Most commentary thus far has been on how the Australian government will handle a Trump Administration. More will emerge on the implications for Australia, from Trump’s tariff policies to the likely continued decoupling from China, and Trump’s transactional nature. As a first cut, here are some fundamental defence issues the government—of whatever persuasion—must address.
Alliances
The bedrock of Australian strategic policy is the US Alliance, ANZUS. For all the optimistic rhetoric of a ‘special relationship’ pursued by Australian government officials—that include ministers—and the Opposition, a better guide to Trump’s approach is his attitude to Ukraine and to the United States’ primary alliance arrangement, NATO. And that is one of abandonment, not least to pursue his personal friendship with—appeasement of—a dictator, Vladimir Putin. There are no shared Western liberal values here. An alliance, of itself, means little to Trump other than bringing the presumption that the ally is free riding on America and needs to start to pull its own weight.
Donald Trump has expressed a desire to leave NATO, the premier alliance organisation that helped the West withstand the threat of the Soviet Union. He has little regard for the inherent deterrent value of strong alliances, let alone the strength it has given the United States in its global role. His transactional ethos sees only costs and entanglements, not benefits, let alone intangible outcomes.
The bedrock of Australian defence and security is shifting. And that means that, while it lasts, Australia will need to do more heavy lifting on AUKUS (needed to exploit its benefits as long as possible). The idea that things will ‘go back to normal’ after four years of a second Trump Administration (and potentially 12 years of Trump/Vance) seems simply delusional. The world and the security system Australia depends on and participates in will have undergone marked change
On the submarines (AUKUS Pillar I), several Trump adherents have already expressed concern that the United States would be providing Australia, a foreign nation with no expertise in nuclear-powered submarines, with capability—Virginia submarines—that the United States itself needs.
That Australia is paying to help rebuild submarine manufacturing capability in the United States and will be supporting rotational deployments in Australia—maritime in Western Australia, and marines in the Northern Territory—may well be seen as not enough.
Pillar II is already in trouble. It’s proving hard to build new capability that meets the needs of all three nations, especially with three nations’ bureaucracies trying to orchestrate themselves before engaging with those pesky types who make things. Industry here, especially innovative small and medium enterprises, is frustrated with our Defence Department’s Advanced Strategic Capabilities Agency, which remains behind the high walls of Defence and subject to the inertia of its processes, especially in procurement.
Australia’s difficulties in converting research into development and scaling small business into large has long been a topic of discussion but not the subject of many solutions. For the great majority of small and medium Australian companies, it is easier to seek and obtain US funding and customers, thereby losing opportunities for development and retention of IP at home, than to gain Defence.
Trump’s tariffs will likely increase the costs of business for Australian companies, and so inflation; restrictions on the export and exchange of sensitive high-tech technologies will likely increase and entanglement with Chinese supply chains will be a growing challenge. Not only will make it harder for Australia to support Pillar II, but innovative defence small and medium enterprises (SMEs) may also well be forced to close, given the increased cost of business.
Defence policy
Australia must do more to ensure its own security and defence. How the government pursues that will reflect the government of the day.
Coalition governments have traditionally been seen as stronger on defence and national security. But they do so with and through the Alliance, which is looking if not less certain, then lessened in scope.
Labor government have been stronger, rhetorically, on self-reliance. But they have been much less willing to back that with resources—as we are seeing with the current government, with capability and readiness being stripped from within Defence to pay for Pillar II submarines. And they have favoured stylistic flourishes such as ‘seeking our security in Asia, not from Asia’ without being able to delineate the practicalities of dealing with the realities of Chinese power and aggression.
As much as possible, we need to do two things: extract what we can from the Alliance—the United States remains our key source of intelligence, capability and technology—and build our own capability with fewer dependencies on the United States for things like logistics and resupply to the extent we can.
That capability must include better strategic and policy nous, and better governance arrangements. It is not just in military capability where Australia has leant heavily on the United States (and before World War Two, on Britain). Australia’s strategic thinking is risk-averse, lacks depth and relies on weakened assumptions (whether on technology or on what the alliance means, for example); it has always been shaped in relation to great and powerful friends. The Australian system of civilian control of the military is thin and fragile, lacking military investment and civilian contestability. Neither have been tested in extremis in living memory.
Defence expenditure will need to increase—dramatically, and potentially up to five per cent of GDP. It is increasingly clear that Australia cannot have both an ADF and nuclear-powered submarines, while managing the challenge of an increasingly precarious strategic environment, without doubling its Defence budget.
But it won’t be enough simply to pour money on the current edifice. The defence institution is structured for a different world, expectations and mindset, ill-suited to the demands of the next two to five years, let alone longer-term, not least as it has it has capacity and absorption constraints.
Outlook
With an election nearing, the Albanese government will be caught in a cleft. On the one hand, it will naturally move to conciliate Trump and his lieutenants, relying on claims of a special relationship—amongst many others making the same claims. That, however, will not placate the ALP’s left wing, or the Greens, all of whom find Trump and his cohorts—and now by extension, America writ large, abominable.
The Albanese government (like every recent government) is also clearly looking to bolster, financially, its re-election prospects, though handouts and social programs, at MYEFO and a March budget. That’s not going to help shore up Australia’s increasingly precarious strategic position or help constrain debt as a means of ensuring later freedom of action. Moreover, Defence is the traditional ‘balancing’ item of the budget, with a combined Expenditure Review Committee (ERC)/National Security Committee (NSC) meeting traditionally last in the internal Budget decision cycle when other priorities, including any election sweeteners, have been met.
Nor is it clear that the Opposition has fully grasped the financial implications of an ADF stripped back to pay for the submarines—or how to manage the resource burden of nuclear-powered submarines.
And neither side seem willing to address the structural reforms needed in the economy, in government or to the Defence institution and wider national security community.
It is now that we will see the mettle of government, ministers, the opposition, the political system—and of our institutions. It is now that we need to ensure they are held to account for the future.