3 percent of GDP for defence is no stretch. We did 2.9 percent in the Cold War

Australia has plenty of room to spend more on defence. History shows that 2.9 percent of GDP is no great burden in ordinary times, so pushing spending to 3.0 percent in dangerous times is very achievable.

Budget watchers are quick to cite difficulties amid current pressures on revenue and expenditure. But historical data is more revealing than a nearsighted view down in the weeds of fiscal policy.

Australia just isn’t trying. For all the talk of deteriorating strategic circumstances, the defence share of GDP has been flat for half a decade, wandering between 1.9 and 2.0 percent.

The issues holding Australia back from spending more on its defence are largely political rather than economic.

The 2020 Strategic Defence Update identified an increase in geopolitical risks in our region and noted the possibility of Australia becoming involved in a major conflict without the formerly assumed 10-year warning time. As a result, successive Australian governments have made announcements about lifting defence spending through initiatives such as equipping the army with long-range missiles, expansion of the navy’s surface fleet and, most dramatically, AUKUS.

However, in terms of GDP, the proportion of total economic output that goes into current defence spending per year has not increased in recent years. It continues to hover around 1.9–2.0 percent of GDP. As shown in the chart below, Australia’s average defence spending as proportion of GDP since the Cold War ended has been 1.9 percent.

On 5 March, Elbridge Colby, head of policy at the US Department of Defense, called for Australia to spend 3.0 percent of GDP on defence. Various Australian defence and security figures, including former chief of the Australian Defence Force Angus Houston and former secretary of home affairs Mike Pezzullo have similarly called for defence spending to be lifted to 3.0 percent of GDP.

Economics writer David Uren recently explained that to lift defence spending to 3.0 percent, Australia would have to either take on additional debt, increase taxes or reallocate money from elsewhere in the government budget. All three of these options would be politically difficult.

While this is a point well made, the details of fiscal policy that usually absorb us become less useful for assessing the defence budget as we move into more unstable and dangerous times. History shows us that sustaining 3.0 percent of GDP spending over a period of time is quite achievable for Australia. The most recent example of this is the Cold War, particularly up until the 1970s.

Sources: SIPRI Military Expenditure Index and Australian government projections

As the chart shows, Australia could sustain average defence spending of 2.9 percent of GDP through the Cold War over 40 years from 1950 to 1991. (The Stockholm International Peace Research Institute dataset which the chart is based on only goes back as far as 1950, not quite the beginning of the Cold War.) This is very close to the 3.0 percent currently being advocated for. During the Cold War, Australia responded to the threat of communism expanding into South-East Asia by maintaining significant forces and often deploying these into various conflicts across our region.

This contrasts with the post-Cold War period from 1992 until now, where defence spending has averaged 1.9 percent of GDP. After the collapse of the Soviet Union, the United States and its Western allies quickly reduced military spending, enjoying a peace dividend due to reduced global geopolitical tensions. From 1986 to 1996, Australian defence spending dropped 0.6 of a percentage point from 2.5 percent to 1.9 percent of GDP. Over the next few years, defence spending remained consistently below 2.0 percent, even during the years of Australia’s involvement in the global war on terror and peacekeeping operations in our region. In 2013, defence spending reached its lowest share of GDP since 1938, just 1.6 percent of GDP.

The years since have seen great increase in geopolitical tensions, both in our region and globally. Yet defence spending as a proportion of GDP has increased only moderately and slowly since 2013, sitting at 2.0 percent in 2025. Under the government’s projections, spending will continue to slowly increase to 2.3 percent by 2033–34.

This is too little, too late. Under current budget restrictions, new defence announcements largely rely on cannibalising existing funding from sources declared to be of lesser priority, rather than on new funding. A recent example of this is the Redback Infantry Fighting Vehicle, which was cut from 450 vehicles to 129 vehicles, at a much higher per-unit cost.

The proportion of GDP should only be used as a rough guide towards spending on defence. What the money is spent on is important. However, the risk to Australian national security was no greater in the Cold War than it is now, and was arguably much lower. The fact that Australia for several decades maintained defence spending at higher levels than now shows that the country is capable of doing the same again.

The untold story of the 2009 defence white paper

Prime minister Kevin Rudd released the 2009 defence white paper in May of that year. It is today remembered mostly for what it said about the strategic implications of China’s rise; its plan to double the size of the Royal Australian Navy’s submarine force from six to 12 boats; and its goal more generally to build a larger Australian Defence Force, known as ‘Force 2030’.

Most commentaries assumed that Force 2030 was overly ambitious. This missed the point of the deep logic of the 2009 white paper that was hidden in plain, unclassified sight. Force 2030 provided only for an initial baseline force. It was designed to be expanded progressively through a series of five-yearly defence planning cycles, which would have involved regular appraisals of strategic risk, net assessments of military developments and ADF capability gaps, and re-evaluations of defence resourcing (see paragraphs 3.24–25).

The Rudd Government hedged against strategic risk by creating a pathway for a 25-year programme of force expansion. The prescience of this plan becomes clearer with every passing year. Had later Australian governments adhered to the plan, a significantly larger ADF would have been built over a series of five-yearly cycles, in 2009–14, 2014–19, 2019–24, 2024–29 and 2029–34. That version of the ADF would have been more powerful than Force 2030, in terms of its weight, reach and striking power. It also would have been much larger and more powerful than today’s force, and there would have been more options available to rapidly augment the ADF before, say, 2027.

The plan was premised on the critical importance of getting started. Force expansion could occur progressively, once a start had been made. The plan was predicated on a decade (2010–20) of aggressive force development, tendering and capability acquisition. By 2020, production lines, supply chains and procurement agreements would have been in place, especially in the crucial area of naval shipbuilding. Continuous construction, avoiding the start-stop syndrome that often afflicts naval shipbuilding, would have supported rapid construction. It would also have reduced ships’ unit prices over time, as a result of continuity and scale.

This approach was especially crucial in relation to the Future Submarine. The plan was to acquire 12 such boats (paragraphs 8.40, 9.3–10). The best option for timely delivery would have been to order conventional submarines of a Super Collins class, derived from the Collins class that we already had, from 2010 to 2020. They would have been built in Australia, and the first would have been commissioned in 2020. By the late 2020s, a mixed fleet of six refurbished Collins class and six Super Collins class submarines would have been available, at which point a decision could have been taken about whether to decommission the oldest Collins boats, thereby keeping the size of the fleet at 12 units, or, if viable, to retain them, increasing the fleet beyond 12.

Defence White Paper 2009 explicitly contemplated Australia having to acquire a larger force ‘in relation to the heightened risk of inter-state war’. Force expansion would have entailed acquisition of ‘more advanced submarines’ and other capabilities that were not included in the initial baseline force (paragraph 3.21). This meant that, during the 2014–19 planning cycle, consideration would have been given to acquiring nuclear-powered submarines of the Virginia class, the design that Australia would (and indeed does now) need in the 2030s and beyond. We could have negotiated an agreement with the United States under which Australia could have committed to helping with Virginia-class maintenance for itself and the US Navy, thereby increasing the availability of Virginia-class boats for both the USN and the RAN. Perhaps that deal could still be struck today, but that is a story for another day.

