PM winning the politics but still losing the plot
The presidential meeting was a success and every commentator has recognised it as such. However, there’s still no evidence the national policy is coping with the actual challenges the nation faces.
Albanese is having a solid series of bilateral meetings in Southeast Asia and that’s useful. But Australian policy is running at a bare minimum autopilot with no sense of the enormity of the difficulties ahead.
As this column has argued before, Albanese has always had the sense to see that maintaining the US alliance is both necessary for Labor politically and good for Australia. Labor was manoeuvred in opposition into backing the AUKUS deal, under which we’re scheduled to acquire nuclear-powered submarines from the 2030s, but has always made the absolute minimum commitment and effort towards this end.
The government’s actions are so puny and minuscule, it’s almost impossible to imagine the deal will proceed as planned. But as the deal at this stage mainly involves us paying billions of dollars to the US and UK, there’s no reason for Washington or London to quash it.
Beijing’s belligerence in imposing absurd conditions on the use of its rare earths meant the timing for the Albanese/Trump meeting was perfect. Similarly, the Gaza ceasefire allowed Albanese to lavishly praise Trump without upsetting the Labor base.
To describe this all as good luck is not to diminish the achievement of Albanese and Australia Inc in maximising this good fortune. But recognising the element of luck helps avoid our characteristic and chronic complacency.
It’s a simple fact Australia isn’t spending anywhere near enough to make AUKUS work, or to build a minimal credible defence force that includes nuclear-powered submarines. Dennis Richardson, a former head of the Defence Department and a man chosen by the Albanese government to guide it on elements of submarine policy, says Australia must spend significantly more than 3 per cent of GDP on defence to implement AUKUS and maintain its defence force.
Richardson is a sober judge, by no means an unbalanced defence hawk nor a political opponent of Labor. Angus Houston, whom the Albanese government chose to conduct its Defence Strategic Review, also argues defence spending needs to be 3 per cent of GDP. So does Peter Dean, whom the government chose to be the chief author of the DSR.
I’ve cited these men before. Many other strategic analysts make the same arguments. The point is the defence effort under the Albanese government is falling further and further behind the reality of what’s needed.
Defence spending, as Marcus Hellyer of Strategic Analysis Australia points out, has oscillated within the range of 1.9 per cent of GDP and 2.1 per cent for the past seven years.
Under the Albanese government, it’s now just over 2 per cent. Yet Albanese, when he was opposition leader, told me in an interview he would spend whatever was necessary to defend Australia – and this would likely be more than 2 per cent.
Labor has been in office nearly four years and there has been no meaningful increase in defence spending. There’s been a small dollar increase, but as a share of our national wealth no meaningful increase. Yet in that time we have undertaken the immense additional cost of acquiring nuclear-powered submarines. Recently we added the commitment to defend Papua New Guinea and recruit its citizens into the Australian Defence Force.
The Australian National Audit Office has demonstrated that Defence is not providing enough money even to sustain, in peace time, our big LHD ships. Meanwhile there’s been further news of more operational cuts in defence. The government is not remotely implementing the main recommendations of its own DSR. Even these recommendations were very modest because the government had told the DSR authors of many things they couldn’t challenge.
Incidentally, when Defence Minister Richard Marles says the US inquiry into AUKUS was just like our inquiry and therefore nothing out of the ordinary, this is yet another inaccurate statement on which he’s never challenged. The DSR was not authorised to review whether AUKUS was a good idea, or doable.
The bottom line is Australia will not be able to deliver its end of the AUKUS bargain under current funding. The Albanese government has cut many previously scheduled defence capabilities, such as the fourth squadron of F-35 Joint Strike Fighters, de-mining ships, and much else.
It has not implemented specific DSR recommendations in areas such as missile and air defences. We have moved hardly at all in the direction of acquiring swarming drones in large numbers of the type that dominate modern warfare. So we’re unlikely to be able to implement AUKUS, while at the same time virtually destroying much of our other defence capabilities.
How do the Americans feel about all this? They still, rightly, see Australia as a useful ally, mainly for our geography – a de facto US submarine base in Perth, a submarine maintenance facility in Australia, hundreds of Australian sailors supplementing US crews on American boats, air force and intelligence facilities in northern Australia. The point of all this is that it has nothing to do with any significant agency or proactive policy by the Albanese government. Australian policy is about as creative as Afghan government policy before the fall of Kabul and the return of the Taliban. We simply assume that the Americans will always take care of us and we need do nothing for ourselves.
Meanwhile, the Chinese continue to humiliate us militarily frequently and at will. The timing of the incident with the Chinese dangerously harassing an Australian air force plane at the time Albanese was to meet Trump was no coincidence. Similarly, the Chinese interrupt flights in the Tasman Sea with their live firing exercises, or circumnavigate our continent scoping military targets, laughing at our inability to respond in any military fashion at all, and confident that we won’t even work to acquire such ability.
Albanese finally having the courage to softly raise this with the Chinese Premier, while not telling us what he actually said, is laughably ineffective.
The Albanese government’s economic failure is even more spectacular. For nearly half its first term, Australia was in per capita recession. Our productivity performance is notoriously woeful. BHP boss Mike Henry, while trying to be diplomatic, nonetheless delivered a rude warning when he declared a few days ago that energy costs in Australia are twice as high as in Canada and 50 to 100 per cent higher than the US. Given our grotesquely constipated industrial relations system, and labyrinthine regulatory requirements, the idea manufacturing investment would choose Australia is heroic.
The only thing the Albanese government is winning is the politics. As a nation, we couldn’t be doing much worse.
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The silliest conclusion would be to assume that because Anthony Albanese had a productive meeting with US President Donald Trump everything is now going swimmingly in Australian defence and foreign affairs policy. Everything that was wrong two weeks ago is still wrong today.