A Strategic Revolution? Australia’s new Defence Policy in a troubled Indo-Pacific

The recent appointment of Peter Dutton – known as one of China’s most outspoken critics – as the new Australian Secretary of Defence has sparked scathing criticism from Beijing. The former Home Affairs Secretary, who established a reputation for blunt comments and a limited interest in political correctness, has spent the last six years overseeing Australia’s homeland security against a background of increasing Chinese assaults on Australian internal institutions. Unsurprisingly labelled as a “hawkish” politician by the Chinese media outlet Global Times,[1] Dutton replied he was “committed to achieving stability and peace across the region” and recalled the necessity to work “collaboratively” with China.[2]

Henceforward, Dutton’s move to the key position of Secretary of Defence might very well be the latest illustration of the Australian defence policy’s strategic shift regarding the role of Canberra in shaping the Indo-Pacific and countering the growing influence of Beijing in the region, defined as running from the north-eastern Indian Ocean, across South East Asia and into the South West Pacific. One would however be ill-advised to take the 2020 Defence Strategic Update, which recently replaced the Strategic Defence Framework set out in the 2016 Defence White Paper, as a response to the sole rise of China.[3]

A rather quick revision of Australia’s 2016 Defence White Paper, the 2020 Defence Strategic Update released on July 1st indeed takes stock of the rapid deterioration of the Indo-Pacific security environment, with increasing strategic competition (primarily between China and the US) forcing Canberra to adopt a more autonomous approach to defence and regional security. But along with a renewed geographic focus consisting in increased engagement with its neighbourhood, the update promises additional investment (to A$270 billion from A$190 in the 2016 strategic overhaul) in defence capabilities over the next decade, a bolstered cyber capacity, and the reinforcement of the Australian Defence Forces (ADF) as to catch up with the recent military upgrades in the region and increase deterrence.

It removes the ambiguity of the 2016 White Paper, which eschewed the controversial policy debates of earlier years, while being the first White Paper to equate the defence of Australia and the stability of the Indo-Pacific. It also parts from the military over-reliance on Washington by indicating that Australia will take “greater responsibility for our own security” and “grow its self-reliant ability to deliver deterrent effects.” Acknowledging that Australia’s regional military influence will not be able to operate in a vacuum, the update underpins the importance of building defence relationships and security links with regional partners so as to maintain regional security and stability, including Japan, India and Indonesia.

In sum, the 2020 Defence Strategic Update could very well be a crucial paradigm change. The adjustments being implemented aim at three complementary objectives: shaping Australia’s strategic environment, deterring actions against its interests, and responding with credible military force when required. This reflects the largely defensive posture of Australia’s armed forces, lacking lethality on the weaponry side, as well as operational resources on the human side.

I. An overview of the 2020 strategic update: shape, deter and respond

The 2020 Defence Strategic Update originates from the critical observation that Australia faces a changing environment with increasing strategic competition between great powers, the development of extremely capable military systems enabled by technological advances, as well as the use of grey-zone tactics (cyber operations, foreign interference, economic coercion, and disinformation campaigns), however staying above the threshold for a conventional military response. While drivers of the 2016 White Paper are still relevant, the growing tension in the region pushed the issues of deterrence capacity and strategic autonomy to the forefront of the agenda.

The update, therefore, sets out three complementary objectives. Shaping Australia’s strategic environment (1) entails becoming an active and assertive advocate for stability, security and sovereignty in its immediate region, as well as strengthening existing partnerships that support this objective. Deterring actions against Australia’s interest (2) is the other side of the medal: the capable but largely defensive Australian Defence Forces will not best equip the ADF to hamper attacks against Australia or its interests in the challenging environment this document sets out. Responding with credible military force (3) is the last point, as “the prospect of high-intensity conflict in the Indo-Pacific, while still unlikely, is now less remote.”[4] Australia is consequently preparing for such conflict if deterrence measures fail, or to support the United States and other partners where Australia's national interests are engaged. Noticeable among these objectives is the concept of self-reliance, which is a well-established theme in Australia’s defence policy,[5] which was never embraced fully given the prolonged period of peace in the Asia-Pacific[TA3] .[6] Although the update is careful with the word choice, it puts a real emphasison it, as well as on building strong international partnerships in addition to that with the US.[7] This reflects the spreading belief that, as Hugh White has highlighted, “America’s commitment to Australia’s security has always been a product of its wish to preserve its wider strategic position in East Asia and the Western Pacific.”[8]

