8 Big Ideas to Turbo-Charge the U.S.–Australian Alliance


In recent months, Australia’s strategic planners have grown increasingly concerned by the challenging security outlook emerging in the Indo-Pacific. Discussions with senior officials reveal that many believe that simply maintaining current defense policies and programs will be inadequate. Important new options are under discussion, including the possibility of taking the country’s alliance with the United States to a new level.

There are several factors at play.

First, Australians now realize that because the Western allies no longer dominate the Western Pacific economy, the global power balance is shifting. By some measures, China’s economy is already the same size as that of the United States. Moreover, despite recent wobbles, economic growth rates in China, India, and other developing economies in the region are projected to remain higher than those of the United States, Japan, or Australia for at least the next two decades.

Second, strategic thinkers down under note the massive scale of China’s military expansion. They realize that the People’s Liberation Army is not trying to match the United States ship for ship, aircraft for aircraft, or tank for tank. Rather, China’s asymmetric strategy places strong emphasis on building surveillance, missile, submarine, counter-satellite, cyber, and other capabilities that place at risk the Western allies’ concentrated bases, conventional force structures, and vulnerable logistic systems.

Beijing’s assertive international strategy is an even more powerful driver of Aussie security concerns. Fuelled by a desire to reinforce its domestic legitimacy, the Chinese leadership has engaged in dangerous confrontations with Japanese forces in the East China Sea and played “chicken” with American ships and aircraft. China has also dredged up new islands in the South China Sea on which it has rapidly constructed militarily significant airfields, harbors, and communications facilities.

Canberra has noted that China’s claim to some 80 percent of the South China Sea stretches over 900 nautical miles from the Chinese coast and well into the exclusive economic zones of the Philippines, Indonesia, Malaysia, and Vietnam. Many Australian strategists view these claims as a direct challenge to some of the country’s closest security partners in Southeast Asia.

A fourth factor that worries many Australians is their perception that the United States has morphed into a less confident and more hesitant ally. While acknowledging that Washington has announced a rebalancing of its forces to the Pacific, with some 60 percent of American naval and air assets planned for deployment to the theater by 2020, they have also noted that the resources to implement the rebalance have been limited; U.S. readiness levels have fallen; and Washington has shown itself to be easily distracted by crises elsewhere.

In short, the view of many Australian strategic thinkers is that the strategic tides in the Indo-Pacific have been flowing against the United States and its allies. Symptomatic of the shift is that during the last decade, China’s defense spending quadrupled whereas U.S. defense spending rose by a total of only 12 percent.

For Australia, the strategic implications of these developments are profound. During the Cold War, the center of superpower competition, tension, and potential conflict was in Central Europe. Australians got used to being located in a strategic backwater. But now the situation is markedly different. Australians suddenly find themselves close to the center-stage of major power competition and potential conflict.

Australian defense and security planners are even more worried by the outlook for the coming 20–30 years. Japan, India, and most countries in Southeast Asia broadly share Australia’s unease. There is a growing sense in Canberra that new approaches are required. Innovations are needed. Above all, Australia needs to raise its game.

Part of Australia’s problem springs from the long-standing mismatch between the country’s vast geographic scale and its limited defense resources. The Australian continent is of a similar size to the continental United States. Australia also has offshore territories that are as far from the mainland as Hawaii is from North America. However, Australia’s population, economy, and tax base are comparable to those of Texas.

Australian defense planners realize that they need to secure their vast country with a defense budget that is less than one-fortieth of that which is available to the Pentagon. At present, this funds a permanent force that numbers fewer than the number of attendees at the last Super Bowl. Hence, a central challenge for Australian defense planners is how to strengthen deterrence and defensive capabilities in the more demanding strategic environment now developing when Australia’s independent resources are so limited.

Some Australians assume that because China is the country’s largest trading partner, Canberra will be deterred from taking steps to reinforce its security for fear of offending Beijing. This view is simplistic. The reality is that while China is easily Australia’s largest trading partner in physical goods, the value of services traded is less than half that with the United States and also lower than that with the United Kingdom. An even more important part of the picture is that China ranks as only the 9th largest source of foreign investment in Australia and most of that investment is in relatively low value-adding resource, infrastructure, agriculture and property projects. This contrasts markedly with many American and European investments, which involve medium and high technologies and are of much greater importance for the future development of the Australian economy.

Australia’s economic relationship with China is effectively conducted at arm’s length. Both countries are prepared to sell goods to each other but they are hesitant to make meaningful investments. One consequence is that China receives barely 1 percent of Australia’s foreign investment compared with 28 percent going to the United States.

A key conclusion is that while Australia values its economic relationship with China, it is unlikely to stand in the way of resolute steps to strengthen national and regional security.

Precisely how Australian security can be bolstered in the more demanding strategic environment is the subject of considerable debate. There are clear limits to what Australia can achieve on its own. No matter how hard the country tries to build independent military capabilities and further strengthen its relationships with regional neighbors, Australia will remain vulnerable to external coercion and attacks. Hence, there are powerful incentives for Canberra to take the already close alliance with the United States to a new level.

