Frank Lowy calls on Australia to pull its socks up and invest in itself for the future

Australia has enjoyed a well documented, record-setting three decades of uninterrupted economic growth buoyed by the voracious appetite of a growing China, however all good things come to end as the political, economic and strategic competition between the US and China enters a new phase placing both the global and Australian economies in a precarious position.

Further compounding these emerging challenges is the growing period of economic and strategic competition between Japan and South Korea, equally important US and Australia allies, which have long-standing, robust links to Australia's economic security.

As this vortex of competition continues to devolve into a game of economic brinkmanship, resulting in trade tariffs and hindered supply chain access, many within Australia's political, economic and strategic policy communities have sought to redouble the nation's exposure to volatile and slowing economies. 

Australia's earliest economic and strategic relationship with the British Empire established a foundation of dependence that would characterise all of the nation's future economic, defence and national security relationships both in the Indo-Pacific and the wider world.

With British power slowly declining following the First World War and the US emerging as the pre-eminent economic, political and strategic power during the Second World War – Australia became dependent on 'Pax Americana' or the American Peace.

However, the US emergence as the undisputed global economic, political and strategic power was not an overnight success and it had its roots in the 1929 Stock Market collapse and ensuing 'Great Depression', which further spurred the rise of totalitarian regimes in Germany, Italy and Japan in the prelude to the Second World War. 

Franklin Roosevelt's 'New Deal' infrastructure package gave rise to the economic transformation of the US and positioned the nation to support the Allied war effort during the Second World War and the post-war economic boom enjoyed by the US – critical national infrastructure, ranging from early incarnations of the interstate highway network, dams and railway lines, combined with an expansion of military capability, all served to position the US over the long-term. 

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Enter commentary provided by Westfield founder, Sir Frank Lowy, who has issued a challenge for Australia to expand its commitment to infrastructure expenditure to support the nation through what he believes is an impending economic downturn, telling The Sydney Morning Herald: "The government needs to spend a lot more on infrastructure to make us current in the 21st century … we all know what needs to be done."

The national security overlap of infrastructure development and economic growth

National security in the contemporary context is best defined by US academic Charles Maier: "National security ... is best described as a capacity to control those domestic and foreign conditions that the public opinion of a given community believes necessary to enjoy its own self-determination or autonomy, prosperity and wellbeing."

Recognising the traditional 'hard power' elements of national security policy and strategy, which is the key responsibility of any government – namely elements of political, economic and military power – Australia has long enjoyed a period of relative stability and consistency that has empowered the nation, but also engendered a sense of complacency.

Australia has long had a tough relationship with the ‘tyranny of distance’. On one hand, the nation’s populace has treated it with disdain and hostility, while Australia’s political and strategic leaders have recognised the importance of geographic isolation.

The rise of Indo-Pacific Asia means the ‘tyranny of distance’ has been replaced by a ‘predicament of proximity’. China, India, Indonesia, Thailand, Japan and several other regional nations are reshaping the economic and strategic paradigms with an unprecedented period of economic, political and arms build-up, competing interests and rising animosity towards the post-World War II order Australia is a pivotal part of in the region.

As these nations continue to enjoy periods of record economic growth, development and industrialisation, Australia edges ever closer to economic slow down raising a series of complex, intersecting challenges for Australia's policy makers.

The nation is currently facing a critical infrastructure back log, with the nation's major cities clogged and bogged down by congestion on major transport corridors. Reserve Bank governor Philip Lowe has also pleaded with the Commonwealth government to lift infrastructure spending to address the G20 identified $230 billion shortfall, while also putting downward pressure on unemployment.

The G20 in particular found that while Australia's road infrastructure investment was adequate, the nation faced significant shortfall in major investment in ports and railways – this was further reinforced by former RBA governor Bernie Fraser, who stressed the importance of extra infrastructure expenditure to support the government's agenda to deal with the growing strain on the economy.

Critical infrastructure expands beyond simple road, rail and port infrastructure and includes a considered, nationally consistent approach to critical energy and water security infrastructure – both of which provide extensive value adding for the national economy across a range of sectors ranging from advanced and heavy manufacturing, through to agriculture and placing downward pressure on cost of living for Australians.

Your thoughts

Australia's position and responsibilities in the Indo-Pacific region will depend on the nation's ability to sustain itself economically, strategically and politically. Despite the nation's virtually unrivalled wealth of natural resources, agricultural and industrial potential, there is a lack of a cohesive national security strategy integrating the development of individual, yet complementary public policy strategies to support a more robust Australian role in the region.

Contemporary Australia has been far removed from the harsh realities of conflict, with many generations never enduring the reality of rationing for food, energy, medical supplies or luxury goods, and even fewer within modern Australia understanding the socio-political and economic impact such rationing would have on the now world-leading Australian standard of living.  

However, as events continue to unfold throughout the region and China continues to throw its economic, political and strategic weight around, can Australia afford to remain a secondary power or does it need to embrace a larger, more independent role in an era of increasing great power competition?

Let us know your thoughts and ideas about the development of a holistic national security strategy in the comments section below, or get in touch with This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it..