The white paper’s approach to capability hedging and force expansion should also be read as providing for acquisition of heavy bombers, missile-defence interceptors and other capabilities that were not included in Force 2030. To this end, the Department of Defence was directed to develop ‘additional force structure options’ for future consideration (paragraphs 9.108–109). It was also directed to undertake mobilisation planning, in contemplation of Australia having to mobilise significant resources if circumstances of ‘national peril’ arose (paragraphs 10.22–24).

There were other clues regarding force expansion. In a section on fundamental changes in our strategic outlook, there was a discussion of the possibility of a dramatic deterioration of our strategic circumstances. Of particular concern would be any diminution in the willingness or capacity of the US to act as the stabilising force of world order (paragraphs 3.17–19). Indeed, the 2009 white paper explicitly asked whether the US would continue to undertake the strategic role that it had played since the end of World War II (paragraphs 4.17 and 6.27). This raised eyebrows in Washington. It was not presumed that the US would withdraw. Rather, it was judged that, as the US’s strategic primacy and military dominance came under increasing challenge, its allies and partners, Australia included, would have to do more for themselves. The possibilities were that they might do so through their own decisions, or because of pressure from a future US administration, or due to a combination of these factors.

If the future role of the United States was of concern, the plausible contingency of having to militarily confront a major power adversary was positively alarming. This might include hostile operations by such an adversary in our sea-air approaches, most likely as a result of a wider conflict in the region (paragraphs 5.6–7). Such an adversary might gain access to bases and operating opportunities in our sea-air approaches (paragraphs 3.8, 5.12 and 6.25). The higher the likelihood of such contingencies, the heavier the force that we would need (paragraph 8.44).

It was assumed that, except in the case of nuclear attack, Australia would be expected in such contingencies to provide for its own direct defence without relying on the combat forces of other countries. So, in a wider Pacific war, Australia would need to be able to independently contest hostile military operations by a major power in our area of direct military interest (paragraphs 8.45–46). In such a war, Australia would almost certainly be attacked if it was supporting the US, including by providing it with basing and other support (paragraph 7.18).

The 2009 white paper made clear that we would have to be prepared and able to mount such a defence by denying access to the sea-air approaches to Australia and by disrupting an adversary’s freedom of action in our immediate neighbourhood through the independent application of combat power (paragraphs 6.17–19). This would mean being prepared to achieve and maintain air superiority and sea control in places of our choosing in our area of direct military interest (paragraphs 7.3, and 6.38–42). It would also mean being prepared to strike as far from Australia as possible at an adversary’s bases, staging areas and forces in transit. In doing so, we would exploit the funnelling effect of our strategic geography (paragraphs 6.39 and 7.4–6). This might involve operations as far afield as maritime Southeast Asia and elsewhere (paragraphs 6.46 and 8.47).

Such an approach, which echoed the policy of defence self-reliance that was first articulated by the Hawke government in 1987, would not mean we would cease to look to the US for support in such matters as space-based intelligence systems, advanced technologies, long-range missiles and so on, and for protection against nuclear attack (paragraphs 6.20–21 and 6.32–34).

We would, however, have to be prepared to fight independently and aggressively. Assuming that the ADF was heavy enough and had long enough reach, Australian military strategy would be: (1) to deter an attack, because an adversary would have to devote an unacceptably large proportion of its military capability to ensure success against us; or (2), failing that, to blunt an attack by inflicting heavy losses on an attacker while we rallied support.

By 2008, it was clear that by the early 2030s, China would have the capability to be able to operate in our sea-air approaches and to strike at Australian forces, facilities, and infrastructure from long range. It was also judged that the US would be stretched and challenged by China, and that others, such as US allies and partners, would have to be prepared to do more to defend themselves.

Critics were scathing of Defence White Paper 2009’s hawkish view of the risks posed by China’s military modernisation. Almost universally, supposed experts in Australia and elsewhere judged that China would take its place as a responsible stakeholder in the global system and that its military modernisation was no more than what all emerging great powers pursued as they rose.

The white paper took the view that China was no ordinary emerging great power and that it was likely to take a different path. This proved to be prescient. China disliked the language of the document (especially paragraphs 4.26–27 and 5.14) and protested stridently when briefed ahead of the launch of the document. The Rudd government did not buckle, and the offending text was not amended, as Beijing demanded.

Rudd himself would have preferred to see evolution of Asia-Pacific regionalism, in which the US, China, Japan and other nations could integrate their economies and resolve their differences peacefully. However, he was also deeply realistic about prospects of confrontation in the region and the resulting requirement to hedge against a darker future. He knew this would require significant investment in military power, with a particular emphasis on building a strong navy. No Australian prime minister since Alfred Deakin had so keenly appreciated the critical importance of sea power.

The plan got off to a promising start in 2009 and 2010 but was effectively dismantled after Rudd’s removal from office in June 2010. Funding was cut. This stalled the momentum that should have be built over the decade 2010 to 2020, which was when the platform for force expansion was supposed to have been laid. As a result, the ADF is smaller and less powerful today than it would have been under the plan; Force 2030 is unachievable; and the further force expansion that should have occurred cannot be realised by the mid-2030s.

Had force expansion occurred, a plausible alternative history might now read as follows. Defence funding could have been progressively increased over the series of five-yearly planning cycles, with real growth (assuming annual price rises of 2.5 percent) increasing from 3 percent in the 2009–14 cycle to 5 percent in 2014–19, 7 percent in 2019-24, 9 percent in 2024–29 and 9 percent in 2029–34. Factoring in supplemental funding to cover for inflation of the Covid-19 era and extra funding for the Virginia-class submarine program, and allowing for Defence to reinvest internal efficiencies, this funding strategy would have provided us with a defence budget in 2025–26 of around $85 billion to $90 billion growing by 9 percent in real terms. (The actual defence budget for 2025–26 is $59 billion.)

A larger ADF would have been available today, with the following force being realised fully during the 2029–34 cycle. The RAN would have had a battle fleet of at least 12 submarines (a mix of Collins and Super Collins boats), with a pathway to acquiring Virginia-class nuclear-powered submarines; six destroyers; 14 frigates; 20 corvettes; six missile arsenal ships, each with 100 vertical launch cells; and two light aircraft carriers (repurposed LHD assault ships) able to carry F-35B fighters, helicopters and autonomous aircraft and other uncrewed vehicles.

The Australian Army would have been a three-division force, with the 1st Division optimised for littoral, amphibious and missile warfare, the 2nd Division for continental defence, and the 3rd Division for training and reinforcement. This would have required 18 battalion groups, as compared with the 10 battalion groups in Force 2030 (paragraph 9.30).

