Australia Steps Up in Defense of the Indo-Pacific Order

Australia is embarking on the most significant reorientation of its strategic policy settings in more than a generation – and it’s all about assuming a more active role in defending a stable regional order in the Indo-Pacific. This is the key message in Canberra’s newly minted 2020 Defense Strategic Update and Force Structure Plan.

Motivated by intensifying strategic competition across the Indo-Pacific and the geopolitical fallout from COVID-19, the update provides a blueprint for how Australia will navigate what Prime Minister Scott Morrison says will be a “poorer, more dangerous and more disorderly” future. Its prescription is as clear-eyed as the assessment from which it arises. No longer able to rely on a 10-year strategic warning time to prepare for major threats against Australia and its interests, Canberra is tasking the Australian Defense Force (ADF) to get ready for grey zone competition and high-intensity conflict today. It’s a mission that requires a sharper set of defense planning objectives, which the update reframes into a three-pronged endeavor to “shape Australia’s strategic environment, deter actions against our interests and, when required, respond with credible military force.”

This is an ambitious agenda for a middle power to pursue. But it’s a necessary one if Australia is to achieve the overarching strategic objective that its 2017 Foreign Policy White Paper identifies as “a balance in the Indo-Pacific favorable to our interests.”

From Canberra’s perspective, the rapid deterioration in Australia’s strategic landscape boils down to a crumbling rules-based system, a decline in the United States’ capacity to maintain a regional balance of power, and an acceleration in China’s use of coercive statecraft backed by its proliferation of sophisticated anti-access/area denial systems. These developments threaten to bring about a Chinese sphere of influence by restricting the access and influence that Australia and other countries have enjoyed throughout the Indo-Pacific for the best part of the last 75 years. It’s a challenge that can only be addressed through a collective regional strategy in which all countries play a role in blunting Chinese adventurism, offsetting America’s relative decline, and bolstering the resilience of sovereign nations.

Australia has recently shown itself to be a leader in strengthening the regional order on issues as wide-ranging as the Trans-Pacific Partnership and lifting of technology standards, to its Pacific Step-Up, stance on the South China Sea, health security push, and efforts to counter foreign interference. Canberra’s defense update doubles down on the military part of this equation by prioritizing the Indo-Pacific, carving out a larger strategic role for Australia, transforming the U.S.-Australia alliance and positioning Australia as highly capable regional partner.

Prioritizing the Indo-Pacific 

By far the most overdue shift in the Defense Strategic Update is its unambiguous prioritization of Australia’s Indo-Pacific neighborhood. Defined as “our immediate region” ranging “from the north-eastern Indian Ocean, through maritime and mainland Southeast Asia to Papua New Guinea and the South West Pacific,” this cross-section of the Indo-Pacific has been elevated to “Australia’s area of most direct strategic interest.”

This matters a great deal.

Since 2001, Australia has spent over $15 billion on military operations in the Middle East compared to less than $4 billion in the Indo-Pacific – an unstrategic use of resources that was compounded by the way counterinsurgency operations also warped the ADF’s acquisition priorities. Although Canberra’s 2016 Defense White Paper paved the way for a number of important regional engagements and new capacity-building initiatives – such as the Indo-Pacific Endeavor exercise and the Pacific Step-Up – it continued to spread the government’s defense planning focus too broadly, placing equal emphasis on Australia’s northern approaches, maritime Southeast Asia and the Pacific, and operations in support of a stable regional and global rules-based order. The 2020 update finally fixed this glitch, aligning the ADF’s geographic focus and force structure priorities with Australia’s most pressing strategic interests.

Of equal significance is the kind of order-defending role that Australia now envisages its military will play in the Indo-Pacific. Although Canberra has long positioned the ADF as having a responsibility to contribute to a secure and stable region, the update places much greater stock on the need for Australia to assume a leadership role in “building and exercising influence in support of shared regional security interests” – a task that includes Australia’s preparedness to “lead coalition operations where it is in the interests of the region for us to do so.”

This points to a major evolution in the way Australia defines its strategic outlook. Rather than persisting with the overly “globalist” agenda of the past two decades or pulling back to a “continentalist” mindset that narrowly prioritizes the defense of Australia, Canberra is moving to play a much deeper role in directly defending the Indo-Pacific order as part of a collective regional approach. It’s a role that places a premium on Australia’s “self-reliant” ability to deliver deterrence effects in conventional and grey zone operations. It also fronts Australia’s capacity to cooperate with the United States and other regional partners – such as Japan, India, Indonesia, and New Zealand – in support of common interests, including the provision of assistance to vulnerable Southeast Asian and Pacific nations on the frontline of Chinese influence. The key point is that Canberra has now determined that its own strategic interests can only be safeguarded by taking a direct stake in maintaining the regional order in which Australia’s security is enmeshed.

Entering the Grey Zone

Exactly what this will look like in practice is, understandably, not clearly outlined in the update. But it is bound up with Australia’s emerging approach toward grey zone challenges and conventional deterrence. Both domains of strategic competition are being thought about in more forward-leaning ways and offer clues as to how Australia will fulfill its more expansive set of regional security responsibilities. 

