and relevant territory agencies. 

The fastest possible measure is to accelerate unskilled migration from Papua New Guinea, Pacific island countries and Indonesia. All of those nations have significant pools of unskilled labour and are looking for employment for their people. Providing job opportunities in the Northern Territory would have the side benefit of strengthening economic and personal links between those countries and Australia at a time when China is competing for regional influence. 

Labour mobility schemes are hardly new: sugar cane and fruit growers in Queensland have successfully employed Pacific Islanders for many years. The federal government could adapt such existing programs as the Pacific Australia Labour Mobility Scheme to help supply the Northern Territory with workers. 

Meanwhile, training of apprentices in the Northern Territory must be expanded. Since completion of a construction-sector apprenticeship typically takes at least two years, action is needed now to expand and strengthen the territory’s apprenticeship recruitment and training programs. 

Australia can also consider increased use of foreign construction companies in the Northern Territory. They would act as subcontractors to Australian firms. 

Delaying some of the defence and resources projects is not an option. The Defence Strategic Review is emphatic on the need to move quickly in reinforcing bases to meet Australian’s defence needs, and the facilities play key roles in the United States’ efforts to strengthen its military position in the Indo-Pacific. Meanwhile, development of the gas fields has enormous economic importance to the Northern Territory and indeed the whole country. 

So it all comes down to getting more skilled and unskilled labour into the Northern Territory quickly, before all of the projects are adversely affected. It’s a national priority, and there’s no time to lose.

While helping negotiate the AUKUS agreement with the United States and Britain as defence minister in 2021, Peter Dutton regarded claims that Australia acquiring nuclear-powered submarines (SSNs) would contribute to a regional arms race as ‘nonsensical’.

And Dutton, now opposition leader, says regional leaders privately supported Australia’s decision to procure the conventionally-armed SSNs. ‘All of them, frankly, in private, are supportive of Australia’s position, and I think we should take comfort from that,’ Dutton tells former ASPI executive director Peter Jennings in a video interview as part of ASPI’s ‘Lessons in leadership’ series. The interview took place when Dutton was seven months into his role as defence minister in Scott Morrison’s government.

‘They want stability in our region,’ he says. ‘They’re enjoying relative economic success today, stability in their own countries because people are being lifted from poverty, they are joining the middle class. There’s a period of stability that hasn’t been possible since the Second World War, or in the case of Vietnam since the Vietnam War, or on the [Korean] Peninsula since conflict there. And they want that to enjoy, as we do.’

Clearly caught by surprise at the time of the initial AUKUS discussions, some regional nations then expressed strong concern about the SSN agreement.

To put AUKUS into context, Dutton says that every 18 months China is pumping out, on average, naval tonnage greater than the entire British fleet.

Dutton was defence minister from March 2021 to May 2022. He says in the interview he wants to see rapid acquisition of equipment the ADF needs including the intellectual property for Australia to manufacture missiles. And he wants to ensure the presence in the Indo-Pacific of forces from those partners.

‘It was a natural go-to for us because of the interoperability between the three partners, and it builds off the Five Eyes relationship and the trust, the established systems of information and intelligence sharing, joint operations and exercises.’

AUKUS also includes space and cyber. ‘I see the cyber effort as paramount for us because, regardless of what happens in relation to Taiwan, China will continue her grey zone activities. And there will be the continued attacks, the theft of IP from our system, the targeting of people within the defence supply chain.’

Tangible gains from AUKUS will include both offensive and defensive technology with much more on quantum and underwater capabilities, investment across the top of Australia, and the jobs that go with maintenance and sustainment in Australia, Dutton says.

Acquiring eight SSNs is part of a strategy of deterrence and the buildup to the defence of the homeland. ‘We’ve not had to think about that since the 1940s. And we’ve got ourselves on a track where there’s greater capacity to defend ourselves, but to provide deterrence before we got to that point of extremis.’

