Tag Archive for: Australian Government

How a government manages crises is key to curbing the rise of conspiracies

Australia has suffered a litany of crises over the past three years—fires, floods and a pandemic. Crises sap the resources and capacity of government, requiring careful yet immediate management and clear, effective messaging. The way a crisis is managed can have a huge impact on the resilience of the community, as well as on its attitudes towards government. If the government delivers, the confidence of the public can go up; if the government’s efforts seem misplaced or its messaging is unclear, trust in government unsurprisingly falters.

As well as crises, the past three years have also thrown up another challenge—the rise of conspiracy theories. While conspiracy thinking is nothing new, it has reached a level of fervour that poses a real and present risk to the nation’s security. Efforts to counter conspiracies have so far concentrated on independent fact checks and monitoring of foreign influence. While these efforts are steps in the right direction, more must be done to address the individual risk factors for conspiracy thinking—fear, anxiety, isolation and distrust.

The Covid-19 pandemic has been in many ways a masterclass on the relationship between crises, fear and government. Anxiety and fear have been defining factors in the community’s experience of the pandemic, just as they’ve been in the conspiracies that accompanied it.

Studies from the UK have suggested that, regardless of whether an individual complies with health orders or actively undermines them, fear of the virus is the primary motivating factor for both actions. This can put governments in a tricky position, because the dominant source of compliance—fear of the crisis itself—is also a risk factor.

But while fear might be the motivator for action, it isn’t the deciding factor in what people will do in a crisis. In the context of Covid, it was trust that determined what people did with their fear—whether they followed health directives or rioted in the streets. In a nutshell, when it comes to crises, the less people trust a government, the more likely they are to seek alternatives to manage their fears and anxieties. Of course, how effectively a government manages crises, and how clearly it communicates with the people, are themselves deciding factors in public trust.

This means that in a time of rolling crises and pervasive conspiracy, government messaging about and management of crises must be more carefully considered from a conspiracy lens. As outlined in a recent policy paper released by the National Security College at the Australian National University, fear, anxiety, vulnerability and similar conspiracy risk factors must be more effectively incorporated into the government’s calculus when responding to and communicating in disasters and crises.

Government messaging during crises—especially extended ones—should be connected across relevant agencies so that it balances psychological and security considerations. As it stands, security and law enforcement monitor dangerous conspiracy movements for security reasons, while health agencies and mental health professionals monitor conspiracy risk factors.

These two capabilities should be combined by governments when messaging in a major crisis event to ensure that what’s being said doesn’t exacerbate known threats or play into the hands of those peddling conspiracy theories. In the context of Covid, poorly announced news about variants has played into classic conspiracy territory. More recently, reports by officials and the media of a ‘weather bomb’ hitting northern New South Wales assisted the spread of claims that flooding there was the result of cloud seeding.

While it may not be possible to dodge every pothole of conspiracy fears, there are some—such as concerns over child safety or weather manipulation— that are well within the power of government to address.

This combined security and mental health approach can and should be incorporated into law enforcement responses to conspiracy thinking as much as possible. The long-range acoustic devices deployed by police in response to the recent protests in Canberra exacerbated conspiracy fears. If possible, such responses should be calculated to ensure that the benefit of deployment outweighs the possible costs. This is especially important given that, due to the inherent fragility precipitated by a crisis, the effect of any disruption is magnified.

Conspiracy thinking has many causes and considerations that must be addressed on their own terms, not least of which is socioeconomic vulnerability. But while Australia’s string of crises might not be the origin of our most dangerous conspiracy thinking, the way governments navigate crises has a pronounced effect on the prevalence and power those conspiracy theories hold, and the risks they pose to national security.

The Australian government—especially law enforcement, security agencies and emergency services—should develop strategies to ensure that their crisis management and messaging take into account the risk factors for conspiracy thinking. While crises demand quick responses, a bit more consideration can avoid creating two problems out of one.

Agenda for change: making the most of Australia’s free-trade deals

In the lead-up to every federal election, ASPI looks at the big challenges facing Australia and what’s needed to address them. Agenda for change 2022: shaping a different future for our nation, released on 2 February, aims to promote public debate and understanding on issues of strategic importance to Australia. The report’s key message is that we need to embrace uncertainty, engage with complexity and break down the silos. Our economic prosperity, national resilience and security depend upon it.

ASPI senior fellow David Uren’s creatively titled chapter in Agenda for change 2022, ‘Free trade partners: where the bloody hell are you?’, highlights the need for Australia to get better value out of its free-trade agreements.

Over the past 10 years, Uren says, Australia focused its trade attention on China in a ‘one-horse race’, and it’s time the government introduced ‘some competition by working with our broader network of free trade and security partners’.

Uren highlights that our cumulative trade with China over the past decade has risen by 150%, against a ‘paltry’ 23% increase elsewhere. He says the story is similar on the imports side: ‘China’s sales to Australia have rise by 110%’, while the remainder of our purchases have grown by just 14%.

These results sit in stark contrast to the ‘huge expansion in Australia’s network of bilateral and regional preferential trade agreements’ over the past decade.

The share of Australia’s trade with its principal trading partner is high relative to other peer economies, but not exceptionally so. What is unique for Australia is that the government of its largest market has ordered punitive trade action in an effort to force changes in Australian government policy.

During the Covid-19 pandemic, Australia experienced firsthand the uncertainty and fragility created by the fracturing of our supply chains when we found ourselves at the end of the trade queue as our trade partners prioritised their trade arrangements.

Uren reminds us that ‘Economics 101 teaches that the point of an economy is to enhance consumer welfare or to raise living standards. Exports aren’t an end in themselves but are a means to finance imports.’

He also notes: ‘China isn’t buying goods that Australia used to sell from the US because they are lower cost or better value, but because the Chinese government has banned purchases from Australia and the US government has required Chinese purchases from the US. It’s a world of managed trade that can only harm the interests of a mid-sized economy such as Australia.’

