Australia must urgently build its power as global order collapses

Ten years ago I was asked to deliver the Boyer Lectures. I proposed that we go global and give a Boyer Lecture overseas for the first time – in China. As I stepped off the plane in Beijing, I found I had received two voicemails.

One was from a senior intelligence official in Canberra, whose message was encouraging. He thought giving the speech in Beijing was a good idea. He said that as a private citizen I could send some tough signals to China that an Australian official could not.

The next voicemail was from a diplomat at our embassy in Beijing. “Welcome to China!” the diplomat began. “May I ask you one favour: please don’t screw up the relationship with Beijing this week!”

The “tale of two voicemails” encapsulates Australia’s enduring China dilemma. We want a good relationship with our largest trading partner but we also need to be clear with Beijing about how we see the world.

I began my lecture in Beijing by recalling Dean Acheson’s memoir of his time as Harry Truman’s secretary of state. Acheson’s generation of American statesmen created the post-war world.

Acheson titled his memoir Present at the Creation. I suggested that we were “present at the destruction” – the destruction of a world order that had served Australia’s interests well.

So how has my analysis fared in the past 10 years? Are we, in fact, present at the destruction? And have we responded to this moment with the appropriate sense of urgency?

In 2025, the liberal order has been replaced by something illiberal and disorderly.

A major land war has raged in Europe for more than 1000 days, with more than a million casualties. Populist movements are approaching the gates of power in London, Berlin and Paris.

To the east, Hamas’s vicious October 7 attack ushered in two years of agony and suffering. In the Indo-Pacific, the world’s two most powerful countries, the US and China, eye each other warily.

Norms have been abandoned. Bright red lines – such as that prohibiting the acquisition of territory by force – have been crossed. Tariffs have returned. January 6 exposed the fragility of America’s democracy. The leader of the free world doesn’t believe in the free world and doesn’t want to lead it.

Efforts to address climate change are faltering. Nobody knows whether artificial intelligence will end scarcity or end humanity.

In 2015, I pointed to five trends that were transfiguring the international system. How do these assessments hold up today?

First, I argued that after the traumas of the Iraq war and the war on terror, America had begun to step back from the world.

Donald Trump, an unbeliever in the liberal order and an alliance sceptic, has accelerated this process of withdrawal. He is oblivious to the advantages of global leadership. As with all things, the Trump administration, too, will pass. But the US won’t snap back. The impulse for presidents to put America first will persist.

Second, authoritarian powers are now definitely up on their hind legs. Russia’s unprovoked, unjustified, brutal war of aggression against Ukraine continues. Its warplanes breach NATO airspace. Its agents deal in sabotage and murder.

Across the past two years, Iran has suffered severe setbacks: the Assad regime in Syria has fallen; Hamas has been devastated; Hezbollah has been decapitated; and the US and Israel have struck at its nuclear program. But Tehran will be back.

North Korea remains poor, resentful and dangerous. Kim Jong-un has expanded its nuclear arsenal and deployed its forces to Europe.

China has had a more successful decade. Xi Jinping aspires to make China the pre-eminent power in Asia. His formidable military parade in September was a show of strength.

The past decade also has seen the tightening of connections between these authoritarian countries. Vladimir Putin’s invasion of Ukraine is being powered by North Korean soldiers, Iranian drones and Chinese technology.

Third, international institutions have atrophied. At 80 years old, the UN is frail. When it comes to recent conflicts in Europe and the Middle East, it has been conspicuously absent. Secretary-general Antonio Guterres moves without trace.

These days, world leaders rarely ask themselves: “What does the UN think about this?”

My fourth assessment was that the West was retiring from the global stage. Here I was partly right and partly wrong. I compared European countries to the priest and the Levite in the Parable of the good Samaritan, who preferred to pass by on the other side of the street. But after Russia’s invasion of Ukraine, Europe could no longer pass by on the other side – partly because Putin had brought violence and chaos to their side of the street, and partly because Trump had shown he is no good Samaritan.

My final assessment was that competition in our part of the world, the Indo-Pacific, was escalating.

Australia now has a different relationship with China from that which we enjoyed 10 years ago.

In 2015, I said we should co-operate with China when we can; disagree when we must; and always be clear and consistent. A version of this formula has now lodged itself in Australia’s official diplomatic vocabulary.

Since Labor’s election in 2022, Canberra and Beijing have stabilised the relationship. But we won’t see a reset of the relationship because the factory settings have changed.

In 2018, 52 per cent of Australians trusted China to act responsibly in the world. By 2022, that figure had fallen to 12 per cent. The PLA Navy’s circumnavigation of our continent shows that China intends to keep the pressure on.