The Royal Australian Air Force would have been building to 100 F-35A Lightning fighters 24 F/A-18F Super Hornet fighters, 12 EA-18G Growler electromagnetic attack aircraft, 10 B-1B Lancer bombers (with B-21 Raiders in prospect), 20 P-8A Poseidon maritime patrollers, 10 MQ-4C Triton uncrewed surveillance aircraft, 10 E-7A Wedgetail air-surveillance aircraft and 10 A330 MRTT tankers (called KC-30As locally).

The ADF would have been equipped with more Tomahawk cruise missiles, launchable from land as well as sea. A land-based, intermediate range ballistic missile force would have also been in prospect. Missile-defence batteries would have been available, including SM-3 and THAAD systems. Autonomous technologies and asymmetric capabilities would have been widely deployed across the force. Crucial enablers, such as command centres, communications systems, hardened bases, and fuel and logistics networks, would have been remediated and expanded. All of this would have required a complete enterprise-level reform of Defence—to make it lean, focused and driven.

With such a force, Australia could have defended itself against a major power adversary by being able to extract a high cost from the attacker while we rallied support from the United States and others. A plan to hold out, as Britain did in 1940, would require Force 2030 and then some. The 2009 White Paper was that plan.

Australia’s international spending reveals uneven ambition

How Australia funds development and defence was front of mind before Tuesday’s federal budget. US President Donald Trump’s demands for a dramatic lift in allied military spending and brutal cuts to US foreign assistance meant that a discussion was unavoidable. The difficult politics of increasing defence spending in Europe continues, and the British government has cut aid to pay for a rise in its defence budget.

This is an important discussion, but we ought to be considering investment in Australia’s strategic posture as a whole.

One way to measure that is the overall level of international spending. Taken together, defence, foreign affairs and trade, aid, the intelligence community and international policing total $72.05 billion for 2025–26, which is about 9 percent of total federal spending.

This share of spending has been steady at a little less than 10 percent since 1999. Attention has understandably focused on a potential lift in the defence budget. But we should think more broadly: there is a strong case that the overall level of spending on tools of ‘statecraft’ needs to rise above its steady level.

Within that $72.05 billion, defence dominates at $58.99 billion. There has been some reprofiling across the forward estimates, but this is consistent with the existing trajectory.

Time will tell whether the Trump administration decides to make an issue of this level of spending, which still hovers around 2 percent of GDP. Time will also tell whether Defence’s ambitious acquisitions program is achievable without further increases.

The official development assistance budget is $5.10 billion. This is about the same as the 2024–25 budget, adjusted for inflation. From a global perspective, with aid spending in retreat in many countries, this is welcome.

We should all recognise the particularities of Australia’s strategic circumstances. One such feature is a neighbourhood of low-income and middle-income countries. Development assistance in this context is not altruism but a strategic necessity. It helps offset risks that are born of underdevelopment, and that directly threaten Australian interests.

Moreover, experts across Southeast Asia have been clear on how Australia should respond to US aid cuts: ensuring stability in existing programs is the top priority.

The foreign affairs and trade budget is $3.91 billion. Within this, the diplomatic or foreign policy operating budget is $1.76 billion. This is a narrower measure, constructed by James Wise and originally published by ASPI. It strips out administered spending and other costs, such as IT and infrastructure, to provide a reasonable measure of Australia’s spending on diplomacy.

As Development Intelligence Lab research has previously noted, of Australia’s relevant budgets over the past 25 years, investment in diplomacy has been the most inconsistent. Although there has been no dramatic cut, projected inflation-adjusted declines in both the overall foreign affairs and narrower diplomatic budgets out to 2028 are concerning.

Australia’s intelligence community will receive a modest real budget rise to $2.05 billion year-to-year (this number excludes the Australian Signals Directorate, which is budgeted under Defence). This tallies with the recently released Smith-Maude Review, which recommends continued investment in Australia’s intelligence agencies, with focus areas including the Office of National Intelligence’s capability as a coordinating agency.

Finally, the Australian Federal Police budget (excluding domestic policing functions) is $2.00 billion, a small real decline compared to the 2024–25 budget. With the federal police now central to high-profile components of Australia’s engagement in Southeast Asia and the Pacific, such as the Pacific Policing Initiative, we can expect the federal police’s international spending to remain significant.

In short, defence spending has been bumped but its trajectory remains essentially the same. Aid, diplomacy, the intelligence community and federal policing are all at about a steady state, with modest inflation adjusted declines across the forward estimates.

The good news is that Australia has not decided to rob Peter to pay Paul. Nonetheless, the big questions remain: in 2025, do we really think that these tools should receive the same share of federal budget they received in 1999?

Things weren’t simple in 1999, and they’ve only become more complex since then. The crisis surrounding East Timor’s independence and then the 9/11 attacks in 2001 marked the beginning of complicated decades for Australian defence and foreign policy.

But Australia is now grappling with how to respond to a fraught position between China and the United States, while also trying to find a durable place among a crowd of ambitious partner nations across Southeast Asia and the Pacific. We need to properly invest in a broad range of tools to navigate this.

Northern Australia’s economic revival can support defence readiness

Two blueprints that could redefine the Northern Territory’s economic future were launched last week. The first was a government-led economic strategy and the other an industry-driven economic roadmap.

Both highlight that supporting the Northern Territory is not just an economic necessity; it is a national security imperative. By aligning defence priorities and economic development, Australia can ensure the Northern Territory is a resilient and self-sufficient pillar of our national defence strategy.

The Northern Territory Government’s Economic Strategy 2025 sets out a determined investment plan to drive economic growth using the Territory’s natural resources, strategic location and emerging industries. It prioritises renewable energy, critical minerals, transport and digital connectivity, tourism, and workforce capacity building. These areas are intended to enhance trade links with Asian markets and achieve annual growth in gross state product that exceeds national GDP growth.

Simultaneously, the Darwin Major Business Group’s What the Territory Needs 2025 roadmap presents an industry-led approach to the Territory’s economic revitalisation focusing on defence, agriculture and critical minerals. By upgrading Darwin Port and expanding renewable energy projects, it seeks to establish the Territory as a trade and energy hub while aligning with national security priorities to attract federal funding and international partnerships.

Both strategies recognise the Territory’s role in Australia’s defence posture and the fact that the Territory’s economic strength underpins national security. Revitalisation of the Territory could reduce reliance on imports, sustain defence operations and reinforce Australia’s ability to project power in the Indo-Pacific.

But progress to transform Northern Australia into a hardened defence hub is slow and limited to enabling infrastructure contained within the defence estate. For example, Defence has earmarked billions over the coming decade to strengthen northern bases. Beyond this, secure energy, stable digital connectivity, reliable water supply and resilient transport networks are required to sustain military operations and accommodate extreme demand surges during joint training exercises.

Defence investment in the Northern Territory cannot operate in isolation. Without a strong economy to sustain it, Defence will struggle to reach its full posting potential. The Territory needs affordable housing, healthcare, education and job opportunities for defence families and industry. Otherwise, recruitment and retention will suffer, places such as Darwin and Katherine will continue to be considered ‘hardship’ postings, and the Territory will be unable to build the workforce needed to support a growing Defence presence.