Australia’s usual approach to stimulating trade is through trade missions and delegations where relevant ministers and business leaders head off overseas to entice other nations to buy our goods. Uren says the focus should be on our bilateral trade partners and we should be meeting with them here.

He also suggests that Austrade’s mandate should be expanded to include ‘the promotion of Australia as a destination for imports, as well as simply supporting exports’. The establishing legislation for Austrade doesn’t reference imports, so broadening Austrade’s role would require amendments to the relevant legislation.

The significant effort by the Australian government to develop bilateral trade agreements with India and the UK is acknowledged by Uren, but he says more is needed. ‘Australia should be working harder to integrate its security and its economic policy’ and we should be leveraging the Quad and AUKUS partnerships to a greater extent.

Uren suggests that ASEAN trade partners including Thailand, Malaysia and Indonesia provide further opportunity for enhancing and diversifying trade. The catch is that ‘success is likely to hinge on Australia accepting limited inroads for our agricultural exports’.

He notes that the use of a bilateral agreement by the US ‘to seize export markets from a principal ally is an example of what happens when the world’s most powerful nations depart from the rule of trade by the World Trade Organization’ and ‘manage their commerce by the exercise of their power’. In response, Australia’s prime minister needs to lead on ‘concerted trade diplomacy’ with our security partners.

Uren’s conclusion is that Australia must ‘defend governance of global trade according to agreed rules and to underline the damage caused when great nations dictate their own terms of trade’.

Decency in Oz foreign policy: the bell tolls for thee

International relations is work of desperate hope, beset by brutal lessons.

For the society of states, Russian President Vladimir Putin’s monstrous appointment with history in Ukraine is trauma and test and teaching moment.

Turning Russia into a pariah, Putin demonstrates that might doesn’t always make right.

It’s an achingly apposite moment for one of Australia’s finest foreign ministers to ponder morality in foreign policy.

Gareth Evans last week released Good international citizenship: the case for decency, an essay in Monash University’s series ‘In the National Interest’.

Australia’s foreign minister from 1988 to 1996 (standing with Alexander Downer, R.G. Casey and H.V. Evatt as longest in the job), Evans casts a hard light on how we’re performing on the global stage: ‘[O]ur overall record has been patchy at best, lamentable at worst, and is presently embarrassingly poor.’

Evans sets up the case for good international citizenship with a typically broad question: ‘Why should we in Australia, or any country, care about poverty, human rights atrocities, health epidemics, environmental catastrophes, weapons proliferation or any other problems afflicting faraway countries, when they don’t, as is often the case, have any direct or immediate impact on our own safety or prosperity?’

He mounts the case for ‘the boy scout’ stuff against the ‘self-described political realists’ who argue that ‘the core, hard-headed business of foreign policy’ is to advance and protect the national interest.

The scout answer is that morality isn’t an add-on; it’s at the heart. Idealism can be realistic.

The traditional duo of security and economic interests must stand beside a third, equal category: ‘national values’. The intellectual judo throw on the realists is that morality is a core interest that can support and advance those geopolitical and prosperity purposes.

When values and morality are treated as optional, Evans argues, Australia is ‘drawn into the kind of adhocery which has characterised the conduct, on both the Coalition and Labor sides, of so much of Australia’s international relations as well as domestic policy in recent years’.

Policy is blown about by opinion polls and focus groups and ‘the sometimes idiosyncratic predilections and prejudices of party leaders’.

The problem, Evans reckons, lies not with the attitudes of Australians but the cynicism and prejudices of our governments. He offers three kinds of ‘hard-headed return’ for a state that acts as a good international citizen.

Problems without borders: a collective international mindset is needed for the big issues no state can fix—global warming, pandemics, cross-border population flows, trafficking of drugs and people, terrorism, extreme poverty, and abolishing weapons of mass destruction.

Reciprocity: let’s make a deal. I’ll help you today; you help me tomorrow. Reciprocity, Evans writes, ‘is not always explicit or transparent, and subtlety will often be an advantage in achieving it. But no practising diplomat will be unaware of the reality, and utility, of this dynamic, and no government policymakers should be oblivious to it.’

Reputation: more intangible, but perhaps most significant. ‘A country’s general image, how it projects itself—its culture, its values, its policies—and how in turn it is seen by others, is of fundamental importance in determining how well it succeeds in advancing and protecting its traditional national interests.’

Evans marks Australia hard against key international-citizen benchmarks: foreign aid generosity; response to human rights violations; reaction to conflict, mass atrocities and refugee flows; and contribution to addressing the existential threats of climate change, pandemics and nuclear war.

On aid, Evans writes that Australia is ‘the worst performed of any rich country’ in ‘the decline in our generosity over the last five decades’. Aid caused his toughest budget brawls as foreign minister—‘an almighty struggle’ and ‘the bloodiest I ever had to fight in cabinet’. Australia has been insouciant about cutting aid, he thinks, because it’s ‘not generally seen by the political class and senior public service as a core national interest’.

The human rights record is judged as ‘mixed’. Much of the advance within Australia, Evans writes, ‘has been driven more by culture change from below than leadership from above’.

In the conflict category, Evans says Australia has been both a responsible and an irresponsible player. ‘Down payments in blood’ were a naive effort to buy defence insurance from the US: ‘We went to war in Vietnam and Iraq, and stayed in Afghanistan much longer than we should have, not because these fights were justified in law or morality, but because the United States wanted us to, or we thought they wanted us to, or because we wanted them to want us to.’

On existential threats, the pandemic has been ‘a huge wake-up call’, while on climate change, ‘the ranks of the doubtful on its nature and impact—even within Australia’s conservative government—are rapidly diminishing’.

Putin’s brandishing of nuclear weapons might have disturbed what Evans calls ‘an alarming degree of complacency, among both publics and policymakers’, about nuclear war: ‘The fact that we have not had a nuclear weapon used in conflict for over 75 years is not a result of statesmanship, system integrity and infallibility, or the inherent stability of nuclear deterrence. It has been sheer dumb luck.’