The financial plan reflects these ambitions as the budget will continue to grow past 2% of GDP, and indeed at a faster rate than before the Covid-19 pandemic hit. As compared to the 2019–20 starting point, the budget is planned to grow by a remarkable 87.4% over the coming decade.[9] This funding will increase over the next ten years to A$73.7 billion by 2029-30. The total funding of A$575 billion over the decade includes around A$270 billion in capability investment, compared to A$195 billion in capability investment for the decade to 2025-26 when the 2016 Defence White Paper was released. It is interesting to notice that budget allocations reflect the priority given to the maritime domain, which gathers some 28% of the funding allocation, leading to those of the air (24%) and the land (20%). It follows in the footsteps of Australia’s strategic reorientation towards its close neighbourhood, as well as it indicates the fact that many new naval constrictions will only enter service after 2030.[10]

On the technical side, the Australian Defence Force’s (ADF) basic force structure will not change significantly. The government has however committed to acquiring long-range strike weapons and boosting offensive cyber capabilities with the explicit intention “to hold potential adversaries forces and infrastructure at risk from a greater distance,”[11] which is all the more important as it will increase Australia’s capability to protect its deployed forces and also its regional partners, from small island states in the Pacific to the near north and west to India.[12] The Maritime Factsheet addendum further calls for the development of an undersea surveillance system to detect submarine activity and enhanced maritime mining and countermining capabilities, which will provide the ADF with more useful information it can share with Southeast Asian states with weaker domain awareness capabilities.[13]

Funding has also been allocated for exploring and potentially implementing additional measures, including the development of sovereign manufacturing capabilities for advanced guided weapons and enhancing ADF fuel storage capacity. It will also continue to strongly support self-reliance in the field of geospatial information and intelligence capability, both to support strategic intelligence requirements and precision-guided weapons.

Finally, the update operates an important geographical shift, focused on the defence of a geostrategic ecosystem rather than territory, parting from the continentalist approach that had characterized the Australian defence debate for years.[14] Australia’s strategic stance, which consisted in supporting its great power allies in operations often far from Australia’s shores, was indeed only possible when its neighbourhood was not at risk.

But it is difficult to ignore the challenges surrounding the feasibility of delivery. The COVID-19 crisis has deeply affected Australia’s economy. Should its impacts result in prolonged economic stagnation, it will surely take sustained resolve by this and future governments to keep increasing defence funding over the decade. Furthermore, most of the above-mentioned projects won’t be directly operational. At best, the ADF will have to wait 10 years for the first frigate, 14 for the first submarine, subsequent vessels being delivered only on a two-year drumbeat. The Air Force isn’t getting additional air combat aircraft beyond its 72 F-35 until late in the decade. But the more critical uncertainties are the following: will the planned measures be enough, and will they be in place in time to achieve the deterrent effects now deemed so necessary?[15]

II. A strategic realignment towards the Indo-Pacific: enhancing self-reliance and building regional partnerships

The 2020 Defence Security Update emphasizes an ongoing trend in Australia’s Defence Policy, which is by reorienting its projection over Canberra’s close neighbourhood. Overall, the 2020 Defence Security Update appears to have been warmly received by Australia’s neighbours, as it strives to ensure a safer Indo-Pacific establish stronger partnerships. Such strategic realignment entails reducing Australia’s presence in the Middle East to enable greater focus on the Indo-Pacific region, and not extending Australia’s time-bound commitment to the International Maritime Security Construct (IMSC) beyond December 2020.[16] Indeed, increasing strategic competition in the Indo-Pacific, along with the alignment of Australia’s neighbours on similar geopolitical concerns, have fostered the necessity to organize a coordinated response with Australia’s close neighbourhood.

But when it comes to military issues, the only alliances and cooperations that count are the ones that express clear commitments to intervene under certain circumstances. As of now, Australia only has two military alliances with neighbours: one with New Zealand under the ANZUS, and the other with Papua New Guinea under the 1987 joint declaration of principles. Aside from these two rather old cooperations, Australia’s regional cooperations with neighbouring countries remain limited.