Both economic strategies recognise that private sector investment must be mobilised alongside government funding. The industry-led strategy can ensure a faster, more agile approach to infrastructure development by using private capital, streamlining regulations and incentivising business. Encouraging the private sector to co-invest in dual-use infrastructure—ports, airstrips and logistics hubs—will create lasting economic benefits while supporting defence capabilities.

Unlocking the Territory’s vast critical mineral reserves and energy resources must also be framed in a national security context. The Beetaloo Basin’s gas potential and the Territory’s deposits of rare earth elements can contribute to energy security and domestic manufacturing growth and self-resilience. The Adelaide River Off-stream Water Storage project ensures reliable potable water supplies for defence bases, training areas and disaster response operations. This shows how infrastructure investment can serve both economic and military needs.

The Northern Territory has a once-in-a-generation opportunity to become Australia’s northern powerhouse for defence and critical minerals. But success will require sustained bipartisan support and collaboration between government, industry and Defence. The window for action is narrowing. As regional tensions rise and global competition for supply chain sovereignty intensifies, Australia must seize the opportunity to strengthen its northern frontier.

Trump could make Asia more united

US President Donald Trump has raised the spectre of economic and geopolitical turmoil in Asia. While individual countries have few options for pushing back against Trump’s transactional diplomacy, protectionist trade policies and erratic decision-making, a unified region has a fighting chance.

The challenges are formidable. Trump’s crude, bullying approach to long-term allies is casting serious doubt on the viability of the United States’ decades-old security commitments, on which many Asian countries depend. Worse, the US’s treaty allies (Japan, South Korea and the Philippines) and its strategic partner (Taiwan) fear that Trump could actively undermine their security, such as by offering concessions to China or North Korea.

Meanwhile, Trump’s aggressive efforts to reshape the global trading system, including by pressuring foreign firms to move their manufacturing to the US, have disrupted world markets and generated considerable policy uncertainty. This threatens to undermine growth and financial stability in Asian economies, particularly those running large trade surpluses with the US—such as China, India, Japan, South Korea and countries in the Association of Southeast Asian Nations.

Currency depreciation may offset some of the tariffs’ impact. But if the Trump administration follows through with its apparent plans to weaken the US dollar, surplus countries will lose even this partial respite, and their trade balances will deteriorate. While some might be tempted to implement retaliatory tariffs, this would only compound the harm to their export-driven industries.

Acting individually, Asian countries have limited leverage not only in trade negotiations with the US, but also in broader economic or diplomatic disputes. But by strengthening strategic and security cooperation—using platforms such as ASEAN, ASEAN+3 (with China, Japan and South Korea), and the East Asia Summit—they can build a buffer against US policy uncertainty and rising geopolitical tensions. And by deepening trade and financial integration, they can reduce their dependence on the US market and improve their economies’ resilience.

One priority should be to diversify trade partnerships through multilateral free-trade agreements. This means, for starters, strengthening the Comprehensive and Progressive Agreement for Trans-Pacific Partnership—which includes Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Britain and Vietnam—such as by expanding its ranks. China and South Korea have expressed interest in joining.

The Regional Comprehensive Economic Partnership—comprising the 10 ASEAN economies, plus Australia, China, Japan, New Zealand and South Korea—should also be enhanced, through stronger trade and investment rules and, potentially, the addition of India. Given the Asia-Pacific’s tremendous economic dynamism, more robust regional trade arrangements could serve as a powerful counterbalance to US protectionism.

Asia has other options to bolster intra-regional trade. China, Japan and South Korea should resume negotiations for their own free-trade agreement. Japan and South Korea are a natural fit, given their geographic proximity and shared democratic values. The inclusion of China raises some challenges—owing not least to its increasingly aggressive military posture in the region— but they are worth confronting, given China’s massive market and advanced technological capabilities. With the US putting economic self-interest ahead of democratic principles, Asian countries cannot afford to eschew pragmatism for ideology.

Beyond trade, Asia must build on the cooperation that began after the 2008 global financial crisis. The Chiang Mai Initiative Multilateralisation, which provides liquidity support to its member countries (the ASEAN+3) during crises, should be strengthened. Moreover, Asian central banks and finance ministries should work together to build more effective financial-stability frameworks—robust crisis-management arrangements, coordinated policy responses and clear communication—to stabilise currency markets and financial systems during episodes of external volatility.

Trump is not the only reason why Asia should deepen cooperation. The escalating trade and technology war between the US and China is threatening to divide the world into rival economic blocs, which would severely disrupt global trade and investment. But there is still time to avoid this outcome, by building a multipolar system comprising multiple economic blocs with overlapping memberships. By fostering economic integration, within the region and beyond, Asian countries would be laying the groundwork for such an order.

In an age of geoeconomic fragmentation, Asian countries could easily fall victim to the whims of great powers. But by strengthening trade partnerships, reinforcing financial cooperation, enhancing strategic collaboration and building economic resilience, they can take control over their futures and position Asia as a leading architect of a reconfigured global economy.

To counter China’s coercion of Taiwan, we must track it better

The threat of a Chinese military invasion of Taiwan dominates global discussion about the Taiwan Strait. Far less attention is paid to what is already happening—Beijing is slowly squeezing Taiwan into submission without firing a shot.

Instead of launching a full-blown attack, China is ramping up a full spectrum of coercion: political meddling, economic pressure, information operations, legal manoeuvres, cyberattacks and diplomatic isolation, all conducted within the pressure cooker of constant military threats. The goal? Wear Taiwan down bit by bit until it has no choice but to give in to Beijing’s demand for unification.

ASPI has launched State of the Strait, a weekly Substack that keeps track of all the ways China is putting the squeeze on Taiwan. The international community can’t afford to ignore China’s evolving tactics. These coercive strategies don’t just increase tensions; they create a serious risk of miscalculation that could spiral into a larger conflict. That’s why it’s important to keep a close watch on these developments. By tracking China’s actions, policymakers can better understand where the red lines are, strengthen deterrence efforts and help Taiwan remain a resilient democracy.

Chinese President Xi Jinping’s approach is clear: he’d rather pressure Taiwan into submission over time than launch an all-out invasion. In late 2024, US intelligence reported that while Beijing is still committed to taking control of Taiwan, it’s hesitant to start a direct war. China’s coercion tactics are carefully calibrated to stay just below the threshold of outright war, creating a new normal that benefits the Chinese Communist Party while avoiding an immediate international crisis, reflecting Sun Tzu’s principle of ‘subduing the enemy without fighting’.

Taiwan’s fall would have devastating consequences. A war over Taiwan could cost the global economy up to $10 trillion—far more than the economic damage caused by the war in Ukraine or the Covid-19 pandemic. Even without an actual war, ongoing tensions could cause financial chaos, with global markets taking a hit and a potential $358 billion trade disruption if China were to block imports from G7 nations. If China manages to annex Taiwan without starting a war, this would also send a dangerous message to authoritarian regimes everywhere that democracies aren’t willing to stand up against territorial expansion.