As an ‘incorrigible optimist’, Evans ends, as he starts, with two big reasons why Australia should be a good international citizen—‘not just because it is the right thing for us to do morally, but because it is also in our national self-interest’.

Australia’s leaders need to be both idealistic and pragmatic.

The simultaneous ambition follows the admonition of a Scottish Labour MP, Jimmy Maxton, who coined a line often heard from the lips of Gareth Evans: ‘If you can’t ride two horses at once, you’ve no right to be in the bloody circus.’

We don’t get much poetry into The Strategist, but as Putin tries to swipe ‘a piece of the continent’ to make Europe the less, turn to John Donne’s advice in ‘Meditation XVII’:

No man is an island,
Entire of itself;
Every man is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less,
As well as if a promontory were,
As well as if a manor of thy friend’s
Or of thine own were.
Any man’s death diminishes me,
Because I am involved in mankind;
And therefore never send to know
For whom the bell tolls;
It tolls for thee.

From vaccines to missiles: the imperative for Australian production

It’s great news that negotiations between Moderna and the federal and Victorian governments have resulted in Australia establishing a national facility to produce mRNA vaccines and medicines. Oddly, there are some parallels between this project for vaccine production and the government’s welcome decision to establish Australian manufacture of some of the advanced missiles our defence force uses.

Just as with Covid-19 vaccines, Australia is currently far too dependent on shaky global supply chains for the guided weapons used by the Australian Defence Force. Right now, not a single missile our military uses is made here in Australia, and the ADF plans to buy $100 billion worth of different missiles over the next 20 years; obviously more if it needs to use them in conflict. Just like vaccines, when our military want lots more missiles, everyone else will too, so national production is an essential priority.

And a manufacturing facility for mRNA vaccines is a high-technology, high-precision enterprise. Manufacturers guard their trade secrets and intellectual property closely, just as is the case with the US, European and Israeli missile manufacturers that currently supply Defence.

The last parallel is that making a big bet on a single vaccine can be risky. Fortunately, we already have the AstraZeneca production capability, and an mRNA factory can produce multiple different vaccines and variants more rapidly than more traditional vaccine development.

Moderna vaccine production locally will start in 2024. Everyone would like that to be faster, but two years from announcement to the first filled vials is timely implementation. Full maturity—and hopefully research and design capabilities for vaccines—will grow over 10 years.

All this has important lessons for how the government establishes a guided-weapon manufacturing facility or facilities. It’s possible to get some rapid results on national missile production early while larger, more mature production capacity is developed in slower time. None of this will happen if operating companies have to build the plant ‘on spec’ in the hope of government orders, perhaps, should there be a need. As with the Moderna facility, co-investment by governments and companies is what’s needed.

It’s wise to think ahead and not place all bets on just one weapon type for local production. As is the case with diseases, warfare too produces changed circumstances and surprises.

A local production approach should begin with Australia partnering with more than one of Defence’s current guided-weapon providers. Logically, at least one will be the current primary builder of weapons in the ADF inventory—the huge US Raytheon defence conglomerate and its successful local subsidiary.

But it’s also wise to have a parallel production track with other credible suppliers, particularly ones that will be unburdened by the intricate, slow-moving US laws and regulations governing defence exports and missile controls—the key obstacle to any accelerated production of US missile designs in Australia.

That probably means partnering with one or both of Kongsberg and Varley Rafael, manufacturers of the versatile Naval Strike Missile and Spike families of weapons, respectively, each likely to be able to move much faster on local production than even the most motivated US supplier. These Norwegian and Israeli companies are backed by their governments and so would bring crucial government-to-government research and development partnerships.

A national production approach will almost certainly include these and others working with Thales’s existing plants for propellant and explosive manufacture. It could also involve working with a ‘missile agnostic’ consortium like the Australian Missile Corporation to produce different missile designs, such as Raytheon’s, Northrop Grumman’s and Lockheed Martin’s, in a joint facility if intellectual property issues can be worked through.

The biggest lesson from the mRNA production deal, though, is that a sense of urgency can deliver rapid local production, even where there are webs of legal, intellectual property and commercial interests to be navigated, in an area in which Australia has related skills and capabilities but not as much in the way of applied experience or track record. It’s refreshing that both the federal and Victorian governments kept their eyes on the actual goal: removing the glaring vulnerability of being totally dependent on international supply chains and establishing early national production. Deeper capability being grown after this is part of the deal, but the eyes stayed on the prize.

The traditional Defence procurement answer would be less likely to do this. It would probably default to just buying in more stocks of missiles the ADF needs from current offshore production for the first few years, and emphasise that missile production requires a dense policy, regulatory and industrial ‘ecosystem’ that can only be created slowly. This would not disturb the traditional way Defence works with big US suppliers. The only thing this traditional procurement approach would not do is have an Australian-produced missile rolling off a local production line any time before 2030. We may not have the luxury of waiting that long.

So, the vaccine production decision is a bit of a pathfinder for rapid local production of missiles—and other areas beyond medicine—that can help streamline traditional planning and implementation.

Dutton: War with China would be ‘catastrophic’ and mustn’t be allowed to happen

Defence Minister Peter Dutton’s National Press Club address is more easily understood when considered in the context of Australia’s 2020 defence strategic update and the accompanying force structure plan rather than under the fierce spotlight of an upcoming election campaign.

The 2020 update warned that major conflict could come without the assumed 10 years’ warning time, and the force structure plan promised, in stark contradiction, capabilities to be delivered to the Australian Defence Force as far away as 2055.

The strongest messages that Dutton delivered on Friday were not much different from those of his critics. He warned repeatedly that war with China over Taiwan would be ‘terrible’, ‘calamitous’ and ‘catastrophic’.