The update’s focus on grey zone coercion marks a break from the 2016 Defense White Paper, which did not even mention the term. Characterized as a set of “activities designed to coerce countries in ways that seek to avoid military conflict,” Australia’s growing list of grey zone concerns include “[the use of] paramilitary forces, militarization of disputed features, exploiting influence, interference operations and the coercive use of trade and economic levers.” China is the unstated actor behind these activities. Crucially, as the update acknowledges, this kind of coercive statecraft is “now being used in our immediate region against shared interests” and is “directly or indirectly targeting Australian interests.”

Addressing grey zone coercion will take numerous forms across the whole-of-government but – from the Department of Defense’s standpoint – largely falls within its reinvigorated mandate to “shape Australia’s strategic environment.” This is where the focus on strengthening regional partners and partnerships takes center stage. For Canberra, an Indo-Pacific region made up of independent, sovereign, and resilient states is the best – and perhaps only – response to Chinese grey zone coercion. To ensure this element of the regional order is defended, the update states that Australia will be a more “active and assertive advocate for stability, security and sovereignty in our immediate region.”

In Southeast Asia, this is likely to involve enhanced intelligence-sharing, capacity-building, and provision of direct operational support to ASEAN claimants in the South China Sea dispute – including an expansion of coordinated patrols with Southeast Asian vessels in support of fishing ships, hydrocarbon exploration platforms, and other commercial vessels, designed to raise the stakes for Beijing should it try to interfere with claimants’ lawful activities. In the Southwest Pacific, Australia is likely to further augment its Pacific Step-Up and delivery of security-related infrastructure – such as port facilities, communications networks, and logistical assets – in addition to actively working to deny the establishment of a Chinese military base in the region, a specific concern that the update alludes to in a thinly veiled way.

Bolstering Deterrence in the Region 

At the other end of the conflict spectrum, Australia is making a serious push to retool the ADF for high-end deterrence and warfighting operations – again with China firmly in its crosshairs. The centerpiece of this effort is Canberra’s investment of up to $100 billion over the next two decades into long-range strike – including hypersonic – missiles, unmanned combat vehicles, offensive/defensive cyber weapons, and new area denial systems. All of this is designed to give Canberra a range of deterrence options “to hold potential adversaries’ forces and infrastructure at risk from a greater distance.”

But in another key deviation from the 2016 Defense White Paper, deterrence is no longer solely viewed as a continentalist mission that centers around Australia’s northern approaches. Instead, it is regarded as what Defense Minister Linda Reynolds has called a “shared responsibility,” which the ADF must be able to fulfill both independently and in a modular way that “support[s] the United States and other partners where Australia’s national interests are engaged.” This opens the door to a broad range of Australian contributions to collective deterrence and defense in support of its Indo-Pacific interests.

How and over what stakes Australia will use its long-range strike weapons and other high-end capabilities to deter Chinese actions will require the development of new operational concepts and political thresholds for issuing pre-emptive threats. Two observations appear likely at this stage. First, while Australia will have capabilities that could, in theory, be used to deny Chinese military adventurism or punish Beijing after the fact, Canberra is predominantly focused on deterrence by denial. This is a function of Australia’s asymmetric position vis-à-vis China – which makes denial strategies more credible – and of Canberra’s very high interest in preventing Chinese military influence in a subregion that is core to Australia’s security but relatively peripheral for Beijing. It’s precisely because of this imbalance of stakes that a self-reliant Australian deterrence posture is credible when it comes, for example, to denying China a military base in the Pacific or dissuading it from seizing strategically valuable features in sensitive parts of Australia’s “immediate region.”

Second, Australia’s deterrence toolkit is likely to have unique applications in different parts of the Indo-Pacific. At the low end of the spectrum, long-range strike capabilities could provide Canberra with the confidence it needs to play a more active role in pushing back against grey zone activities. For instance, it’s not hard to imagine that with a greater capacity to set up its own area denial envelopes, Canberra might be more willing to disrupt Chinese operations or undertake risky military missions in support of regional partners and interests. Beyond continuing to deter major threats against the continent, the ADF will also be in a position to make more than niche contributions to high-end deterrence scenarios further afield. In fact, the update hints at possible ADF deployments to North Asia, where Australia has “important trade and broader partnership-based interests.” This may see Australia assume a direct role in coalition operations along the first island chain – stretching from Japan and Taiwan through the Philippines to maritime Southeast Asia – to deter Chinese aggression, defend Australian partners, or check China’s access into the Western Pacific.

Transforming the U.S.-Australia Alliance 

The potential for these kinds of high-end military operations raises the question of what Australia’s defense update means for the United States-Australia alliance. Although some analysts have argued that the focus on a “self-reliant” deterrent effects shows that Canberra is stepping back from the alliance, the real story is one of alliance transformation for an era of Indo-Pacific strategic competition.