While other think tanks and intelligence analysts do a great job covering China’s military and paramilitary moves, there’s no widely trusted platform that tracks the full range of coercion tactics in one place. That’s where State of the Strait comes in. By compiling and analysing data on all aspects of China’s coercive strategy—not just military actions—it fills a crucial gap and gives a more complete picture of what’s happening.

One example of coercion is when countries engage with Taiwan in ways deemed unacceptable, Beijing typically responds with strong rhetoric in official statements designed to deter further interaction. As the graph below shows, in 2024, Beijing’s most common grievance (representing 48 percent of observations) was foreign governments ‘violating China’s One-China principle’—a broad category that encompassed any action perceived as recognising Taiwan as distinct or autonomous, even if it fell short of full diplomatic recognition. Another 22 percent of criticisms stemmed from foreign officials meeting with Taiwanese counterparts, reflecting former president Tsai Ing-wen’s increased participation in international security forums.

What are China’s reasons for criticising countries engaging with Taiwan in 2024? (Source: ASPI’s State of the Strait Database.)

In another form of coercion, Beijing consistently and deliberately revokes the tariff-free status of Taiwanese exports as a means of leverage and punishment, as indicated in the graph below. Taiwan’s Mainland Affairs Council, which is responsible for cross-strait relations policy, has characterised this form of coercion as ‘economic oppression’. In 2024 alone, China imposed trade restrictions on 169 Taiwanese exports, primarily through the removal of tariff-free status; the only exception was polycarbonate, which faced anti-dumping tariffs. Machinery and parts constituted the largest category of Taiwanese exports, followed by plastics.

China lifted its ban on the import of wendan pomelos, a type of citrus fruit from Taiwan, in 2024. That occurred two weeks before the Mid-Autumn Festival (2 September), but the ban was reinstated a week after the holiday (25 September), along with bans on 33 other Taiwanese imports. The pomelo symbolises prosperity and good fortune in Chinese culture and is often given as a gift during festival times.

On which Taiwanese exports did China put new trade restrictions in 2024? (Source: ASPI’s State of the Strait Database)

This is only data on two coercion tactics from one year. In future, ASPI intends to expand State of the Strait by developing a searchable public database and assessment platform. That interactive tool will visualise coercion data across domains and years, distil key insights and help policymakers track long-term trends with greater clarity.

The goal is simple: to help decision-makers and the public understand how China is ramping up the pressure, how close we are to a tipping point, and how these tactics are affecting Taiwan’s government, society, and decision-making. Over time, State of the Strait will become an essential resource for tracking China’s tactics and shaping the strategies to counter them.

China’s warships reveal more than a need to strengthen the ADF

Last month’s circumnavigation by a potent Chinese naval flotilla sent a powerful signal to Canberra about Beijing’s intent. It also demonstrated China’s increasing ability to threaten Australia’s maritime communications, as well as the entirety of its eastern and southern seaboards, where the major population centres and critical infrastructure are concentrated. In a major war, our civilian infrastructure is likely to be targeted, not just military bases.

The deployment further highlighted national resilience vulnerabilities that go well beyond the need to strengthen the Australian Defence Force’s capabilities, overdue and critical though this task undoubtedly is.

While the presence of a Chinese navy task group this far south was unprecedented, and a noteworthy demonstration of China’s reach and sustainment capability, it is important to stress that peacetime signalling through military presence and wartime operations are poles apart. As we are in peacetime, China’s naval flotilla was free to manoeuvre in close formation within Australia’s exclusive economic zone (EEZ) and conduct live-fire exercises in the Tasman Sea.

In a crisis or conflict, it is highly unlikely that China’s warships would venture so close to Australia’s continental coastline. Even with Australia’s current, inadequate military capability, the ADF would be able to hold a similar Chinese flotilla at clear risk of annihilation. Surface vessels approaching Australia are easily detected long before they appear in our vicinity, by surveillance systems such as the Jindalee Operational Radar Network. If the navy had not already intercepted a hostile surface action group in Australia’s maritime approaches, the air force would be tasked with responding.

However, such an effort would absorb much of the ADF’s combat capacity. It also assumes a free hand to operate from air bases, when those same, currently unhardened bases could be subjected to preparatory missile strikes launched by China’s long-range aircraft and submarines. China’s most capable warships have stand-off and air-defence weapons of their own, and could still pose a significant threat to ships and coastal targets.

China’s growing fleet of nuclear-propelled attack submarines would be much harder to detect than surface vessels. They would likely operate independently, further stretching the ADF’s resources. Even when threats are detected, gaps will remain in the ADF’s ability to respond to intrusions in our vicinity. After all, while Australia’s extensive continental and island territories create the world’s third-largest EEZ, our navy is and will remain significantly smaller than Japan’s or South Korea’s.

Monitoring and responding to incidents within such vast tracts of sea and air space is challenging even in peacetime. But gaps in capability can be narrowed if Australia invests with greater urgency and purpose to realise the focused, integrated force outlined in the 2023 Defence Strategic Review.

To defend the Australian homeland against China’s power projection, which is only going to grow in scale and frequency, the ADF needs to grow bigger, faster and more lethal. At the same time, Australia’s political and military leaders must avoid being lured into a defensive mindset. Beijing’s ‘I can play in your backyard, if you play in mine’ message is intended to do just that.

An Australia preoccupied with localised defence, less intent on shaping its surrounding region or developing the capabilities and forward posture needed for deterrence, serves Beijing’s interests more than Canberra’s. We need military flexibility, political will and strategic vision to help secure the region and defend ourselves.  We must remember that while China’s navy was sailing around Australia, it had other ships exercising in the South China Sea and near Taiwan. These remain China’s primary areas of military focus and should therefore be an ongoing focus for Australia’s deterrence efforts.

Even as Australia grapples with this unfamiliar challenge—a potential adversary that can project power from all directions and has every motivation to tie down the ADF during a conflict in East Asia—Canberra must continue to align its military efforts with those of our key allies and partners.

Also, the nuclear submarines we’re acquiring under AUKUS are flexible platforms that can be used for sea control. But their primary purpose is not, as sometimes portrayed, to protect and defend Australia’s vital trade routes and sea lines of communication. The massive investment to acquire them will be squandered if they are tied up in the defence of homeland waters or escorting high-value assets. Fundamentally, they are for projecting denial by taking the fight as close to the adversary as physically feasible.

But within the next decade Australia will only have one SSN in service, at best, while the fate of the life extension program for our six old diesel submarines of the Collins class hangs in the balance. China’s uninvited naval presence underscores that even if Australia had an operational AUKUS submarine fleet tomorrow, there would still be a need for a concomitant uplift in the ADF’s conventional capabilities across the board.  Unfortunately, the government has not approached this uplift with the requisite urgency. The opportunity costs of prioritising defence spending increases to fulfil our AUKUS Pillar 1 commitments have come home to roost.