Dutton told his audience that Australia faced the most significant changes to its strategic environment since World War II in a region at the epicentre of global strategic competition. He warned that the region faced a military build-up ‘of a scale and ambition that historically has rarely been associated with peaceful outcomes’.

While the Chinese government insisted it would cooperate with other countries to maintain the safety of maritime routes and address territorial disputes peacefully through dialogue and consultation, regional nations watched with alarm as it built and militarised 20 outposts in the South China Sea.

China was using its increasing power in security, trade and economics, media and the internet to compel compliance, Dutton said, and Australia must amplify voices of regional neighbours silenced by coercion.

Beijing had rejected the decision of international arbiters on territorial rights, regularly sent military jets into Taiwan’s air defence zone and used fishing boats crewed by militia to intrude on other nations’ exclusive economic zones. It broke it’s ‘one country, two systems’ promise over Hong Kong and escalated tensions on its border with India and in the East China Sea with Japan.

China was rapidly expanding the size and capability of its military, Dutton said, building the world’s largest navy with some 355 ships and submarines. By 2030, that was expected to reach 460 vessels. Over the past four years, China had built naval vessels to the equivalent tonnage of the Royal Australian Navy every 18 months.

Two other fleets, subordinated to China’s armed forces, were a coastguard with 130 1,000-tonne ships and a maritime militia that routinely had 300 vessels operating in the Spratly Islands. The coastguard possessed capabilities and maintained an operational tempo on a par with some Southeast Asian nations’ navies.

China had amassed more than 2,000 ground-launched ballistic missiles and ground-launched cruise missiles with a range of up to 5,500 kilometres. Over the next decade, its nuclear warhead stockpile, estimated to be in the 200s last year, was projected to reach between 700 and 1,000. ‘Every major city in Australia, including Hobart, is within range of China’s missiles,’ Dutton said.

The region was not on an inevitable path to conflict, ‘but only if all countries of goodwill ensure together we do our utmost to steer clear of the cliff face’.

Were conflict to come about through misunderstanding, miscalculation or hostility, it would be calamitous for all, Dutton said. ‘Australia’s position is very clear. Conflict must be avoided.’

But acquiescence or appeasement would end in a cul-de-sac of strategic misfortune or worse.

‘Yes, there would be a terrible price of action, but the analysis must also extend to the price of inaction,’ Dutton said.

If Taiwan were taken by force, then Japan’s Senkaku Islands would surely be next.

The Chinese Communist Party couldn’t make its ambitions any clearer, Dutton said. ‘The regional order on which our prosperity and security is founded would change almost overnight. In the absence of a counter-pressure, the Chinese government becomes the sole security and economic partner for Indo-Pacific nations. Now, that is a perilous military and economic situation for our country, but for so many more.’

Dutton said he did not believe China wished to occupy other countries. ‘But they do see us as tributary states, and that surrender of sovereignty and abandonment of adherence to the international rule of law is what our country has fought for and against since federation.’

Any repeat of the mistakes of the 1930s would again exact a great cost on Australia and many other countries. ‘It’s why speaking up and being heard now is essential. We are successful if we adhere to what we know is right, and we do it with great friends.’

The AUKUS agreement with the United States and the United Kingdom was about much more than nuclear-powered submarines, he said. AUKUS would allow the three nations to better share leading-edge military technologies and capabilities. ‘It will bring our researchers, our scientists, industry sectors and defence forces closer together. It will see us initially collaborate on cybersecurity, artificial intelligence, quantum technologies, undersea capabilities and much more.’ In the longer term, there’d be opportunities for even wider cooperation.

AUKUS would complement a broader network of partnerships like ASEAN, the Five Eyes intelligence-sharing group, the Five Power Defence Arrangements, the Quadrilateral Security Dialogue and other arrangements with like-minded partners committed to promoting sovereignty, security and stability.

‘We’re pushing ahead with the $1 billion national guided weapons and explosive ordnance enterprise,’ Dutton said. ‘Long-range strike capabilities, precision weapons and hypersonic missiles are transforming the nature of warfare as significantly as the first rifles, or indeed the Maxim gun.’

Integrated air and missile defence capabilities such as the $2.7 billion Joint Air Battle Management System were being prioritised.

Uncrewed systems such as the Loyal Wingman being developed by the Royal Australian Air Force and Boeing Australia could be produced in quantity and relatively quickly and inexpensively, and their loss or damage would be ‘more tolerable’.

The strategic intent was to drive new determination and speed into delivering defence capabilities. ‘We seek to build a sovereign industrial base that grows our self-reliance and leverages our close technology and industrial collaboration with key allies and partners.’

Dutton sent a strong signal to the many defence industry executives in the audience.

‘Defence and defence industry can no longer be satisfied with a business-as-usual mindset. Instead, they must be driven by a mission of utmost national significance and urgency.’ That meant faster delivery, greater competitiveness and innovation.

And he appeared to step away from the long-held view that the ADF’s weapons and platforms must all be built at home—and the largely unspoken policy that jobs and votes were as important as getting those capabilities into the hands of ADF men and women.

‘The growth of Australia’s defence industrial base, be it our sovereign capabilities, our capacity to contribute to high-value and high-tech defence projects, and our nurturing of skills will complement rather than compete with the industrial bases of our allies and friends,’ Dutton said.

Alone, the ADF could not compete head on with a major power. ‘That much is obvious,’ he said. ‘But it must mean that we complement our defence capabilities with strong relationships of substance, partnerships among like-minded countries, which are focused on the great endeavour of maintaining peace in our region, not nationalistic opportunism.

‘It’s a constellation which is growing strong and more cohesive.’ Australia had a robust defence relationship with Indonesia, for example, and that would include new training initiatives and operational activities including in cybersecurity cooperation.

Japan and Australia would soon formalise a reciprocal access agreement paving the way for advanced defence cooperation and streamlining processes for deploying forces into each other’s territories.

India had been invited to join in the ADF’s massive Talisman Sabre exercise and Australia would augment its defence diplomatic representation in New Delhi to nurture greater information-sharing and coordination on maritime security.