The late July 2020 Australia-U.S. Ministerial Consultations (AUSMIN) illustrated the significant changes that are afoot. On the back of major investments in Indo-Pacific health security and regional resilience, and a joint reprimand of China’s actions in the South China Sea, Hong Kong, and Xinjiang, Australian Foreign Minister Marise Payne laid out Canberra’s vision for a more balanced and multidimensional role within the alliance. Better integrating allied forces and capabilities is a key part of this vision. Beyond signing a classified “Statement of Principles on Alliance Defense Cooperation and Force Posture Priorities in the Indo-Pacific,” the two sides restarted a bilateral Force Posture Working Group to explore more coordinated ways of positioning and preparing allied forces for regional contingencies. Indeed, as new deployments, operations, and high-end exercises are rolled out to shape the strategic environment and deter China during peacetime, Canberra is looking to put in place tools to drive this agenda on its own terms. This is likely to involve the allocation of new roles and geographic responsibilities within the alliance.

It’s true that this process of alliance transformation is being driven, in part, by Canberra’s concerns over the sustainability of U.S. military power in the Indo-Pacific. But the policy settings and force structure that Australia’s defense update envisages depict an ADF that is preparing to make a modular contribution to regional order based on the assumption that it will be operating alongside other capable partners in a conflict.

This is clearly articulated in Canberra’s acknowledgement that Australia’s immediate region is the “area in which we should be most capable of military cooperation with the United States.” Any major military operation in this part of the Indo-Pacific is – except in the most extreme of circumstances – unlikely to take place in a vacuum between Australia and China. It is far more likely to either happen in conjunction with the United States and other regional partners, or form part of a wider regional conflagration in which Australia assumes responsibility for its near neighborhood – freeing an overstretched U.S. military to concentrate on other areas of the Indo-Pacific. The development of this kind of federated arrangement between the United States and Australia will, it is hoped, help to lay the groundwork for a wider collective defense strategy among close regional allies and partners.  

A More Credible Australia 

For any of this to be credible, Australia and other collective defense partners must demonstrate they have the capabilities and resolve to deter shared threats. The update’s focus on enhancing the ADF’s lethality and readiness goes a long way toward achieving the necessary force structure and enablers, even as it highlights some need for ongoing reform.

Notwithstanding the addition of new weapons systems, which, like long-range strike, will edge the ADF toward high-end conventional conflicts in distant maritime environments, Canberra has chosen to retain a largely balanced force structure. This is not a bad thing. Given the range of humanitarian, disaster relief, grey zone, and conventional challenges for which it must be prepared, the ADF needs to be a Swiss Army knife. And with Canberra’s commitment to grow the defense budget by an astonishing 87.4 percent over the next decade, most major acquisitions remain in place.

Australia’s Navy is undergoing its most significant modernization and expansion since the end of World War II, with new submarines, frigates, destroyers, and amphibious vessels on the way. This will be augmented with underwater sensor networks, a repair vessel, and sea mines, allowing the navy to sustain vessels far from Australian shores, contribute to theater-wide anti-submarine warfare operations, and blockade the narrow littorals of Southeast Asia. The Australian Air Force is well on its way to becoming the world’s first “fifth generation” air force, with new intelligence, surveillance and command systems, a sovereign satellite communication capability, and lethal autonomous airframes. Australia’s Army, by contrast, is still catching up. Despite some changes to its footprint, structure, and long-range capabilities akin to recent reforms by the U.S. Marine Corps, its modernization will leave it heavier, more armored, and arguably less agile – which is likely to limit its options in an era of precision strike and contested air superiority in which land forces should prioritize mobility.

Finally, Canberra is dedicating 20.3-30.4 billion Australian dollars ($14.5 to 21.7 billion) to build a munitions stockpile over the next 20 years – including AU$1 billion to develop a sovereign precision-guided munitions manufacturing capability. This massive investment will not only enhance the ADF’s ability to operate independently if it is cut off from global supply chains, but is designed to bolster Australia’s value proposition as a capable partner and Indo-Pacific security provider. An onshore precision-guided munitions facility would enable Australia to act as a secondary supplier – after the United States – for interoperable militaries, and goes hand-in-hand with Canberra’s planned establishment of a local fuel reserve. Both will be within range of operations across Australia’s Indo-Pacific neighborhood, but far enough away to remain largely out of direct harm.

Leveraging Australia’s strategic geography and industrial base in this way helps underwrite the overall credibly of Canberra’s forward-leaning defense update. In much the same way as the 2016 Defense White Paper was celebrated for being fully costed and accompanied by an integrated investment plan, so too is the current defense blueprint evidence of serious planning. But capabilities alone don’t provide for deterrence or defense. As the update soberly notes, Canberra intends its new strategic policy settings to “signal Australia’s ability – and willingness – to project military power and deter actions against us.” It’s a message of reassurance and support for Australia’s regional partners and a bold statement of resolve for those that seek to undermine the Indo-Pacific order.