Becoming ‘incoercible’: How does Australia ensure its sovereignty from great power coercion?

Whether via the threat of military force, economic sanctions or political ostracisation, powers of all sizes throughout history have utilised tactics of coercion to achieve their geopolitical objectives.

Accordingly, it goes without saying that such methods are not new phenomena.

Yet for many across the Western world, efforts by revisionist, autocratic powers like the People’s Republic of China, Russia, Iran, North Korea and even democratic nations like India to leverage coercive tactics have come as a nasty shock to the system.

This is particularly the case as decades of political capital, economic investment and defence underspending have been invested in the false belief that we lived in the “End of History” and a post-Cold War “peace dividend” where the liberal, capitalist, and democratic system of the Western world was unchallenged.

Australia, in particular, has been caught off balance by this shift in global and regional affairs with the proverbial chickens of our lethargic political and policy response coming home to roost in the public consciousness over the past half-decade.

In particular, this has been driven in large part by China’s blatant attempts to economically, politically, and militarily coerce Australia at the height of COVID-19 and in the ensuing aftermath.

Despite rhetoric from the government amid Chinese Premier Li Qiang’s state visit, it is clear that should the nation fail to “toe the line” when it comes to Beijing’s ambitions and designs for the Indo-Pacific, more acts of coercion will be directed towards Australia.

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With this in mind and harkening back to the Libertarian meme of “becoming ungovernable”, how does Australia “become incoercible”?

Resisting economic coercion

While for the most part, Australia’s economy over the last three decades has been insulated from the broader shocks that rattled the global economic system like the Asian Financial Crisis and the Great Financial Crisis, the COVID-19 pandemic ultimately revealed the startling lack of economic resilience Australia has.

While low order manufacturing was able to step in to fill the gap (think hand sanitiser, personal protective equipment etc) the larger, more complex manufacturing side of the economy has been left hollowed out by nearly 30 years of unfettered and unrestricted hyper-globalisation.

However, by far, the most startling shock to come from the COVID-19 pandemic was the blatant and ham-fisted attempts to economically coerce Australia at the hands of our largest trading partner, the People’s Republic of China over Australian government-led calls for an independent global inquiry into the origins of the pandemic.

This builds on a recognition by the current and former federal government that the Australian economy needs to diversify and become, as Treasurer Jim Chalmers described in late-March, “anti-fragile”, but there is a big difference between being “anti-fragile” and becoming “incoercible”, particularly in the current era.

Now this approach leads into the government’s signature “Made in Australia” policy that is designed to “re-shore” critical manufacturing capacity to Australia, drawing inspiration from the Biden administration’s Inflation Reduction Act.

In drawing inspiration from the Inflation Reduction Act, the Prime Minister is seeking to focus on a number of sectors in the national economy, through targeted investments and strategies in critical infrastructure, education and training, research and development, small business support and, of course, the development of clean and renewable energy, advanced manufacturing, among others.

Detailing this, the Prime Minister explained, “This new wave demands a new approach – and since the last election, our government has been laying the foundations to deliver it:

• Embracing clean energy.
• Securing a landmark National Skills Agreement.
• Creating the National Reconstruction Fund.
• Establishing the Net Zero Economy Authority.
• Putting science together with industry under Ed Husic, to make sure we commercialise the opportunities arising from Australian innovation.”

But again, there is still little in the way of detail and still little that ensures Australia becomes “incoercible”.

The problem with much of the debate surrounding Australia’s economic and industrial redevelopment, or perhaps development is more apt, is much of the debate is centred around Australia doing it all and competing in industries that we would be considered uncompetitive in.

Or simply put, the argument centres around Australia competing for low-cost, low-return “K-mart goods”, rather than emphasising the high-value add products and scale Australia needs to be focusing on and economic reform is at the heart of that.

For Dimitri Burshtein, principal at Eminence Advisory, Australia requires an intense period of economic reform in order to avoid, as he believes, “Canberra [is] driving us down the long, slow road to economic ruin.”