There was a great deal of concern as far away as Europe, Dutton said.

‘Ultimately, regional stability requires, though, the US to be completely engaged right here, to continue to protect the peace and prosperity it’s engendered and from which we have all benefited since the end of the Second World War, and that is exactly what the US is doing.’

Australians deserved an honest conversation, Dutton said, and the opportunity to weigh up if Chinese leader Xi Jinping was bluffing.

‘They need to understand that the government, and through it the ADF, is making sure that we have every capacity, every capability, to defend our country. To be a useful neighbour, to stand up for those that have been silenced, and to work with our great partners including the US, the United Kingdom, Japan, India, South Korea, many others in the region.

‘If China takes a path other than peace, it’s catastrophic,’ Dutton said. ‘I don’t want to see it, and I’ll do everything I can to deter it. And we will deter it from a position of strength, not weakness.’

Australia should invest in a home-grown quantum industry

The recently announced AUKUS technology-sharing pact is about much more than the United Kingdom and United States helping Australia get nuclear-powered submarines; it is an agreement to share platforms and innovation costs for advanced technologies like artificial intelligence and quantum computing. Much of America’s rapidly expanding quantum sector has been fuelled by Australian discoveries and research. But the agreement highlights that, rather than be an intellectual supplier to the US, Australia needs to initiate a strategic investment in quantum technology as a national priority.

In 2001, a discovery made by three physicists, one an Australian, provided a radical new way to build quantum computers using light. Two decades later, two world-leading quantum computing companies—built on principles of this theory and led by Australians—have a valuation of well over US$3 billion.

But neither is based in Australia. PsiQuantum is based in Silicon Valley and Xanadu is based in Toronto. Other Australians have gone on to lead quantum computer development teams in public companies like IBM and Google—but again, overseas. Despite Australia’s continued prominence in quantum research, when it comes to capitalising on the ideas domestically, we come up short.

The impact of quantum computing, quantum communications and other quantum-enabled technologies is world-changing. Quantum computers can solve a panoply of problems for tasks like synthesising new drugs, managing supply chains and cracking public key cryptography. Meanwhile, quantum cryptography promises uncrackable encryption and quantum sensors can be used for mineral exploration, medical diagnostics and navigation.

Throughout the Covid-19-induced economic downturn, major world economies have escalated their investment in quantum in a global arms race, of sorts. In 2020, the US Congress passed the National Quantum Initiative Act, which injects another US$1 billion into the country’s already multibillion-dollar investment in the advancement of quantum technologies. Several EU nations are making similar scale investments.

However, by far the biggest state actor is China, which has flagged an investment of more than $13 billion to establish a four-hectare quantum technology centre in Hefei, and has made major advancements in the field in recent years, including secure communications mediated using satellite-based quantum cryptography.

Aside from major financial investments, 17 countries have now adopted coordinated national quantum strategies and another three have quantum strategies in development.

While Australia played a highly influential role in the early development of quantum technologies, today we are witnessing a significant flight of intellectual capital to more fertile jurisdictions overseas. Exacerbating this situation is the slow rollout of Covid vaccines accompanied with strict border controls, which has accelerated Australia’s technology talent leak.

Before 2015, we ranked sixth in sovereign investment among the nine largest economies actively investing in quantum technology. Today, we’re ranked last. And, Australia has no coordinated national quantum strategy to speak of. Of course, Australia can’t directly compete with the US or China in terms of capital investment and infrastructure for quantum. But we can nurture the advancement of our place in the global quantum ecosystem in a manner that matches our national strategic interests—the same approach that we, and other medium-sized economies, use in existing areas of defence and strategic policy.

Quantum technology will be one of the most strategically valuable sectors in the coming decades, but it needs entrepreneurs and resources to thrive. Australia enjoys a well-educated workforce, a uniquely attractive natural environment and a welcoming culture with a high standard of living. These are prime conditions to build a knowledge-based economy. But what’s lacking is an investment culture and federal policy committed to support this technology.

In a recent policy report published by ASPI’s International Cyber Policy Centre, we provide a roadmap for establishing a national quantum technologies initiative to develop a home-grown quantum industry.

This should be a whole-of-government initiative with a dedicated minister for critical and emerging technologies working across the relevant economic, national security, industry, research, defence and science agencies in the public sector.

The Australian government should also immediately lay the groundwork for a post-Covid multibillion-dollar technology stimulus that should include a significant fraction targeted to quantum technologies. The stimulus would be a game-changer for Australia and help the country diversify and deepen its technological and research and development base.

We also argued that an Australian ‘distributed quantum zone’ should be established to create a competitive commercial environment for developing quantum hardware and software through tax and regulatory incentives, infrastructure and training, and to attract foreign direct investment.

Australia sits at a point in its history where our economic strength is heavily reliant on industries that are in decline. The fourth industrial revolution will require shifting to a more knowledge-based economy, employing intellectual capital. This is an area in which Australia already has a competitive advantage. The government says it wants advanced development and manufacturing industries to emerge in Australia and the AUKUS agreement is an important step in that direction. But first we need to build up the right ecosystem, and that involves giving technologists, inventors and entrepreneurs a reason to base themselves here.

The hidden cost of the Attack-class submarine cancellation

The abrupt announcement last week by the Australian government that it was scrapping its plans to build a fleet of diesel-electric submarines in favour of nuclear-powered boats will have a ripple effect throughout the defence industry. The sunk cost of five years’ work and $2.4 billion has inflicted greater damage on domestic relations than on bilateral relations with the French government—it has broken the trust between our defence leaders and Australian industry.

On the one hand, the government should be applauded for abandoning a program that was clearly deficient in its provision of the Australian Defence Force’s strategic requirements. However, with all business investment decisions comes a calculation of risk. For small and medium-sized businesses operating in the Australian defence market, the risk surrounding the making of strategic investments continues to increase.

