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Day: February 29, 2024
AUKUS taking focus away from Australia’s immediate security issues
Australians have been told for generations the United States is vital to Australia’s defence and security. The Anglo-centric defence and foreign affairs establishment in Canberra still sees a non-polar world dominated by the US, and is focused on preventing an emerging multi-polar world. This has been national policy since the Cold War, placing an important emphasis on ANZUS. This stance has been supported by think tanks like the Australian Strategic Policy Institute (ASPI), heavily funded by the pro-US defence establishment, and got Australia involved in a number of meaningless wars and military actions.
The ‘demonization’ of China and Russia is making it almost impossible to put forward alternative viewpoints, where one would be labelled a Sino-Sympathiser or Putin supporter. Iran and North Korea are seen as evil empires, where history plays no credence, as we saw in the Ukraine playbook.
The new AUKUS alliance between Australia, the United Kingdom and the United States locks Australia into US and UK Pacific policy for at least another 30, if not 50 years. As Australia’s defence spending hits AUD 50 billion in the 2023-24 budget, surpassing 2.0 percent of GDP, a proportion of those funds are beginning to be spent on projecting an Australian presence into the East China Sea and Taiwan Straits. These areas are of little true strategic interest to Australia, when there is a wide area of sea to Australia’s west, north, and east, shared with a number of emerging nations.
The 2023 Defence Strategic Review (DSR), which is a blueprint for Australia’s future defence posture came with a built in assumption that Australia’s security correlates with US policy in the region. The DSR even goes further, saying that the Australia-US alliance will become even more important in the coming decades (see P.18). Building up regional ties was a mere afterthought.
The DSR was a lost opportunity to debate any alternative options concerning Australia’s security future.
Australia’s immediate neighbourhood is a rapidly changing place
Australian defence capabilities have slipped over the last few decades, with critical shortages in manpower. This has happened when our near neighbour’s defence capacity has risen to the point of where some now consider Indonesia to be a middle power, occupying an area to the immediate north-west of the Australian mainland. Australia’s Lowy Institute also cites Indonesia as a regional middle power. Indonesia’s GDP is now 75 percent of Australia’s GDP and could surpass Australia over the next decade.
Indonesia will spend AUD 38 billion on defence this year modernizing its military. Military spending could become even a higher priority for Indonesia if Prabowo Subianto wins the presidential election to be held later this year.
While the political and military dynamics are rapidly changing in Australia’s own neighbourhood, there are distinct risks that Australia’s visons are fixated further afield, completely missing what lays just before us.
Australia’s immediate neighbourhood could have been given more consideration. The attention given to the immediate region appears to be token. The potential security effects of any natural disaster, or any radical shift in any neighbour’s ideology would be of far greater concern than the game of détente being played between China and the US. As we are witnessing in Myanmar, potential regime change is not a far-fetched reality.
What is Australia banking on today with the US?
US defence policy appears flawed and has become overly aggressive over the last 3 years of the Biden administration. Diplomacy as a tool has been downgraded and lack of it, failed to avert massive scaling up of the Russo-Ukraine war over the last two years. A peace agreement was vetoed by the administration more than a year ago, costing endless Ukrainian lives, and stepping up international frictions. There is open speculation over the real drivers of this war from the US standpoint. This leaves question marks as to who is really driving US defence actions. Is it the Secretary of State Antony Blinken, the Defence Department/Pentagon, former Obama administration people, or Preseident Biden himself? This doesn’t relate exclusively to the Biden Administration, US foreign/defence policy has been heading in this direction across previous administrations.
We hear about China’s expansionary presence in the South China Sea, a place it has been in for more than a thousand years. A large percentage of citizens of countries around the South China sea were Chinese migrants. With the exception of China’s advance across the border of Vietnam in 1979, China has not invaded any country. China’s activities in its immediate region are interpreted very differently to the way Australia’s strategic and defence experts are interpreting the presence (expansion), reasserting influence after a 65-year hiatus. This issue requires much more examination than was provided in the DSR.
In contrast, China’s Pacific theatre and shipping routes are surrounded by US bases in Korea, Japan, Guam, along with a heavy naval presence ensuring ‘freedom of navigation’. The US has a containment doctrine in place, which Australia subscribes to through the AUKUS nuclear powered submarine plans. Indonesia has deep reservations about AUKUS.
US defence competency must be questioned with the haphazard withdrawal from Afghanistan and reinhabiting of the country by elements of Al Qaida. The unchecked run of the Taliban is strengthening the Pakistan Taliban which could topple the government in Islamabad, allowing the Taliban to control Pakistan’s nuclear arsenal. Iran has gained access to billions of US Dollars, which is funding Hamas and the Houthis in Yemen. Although not widely reported in the legacy media, merchant ships are being sunk by low cost Houthi missiles on a regular basis in the Gulf of Aden. The failure of US high technology weapons to keep shipping safe will require a drastic rewrite of military tactics. The US is depleting its own stockpile of weapons in Ukraine, and terrorist cells are establishing themselves in the continental the United States.
Much of the above could have been preventable. The soundness of current US policy should at least be discussed to ensure Australia is not harmed as a party to some future conflict unnecessarily.
Australia’s unique issues in the region
Being antagonistic towards Australia’s largest two-way trading partner China defies logic. We can observe and learn from the results of the Morrison government’s approach to China. China trade is just too important to put at risk. In 2022-23, the two-way trade with China increased 12 percent, totalling AUD 316.9 billion. This made-up 26 percent of Australia’s two-way trade with the world.
Canberra’s Anglo-orientated bureaucrats really need to learn from neighbours in the region how diplomacy could better be conducted in the region. We are no longer the ‘superior’ white man of the south.