A decade ago, I argued these five trends were undoing the international order. This is why I thought we were “present at the destruction”. At the time, some said I was too gloomy. But if anything, I wasn’t gloomy enough!

Given the erosion of the international order over the past decade, have our international policies undergone a corresponding step change? Have we become a larger Australia?

The answer is: not yet.

The good news is that over the past decade, we have put our political house in order. When I delivered the lectures in 2015, we had endured the spectacle of five PMs in five years. Today, we have had only two PMs in seven years. Stability has returned to the Australian political system. This should set us up to make bold decisions.

The single largest contributor to a nation’s power and influence is the strength of its economy. Economic success makes us more attractive as a country. It also enables us to afford the military and foreign policy instruments we need. If you don’t have the right tools, you can’t do the job.

Across the past decade, defence spending has inched in the right direction. This year, we are back up to 2.05 per cent of GDP. Given our circumstances, however, this is not enough.

Our leaders keep telling us that our strategic circumstances are worse than at any point in their lifetimes. If that’s true, then our policy response should be substantially different from what we’ve done in the past. As the international order degrades and our principal ally looks inwards, Australians will need to do more to protect our own sovereignty.

Anthony Albanese is right when he says it’s arbitrary to measure defence spending as a proportion of GDP, and the better approach is to cost out the capabilities we need. But however we calculate the cost of our capability needs, the bill is likely to come in at much higher than 2 per cent.

One reason for this is that we are acquiring an expensive new signature capability: nuclear-powered submarines.

Our public debate on AUKUS is unbalanced. The government rarely makes the strategic case for nuclear boats, which means the debate is dominated by the critics. You would never know from the tenor of media discussion that both major political parties and two-thirds of Australians support nuclear boats – or that eight out of 10 Australians believe the US alliance is important to our security.

Australia decided to acquire nuclear-powered submarines four years ago. It’s right that we have debated that decision at length. Now we need to get on with it. Let’s move quickly and with purpose to show we can be a reliable steward of this technology and seize the opportunities it provides. The alternative – to walk away from our American and British partners, after previously walking away from the French, and the Japanese – would make us look unserious.

A larger Australia means more than just a larger defence budget. Deterrence must go hand-in-hand with diplomacy. Yet our diplomatic spending has remained roughly flat across the past decade.

Why should Australia have fewer overseas posts than smaller countries such as the Netherlands, Hungary, Greece and Portugal? We have the 14th largest economy but only the 25th largest national diplomatic network.

I commend the government’s energetic diplomacy in Southeast Asia and the Pacific.

We should devise a cat’s cradle of agreements that links our security to those of our neighbours. A latticework of mutual strategic trust will make it harder for any of us to be isolated or coerced – and harder for Australia to be portrayed as an outsider in our own region.

Albanese pulled off a successful visit to Washington. Now Canberra should build on this success by seeking to play a co-ordinating role with other US allies in the region.

The Europeans have learnt the hard way the need to co-ordinate their approaches to this White House. Creative Australian foreign policy along these lines could improve the prospects of alliance co-operation and mitigate the risk of alliance fracture.

US allies in Asia have long been concerned about Beijing’s intentions. Now we also worry about Washington’s reliability. What if, in future, we face the worst possible combination: a reckless China and a feckless America?

The answer is that Australia and other Indo-Pacific allies should do more to strengthen our own capabilities to deter aggression; do more with each other; and do whatever we can to keep the US deeply engaged in our region. Our interests are served by a stable balance of power in the Indo-Pacific, in which America plays an important role.

As I said in 2015, all of us deserve our own space. None of us wants to live permanently in another’s shadow. We all have the right to make our own way.

Our international circumstances have deteriorated, but the changes to our policy settings have not kept pace. A gap has opened up between our national interests and our national capabilities.

Australia has a secure government, with a large parliamentary majority, led by a confident PM. This is the moment to invest in both defence and diplomacy, and take on an even more demanding regional role.

Australia remains, as Clive James put it, “the birthplace of the fortunate”. Life is good here. It can be tempting to focus on perfecting our society without proper regard for the international environment on which our wealth and security depend. It feels easier to prune our garden than to look over the wall at the jungle beyond.

Just because you’re not interested in the jungle, however, doesn’t mean the jungle isn’t interested in you.

I closed my final Boyer Lecture in 2015 by asking this question:

“Are we content to be a little nation? Do we want to be a nation with a limited diplomatic network, a modest defence force and a cramped vision of our future?

“Or do we want to be larger than this – a big, confident country … a nation with a reforming mindset, a generous debate and a serious public life; an ambitious country with the instruments that enable us to influence the balance of power in Asia?”

I hope we decide to think big.