Commentary | 05 September 2013

Caught between the U.S. and China

In a New York Times op-ed, Lowy institute Executive Director Michael Fullilove argues that the 2013 election campaign ignored the greater strategic and economic challenges facing Australia. 

  • Michael Fullilove

In a New York Times op-ed, Lowy institute Executive Director Michael Fullilove argues that the 2013 election campaign ignored the greater strategic and economic challenges facing Australia. 

  • Michael Fullilove

Executive Summary

Buoyed by a mining boom, Australia was one of the only major developed economies to avoid recession during the global financial crisis. Its economy has been growing for two decades. So why is the ruling Labor Party, in power since 2007, badly trailing in most public opinion polls?

Labor has been undone by disunity and regicide. Prime Minister Kevin Rudd was overthrown by his deputy, Julia Gillard, in an internal party coup in June 2010. Demoted to the job of foreign minister, he bided his time and then exacted revenge on Ms. Gillard in June, leading a successful intraparty revolt nearly three years to the day after he was overthrown. Critics also point to promises gone astray, notably a pledge to return the budget to surplus this year.

Tony Abbott, the leader of the opposition, is a disciplined campaigner. His attacks on the government’s carbon tax and its record on illegal immigration have hit home. He has the spirited support of most of Rupert Murdoch’s Australian newspapers. But the public remains wary of Mr. Abbott’s rugged social conservatism and unconvinced that he has a positive reform agenda.

As an underwhelming campaign season ends with Saturday’s federal elections, the public temper is one of resignation, not hope.

The campaign has been clogged with trivialities. Was Mr. Rudd rude to a makeup artist who worked with him and Mr. Abbott before a televised debate last month? Did he delay a briefing over the crisis in Syria to appear on a cooking show? Is Mr. Abbott a chauvinist for praising a female candidate for Parliament, a fellow Liberal, for her “sex appeal”? Was he disrespectful to the office of the prime minister when he asked, during the debate, “Does this guy ever shut up?” The stakes in the election are much higher than these nonevents would suggest.

A once-in-a-lifetime boom in natural resource exports to China is leveling off. Commodity prices have peaked, and investments generated by the boom — the digging of coal and iron ore mines, the laying of pipelines, the construction of terminals — is slowing. Unemployment is rising, albeit from a low base.

On foreign policy, Australia’s challenges are serious. The country has seemed torn between its Asian geography and its European history. Here the contrast between Mr. Rudd, a wonk who speaks Mandarin, and Mr. Abbott, who has a pronounced affection for the “Anglosphere” (the community of English-speaking nations), is most pronounced. In the campaign, however, Mr. Abbott has criticized Mr. Rudd as being overly ambitious on the global stage and promised that his first overseas trips as prime minister would be to Asian capitals.

The most prominent international issue has been the treatment of asylum seekers — migrants from Afghanistan, Iran, Iraq, Sri Lanka and other countries, who keep turning up in leaky boats — but there, the distance between the major parties has narrowed; both favor harsh treatment of such migrants to deter them from coming.

There has been little discussion during the campaign of the global shift of power toward Asia. In the past few years, Australia’s government in Canberra, the capital, has become one point on a strategic triangle formed with Washington and Beijing. Australian diplomats are keen to get relations with China right, given that country’s rapid (though slowing) economic growth, expanding military expenditure and geopolitical clout. It’s not easy, however, for a midsize liberal democracy to get on with a giant authoritarian state.

The Australian-American side of the triangle is much more robust. President Obama has placed our country near the heart of his “rebalance” toward Asia, by deciding to rotate a force of up to 2,500 American Marines through Darwin, in the north.

But old friendships create high expectations — and whoever wins may end up disappointing Mr. Obama.

Australia’s military spending has slipped to 1.6 percent of gross domestic product, compared with more than 4 percent in the United States. This is the lowest it has been since before World War II. We have scaled down our military expenditure at the exact moment other countries in the region, including Indonesia, India and Vietnam, have scaled theirs up. Both parties have promised to increase military spending, but have not said how.

Australia is the only country to have fought beside the United States in all of its major conflicts over the past century, including Vietnam and Iraq. However, getting involved in any of the unpredictable disputes in our neighborhood in the future may be a different matter. A poll earlier this year by the Lowy Institute found that only 38 percent of Australians agreed that their country “should act in accordance with our security alliance with the United States even if it means supporting American military action in Asia, for example, in a conflict between China and Japan.” This striking ambivalence reflects the fact that our leading strategic partner, the United States, is increasingly a rival to our most important trading partner, China.

Australia faces difficult economic and security choices — but this campaign has done little to clarify those choices or articulate the country’s place in the world. It may be left to events, not elections, to awaken us from our slumber.


Michael Fullilove is executive director of the Lowy Institute for International Policy and the author of Rendezvous with Destiny: How Franklin D. Roosevelt and Five Extraordinary Men Took America into the War and into the World.