Rapidly building the skills to safely operate the SNNs is incredibly important, Dutton says, but it’s not going to happen overnight. ‘The US is very serious about nuclear stewardship. The UK has had this capability since the mid-1950s, and they’re still learning through the course of the different iterations, different blocks, and the different platforms that they’ve delivered.’ The US does not want an accident, and the UK had not suffered one. ‘We’re not going to either’, he says. Establishing those foundation stones is incredibly important to the Americans, and to Australia.

Jennings notes that defence is a challenging portfolio renowned for its high workload. Dutton describes the grueling pace in Canberra and constant meetings with figures such as the chief of the ADF and the service chiefs, briefings from the department and agencies including the Australian Signals Directorate, and documents needing to be signed urgently.

The lack of time to read everything he’d like to is a frustration,’ Dutton says. The day is scripted through the diary from a very early day to a late finish. ‘But, ultimately, it’s about a bigger purpose and you do get a lot of satisfaction.’

Dutton says Defence is ‘an incredible beast’. A former department secretary once confided in him that it was ‘sort of bovine-like—you can lead it to a certain extent, but don’t get behind and start pushing because it’ll react violently’. It’s like anything in politics, he says. ‘The art of the possible and try to nuance the outcome that you want. Sometimes you need to be more direct if you’re frustrated with the processes.’

A big part of the job is to keep the paperwork moving and keep strict discipline on the department to bring correspondence up in a timely way, says Dutton. ‘I want my advisors to deal with it in a timely way, and that obviously imposes the same obligation on me. In some portfolios, I think ministers sit on briefs or they take forever to process.’ That’s not good management, he says.

As a department, Defence can be slow, says Dutton but on operations it can move quickly, and it knows its business very well.

He cites the evacuation of more than 4000 Afghans from Kabul airport in August 2021.

‘I was inspired by the acts of bravery on the ground,’ he says. ‘Many of our people went into harm’s way to help women and children, in particular, find their way onto our C-17s. Quite remarkable people, really.

‘The skill and the expertise of the SAS and other highly trained ADF personnel, the way they worked with their partners, the way we lent assistance to the Brits to uplift some of their people and their assets, the way we helped other countries, that they helped us.’

Dutton says the operation reinforced relationships built up over many years and that’s under-recognised ADF activity. ‘The joint training exercises, the postings, the people-to-people links that mean in these times of adversity, if one of our planes is inoperable, unserviceable, we can go to the Canadians, and they to us, without any hesitation.’

There were constant discussions with ADF chiefs, the foreign minister, the prime minister and the ASIS intelligence agency about people needing rescue including those who ‘had provided assistance to us or had collected intelligence for us who were beyond the wire and how we were going to bring those people in.’

That so many were rescued was remarkable, Dutton says, and Australia should be proud.

Ultimately, none of it would’ve been possible without the United States. No other country could have held Kabul Airport for even a day. ‘And as tragic as the circumstance was, particularly the opening scenes of people clinging to that aircraft, it was the best outcome that we could have hoped for in those circumstances for our country and for our partners.’

Dutton says Defence is steeped in history and the nation benefits from its experience. ‘But, in some cases, there’s an aversion to risk. There’s an adherence to hierarchical structures.’ There are good reasons for that, he says, but it can lead to frustration in terms of timelines and the responses and a danger of becoming bogged down in process. ‘And so, I think you’ve got to make your ground rules clear very early on as to the timeliness and how you want things responded to.

‘But they’re dealing with a lot of money and there’s a lot at stake in terms of protection of our own people. So, obviously, there’s a process to get go through and people are very mindful of that. If there’s a frustration, it’s the drawn-out response times, which I would like to see sharpened up.’

That said, within the department and the uniformed ADF there’s a desire to listen to the government’s agenda and to implement it.

On possible threats to Australia, Dutton says President Xi Jinping and others in China’s Communist Party have been very clear about their intentions for Taiwan. China has also been involved in land border clashes with India. Japan has faced daily intimidation by Chinese military personnel in coast guard uniforms. Other nations, including Australia, face economic coercion when China stops importing certain commodities. Others face corrupt practices in Beijing’s Belt and Road Initiative.