Granted, improvements to the Royal Australian Air Force’s maritime strike capabilities are underway, as evidenced by the recent test-firing of an LRASM anti-ship missile by an F/A-18F Super Hornet, and an associated missile order from the US. The navy is also boosting its inventory of Mark 48 heavyweight torpedos. But the dollar value of such orders tends to obscure their relatively modest scale. For example, A$200 million buys 30 torpedos of the Mark 48 latest variant, based on a unit cost of A$6.7 million.

War stocks are chronically low across the ADF, despite the need to ‘sustain protracted operations during a conflict’ being designated as one of six priority capability effects in the 2024 National Defence Strategy. In addition to boosting its combat power, the navy needs to enhance its undersea surveillance capabilities in Australia’s approaches, to aid submarine detection efforts.

Mike Pezzullo has suggested that Australia acquire B-1B bombers as they are progressively retired from the US air force, and put them into service with Australia’s air force in an anti-ship role. This is a radical idea that deserves serious consideration. While expensive, it could be done on a timeline more relevant to our deteriorating security situation than AUKUS—though AUKUS should still go ahead.

Even then, Australia’s investments in maritime strike from the air will be worth nothing in a war if missile strikes render the air force’s bases inoperable. Base hardening needs to be done in parallel, just as China is doing on a massive scale. Equally, the government’s ambitions to invest in integrated air and missile defence, highlighted as a priority in the Defence Strategic Review, remain just that: ambitions.

In this context, the Australian Army can contribute to securing our surrounding waters and approaches by fielding anti-ship missiles on mobile launchers. This will make our coastal defence thicker, less predictable to enemies and more survivable. But it remains unclear how far down the track the project to implement this, Land 8113 Phase 2, has progressed.

China’s demonstration that it can project and sustain naval power into Australia’s surrounding waters has highlighted our lack of maritime resilience. As the late James Goldrick put it, defending a fortress is pointless without attending to its water supply.

As an island nation, Australia would face profound national sustainment challenges in a wartime environment where prevailing regional trade patterns would be massively disrupted. Shipping would be a key pillar of our national economic security, if not survival. In any prolonged maritime conflict, Australia would have to requisition merchant vessels to sustain the nation’s wartime needs beyond the short term. Australia’s nationally flagged fleet, comprising around 12 vessels and not a single tanker, is risibly inadequate.

The idea that Australia could depend solely on market forces for imports needed for national survival is dangerously complacent, especially given China’s growing dominance in international shipping and port ownership. The fact that the global maritime trading system has absorbed the impact of limited conflict in the Black and Red seas without breaking down owes much to good luck and some wrenching supply-side adjustments.

This is not simply a question of ensuring that Australia maintains maritime imports of essential commodities from across the oceans. Coastal shipping, although out of sight to most of the population, is vital to Australia’s economic functioning. Road haulage is no substitute for bulk transportation by sea. Much of Australia’s critical infrastructure, including our two remaining oil refineries, is vulnerably situated near the coast. We lack the redundancy and stockpiles to absorb damage or cope with sustained supply disruptions. Australia is energy rich. We are a major exporter. But what counts more when it comes to the crunch is our continuing dependence on imported fuels, including 100 percent of our aviation fuel.

The government-commissioned report on a Maritime Strategic Fleet, submitted almost two years ago, needs to be revisited urgently. There is little evidence that its modest suite of recommendations has been adopted. The report assessed that 12 privately owned and commercially operated vessels under the Australian flag and crewed by Australians would be enough to meet emergency needs. This is highly questionable if there were a protracted maritime conflict in the Western Pacific. The strategic fleet needs to include dedicated tankers, as well as more cargo vessels capable of transporting refined fuel products (the navy has two replenishment ships of its own).

By comparison, the US has a fleet of 10 US-registered tankers in its Tanker Security Program. These vessels operate commercially in peacetime, but are essentially reserved for military use to support forward operations in wartime. They are not intended to keep the US’s lights on, or those of its allies. Australia’s need to secure oil and oil products will be far more acute, given our paltry fuel reserves and absence of domestic alternatives.  Deep pockets may not be enough to secure supplies on the spot market at the outset of a conflict, given the attendant competition and dislocation.

There is a case for Australia to consider acquiring its own cable-laying ship, to repair or replace fibre-optic seabed cables cut by an adversary at the onset of a conflict. Such ships are in short supply and their availability would be highly uncertain during wartime. An Australian-flagged specialised seabed cable support vessel would be a strategic asset that Canberra could make available to its closest allies and partners in the Pacific.

If the South China Sea and the major straits connecting it to the Indian Ocean are deemed too hazardous for international shipping, the long diversionary route around Australia will become crucial for Japan, the Philippines, South Korea, Taiwan (unless it’s blockaded) and the US from a military standpoint. From a supply and sustainment perspective, Australia should benefit from such a major realignment of shipping flows. Calling into Australian ports would no longer require a long and tell-tale diversion from major shipping lanes. And, to some extent, there is still safety in numbers, provided shipping is directly or indirectly protected.

The importance of the coastal sea lanes immediately south of Australia provides a strong case for us entering into cooperative arrangements with countries such as Japan and South Korea. India would become Australia’s most obvious substitute source for refined products, assuming that Japan, South Korea and Singapore would be unable or unwilling to meet our needs. And trans-Pacific routes would be vital to maintain communications and reinforcement from the US.

But there are downsides. China’s naval strategists and planners have likely also realised that the southern diversionary route would become a strategic artery for the US and its regional allies and partners, not simply of local importance to Australia. This paints China’s uninvited naval circumnavigation in a more strategic hue.

Australia’s southern and eastern seaboards could become a target for the interdiction of allied supplies, as they were for Germany and Japan in World War II, on and under the surface (Germany mined the Bass Strait during both world wars). Western Australia would be of heightened interest as a military target, given the likely concentration of US, British and Australian submarines at HMAS Stirling. Australia would necessarily have to assume primary responsibility for the protection of shipping passing close to its shores, partly as a quid pro quo to ensure its own supply. This would mean fewer warships and other assets would be available to perform other tasks, such as repelling an invasion of Taiwan or relieving a blockade of the island.

Fortunately, the closer the shipping lanes pass to the coast, the easier they are to defend. A layered defence incorporating assets based on land, air and sea could extend area protection in sufficient depth so that direct escort would be necessary only for the highest-value strategic cargoes or military assets. All three services would need to play an active role in defending Australian coastal waters and approaches for the duration of the conflict. The creative use of uncrewed platforms could alleviate the burden on the navy and air force.

Sustainment during wartime is a whole-of-nation endeavour. China’s recent naval visit, while in no sense a cause for panic, should sound an alarm that echoes beyond Australia’s naval community and the ADF. The defence of the nation during a major conflict will require more than just capable armed forces to succeed, while civilian infrastructure could be exposed as our Achilles’ heel. Australia’s national resilience and readiness will be the main theme of ASPI’s annual defence conference, on 4 June.

