Aust-US alliance is thriving in new areas, less healthy at its military core
A US Marine being Covid tested in Darwin

Our US partner may not be quite as comfortable as we are with the military progress in the alliance. Image: a US Marine being welcomed to Darwin. US Navy images.

Written by

Michael Shoebridge

Anthony Albanese’s visit to America has done three things. It has broadened the ambition for the alliance into new areas like critical minerals production. It’s revealed a new, deeper dependency on American ‘big tech’ for our government. And it’s highlighted the contrast between these fastmoving areas and the slow progress in expanding Australian military power. 

That’s a very mixed result, and a disturbing one given military cooperation is the core of the Australia-US alliance and key to collective security in the Indo Pacific.

Critical minerals are essential inputs to everything about our digital world, including renewable energy systems, smartphones and electric vehicles. They are inside the semiconductors, lenses, magnets, alloys and electronic components that power militaries’ planes, ships, submarines, missiles, satellites, sensors and uncrewed systems. 

So it’s good news that the US and Australian governments are providing encouragement and financial incentives for companies to build supply chains between us for these materials. If companies respond, this can remove existing high dependencies on China for these materials. 

To keep perspective on relative government programs though, Joe Biden’s Inflation Reduction Act provides $AUD 1.5 trillion in subsidies and incentives for critical minerals, clean energy and digital technologies. The $AUD2 billion in finance Mr Albanese announced is about 1.3 per cent of Biden’s program.

Microsoft’s announcement it will spend $AUD5 billion building data centres in Canberra, Sydney and Melbourne, train around 300,000 Australians in its digital tools and partner with the Australian Signals Directorate on a Cyber Shield program is big news with large implications and consequences. 

The big strategic fact out of the deal is that Australia has chosen to live in the US digital world, not the only other digital world on offer – the Chinese one brought to you by Alibaba, TenCent, Huawei and the Chinese Communist Party.

As digital decoupling accelerates, this choice will matter more and more. It will become less and less sensible to have our society penetrated by Chinese digital technologies and applications – wrenching as this might seem right now for Tik Tok users.

The other aspect, though, is an implicit admission that cyber security now can’t be centred on capacity within government as in the past, even with the massive new investment of $9.8 billion into the Australian Signals Directorate

The large scale outsourcing of responsibility to Microsoft must be the subject of public conversation to retain the support of the Australian population. And, while no Australian technology firm can provide the ‘hyperscale’ of Microsoft, if Australia is to be a contributor to our digital world and not just a customer of US companies, the role of the Australian tech sector has to be set out. Australian data and cyber firms bring diversity and redundancy to mitigate against compromises of Microsoft’s capabilities and systems – and provide unique capabilities that big firms envy.  But the Australian alliance component to this big tech commercial world has yet to emerge in the government’s thinking or policy.

Then there’s what Mr Albanese’s trip tells us about the core area of the alliance – military power. The Ukraine war has been now joined by the Israel-Hamas war, while we’re also experiencing China’s growing willingness to use its military and its paramilitary Coast Guard to coerce countries from Japan, to Vietnam, Taiwan and the Philippines. The alliance remains Australia’s foundation for managing the risks of conflict.  No approach to collective defence makes sense in our region without America, and no country would be an island unchanged if China were to dominate the region militarily.

The two year old AUKUS deal is meant to be helping shift the military balance towards Australia, the US and the UK and our partners, away from China now and in coming years.

But here the news from Mr Albanese’s trip is not good. Congress got more dysfunctional, with Republicans agreeing on a Speaker but not much else. The US government runs out of money on 17 November if Congress can’t pass budget laws, and President Biden’s funding bill for Ukraine, Israel and submarines is stuck too.

This must have underlined in the prime minister’s mind the growing political risks to initiatives like the submarines or the more obscure (but probably more important) AUKUS ‘Pillar Two’ cooperation getting digital technologies like quantum, AI and hypersonics into the hands of our militaries. The practical risks are growing too, with a Congressional Budget Office report showing the US has to lift investment in shipbuilding and subs by between 31 and 40 per cent to achieve its own plans.

Mr Albanese and everyone in Australia’s national security community knows that every future US Congress and every future US President and Navy Secretary will have the power to either enable and implement AUKUS, or derail it should they wish to in coming years.

In light of this, Australia must take two key steps, both more difficult because of our overly complex, top heavy Defence hierarchy that’s struggling to manage itself, much less deal with rapid change in its external environment. 

The first is to deliver, deliver, deliver on all the things that can make AUKUS work for us and our US and UK partners.  That will benefit our own security and make it harder for anyone in Washington to walk away. That means getting moving now, not in the 2030s, on expanding Stirling naval base in the West on the scale our AUKUS ambition demands and choosing the site for the new base in the East.

The other essential step for the alliance and Australian security is to do more, faster, for our own defence – like ending the slow-moving scandal of our shipbuilding programs.  And spending some money on Australian companies who can equip our Defence Force with highly capable small systems that can be used, lost and replaced.

Right now, the alliance is thriving and growing in ways and areas that matter for joint Australian and American economic prosperity and resilience.  But the core of our alliance that’s about increasing our joint and individual military power is lagging, right when our security demands the opposite.

The solution points to far deeper larger change for the Defence organisation than our political leadership has shown the appetite for to date – and a bigger defence budget.

This article was first published in The Australian.