‘We want to be a great trading partner and friend with China. We want to continue that relationship. But the cyber attacks and the foreign interference, the attempts to interfere with democratic processes—all of that is not the act of a friend.’

‘We want to see China continue to grow, people to enjoy prosperity, and we don’t seek conflict with China. We never have, and we never will. But if there’s an attack on Taiwan, if there’s an escalation in the East China Sea of tensions there that result in, deliberate or otherwise, escalation of some sort of conflict, then that could well be a reality. And we need to be honest and open and frank about that. And I think the Australian public has a greater level of awareness now than perhaps they have for a long period of time about the direction now.’

Allowing China to take Taiwan by force would see a domino effect and a shift in world power, Dutton says. Australia would be quickly isolated.

ASPI’s ‘Lessons in leadership’ series has been produced with the support of Lockheed Martin Australia.

Behind the recent spat between Defence Minister Richard Marles and his senior Defence advisors lies a hidden issue: are the governance arrangements for Defence’s high-level decision-making fit for purpose or do they need to be reviewed and brought up to date?

There have been many Defence ‘reviews’ over the past five decades, some more consequential than others. The Tange reforms of the early 1970s changed governance arrangements both to integrate the previously separate service and Defence departments and to ensure the implementation of the government’s new defence of Australia policies. These changes had lasting benefits.

Many of the subsequent reviews concentrated on reducing costs and increasing Defence’s reliance on industry, as well as pursuing the elusive goal of fewer errors in defence procurement.

There have been two major external reviews of the development and interpretation of policy: the 1986 review of defence capabilities, and the 2023 defence strategic review (DSR). In both cases, inadequacies of governance contributed to the need for this outsourcing.

Several post-Tange reviews have also changed governance arrangements, the most recent being the 2015 first principles review. But this work was undertaken years before there was any serious response to Australia’s deteriorating strategic circumstances, as eventually set out in the 2020 defence strategic update (DSU)  and as amplified in the 2023 DSR. This gap alone would be sufficient reason to suggest that Defence’s governance arrangements should now be re-examined.

In addition, however, there had been concerns that Defence had not been sufficiently responsive to earlier stages of the worsening of Australia’s strategic outlook—ASPI Insight paper 123 of November 2017 and Strategic and Defence Studies Centre paper of October 2018. And while the 2020 DSU showed a welcome recognition of the new strategic challenges and included important new initiatives such as long-range precision-strike missiles and remotely-operated combat platforms, subsequent implementation of the new policies has been slow, as set out in some detail in the 2023 DSR.

In brief, there are good reasons to believe that today’s Defence governance arrangements need to be improved. Let’s look more closely at some of the evidence.

The decision to drop the SSK program and to go instead for SSNs represented a major change of course. Why was the original decision so wrong as to need such disruption to a vital and costly capability?

The new plans for the Navy’s surface combatant fleet also represent a major change of direction. Again, why were the earlier decisions on this matter so evidently off the mark?

Why did the DSR conclude that it is necessary to transform the Army (para 8.28), and to reduce the number of infantry fighting vehicles from 450 to 129 (para 8.35)? Is there a structural problem with how Defence considers land-force development? If so, the problem goes back a long way, to the Tange reforms, as it was the inadequacy of Defence’s processes for reviewing the Army that contributed to the need for the 1986 defence capability review.

Why is it that the ADF as currently constituted and equipped is not fully fit for purpose (DSR page7)? Why don’t we already have the ‘sense of urgency’ that the DSR advocates (para 1.9)? Why is there this ‘surprising lack of top-down direction’ for projects entering the Integrated Investment Program (DSR para 12.2)? Why has there been ‘little material gain’ in the guided weapons program over the past two years (DSR para 8.73)?

The DSR’s terms of reference required it to outline the needs for mobilisation, yet it makes only passing reference to this in its public report. Why is this? Is it too embarrassing to be discussed in the open?

Why did the DSR need to emphasise the need for genuine whole-of-government coordination of Defence policy (page 8)? Surely this is a blinding statement of the obvious.