Industry bodies and lobby groups in Team Defence Australia, the Industry Capability Network and the Australian Industry & Defence Network have spent the past five years encouraging companies to invest time and resources to expand or set up a capability to service the submarine program. There have been multiple government-supported trips to Europe inviting Australian companies, at their own expense, to interact within the supply chain to develop relationships and encourage the coveted ‘knowledge sharing’ between French and Australian companies necessary to find success in such a technology leap. Follow-on trips and other efforts have been undertaken in the development of relationships and strategies centred around the program.

Those investments are a sunk cost for the Australian businesses that provide the critical operational services to support our defence capability.

Crucially, a significant number of Australian companies investing in these initiatives were small and medium enterprises that wouldn’t hold contracts directly with the defence organisation but rather with the large prime contractors. They have no claim for losses—and it’s unlikely that the multinational primes will miss out on any penalty clauses contained in their contracts’ cancellation terms.

The repercussions of these actions will have long-lasting implications for the new program, in whatever form it takes. Initial indications are for a reduction in Australian industry content by 30%, down to 40% of the total build of the new submarines from the 60% under Naval Group. The absence of a commitment to 12 submarines under the AUKUS pact (the statement that there will be ‘at least eight’ is suitably vague) further reduces the market by another 30%.

With the Attack-class submarine program failing to survive a change in government leadership, how much confidence can industry maintain for investment when the new program has now apparently bypassed the strategic and political discussions about the requirement for nuclear-powered vessels? Notably, the current and previous two prime ministers have had different preferred submarine suppliers despite being from the same political party. In the context of a change in government, the opposing major political parties have previously maintained a resolute opposition to any nuclear energy in Australia, and while Labor says it supports the new plan (with conditions), it will potentially be put in jeopardy at each federal election.

The AUKUS announcement gave an 18-month period for the examination of requirements for nuclear stewardship. It would be prudent to use that time to take action to begin the process of building trust and confidence in the program among Australian industry. The list of capable suppliers in Australia to support this program is proportionately small in comparison to the other six countries currently operating nuclear-powered submarines and the program’s success will rely heavily on their commitment.

For now, the only approach for industry is to watch and observe—a mindset that will cost the program schedule delays and capability shortfalls from an industry often touted as the fourth pillar of defence in white papers and capability plans.

For the government, as a staunch supporter of and advocate for Australian industry and jobs creation, the pathway back to success will be found only by providing transparency. Addressing the abandonment of white paper and procurement recommendations that led to the initial decision for the conventionally powered Attack class would be good place to start. Public discussion on the practical and political ramifications of a nuclear-propulsion solution within the country, our region and globally is the next step. Finally, continued bipartisan support for the program, in its latest form, will be required to avoid another calamity following an election or leadership spill.

Government plans closer scrutiny of unrepentant extremists

Home Affairs Minister Karen Andrews has detailed plans for authorities to more closely monitor convicted terrorists if they are freed from prison.

In a speech to an online seminar hosted by the ASPI on ‘The road from 9/11’, Andrews said terrorism remained a significant and evolving global threat and extremists would continue to take advantage of events in Australia and around the world.

Some recently freed from prisons or under surveillance because of violent views expressed online had carried out attacks in Britain and New Zealand, she said.

‘And as we witnessed in the 2019 London Bridge and 2020 Streatham attacks in the United Kingdom, convicted terrorist offenders can pose a very real threat to the community at the conclusion of their sentence. In the case of the Streatham attack, it occurred mere days following the offender’s release from prison.’

In Australia, there are 51 offenders serving jail sentences for terrorist offences and another 32 before the courts.

Andrews said that with several of these offenders reaching the conclusion of their prison sentences in the next few years, the need for effective risk-management measures to keep the community safe was greater than ever.

‘As we recently saw in Auckland, some individuals are so committed to doing us harm they cannot be deradicalised.’

Andrews said the Counter-Terrorism Legislation Amendment (High Risk Terrorist Offenders) Bill 2020, now before the parliament, would create an ‘extended supervision order’ that could be used when high-risk terrorist offenders were released into the community after serving their sentences.

At present, the home affairs minister can seek a court order for the continuing detention of certain convicted terrorist offenders who pose an unacceptable risk of committing a serious terrorism offence if they are released into the community.

If the new bill becomes law, the minister will be able to ask the court to impose tailored supervisory conditions specific to the risk posed by the terrorist offender if they were to be released into the community. Such measures could be sought where the court wasn’t satisfied that continuing detention was appropriate to prevent that risk.

This power appears designed to deal with situations like that which occurred in New Zealand recently when police officers followed a suspect into a supermarket where he stabbed seven people.

Andrews said that by acknowledging that terrorism exists on a continuum of behaviour, and  countering violent extremism in all its forms, some individuals could be deradicalised before an attack took place.

She said that since 2014, a focus on countering violent extremism (CVE) had placed Australia’s response to terrorism within the wider context of social cohesion and it remained a core element of Australia’s response. ‘Our CVE initiatives address terrorist and extremist violence by intervening early with a range of vulnerable communities and at-risk individuals, both before and after they face a court or a prison sentence. The need for such a program has never been clearer.’

Andrews said that coupled with efforts to deradicalise such individuals, defences must be hardened against those who could not be brought back from the brink.

She announced that she’d invited Australia’s police and law enforcement ministers to a joint meeting to discuss the continued threat of terrorist attacks.

The national terrorism threat level remains at ‘probable’, where it has been since 2014.

Since September 2014, when the national terrorism threat level was raised, 140 people have been charged as a result of 67 counterterrorism-related operations around Australia. There have been nine attacks and 21 major disruption operations.

The minister said terrorism was a real and enduring threat to Australians, to their way of life, and to their national social cohesion. ‘We cannot be complacent,’ Andrews said.

‘Individuals, groups and ideologies, both old and new, continue to plot and fantasise about doing us harm.