The update could thus very well be an opportunity for Australia to build stronger partnerships with its neighbours, starting from deepening its involvement in the “Quad”. An informal security alliance that originated from quadrilateral talk among Australia, India, Japan and the US, the “Quad” was formed in 2007 to support an open and comprehensive Indo-Pacific region. Recently revived under the patronage of former US President Donald Trump after a ten-year hiatus, the Quad is thought to be a means of maintaining a stable balance of power in the Indo-Pacific and preventing a regional state from becoming dominant. They all share a genuine interest in deterring the use of forceful or coercive practices as well as maintaining a liberal maritime order - which requires supporting and strengthening liberal democratic governance within the Indo-Pacific. Bilateral and trilateral military cooperation have developed among the four countries, as confirmed by the four countries’ largest joint naval exercise in over a decade in November 2020.[17] But constitutional imperatives, differences in strategic cultures, threat perceptions and military capabilities may hamper the deepening of this informal group.[18]

But this is not Australia’s sole option. The 2016 White Paper has heralded the launch of the Indo-Pacific Endeavour (IPE), which is an annual ADF activity to strengthen Australia’s engagement and partnerships with regional security forces, geared towards enhancing interoperability with Australia’s key regional partners including Sri Lanka, India, Malaysia, Thailand, Vietnam, Singapore and Indonesia.

Nevertheless, several voices have pointed at the impossibility for Australia to rely on such allies in terms of strategic posture and force planning. In other words, some Australian strategists[19] seem to consider that they can no longer assume that their allies will step in a fight whenever Canberra needs them, for it is very unclear that Japan’s or India’s vulnerability to Chinese attack is contingent on Australia’s security.[20] Another important determinant to bear in mind is that China is as much of a threatening neighbour that is it a valuable economic partner to all the above-mentioned countries. Such views, however, ought to be qualified in the case of Indonesia, whose strategic location is critical for Australia. Both countries go way back in terms of defence cooperation – even though they had their ups and downs. It is however surprising that the Defence Update seems to be short on Jakarta,[21] as it only features a broad definition of “shared interests” with Australia’s neighbours that may (or may not) rally the support of Indonesia. Despite their common preoccupations, both countries have developed different defence approaches, based on different organizations (ASEAN vs. AZNUS) as well as a different stance regarding international alliances (with Indonesia disavowing great power politics contrarily to Australia and the US).[22]

In a nutshell, the Defence Strategic Update takes note of the fact that Australia should not base its strategic posture on the optimistic assumption that it will always find an ally ready to jump in in case of conflict, other than New-Zealand: self-reliance has become Australia’s Defence Strategy’s new motto. Whereas the new Biden administration recently released a rather muscular national security statement referring to Australia as one of the US’s “greatest strategic assets,” China’s wealth, size and rather unpredictable behaviour make it more formidable than any rival the US has ever faced in Asia – which naturally leads Australians to wonder whether the costs of resisting China’s challenge will always outweigh the benefits for the US to preserve a position in East Asia.

III. Addressing the elephant in the room: does China lie at the heart of this new strategy?

Whereas China is only named seven times in the update, and then suggested in allusions to strategic competition with the US or its presence in Australia’s close neighbourhood, its looming presence is felt throughout all the document. It is therefore difficult not to associate the reference to countries that “pursue their strategic interests through a combination of coercive activities, including espionage, interference and economic levers” with the growing Chinese assertiveness in the region. These developments indeed coincide with a rise of Chinese activity in the South China Sea, via research and survey vessels as well as fishing boats, considering Chinese pretensions on several islands such as the Spratlys, a 14-island archipelago possessed by Taiwan, the Philippines, Viet-Nam and Malaysia. In March 2021, 220 Chinese fishing boats were indeed seen moored around Whitsun Reef in the Spratly Islands.

There seems to be a wide consensus about the fact that these Chinese encroachments indicate a general rise of the tensions as well as a militarisation of the area, which has imposed a review of the Defence White Paper leading to the 2020 Update. Even if Australia is a neutral third party in these territorial disputes, the growing tensions, as well as a risk of confrontation between China and the US might both harm Canberra’s own security. On 25 July 2020, Australia thus rejected China's claims to the South China Sea and filed a statement with the United Nations that said: "Australia rejects any claims to internal waters, territorial sea, exclusive economic zone and continental shelf based on such baselines" and there is "no legal basis" to draw the nine-dash line around the Four Sha archipelagos, Paracel and Spratly Islands or low-tide maritime zones.

But Australia’s leeway is short: China is Australia’s first trade partner. With 40% of its exports going to Beijing, Australia’s exports to China are 9 times higher than its exports to the USA. This dependency is negatively perceived by Australian citizens, 77% of which “do not trust China as a responsible actor in the region.”[23]

This gives China formidable leverage against Australia, which it has used when applying informal sanctions relating to iron imports in 2019, following several bills restricting foreign interference in Australian domestic affairs.