Each of these cases in isolation could be shrugged off, and it’s important to recognise that to seek perfection would be a fool’s errand. But taken together they show that the governance problems are serious.

So much for the symptoms. From the outside we can only speculate as to what has led to this. Are the catalysts for change too inhibited or inconsequential? Is there too much emphasis on consensus? Is robust argument actively discouraged? Is the strategic policy area just too small for the workload, or too easily ignored, especially in the vital task of providing top-down guidance for capability development? Are the military staff also overwhelmed by the workload? Is there a fear that if you rock the boat you will stunt your prospects for promotion?

It’s all too easy to criticise from the sidelines. And in any case, it’s important to acknowledge that much of what Defence does is excellent and that the 2020 DSU swept away the complacency of earlier years. Further, it’s not clear how many of the problems lie with Defence rather than with the machinery of government more generally or with ministers themselves.

Overall, however, it’s clear that governance needs to be brought up to date. As things stand, neither the ADF nor the governance arrangements that guide and support it are capable of much more than peacetime operations. Whether the needed improvements would best come through internal or external review is open for debate. At the very least, in our new strategic circumstances, any proposals for change should keep in mind the first Recommendation of the 1997 defence efficiency review: The Defence Organisation should be organised for war and adapted for peace.

Public discussion of the defence strategic review (DSR) has focused on the announced changes to major capability programs. On that score, the statement by Defence Minister Richard Marles that the DSR is ‘the most ambitious review of Defence’s posture and structure since the Second World War’ is hard to reconcile with its recommendations, as there were few specific changes beyond those to Army which had been long expected. A few short paragraphs on the way that Australia should fundamentally change its approach to defence planning and force design, however, hint at very consequential change—and it is important that the government does not lose sight of their importance, despite them not receiving an explicit mention in the minister’s statement.

Australian defence white papers tend to consist of an engaging essay on the strategic environment in the front, and a list of capability decisions at the back. In general, the links between both are always implicit, and often only tenuous. Indeed, translation of strategic guidance in terms of priority for strategic risks, geographic focus and general tasks for the ADF into capability is the main historic weakness of Australian defence planning—going back at least to the 1970s ‘core force’ concept.

A key exception was the 1986 Dibb Review and 1987 Defence White Paper, which provided an (implicit) force structuring scenario for the defence of Australia, and explicit guidance on how the ADF would operate the ‘defence in depth’ strategy. In this framework lies the real importance of these documents, as it was internalised by Defence and government and implicitly guided defence force design until the 2000 white paper. No similarly impactful and enduring framework has replaced it.

The DSR’s reference to past planning against ‘low level and enhanced low-level threats’ (para 4.7) shows that it was conscious of this history, and seeks to provide a new framework that can have similarly lasting impact. In that sense, the most important paragraph of the DSU is that ‘the ADF needs a much more focused force structure based on net assessment, a strategy of denial, the risks inherent in the different levels of conflict, and realistic scenarios agreed to by the Government.’ What does this mean?

The use of politically, operationally and technically realistic scenarios that align with government strategic intent is key to coherent force design. Internationally, explicit political endorsement of force design scenarios are key elements of defence planning as in the United States; or the NATO defence planning process. Not so in Australia, where historically capability scenarios have only been endorsed by the Chiefs of Staff Committee. Even in white papers, ‘force structure reviews’ often preceded decisions that the government wanted Defence to achieve in the first place. Political endorsement of ADF force structuring scenarios will be crucial for government’s ability to ensure that the process which produces the capability proposals it receives from Defence actually reflects its strategic priorities.

The review’s reference to a ‘net-assessment planning process’ and rejection of a ‘balanced force’ (para 8.3) , which it understands to be designed to be able to react to a ‘range of contingencies’, provide a crucial insight into what the review wants these scenarios to entail. Net assessment as an analytical method has many applications, but the context makes clear that the review wants the ADF to be designed to meet one, extant, actual, clear and present threat (from China) rather than a range of possible or notional adversaries. Also sometimes called ‘threat-based planning’, ADF force design should in future reflect much more closely the actual shape and challenges that a conflict with China would present. As was the case for the US and NATO during the Cold War, changes in Chinese force structure and capabilities will flow much more directly and urgently into Australian capability priorities. The review’s recommendation that government direct a ‘strategy of denial’ is a consistent and necessary element of this approach, insofar as it explains how government would want the ADF to meet this threat.