‘Fuelled by the dark web, religiously motivated and ideologically motivated individuals and groups here in Australia do mean us harm and are planning acts of violence.

‘The changing situation in Afghanistan presents a serious concern; with the Taliban in control, Afghanistan may once again become an international safe haven for terrorist networks and cells.’

And, perversely, the 9/11 anniversary itself could serve as inspiration for some.

‘With little to no warning, a lone actor with a knife and smartphone can cause shockwaves around the world,’ Andrews said.

‘In 2021, ASIO assesses that such lone-actor attacks are the most likely form of terrorism we will experience in Australia.’

As lockdowns ended, Australians would again gather in crowds, Andrews said. ‘Sporting arenas, shopping malls, airports, and other iconic locations will once more need to contend with the spectre of terrorism.

‘I don’t say this to scaremonger; rather, to ensure we’re clear-eyed about the threat—so we can prepare now to safeguard all Australians from those who would do us harm.’

Andrews said the 9/11 attacks had served as inspiration for new generations of extremists ranging from those who were religiously motivated and seeking to replicate the attacks, to other ideologically motivated extremists exporting hate and calling for vengeance.

Australia should plan special refugee intake as Afghanistan faces migration crisis

While the world follows the frantic efforts of the United States and allied nations to evacuate their citizens and others from Afghanistan following the fall of Kabul to the Taliban, the scenes we’re witnessing signal only the start of what will be a massive forced migration crisis in the country, a crisis that the international community is ill prepared for.

Afghanistan already has huge numbers of displaced people—there are about 2.9 million refugees outside of the country and almost 3.5 million internally displaced persons, 550,000 of whom have fled since the start of this year. Many of them had been fleeing the Taliban advance, seeking safety in government-held parts of the country and, finally, moving into Kabul. While there has been some planning for large-scale displacement out of the country, those arrangements likely to be quickly overwhelmed; the United Nations High Commissioner for Refugees, for instance, has planned for a total influx of 500,000 refugees into Iran over a six-month period.

But displacement flows are likely to be far larger than that. The Taliban’s first conquest between 1994 and 1996 didn’t trigger large-scale refugee flows, but it was tempered by three major factors. The first was that 2.6 million refugees were already outside Afghanistan, the second was that would-be refugees could still flee to territories held by the Northern Alliance (about a million people did so), and the third was that Afghanistan’s neighbours had pursued border closures so many people had no choice but to remain in the country.

After the 11 September 2001 attacks, there were major movements as civilians fled anticipated US-led air strikes. During that period, according to UNHCR data, overall refugee figures climbed to about 3.8 million, while internally displaced persons of concern to the UNHCR (a figure that doesn’t include all internally displaced people) doubled to 1.2 million.

Last Monday, more than 60 countries including Australia signed a joint statement that urged the Taliban to allow ‘the safe and orderly departure of foreign nationals and Afghans who wish to leave the country’. But getting out is soon going to be very difficult.

Right now, the main focus is on the evacuation effort from Kabul airport. The US has brought out more than 70,000 people since the airlift began, while Australia has so far rescued 2,700 Australians, Afghan nationals and other foreign citizens. But these evacuations are time limited. US President Joe Biden has said he will stick with his plan to finish the mission by the end of the month. For their part, the Taliban have indicated that 31 August is a ‘red line’ and that extending the American presence would ‘provoke a reaction’.

The US’s main tool to accommodate Afghan refugees is the special immigrant visa, or SIV. But it is designed as an ordinary resettlement program, and processing can take well over a year. This has led the US to negotiate agreements with 11 countries so far to temporarily host refugees. But the other issue with the SIV program is that it only applies to Afghans who were directly employed by the US government or on behalf of the NATO mission. While Biden has indicated the scheme will be extended to support other vulnerable Afghans who worked for US non-governmental organisations and news agencies, that doesn’t provide any access for Afghans who worked for non-US NGOs, or other vulnerable Afghans who may face persecution (and even death) under the Taliban.

Commitments by other countries to provide resettlement spots for these people are therefore critical. Canada has taken the lead here, announcing that it will ‘resettle 20,000 vulnerable Afghans threatened by the Taliban and forced to flee Afghanistan’, including through a special program focused on vulnerable groups. The UK announced a similar scheme for 20,000 Afghans over five years, 5,000 of whom will be accepted by the end of 2021. The British scheme will also prioritise women, children and religious minorities.

Australia has so far taken two actions. The first was to announce a moratorium on returns to Afghanistan for Afghans already here. Then, last Wednesday, the government committed 3,000 places in the existing annual resettlement program to refugees from Afghanistan, focusing on family resettlement and ‘persecuted minorities such as women and girls, children, the Hazara and other vulnerable groups’.

While it’s an important first step, using the existing resettlement program creates its own problems. The government reduced the refugee resettlement intake by 5,000 places this year, which has meant the program is already backlogged and overwhelmed. As of the end of July, there were 32,877 applications in the refugee status determination queue and, with about 950 being processed each month, it takes successful applicants more than a year to get through the process. This commitment also prioritises Afghan refugees at the expense of others who also need protection.

A different model is available: a special intake just for Afghan refugees. Australia used this mechanism in the past, most recently in 2015 when a special intake of 12,500 Syrian and Iraqi refugees was organised by Prime Minister Tony Abbott. That move was praised at the time by the UNHCR.

Such a commitment would see Australia standing alongside the United States, Canada and the United Kingdom, and also ensure safety for more Afghans than would otherwise receive protection.

A special refugee intake would also send an important signal of support to the countries surrounding Afghanistan. In the coming weeks and months, these countries of first asylum—Iran, Turkmenistan, Uzbekistan, Tajikistan and Pakistan—will need to absorb huge numbers of refugees crossing their land borders. The UNHCR has already called on these countries to keep their borders open, noting that ‘those who may be in danger have no clear way out’.