However, it is interesting to notice that this emphasis on China, which is put at the forefront of PM Scott Morrison’s political agenda, is supported by rather controversial proponents. Several think tanks such as the Department of Defence-backed Australian Strategic Policy Institute (ASPI) which, among others, has been accused of being a “hawk intending on fighting a new cold war.”[24] Several of its detractors have pointed at its “one-sided, pro-American view of the world,” leaving “little room for viewing China as a potential partner,”[25] due to its proximity to the military as well as global weapons makers. ASPI was thus put under the spotlights after its executive director, Peter Jennings, named China responsible for a sustained cybersecurity attack that targeted Australian organizations across a range of sectors.[26]

While China is one of the determining factors of this strategic shift – one would be ill-advised to consider it as unique. The COVID-19 crisis has cast into glaring light the prime importance of self-reliance and strategic autonomy: developing the domestic fabrication of weapons as strengthening the capacity of Australian “national champions” follows in the footsteps of this idea. The plan makes therefore clear that there are other issues beyond great power rivalries, including threats to human security, pandemics and natural disasters. Also implicit in the plan is the concern over the waning influence of the US in the region.

All of these factors reminded Australian security strategists of the potentialities of defence as an alarm system, designed to provide for potential threats and deter intruders. Growing territorial disputes and political tensions in the region, notwithstanding the role of China, have put the ADF’s lack of deterrence capacity under the spotlight.[27]

In sum, these developments emphasise the underlying purpose of the ADF update: to ensure Australia’s security, to bolster regional stability and to contribute in shaping the shared interests of the region and stand with its neighbours instead of being focused on security challenges in other parts of the globe.

IV. Lessons for the EU: Towards a Brussels-Canberra axis?

Chinese imposition of informal sanctions, as well as the economic consequences of the COVID-19 have led Australia to realize that it had become unhealthily dependent on the Chinese economy and that a strategy of diversification was needed. Faced with similar considerations, albeit to a lesser extent, the EU should see this as an opportunity to step up its strategy and move towards a fully-fledged Indo-Pacific strategy drawing on Australia as one of its closest allies.

The EU has indeed long been an important bilateral trading partner for Australia and is the second-largest trading partner after China, and the second-largest investor after the United States. Both the EU and Australia are conducting ongoing negotiations on a free trade agreement, which started in June 2018. However, as Margherita Matera argues,[28] the EU-Australia relationship has developed from economic-centred to strategic in all but name. In April 2015, Australia became the seventeenth country to sign a Framework Policy Agreement with the EU, setting out the legal frame for third-state participation in civilian and military missions. Although neither the EU nor Australia has recognised the other as a key strategic partner, they have both acknowledged the importance of working with like-minded international partners to tackle common challenges at the international level. Maritime security has specifically become a major aspect of Australia’s engagement with the EU, as reflected in 2014 when Australia participated in its first CSDP mission, EUCAP Nestor.

However, the EU did still not endow itself with a genuine Indo-Pacific strategy – only France, Germany and the Netherlands recently did. Notably, France’s defence policy for the Indo-Pacific, developed in its capstone strategic documents, public speeches, and tactical undertakings, are clear, consistent, and complementary with Australia’s posture,[29] as expressed in the 2016 Defence White Paper and the 2020 Defence Strategic Update and force structure plan. Both countries have progressively deepened their bilateral relationship by increasing the frequency of high-level defence meetings, as well as conducting coordinated maritime exercises such as Exercise La Perouse, held in the Indian Ocean.[30] These links several convergence points between the two countries: a similar interest for the stability of the region, the pursuit of interoperability, as well as the training for a genuine conflict against a regional foe.[31]

It is time for the EU to step up its presence in the region if it wants to be recognised as a valuable Indo-Pacific actor. This paper thus follows in the footsteps of Timothée Albessard’s recent piece[32] for the IGE on the necessity to reinforce EU presence in the Indo-Pacific by increasing its naval presence in order to preclude any encroachment on the freedom of navigation from happening, taking a side when it comes to unilateral actions that violate international law and ending its neutrality in the South China Sea conflict, and lastly diversifying its partnerships with middle states seeking to avoid a bipolarisation of the international order.

Sustained cooperation with Australia could be a major asset for a geopolitical EU. Brussels could thus very much draw on its member states’ links with Australia – notably France – to deepen its strategic cooperation with Canberra.[33]

However, it could be tempting for both the EU and Australia to shelve the Framework Policy Agreement as not being of strategic importance. But one should not underestimate this agreement, which provides an important mechanism through which the EU and Australia can work together, along with other partners, to tackle growing regional and global instability and conflict.