Several specific initiatives are now under discussion that, in combination, have the potential to turbo-charge the Australia–U.S. alliance.

First, Australia could work hand in hand with the United States, Japan, and other close friends to increase markedly the intensity of its security cooperation with the key countries in Asia and the Southwest Pacific. Core goals would be to build security partnerships further with regional leaderships, strengthen security understanding, help overcome security weaknesses, and reinforce capacities to resist external coercion.

Second, Australia could reinforce American, Singaporean, and other regional efforts to enhance the maritime domain awareness of partner countries in the Indo-Pacific. At present, the varying capabilities of regional countries to detect, observe, and understand sea and air movements in their maritime surrounds mean that they are often unable to detect incidents of maritime pollution, accidents, illegal fishing, armed robberies at sea, terrorist movements, and foreign activities within their exclusive economic zones. Working with regional partners to develop a common operational picture of the maritime domain would reinforce practical cooperation and help to bolster regional confidence.

Third, the United States and most of Australia’s other security partners currently have difficulties accessing a comprehensive network of military exercise and range facilities in the Indo-Pacific. This is a growing problem for the United States as it looks to position the bulk of its naval and air forces to the theater. Relocating extra forces forward is one thing, but maintaining them in this theater in a high state of readiness is another challenge altogether.

Australia already possesses exercise and range facilities that are large, relatively uncluttered, and feature diverse air, sea, and land environments. Australia could readily establish an Indo-Pacific Exercise and Range Complex that could be made available to its close allies and security partners on agreed terms and conditions. This would make extended American force deployments to Australia and its surrounding region much easier, more effective, and less expensive.

Fourth, the major changes under way in the Indo-Pacific are forcing American and Australian defense planners to re-think many assumptions about future operations in this theater. As such, there would be benefit in forming a small, high-quality Australia–U.S. Strategic Planning Group. Primary tasks for this combined staff could include designing, analyzing, and testing alternative campaign strategies and operational concepts, developing contingency plans in close cooperation with the joint operational planning staffs of each country, and assessing the potential for the joint development of promising new defense capabilities.

Fifth, there is scope for Australia to exploit its strong track record for quality intelligence products, its geo-strategic location, its high-quality workforce, and its technological sophistication by investing strongly to become the intelligence hub for close allies in the Indo-Pacific.

Sixth, Australia already hosts a number of facilities that support American and allied space programs. There is scope for Australia to do more in this field to strengthen allied command resilience operational capabilities in the Indo-Pacific.

Seventh, Australian defense planners are well aware that the Pentagon is facing dilemmas as it contemplates basing modes in the Western Pacific for the coming half century. American basing in the region is currently over-concentrated and operationally constraining. Some existing facilities, such as those on Okinawa, are politically contentious.

Canberra could assist greatly. Australia already possesses modern defense facilities, strong industrial support capacities, and a well-developed civil infrastructure. More than 80 percent of Australians support the alliance with the United States, and well over 60 percent support the idea of American forces being permanently based in the country. What’s more, this friendly sentiment is mutual. American service personnel consistently rate Australia as one of the most desirable overseas locations to visit.

While there are Australian political sensitivities concerning some traditional styles of U.S. basing, there does appear scope to carefully negotiate extended deployments of U.S. Air Force, Navy, Marine, and other forces at joint Australia–U.S. facilities. This could ease pressure on American basing in the Indo-Pacific, provide a much firmer, more dispersed, and more resilient allied operating presence and reinforce allied deterrence in the theater.

An eighth area in which there may be scope for substantially increased Australia–U.S. cooperation in coming years is next-generation ballistic and cruise missile defenses. Australian defense planners have noted the proliferation of increasingly sophisticated ballistic and cruise missiles in the Indo-Pacific, and new generations of longer-range systems are anticipated.

It may surprise some Americans that Australia has considerable expertise in some of the cutting-edge technologies likely to be required for next-generation ballistic and cruise missile defenses. In consequence, there may be scope for Australia to contribute significantly to the design, development, and testing of next-generation ballistic missile defense systems. It may also be feasible for Australia to deploy some of these more cost-effective ballistic missile defense systems in the future.

The bottom line is that many members of Australia’s national security community are considering the potential for taking the already close alliance with the United States to a new level. They realize that this may require a shuffling of priorities and an acceleration of the current upward swing in defense spending. Some gentle indicators of this thinking may be found in the new Australian defense white paper, due for release in late August.

The coming three to five years may generate unusual opportunities for the Australia–United States alliance. The time is right for new thinking and fresh rounds of frank and friendly discussions.


Ross Babbage is a Foundation Governor and Fellow of the Institute for Regional Security, Managing Director of Strategy International (ACT) Pty Ltd and a former senior official in the Australian Department of Defence. A more detailed analysis of these and related themes, entitled Game Plan, will be published by the Menzies Research Centre on 11 August.