As Australia is likely to operate alongside the US in such a conflict, and China’s ability to project force against Australia would depend on US action elsewhere, the review likely has set Australia onto a path towards much closer cooperation with the US in force design than has been the case since the SEATO alliance. The review’s comments about ‘recent advances’ in the bilateral and trilateral relations between the US, Japan and Australia hint at this, insofar as the review of alliance ‘roles’, ‘missions’ and ‘capabilities’ and the ‘scope’, ‘objectives’ and ‘forms’ of cooperation are part of these. NATO has always had a process for force structuring at the alliance level, and we may now be on our way to a more informal version of one.

The final element is the explicit consideration of ‘levels of conflict’ (para 7.8). Since the late 1960s, the starting point of Australian defence planning guidance has been geography, as priorities and objectives were framed through geographic regions (Australia, Southwest Pacific, Southeast Asia, Northeast Asia, and the global level), variations of which dominated the table of contents of every strategic review and white paper since 1968. In contrast, the DSR takes us back to the 1950s and 1960s when Australian defence policy was last dominated by the threat of great power conflict. Then, too, defence planning was framed in terms of what level of conflict Australia should focus on—in particular, Cold War (today: competition), limited war, and global (today: major) war.  These remain meaningful distinctions today and lead to very different geographic as well as force structure and posture foci.

In competition, the ADF needs to be able to best respond to the security concerns of those countries over whose alignment we are competing by reflecting the interests in economic, resource and domestic security of South West Pacific and Southeast Asian countries. Today’s lightly armed and lightly built offshore patrol vessels are an example of a capability almost only useful for competition.

In limited conflict, by definition both sides accept that limited stakes impose limits to escalation and acceptable cost of conflict. Territorial conflict over maritime features other than Taiwan, or confrontations over incidents at sea, may today reflect such circumstances. Australia and partners would seek to manage limited conflict by deterrence through forward presence of highly capable, visible surface and air forces—including in regions such as the South China Sea where they would not be survivable in major war. Kinetic use of submarines against surface vessels would likely be subject to direct political concern about escalation, as was the case of the Belgrano sinking in the Falklands war. The main axis of ADF operations would be north-south, from Australia to the likely areas of conflict.

In major war, both sides fight to disarm and thus impose their will on the adversary. War termination will come to rest on the nuclear balance (if only in the sense that one side accepts cutting its losses rather than risk escalation). Australia’s main concern will be to secure supplies to remain in the fight, to avoid catastrophic losses, and to influence the shape of a post-war settlement in our immediate approaches. The main axis of ADF operations would thus be east-west, reflecting the crucial sea lines of communication to bring supplies across the Indian and Pacific Oceans, with US long-range strike forces operating north from the continent.

The guidance in the 2020 defence strategic update was arguably compatible with preparations for any three of these levels of conflict. While the review in its unclassified form is silent on what it would recommend government focus on, its insistence that the ADF is ‘not fit for purpose’ (para 8.2), emphasis on long-range strike, hardening of bases and fuel reserves in Australia hints at a classified recommendation to focus on major war.

The review and government have clearly internalised the need for much faster, and more robust and coherent adaptation than Defence has been able to provide. The effective admission that the post-2016 contestability agenda has failed (paras 12.2-3) shows the difficulty of reforming Defence, despite the clear efforts of Defence leadership and governments of recent years. Time will tell how long the intended biannual cycle for the new national defence strategy will survive a three-yearly electoral cycle, but it would in any case only be an outcome of the underlying defence planning framework. Hence, the review’s section on defence planning and force design is arguably not just the most brief, but also the most important, and—if implemented—would well warrant the minister’s moniker as the ‘most ambitious review’ of them all.