Burshtein detailed the importance of considered, thorough economic reform, explaining, “Modern economic history has repeatedly shown that competitive tax rates, limited regulation, and restrained government spending are preconditions for prosperity. Yet, based on the flawed logic that any problem can be resolved through a tax, subsidy, law, or regulation, governments have continued to throw sand into Australia’s economic engine. And when the engine starts to sputter, delivering inflation and a slowing economy, the electoral incentive is for even more sand to be thrown.”

So begin there and shift the dialogue in the public consciousness to emphasise these opportunities.

Becoming strategically resilient

A good place to start, at least from the strategic and defence aspect, is a key paragraph in the Albanese government’s 2023 Defence Strategic Review (DSR) which articulated: “Australia does not have effective defence capabilities relative to higher threat levels. In the present strategic circumstances, this can only be achieved by Australia working with the United States and other key partners in the maintenance of a favourable regional environment. Australia also needs to develop the capability to unilaterally deter any state from offensive military action against Australian forces or territory.”

But how do we deliver that quantum leap in military capability? First and foremost, this requires a diametric shift in the way Australia views itself and its strategic place and reality in the Indo-Pacific.

As we have established extensively previously (here, here, here and here), deterrence depends on a number of overlapping and, as is the case in our new world, interconnected capabilities across the domains that can be scaled up or down, depending on the threat environment and the contingency required.

Currently, Australia’s defence capabilities as they stand and as they are tentatively outlined in the DSR and the Integrated Investment Plan, don’t have the structure, mass, scalability, let alone platforms (nuclear-powered submarines excluded) or doctrine needed to secure the nation’s interests as an “independent middle power in the Asia-Pacific region”.

Most of the proponents of this approach will cite the success of “independent middle powers” particularly Sweden, a nation significantly smaller than Australia, but one which is rapidly expanding its armed forces to have a similar-sized military to that planned by the Australian Defence Force by 2040.

This comparison fails to account for the differences between the two nations, namely the population, the geographic environs (broadly speaking, Sweden has a comparatively more benign environment, despite sharing a land border with Russia than we do) and the economic and industrial base Sweden has.

So that rules Sweden out as a model to emulate. What about a “tier one” middle power like the United Kingdom (when the British Armed Forces are sufficiently funded and equipped that is)? Taking away the UK’s nuclear weapons arsenal (limited though it is) we are probably getting closer to the money in terms of scalable, flexible, and adaptable capability Australia needs to emulate in order to act as an “independent middle power in the Asia-Pacific region”.

Still with me?

Because meeting that level of capability will require a significant expansion of both the ADF’s manpower and funding, beyond the 2 per cent of gross domestic product target both sides of Australian politics have lauded as our long-term goal, even though both sides of politics have claimed it is now the new “floor”.

Equally, this will require the maximisation of force structure, paired with autonomous and other novel capabilities to provide Australia with the balanced force (sorry, I know we are now pushing for an integrated, focused force) we need to survive and thrive in this era of great power competition.

Final thoughts

Importantly, in this era of renewed competition between autarchy and democracy, this is an uncomfortable conversation that needs to be had in the open with the Australian people, as ultimately, they will be called upon to help implement it, to consent to the direction, and to defend it should diplomacy fail.

Our economic resilience, capacity, and competitiveness will prove equally as critical to success in the new world power paradigm as that of the United States, the United Kingdom, or Europe, and we need to begin to recognise the opportunities presented before us.

Expanding and enhancing the opportunities available to Australians while building critical economic resilience, and as a result, deterrence to economic coercion, should be the core focus of the government because only when our economy is strong can we ensure that we can deter aggression towards the nation or our interests.

This also requires a greater degree of transparency and a culture of innovation and collaboration between the nation’s strategic policymakers, elected officials, and the constituents they represent and serve – equally, this approach will need to entice the Australian public to once again invest in and believe in the future direction of the nation.

Additionally, Australia will need to have an honest conversation about how we view ourselves and what our own ambitions are. Is it reasonable for Australia to position itself as a “middle” or “regional” power in this rapidly evolving geopolitical environment? Equally, if we are going to brand ourselves as such, shouldn’t we aim for the top tier to ensure we get the best deal for ourselves and our future generations?

If we are going to emerge as a prosperous, secure, and free nation in the new era of great power competition, it is clear we will need break the shackles of short-termism and begin to think far more long term, to the benefit of current and future generations of Australians.

Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..