By Rory Medcalf, Director of the Lowy Institute's International Security Program and James Brown, Military Fellow

Debates on Australia's defence policy have long oscillated between two schools: one focused on the physical defence of Australia's territory and its immediate maritime approaches, the other on maintaining the capability to send out expeditionary forces to meet threats early on or contribute to alliances. Both have characterised Australia's relative isolation mainly as an asset.

But Australia benefits from exceptional interconnectedness with the world through flows of trade, finance, information and people. This brings with it a reliance on rules, order and secure access to the global commons. Australia's interests go beyond the obvious priorities of protecting the physical security of its citizens, its sovereign territory and its resources. They also include maintaining national freedom, including independence of action, social cohesion and a democratic political system, as well as secure access to energy supplies and international markets. 

Australia's best defence involves securing its lifelines to the wider world.

Today we launch a new Lowy Institute Analysis, Defence Challenges 2035: Securing Australia's Lifelines. It addresses three questions of critical importance to Australia's defence planning. What is Australia's strategic environment likely to look like in the decades ahead? What are the risks to security Australia may face out to the 2030s? And finally, what are the circumstances under which future Australian governments may want military options?

The good news is that on no single issue has Australia's strategic environment reached a point of looming catastrophe. It would be alarmist to draw parallels with the world wars and superpower confrontations of the 20th century. But power balances in Asia are changing with the continued rise and assertiveness of China, and this may encourage strategic risk-taking. Although the probability of war in Asia is small, it is real, and certainly higher than a few years ago. As the Australian Government prepares a new white paper to guide the country's defence planning to 2035, the burden of strategic risk on Australia's national interests is increasing.

In the next 20 years, there are many plausible situations in which Australian governments might want military options, including during regional crisis interventions, contributions to US-led coalitions and missions to safeguard maritime interests. Consequently, the accumulation of risk to Australia's interests is greater than at any time since the end of the Cold War.

In our Analysis, we outline five hypothetical scenarios to illustrate two key facets of the strategic environment ahead for Australia. Firstly, future security challenges will likely be complex, due to a multipolar regional environment, an array of possible threat domains, a profusion of sub-state, non-state and commercial actors, as well as the intricacies of evolving military coalitions. Secondly, in each scenario, national interests are diffused well beyond the Australian homeland, and their protection is dependent on systems (both political and military) whose capabilities are not all sovereign to Australia..

For a country like Australia, dependent on the functioning and predictability of a globalised world and the rules-based management of differences, there is a thread running through the multiplicity of security challenges: the need for order.

Most scenarios in which an Australian government might use military force involve preserving Australia's connections to the wider world and maintaining the ability of our citizens to live, work, and travel freely and securely within it. Australia cannot achieve these goals without international partnerships — the most important of which by far remains the alliance with the US. These partnerships in turn are reasons for Australia to uphold its reputation as a secure, capable, reliable and active participant in the international system.

Australia in the years and decades ahead will also face a wide range of transnational and sub-state security risks. In the near neighbourhood of East Timor, Papua New Guinea and the South Pacific, it remains likely that Australia will again be pressed to take the lead in humanitarian or even armed stabilisation operations. Australia will also be expected to contribute to operations beyond it's immediate neighbourhood.

Yet as the horizon of security risks becomes more crowded, the capacity to address these risks is not keeping pace. Advanced militaries are prioritising intelligence/surveillance capabilities and 'jointness', integrated command and control systems and smaller (but higher readiness) forces. These militaries are more expensive and increasingly unable to prepare for all eventualities. Hence the importance of strategic decisions on defence procurement has increased.

As the strategic contours of Indo-Pacific Asia shift, and thinking on Australia's place in this region changes, trade-offs between Australia's limited defence capabilities will become more apparent. And if conflict does ensue, it will unfold in a manner unfamiliar to most Australians and involve new domains and technologies, placing additional strains on military commanders and political decision-makers.

Securing Australia's lifelines will involve making contributions to a rules-based regional and global order, as well as influencing the way it adjusts to changes in the balance of power. The challenge for the national defence establishment will be to provide options to government to manage this new horizon of risk.

Image courtesy of Australian Defence Image Library.