Trump’s critical minerals order may harm Australian interests

US President Donald Trump is certainly not afraid of an executive order, signing 97 since his inauguration on 20 January. In minerals and energy, Trump has declared a national emergency; committed to unleashing US (particularly Alaskan) resource potential; and established the National Energy Dominance Council (NEDC), granting it considerable executive powers.

His latest minerals order, titled ‘Immediate Measures to Increase American Mineral Production’, aims to overhaul US domestic production and reshape domestic and international critical mineral supply chains. It could derail Australia’s efforts for greater domestic production in the process.

At the strategic level, Trump wants to end US reliance on Chinese and adversarial mineral supplies and massively boost US production for national security and economic gains. While there is room for international partners to assist, the order is clearly aligned with the Trump’s broader America First approach.

Operationally, the US government will attempt to unlock mineral and energy production by administratively and financially prioritising new and existing projects and slashing regulatory red tape across critical minerals, uranium, and other commodities.

This will occur across the supply chain, targeting ‘mineral production’  encapsulating mining, processing, refining and end-use manufacturing in technological productions, including semiconductors, permanent magnets, and electric vehicles.

Executive orders are designed for immediate effect. Trump’s minerals order is no different, outlining near immediate actions for departmental heads and agencies. Much of it overseen by the NEDC.

For example, within 10 days of signing, agencies involved in mine production permitting are to produce a list of viable projects to prioritise. In the following 10 days, the Secretary of the Interior Doug Burgum, through his role as NEDC chair, will select priority projects for immediate approval.

Similarly, legislative reform to mine waste disposal and treatment—presumably reducing environmental protections—is ordered to be introduced to congress within 30 days of signing.

Alongside Burgum as NEDC chair and Secretary of the Interior, US Secretary of Defense Pete Hegseth and Secretary of Energy Chris Wright are tasked with significant decision-making across new investments and project prioritisation.

Project prioritisation, expedited approvals, and expedited delivery of supporting infrastructure are the primary levers through which Trump aims to unlock US mineral production. Achieving each will likely come at cost of environmental and social protections.

Whether it achieves rapid overall production increases remains to be seen.

According to S&P data, US mines have an average lead time of 13 years. Discovery and exploration studies account for the largest proportion at 8.7 years on average. Rapid permits should reduce the lag time between the completion of feasibility studies and mine construction, but it will not open new mines overnight.

Commercial factors, technical and financial feasibility, and major financing hurdles must also be considered. Trump’s slate of mineral and energy orders contain some measures to increase financial support to domestic mining and processing projects, including directing the International Development Finance Corporation to distribute more domestic funding. But doing so quickly and efficiently will test the US government. Industry, additionally, will most likely want to see sustained policy commitment and market effects before investing into new capital intensive projects.

Moving forward there will be opportunities for Australia to grasp, as well as risks to manage.

Several Australian mining companies are already operating or proposing government-supported processing plants in the United States. This includes Lynas Rare Earths’ refinery in Texas, Syrah Resources’ graphite refinery in Louisiana and South 32’s potential battery-grade manganese plant fed by its new Hermosa mine in Arizona. These projects could become important linkages in the sector and may benefit from these recent reforms.

The US will also remain reliant on international supply for some minerals and will need to prioritise close international partners with large mineral deposits, such as Australia.

The US has already demonstrated its willingness to provide generous concessional loans and fund minerals processing projects. The financing provisions of the minerals order will create further opportunities while increasing competitive pressure on Australia—particularly regarding our Future Made in Australia aspirations.

But there are risks to Australia’s ability to compete. Faster approvals and greater government funding commitments may draw investment to the US rather than Australia. However, poor implementation or environmental and social backlash may undermine this competitive advantage.

Australia should be most concerned if the US successfully expands its raw outputs quicker than its downstream industry, as US mineral production could flood the market. In 2024, Australia saw similar effects of oversupply in the nickel market (largely due to Indonesia), leading to temporary shuttering of nearly all Australian nickel operations.

Australia will need to assess the risks presented by US production increases. The government must work with industry to protect our domestic production and assess whether demand-side policy responses, such as a national stockpile, will be needed.

Trump’s mineral policy puts America first. Australia must respond and engage directly with the US to negotiate collaboration and maintain fairness in the market. International forums, such as ASPI’s Darwin Dialogue, may become particularly important to achieving this.

Australia’s security architecture must evolve, not regress

The Independent Intelligence Review, publicly released last Friday, was inoffensive and largely supported the intelligence community status quo. But it was also largely quiet on the challenges facing the broader national security community in an increasingly dangerous world, in which traditional intelligence is just one tool of statecraft and national power.

After the January discovery of a caravan laden with explosives in Dural, Sydney, confusion emerged around what federal and state governments knew and when. The review was completed before the caravan was discovered, and the plot was likely beyond the review’s scope. However, government responses to the event should prompt a discussion about Australia’s national security architecture.

Australia faces an unprecedented convergence of threats. We are confronted simultaneously by the rise of aggressive authoritarian powers, global conflict, persistent and evolving terrorism, foreign interference and the normalisation of cyber warfare.

Luck will not protect us; we need structure and certainty. Australia saw these threats early and began to modernise its security architecture in 2017, including the establishment of the Home Affairs portfolio.

But the government has gradually reversed some elements of the consolidation, returning various security responsibilities to the Attorney-General’s portfolio, including for the Australian Federal Police and the Australian Security Intelligence Organisation. This reversion to an outdated model risks leaving the system ill-equipped to confront the challenges of the 21st century.

Debate on Home Affairs seems fixated on the leadership style of its former head, Michael Pezzullo. Leadership is crucial, but obsession with individual style over substance, distracts from both strategic thinking and the fundamental issue of resurrecting a system that had structural inadequacies and was demonstrably unfit for purpose. We are not simply revisiting a past model; we are resurrecting a failed one.

The Attorney-General’s portfolio, in its traditional guise, was designed for a simpler, less dangerous era. Domestic threats were minimal and tended to come one by one—for example, after the end of the Cold War, security focus shifted from espionage to the emerging threat of Islamist terrorism. The Attorney-General’s oversight was appropriate, as it focused primarily on the legal framework while security agencies executed operations.

However, the proliferation and intersection of modern threats have overwhelmed this antiquated model.

When confronted with asylum-seeker boat arrivals, global terrorism, China and hybrid threats including cyber, the previous system—notwithstanding highly talented people—struggled as the Attorney-General’s portfolio held both the legal and security responsibilities. Having public servants working on legal considerations and intelligence officers doing operations is no longer adequate.

The system’s limitations were evident well before the 2017 restructure. In 2011, prime minister Julia Gillard moved cybersecurity from the Attorney-General’s purview into her own department. Similarly, the 2012 review of illegal boat arrival policy was managed within the prime minister’s department, reflecting that the framework was not up to the task. And as a result of a review after the 2014 Martin Place terrorist attack, the Abbott government created a Counterterrorism Coordinator within the prime minister’s portfolio.