These countries will need financial assistance to do so—the current UNHCR plan for Afghanistan has received only 37% of the US$1.3 billion requested. Australia can help by continuing its humanitarian assistance program, which has amounted to $134 million since 2014. But a tangible resettlement program would be an important step to signal international solidarity with Australia’s allies and Afghanistan’s neighbours, solidarity that will be critically important to ensure the stability of the region after the Taliban’s victory.

ASPI’s decades: Urgently eating the defence elephant

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

‘It’s a very encouraging sign that industry can meet the challenge of ‘eating the elephant’ presented by the 2020 Defence Strategic Update’s growing acquisition program.’

— Marcus Hellyer, The cost of defence: ASPI defence budget brief 2020–2021, May 2021

Australian industry is showing the appetite for ‘eating the elephant’, the big task of producing new defence equipment.

A lot more of the defence elephant is going on to the plates of Australian companies.

Not so long ago, industry policy was damned as hampering the need to get the best possible kit. Now Australian industry gets to pour the gravy on the elephant.

In the new era of ‘sovereign industrial capability’, the local makers are lordly as they’re embraced royally. The Covid-19 era confirms (and clinches) the concept.

Defence’s spending on locally made military kit is growing in absolute terms and in relative terms compared with purchases from overseas. That dimension of the government’s defence industry policy is delivering.

Taking over as ASPI’s senior analyst for defence economics in 2018, Marcus Hellyer remarked that it was amazing how a few years could change the industry environment:

The Abbott Coalition government came to power [in 2013] with a defence industry policy that was essentially indistinguishable from its broader industry policy. Subsidies were a bad thing, and just as the government wasn’t going to subsidise Australian industry to build cars, so it wasn’t going to pay extra to build military equipment in Australia. Defence’s investment plan was first and foremost about military capability, not nation building or supporting local industry.

Times (and prime ministers) have certainly changed, and changed quickly.

To let anyone track the cash, Hellyer set up a Cost of Defence public database, making available much of the data on the defence budget and spending that ASPI had accumulated since it was established in 2001. The categories of data available for download are defence funding, the capital program, the sustainment program, personnel, flying hours and costs, the cost of operations, the defence cooperation program, shipbuilding and external data sources.

Amid the tough times and bad economic news of Covid-19 in 2020, Hellyer judged the 2020 defence strategic update (DSU) ‘a remarkable commitment by the Australian Government to sustained growth in the defence budget’.

Confirming the robust funding line of the 2016 defence white paper, the defence budget would continue to grow past 2% of GDP, ‘and indeed at a faster rate than before the Covid-19 pandemic hit’.  The government had declared that Australia’s strategic circumstances had deteriorated significantly: ‘It states that the region is in the middle of the most consequential strategic realignment since World War II. That brings significant uncertainty and risk. The government regards robust military capabilities as essential to managing it.’

The DSU stated that a largely defensive force won’t deter attack, Hellyer noted. Instead, ‘new capabilities are needed to hold adversaries’ forces and infrastructure at risk from a greater distance. They include longer range strike weapons, cyber measures and area denial systems.’

Among the risks, Hellyer wrote, much of the planned force was still a long way off in the future. And Australia was confronting the industry policy trap of preferring industrial outcomes to military capability. Some of the hidden costs of continuous build programs were becoming more apparent. A key question, Hellyer concluded, was whether Defence could internalise the urgency, and change the way it did business:

We now have a plan that calls for speed, lateral thinking, innovation and partnerships—to be implemented by an organisation that’s slow, subject to groupthink, risk averse and reluctant to reach out. Adapting Defence to the demands of our new reality is going to be challenging, to say the least.

In the 2021 budget, consolidated funding (including both the Department of Defence and the Australian Signals Directorate) was $44.6 billion, which represented real growth of 4.1%. Hellyer noted that it was the ninth straight year of real growth, and, according to the DSU funding model, that would continue until the end of the decade.

In 2020, defence cash hit 2.04% of GDP, meeting the government’s promise to restore the defence budget to 2% of GDP by 2020–21. In 2021, it was projected to reach 2.09%. Both the 2.04% and 2.09% numbers were ‘smaller than predicted a year ago, as GDP has recovered faster than expected. It’s a salutary lesson on why we shouldn’t obsess too much about small changes in percentages of GDP.’

Spending on military equipment, facilities, and information and communications technology had all set records, Hellyer said: ‘That’s quite an achievement in the middle of a pandemic.’

Drawing together issues of cash, kit and capability with the ticking strategic clock, Hellyer saw a ‘fundamental disconnect’ between strategic assessments and the capabilities of the force structure being planned and built:

The DSU emphasised the need for long-range strike capabilities that can impose cost on and deter a great-power adversary at distance. Yet the ADF’s strike cupboard is bare, and there’s no clear path to restock it quickly. Moreover, huge investment is planned in capabilities that appear to have minimal deterrent effect on a great-power adversary, such as up to $40 billion on heavy armoured vehicles.

Overall, the force structure and timelines for delivery are holdovers from previous strategic planning documents developed in circumstances that bear little resemblance to our current one.

Fundamental changes to concepts and force structure, such as making greater use of uncrewed and autonomous systems, are occurring only slowly.

The vast bulk of investment is still going into small numbers of exquisitely capable yet extremely expensive crewed platforms that take years, even decades, to design and manufacture and are potentially too valuable to lose. Defence needs to take more risk and invest more than half of one percent of its budget in R&D, particularly in distributed, autonomous technologies.

The government has delivered the steadily increasing funding it promised at the start of 2016. That was commendable, considering the economic impact of Covid-19. Yet, while Australia’s strategic circumstances had deteriorated since 2016, Defence’s funding model hadn’t changed, Hellyer concluded:

More funding is needed, but Defence will need to show that it can use it well to deliver capability rapidly. Over the decade, the government is providing $575 billion in funding to Defence, but in that time it won’t deliver a single new combat vessel.

Defence will need a ‘sense of urgency’ in confronting the complexities of kit, cash and capability.