PM signals shift in economic, national sovereignty plans post-COVID

Driven by an unprecedented economic transformation, propelling once developing nations onto the world stage, the region, the globe and its established powers, including Australia, have enjoyed a period of previously unseen economic prosperity and stability. 

Australia in particular has been buoyed by the immense mineral and resource wealth of the landmass and the benevolence of the post-Second World War political, economic and strategic order, namely the tactical and strategic freedom enabled by the US to capitalise upon the immense economic opportunities, with little concern for national security and supply chains. 

However, across the Indo-Pacific, competing economic, political and strategic interests, designs and ambitions are beginning to clash, flying in contrast to the projections of many historians at the end of the Cold War – further compounding these issues is the continued instability caused by COVID-19, economic disruption through the advent of automation and artificial intelligence and, of course, concerns about ecological collapse.

For Australia and comparable Western nations, like the US, UK and increasingly across the European Union, the outbreak of COVID-19 has only served to further hasten the economic decline, stagnation and political malaise experienced throughout the developed world, with many once-powerful, world-leading nations beginning to feel the pressure.

Further compounding Australia's challenges in this era of disruption is the growing economic tensions and conflict emerging between China and the rest of the world, with Australian industries, from agriculture and mineral exports, through to education all in the sights of Beijing. 

In particular, recent threats of economic coercion, made by Beijing's ambassador in Canberra, Cheng Jingye, combined with growing domestic sentiment about breaking Australia's economic dependence on the rising power has prompted many within Australia's public and strategic policy communities and the Australian media to begin expanding the debate. 

The time has come

VIEW ALL

This perfect storm of factors has prompted many within Australia's political and strategic policymaking communities, as well as journalists, to call for a reset of Australia's economic policy, with a focus on building what NSW senator and retired Major General Jim Molan defines as 'national sovereignty' to better position the nation and secure its national security in an era of great power competition. 

Other examples include John Coyne of the Australian Strategic Policy Institute (ASPI), who has penned a piece, titled 'Making our own luck in the face of a pandemic', calling for Australia to use the impact of the global pandemic to take advantage of the moniker of the 'lucky country' and establish a semblance of national resilience and security, learning the lessons of over-dependence on global supply chains and blind faith in 'market forces' to secure national interests. 

"Australia, like many countries, failed to heed such warnings. Critical pandemic readiness policies were overexposed to short-sighted budget cuts underpinned by the dogged pursuit of efficiency. The long-term development of critical infrastructure was left to the whims of market forces. Nation-building efforts were underpinned by a user-pays model," Coyne states. 

"COVID-19 has already shown that market forces don’t promote adequate national resilience in myriad areas, from broadband bandwidth to the capacity to produce basic medical supplies, and that far too much of our preparation for pandemics, along with national resilience, was predicated on good luck."

The key point of this is a growing realisation that Australia's national resilience must be subject to a considered, consistent and well-articulated strategy and policy platform and leadership from within Australia's political and public service class. 

Adequately responding to these challenges also necessitates a clear understanding of the difference between 'national security' and 'national resilience', particularly in the modern context.

Coyne reinforces this, stating, "Until now, Australian long-term funding of national resilience and responsiveness often seemed economically inefficient. Little surprise, then, that policymakers regularly looked to the market to provide such resilience, especially in critical infrastructure investments.

"However, the creation of spare capacity is often not a commercially viable prospect. Arguably, the NT government’s decision to maintain the Howard Springs site, without a clear customer, was a high-risk one."

More recently, Chris Uhlmann writing for The Sydney Morning Herald has stated, "we can't return to business as usual with China", prompting increased debate in light of the rapidly evolving geo-political and economic environment Australia finds itself in. 

Echoing these sentiments, Uhlmann is scathing in his positioning of the argument, something that has been long overdue as the nation embodies the very definition of the Lazy Country, something Donald Horne, author of The Lucky Country, considered was a far more accurate descriptor of Australia. 

"To date Australia’s business captains and university chiefs have shown they can’t handle the truth. As long as the rivers of gold flowed, they were happy to urge silence in the face of the militarisation of the South China Sea, industrial-scale cyber theft, the arbitrary arrest of our citizens, rampant foreign interference and the imprisonment of a million Uighurs in Xinjiang.

"In the words of a former intelligence officer: 'I don’t understand why Australian politicians think that we have to build a relationship of trust with China in order to do business with it. Russia and China understand each other perfectly because they don’t trust each other at all'," Uhlmann states. 

The PM heralds a shift

In response to the growing groundswell of support for the Australian government to design and implement a national strategy, Prime Minister Scott Morrison has used an interview with Simon Benson of The Australian to lay the groundwork for a post-COVID-19 revival of Australia's economic diversity and industrial capacity. 

Benson, states, "Scott Morrison will urge a new industrial compact between workers, employers, unions and government to boost employment and forge a remodelled economy after the pandemic, while signalling a new and more effective federation emerging from the crisis.

"Ahead of a headland speech next week expected to kick off the debate over longer-term reform, the Prime Minister said the country could not return to the pre-COVID-19 system that had undermined productivity and had begun to show signs of 'sclerosis'."

This scene-setting paves the way for the Prime Minister to elaborate on his plans, in what Benson describes as a "call to arms for a united approach to ­reshaping the economy comes as an exclusive Newspoll conducted for The Australian shows a surge in support for the collective government approach in handling the economic crisis and the strengthening of the public health system to cope with the health crisis".

"More than 75 per cent of voters claim confidence in the health system, while those backing the government’s approach to managing the impact on the economy have shot up from 47 per cent to 60 per cent despite the release of 'devastating' unemployment numbers," he adds.

The Prime Minister builds on the underlying premise, stating, "Over a long period of time our economic success has built up a momentum, but it was also building some sclerosis … and the ability to deal with that was very limited ­because of the success we had.

"Australia’s economy has been very resilient … you could argue that has not motivated people to seek new and better set of arrangements. It has left employees and employers to settle for what was there and not reach to the next level where they will both genuinely benefit.

"Businesses have to have a competitive cost base. They have to be able to draw on the best of the skills base that match their needs and they have to be engaged in technology and they have to diversify into markets that will sustain them."

One thing is certain, the old paradigm of Australia as farm, mine and schoolyard is over, the Australian public have recognised the exposure and dependence the national economy has on potentially unreliable partners, combined with the rapid acts of self-preservation among the 'globalised' world powers, prompting a major and timely rethink of the nation's national security and sovereignty. 

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.

Enhancing Australia’s capacity to act as an independent power, incorporating great power-style strategic economic, diplomatic and military capability, serves as a powerful symbol of Australia’s sovereignty and evolving responsibilities in supporting and enhancing the security and prosperity of Indo-Pacific Asia.

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?

Further complicating the nation’s calculations is the declining diversity of the national economy, the ever-present challenge of climate change impacting droughts, bushfires and floods, Australia’s energy security and the infrastructure needed to ensure national resilience. 

Let us know your thoughts and ideas about the development of a holistic national security and sovereignty strategy and the role of a minister for national security to co-ordinate the nation’s response to mounting pressure from nation-state and asymmetric challenges 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..