The rise of the Islamic State terrorist group in 2014 exposed policy deficits. While terror laws rightly fell under the Attorney-General’s remit, the broader policy response demanded a more strategic perspective and decisive approach. Changes were needed, partly because laws were so out of date.

But it was China’s rise that finally revealed the urgent need for a dedicated focus on national security policy. The 2016 review into foreign interference was a direct consequence of Australia’s evolving threat landscape.

Few of our closest partners’ chief law officers also function as security ministers. Typically, a dedicated security minister focuses on threat assessment and policy development, while the Attorney-General ensures that all actions are lawful.

Australia’s Home Affairs model strengthened the legal checks and balances by separating security policy and operational functions from the legal oversight function. It ensured that a single minister could not simultaneously identify a threat, determine the appropriate response and authorise the necessary actions without independent scrutiny. The previous system essentially allowed a single minister to mark their own homework.

Dividing security responsibilities between the Attorney-General and Home Affairs portfolios limits the effectiveness of both departments.

If this gradual dilution portends a future abolition of Home Affairs altogether, that would be a mistake. As the Dural caravan controversy unfolded, no one seemed able to agree on what was an appropriate amount of information-sharing between police and security agencies, and state and federal governments. This underscores the need for clarity that Home Affairs is responsible for setting, coordinating and implementing national security policy.

Home Affairs was created because the threat environment was evolving and, within our national security architecture, foreign and defence policy were covered but the third aspect of national security—domestic security—was lacking. So, what security evolution has justified its regression? The Attorney-General’s department has not shown itself to be more capable than Home Affairs in terrorism, cybersecurity or foreign interference.

Home Affairs—to the government’s credit—led the world by banning DeepSeek from government devices. Could we count on such decisive action if lawyers were doing all the work and then reviewing it themselves? Would you allow your lawyer to run your business, rather than provide essential legal counsel?

Technology amplifies threats and is advancing much faster than new laws can be written. Terrorists use encrypted apps to plot attacks and social media to attract recruits. China spreads propaganda through social media and has already begun using cyber intrusions to prepare to conduct sabotage operations in future conflict.

Australia must not only reinstate the separation between the security minister and the attorney-general; it must evolve further to confront 21st-century threats. This should include establishing a National Security Council or Secretariat, like those of many of our partner nations, including Quad countries. This body should be led by a national security adviser who provides strategic coherence and policy coordination.

To navigate the increasingly complex and dangerous global security landscape, we need to evolve, not regress.

More F-35s, more tankers: a reliable way to strengthen Australian deterrence

If the Chinese navy’s task group sailing around Australia a few weeks ago showed us anything, it’s that Australia has a deterrence gap so large you can drive a ship through it. Waiting for AUKUS or hoping Australia’s troubled shipbuilding program will deliver—in the 2030s—is a recipe for annual panic about grey zone coercion as Chinese deployments become routine.

Boosting our air combat capability is the fastest way to address Australia’s deterrence gap. That requires two things: more combat aircraft and more airborne tankers.

For decades, received wisdom has been that 100 fighter aircraft were enough for Australia. The logic was vague and came from the Royal Australian Air Force’s four fighter squadrons retaining different mission specialisations. Given multi-role capabilities and sensor fusion of modern aircraft, this specialisations argument is outdated.

So, can 100 aircraft provide credible deterrence?

Currently the RAAF has 72 F-35A Lightnings, 24 F/A-18F Super Hornets and 12 EA-18G Growlers (electromagnetic attackers), for a total of 108 combat-capable aircraft. The jets are supported by seven A330 MRTT tanker-transports (called KC-30As by the RAAF).

Combat readiness is a different story. The Australian Department of Defence doesn’t provide combat aircraft availability numbers, but in 2019 the then US secretary of defense, James Mattis, told the US Navy and Air Force to attain an 80 percent mission-capable rate for combat aircraft.

There are four RAAF F-35A squadrons, including one that’s a training unit in peacetime. Each is allocated 18 aircraft to provide an intended 14 ready for duty while airframes and engines are cycled through maintenance. Two of the 14 are usually held as spares during squadron operations. Therefore, in a crisis the Australian government can expect to call on 36 operational F-35As. The same considerations result in just 16 F/A-18Fs and eight EA-18G Growlers being available

That’s a total of no more than 60 aircraft for a continent the size of Europe—hardly enough.

During surge operations the 60 RAAF combat jets could all be available. But during ongoing crisis operations—such as conducting defensive combat air patrols in the east, north and west of Australia or keeping aircraft next to runways for quick intercepts—the air combat force will quickly run into sustainment problems.

Historical observations of British and US combat aircraft availability show the mission- availability rate can be even worse—for example, due to unreliable parts supply.

On an island continent, air power is the fastest and most efficient means of deterrence. But we just don’t have enough air power.

The Royal Air Force operates 171 combat aircraft and 14 tankers from a land mass 3 percent the size of Australia. The Japanese air force has about 330 fighters and a land mass 5 percent of Australia’s. No other nation seems as committed as Australia to doing so much with so little. The only comparable air force in size to the RAAF is Canada’s, which has 79 fighters.

If Australia is serious about retaining strategic independence, including the ability to credibly deter an enemy, we should increase the size of the RAAF’s fighter force by two squadrons—36 aircraft—and add four A330 MRTT tankers. This should be phased alongside introduction of unmanned semi-autonomous teamed aircraft on a ratio of three uncrewed systems, including some for refuelling, for each additional crewed combat aircraft.

Increasing the fighter force to seven operational squadrons, including the existing dedicated electronic attack squadron but not the training unit, and supplementing it with about 100 autonomous aircraft would grow the RAAF’s combat capability to 240 aircraft before 2034.

A force this size reduces the fragility of the current air combat capability by adding depth through numbers and provides the government with a much broader range of options.

The flexibility of packaged air combat aircraft means they can quickly swing between roles and locations in a matter of hours. Missions can range from air policing and regional assurance to cruise missile defence, maritime strike and counter-air missions. Combat aircraft can be permanently stationed on both the west and east coasts.

The United States is the only country that could supply 36 fighters quickly. The obvious choice is the F-35A, since Lockheed Martin is pushing out 150 fighters of that design annually. Moreover, acquiring aircraft of designs that are already in-service avoids the risks inherent in introducing new types.

Over the long-term, policy settings such backing the development of long-range autonomous and teamed systems can be put in place to make us more strategically secure. But what we need now is an air combat system that helps us understand, decide and act.

The building blocks are in place. The RAAF operates the Wedgetail airborne surveillance, P-8A Poseidon maritime patrol and MC-55A Peregrine electromagnetic surveillance aircraft. Combined with the Jindalee over-the-horizon radar network and Five Eyes intelligence-sharing arrangements, these give us a reasonable understanding of what is happening in our region and where.

But there must be greater emphasis on the action part of the system—the combat aircraft—because deterrence is about the potential for response.

This is an ambitious proposal that would require significant investment in airbase and support infrastructure, particularly in the north and west of the country. But as a realistic, actionable plan that secures Australia’s future it is within our reach. And what’s more, it can be attained in years, not decades.