Commentary |
18 January 2022

Best decision-making needed as Fortress Australia rejoins the world

The central challenge is striking the right balance between negative and positive globalisation. Originally published in the Australian Financial Review.

Ben Scott
Ben Scott

How will Australia re-engage with the post-COVID-19 world?

To much of the world, Canberra’s ejection of the unvaccinated but hardly dangerous Novak Djokovic looks like a doubling down on Fortress Australia.

At the other end of the spectrum, the annual Australia Day lamb advertisement has delivered an amusing counter narrative of joyfully reopened borders. The Djokovic decision was domestically popular, but the lamb ad presumably also reflects Meat and Livestock Australia’s market research.

Still, there can be no simple going back to how it was. Australia has benefited more than most countries from the global flow of capital, goods, people and ideas that accelerated after the Cold War. But suspicion of globalisation had been growing for some time. It helped propel Donald Trump to the US presidency, and it informed Prime Minister Scott Morrison’s attack on “negative globalisation” at the end of 2019.

 

But Morrison can’t have anticipated the range of international risks – from public health to supply chain security – revealed by COVID-19.

The hardening of Australian borders was quickly followed by China’s imposition of economic sanctions – to punish Australia’s call for an inquiry into the origins of the virus. That’s all boosted economic nationalism and distrust of globalisation.

In the next period, the central challenge for countries such as Australia will be to strike the right balance. Australia’s economic strength – and hence security – will continue to depend on our access to trade, investment and immigration.

The emerging technologies are likely to present Canberra with some of its toughest decisions about how to re-engage with the outside world.

But the increased risks of global exposure won’t go away. Canberra will need to ensure that defences against negative globalisation don’t unnecessarily cut us off from positive globalisation.

That’s what critics think Australia is doing to itself by toughening its approach to China. They portray a policy directed by paranoid and national security bureaucrats which has resulted in legislation to quash Victoria’s symbolic agreement with China on the Belt and Road Initiative, and even seen the blocking of Chinese purchase of food and drink companies.

So, it only seemed like a matter of time that until the government quashed the controversial 99-year lease over Darwin port granted to a Chinese-owned company by the Northern Territory in 2015 – without Canberra’s knowledge and to Washington’s irritation.

The port is obviously a strategically important asset, and the opposition argues it should remain in public hands. And, according to Peter Jennings, of the Australian Strategic Policy Institute: “There is no more important step the Morrison government could take than to end [the lease].”

Nevertheless, the Department of Defence has quietly concluded that there are no national security reasons for cancelling the lease. Although the reasons haven’t been made public, the decision appears to be a statement of confidence in Australian sovereignty.

Chinese investment in overseas ports indubitably has a strategic dimension and has challenged the sovereignty of weaker countries. But it doesn’t follow that Australia lacks the power to satisfactorily mitigate any security risks.

The government went the other way in the case of 5G, concluding in 2018 that it would not be able to maintain sovereign control of a network built and operated by Chinese telecommunication companies.

That was almost certainly the right call. But a default and blanket rejection of Chinese technology is unrealistic. It could deny Australia essential inputs and cut us off from regional economies. The emerging technologies are likely to present Canberra with some of its toughest decisions about how to re-engage with the outside world.

There is no template, but making the best decisions requires doubling down on good policy-making processes: evidence-based, informed by expertise, and transparent. Expertise is necessary but insufficient. The experts can’t – almost by definition – know every relevant factor. More inputs will produce better decisions. So, decision-making should be as contestable as possible.

Australia also needs more open decision-making to stay ahead of the global wave of populism. Populism drives bad decision-making. But populism is also fed by opaque governance.

The pandemic has underscored that public policy is mostly an exercise in risk management. But this message has been weakened by the Morrison government’s inability to make expert advice easily understandable, and is reluctant to speak openly about trade-offs.

Just as Canberra has shown confidence in Australian sovereignty, it should have more confidence in the Australian polity. The government addresses conspiracy theories and populist anti-vaxxers directly rather than trying to shut them out. And it should make its reasoning about Darwin Port as public as possible. National security decisions often require secrecy, but public objections to the lease should be openly addressed.

Australia is not the only country working out how to engage a world that is riskier and more competitive. Countries that remain either too open or too closed are likely to fall behind. Australia doesn’t have the margin for error that big countries like the US and China do. But good public policy should be our comparative advantage.