[1] LEI, Yu, “ Dutton’s appointment in Canberra hints at more hawkish stance on China”, Global Times, published March 31st 2021. – Link? [2] HARRIS, Rob, “Australia wants to work with China to ensure peace in Indo-Pacific, says Dutton”, The Sydney Morning Herald, published April 4th 2021. – Link? [3] 2020 Defence Strategic Update, Australian Departement of Defence official website, available online at: https://www1.defence.gov.au/strategy-policy/strategic-update-2020. [4] Ibid. [5] DEAN, Peter J, “A New Strategic Song? Anzus, the 2020 Australian Defence Update, and Redefining Self-reliance”, War on the Rocks, published August 12nd 2020. [6] DEAN, Peter J, “2020 Australian Defense Strategic Update: The Revenge of Geography”, The Diplomat, published July 22nd 2020. [7] GRAHAM, Euan, “Australia’s serious strategic update“, International Institute for Strategic Studies, published July 3rd 2020. [8] WHITE, Hugh, “Standing alone: why Australia can’t rely on America“, Australian Strategic Policy Institute, published December 24th 2019. [9] HELLYER, Marcus, “The Cost of Defence 2020–2021, Part 2: ASPI 2020–2021 Defence Budget Brief”, Australian Strategic Policy Institute, October 2020. [10] GOLDRICK, James, “Defence Strategic Update 2020: A first assessment”, The Intepreter, published July 2nd 2020. [11] GRAHAM, “Australia’s serious strategic update“. [12] HUNT, Luke, “ Indo-Pacific in Focus as Australia Substantially Lifts Military Spending“, The Diplomat, published July 2nd 2020. [13] COOK, Malcolm, “Australia’s 2020 Defence Strategic Update: Red Alert, Down Under”, Yusof Ishak Institute, published July 2nd 2020. [14] GOLDRICK, “Defence Strategic Update 2020: A first assessment”. [15] Ibid. [16] “The Shift to the Indo-Pacific: Australia Resets Its Defence Strategy“, SLDinfo, published October 10th 2020. [17] MIGLANI, Sanjeev, “India, U.S., Japan and Australia kick off large naval drills”, Reuters, published November 3rd 2020. [18] TSUYOSHI, Minami, “ Will the Quad Alliance Take Off?“, Australian Institute of International Affairs, published November 5th 2020. [19] WHITE, “Standing alone: why Australia can’t rely on America“. [20] Ibid. [21] LAKSMANA, Evan, “Australia’s regional defence strategy is short on Indonesia“, Financial Review, published July 20th 2020. [22]LAKSMANAN, Evan, “Reinforcing Indonesia–Australia Defence relations: the case for maritime recalibration”, Lowy Institute, published October 2nd 2018. [23] BONDAZ, Antoine, “L’expérience australienne des sanctions commerciales chinoises : une leçon pour l’Europe ?“, Défense & Industries, n°15, April 2021. [24] ROBIN, Myriam, “The think tank behind Australia's changing view of China“, Financial Review, published February 15th 2020. [25] Ibid. [26] REUBENSTEIN, Marcus, “‘Independent’ think-tank ASPI behind push for more defence spending rakes in advisory fees“, Michael West, published July 1st 2020. [27] BLAXLAND, John, “Defence update: in an increasingly dangerous neighbourhood, Australia needs a stronger security system“, The Conversation, published July 1st 2020. [28] MATERA, Margherita, “European Union–Australia security cooperation through crisis management“, Australian Journal of International Affairs, vol. 72, n°3, 2018, pp. 224-239. [29] BAUER, Anne, “France-Australie : une relation stratégique dans le Pacifique“, Les Échos, published February 11st 2019. [30] It is a French-led maritime exercice with the participation of vessels from Australia, France, Japan and the US, see: https://news.defence.gov.au/media/media-releases/first-maritime-exercise-conducted-australian-french-japanese-and-us-ships. [31] MCLENNAN, Ben, “Australia’s growing defence relationship with France“, Australian Strategic Policy Institute, published July 17th 2020. [32] ALBESSARD, Timothée, “The implications of the French, German and Dutch Indo-Pacific strategies for the European Union’s Asia policy”, Institute for a Greater Europe, published Mars 20th 2021. [33] MATERA, Margherita, “European Union–Australia security cooperation through crisis management“, Australian Journal of International Affairs, vol. 72, n°3, 2018, pp. 224-239.