Australia’s greatest strategic threat will not be from military attack. It will most likely come from a massive natural disaster to the north. This could lead to massive casualties and exodus to the shoreline of Australia. This would happen with little warning.
China has already become extensively involved in the Australian economy. Now, 5.5 percent of the population in Australia are Chinese. This is an important cultural connection to China, as China sees the diaspora as overseas Chinese citizens. One of the best ‘bellwethers’ to measure the Australian-China relationship is the number of tourists that visit each year. When this picks up, then we will know the Australian-China relationship is becoming healthy once again.
These are the cultural issues that will help to prevent any mishap with China.
Meanwhile, Australia must look at how best to defend itself in the immediate region. Submarines for coastal surveillance would be good. Nuclear powered submarines bought on the ‘never-never’ might not even be around when they might be needed.
Australia’s biggest defence is diplomacy and soft power. Australia must move beyond just transactional relationships with its neighbours. Much closer relationships must be built with our neighbours, and this means integrating the military, if possible. Our best defence and also biggest threat is Indonesia.
Australia shouldn’t be playing other nation’s games. It has its own game much closer to home.
By Daniel Kowalski
The plot of Ayn Rand’s 1957 novel Atlas Shrugged can be briefly summed up as follows: the productive leaders and innovators of the country go on strike by disappearing from society to protest the cronyism, corruption, and oppressive taxes that have made living a virtuous life unbearable. The nation is then on the brink of an economic collapse as the remaining politicians, intellectuals, and mediocre businessmen are only able to take from others and have no capability to create or add value. Atlas Shrugged is very popular with those whose views lean toward libertarianism, while those who lean to the left react to it like a vampire does to a crucifix, despite never even reading a page.
Concerningly, the state of California seems determined to bring Rand’s novel to life.
During the 20th century, California was the jewel of America. Beautiful weather, diverse landscapes, access to the Pacific Ocean, and other features made it the leading state of the nation. There is a saying that says “As California goes, so goes the nation” because to many Americans this seemed like the best place in the entire country to live and raise a family.
Things seem to have changed in the 21st century though. When times were good, the government of California grew and spent more money than it had. In the short term, most people ignored this problem, but as time went on the deficits grew and grew. By the year 2000, the government had run up a debt of $57 billion. Twenty-two years later that number had almost tripled to $145 billion dollars. Since California is a state and not a nation they couldn’t print money to make up for the downfall, so their only options were to either cut spending or raise taxes. They chose the latter.
For state income taxes, California has the highest rates in the entire nation. They also have a declining population, with a loss of more than half a million people since a peak population of 39.5 million in 2019—and they did not all die of Covid. The majority are people who left to live in other states that did not have oppressive taxes and draconian Covid restrictions.
While wise leaders might look at this indicator and see it as a sign that they should change course, wisdom seems to be in short supply for the political elite in this state. Rather than move towards freedom, they are instead moving to erode and attack property rights even more through the form of a wealth tax. Of course, the people proposing this are trying to sell the idea to the public by saying only the super wealthy will be on the hook for this. The rest of us in the ninety-percent will benefit thanks to the rich paying their “fair share”.
The 16th amendment was sold to the American people under this promise too, and had people back then known that income taxes would lead to the system we have today, where the majority of the people use the majority of their income to pay taxes (federal, state, local, property, sales, etc), then this proposal would have been dead on arrival. Today’s politicians are trying to use the same tricks to pass a wealth tax, but the difference between now and then is that now we should know better.
What makes California’s proposed wealth tax even more disturbing is that they wish to still collect the tax for years after a person moves out of the state, like a feudal lord persecuting a serf for moving off his land. They also wish to impose the wealth tax on “part time residents” for the portion of the year that they “reside” in the state. In other words, a family vacation to Disney Land might come with a tax bill from the State of California. And when tourism declines, I wonder who the politicians will blame?
While the wealth tax has not become law yet, it is already prompting some of the mega-rich to move away, depriving California of their portion of the income tax and increasing the deficit. And it’s not just individuals who are leaving the state. National corporations are also deciding not to do business there as well.
As inflation rages across the nation, the costs of everything have gone up, and building materials are no exception. It costs more to replace a housenow than it did five years ago. To meet this new reality, home insurance premiums everywhere have increased. California’s Department of Insurance has responded to the new reality by placing new regulations on the insurers to prevent them from raising rates on their customers. The logic here is that the state has the largest population so if insurers wish to do business in the largest market in the United States, then they must abide by our rules.
The reaction has essentially been a boycott of the state by the companies. In addition to normal risks, California is also prone to natural disasters like wildfires, earthquakes, and even mud slides from heavy rains. With these new regulations limiting what prices could be charged, the cost of doing business in the state increasingly outweighs any potential profits. As a result, many of the largest insurance companies in the nation like Allstate and Hartford are no longer issuing new policies in the state.
California government policy has created an insurance desert in the state and with private business unwilling to respond because the once free market is no longer free, the politicians have solved the problem with a government insurance system called FAIR so that homeowners can comply with the insurance requirements for their mortgage. Under this state-owned enterprise, California residents get to enjoy reduced coverage at a higher premium than they would have been able to get before the politicians stepped in to help. This is a clear cut, black and white example of the standard of living decreasing.
The theme of Atlas Shrugged is that the freedom of American society is responsible for its greatest achievements. The book warned that as freedom declined, so too would the standard of living. California’s politicians seem determined to recreate the dystopian world of the book with oppressive taxes, attacks on personal property, and regulations that drive away private businesses.
Someone really ought to tell them that the world of Ayn Rand’s novel was not meant to be aspirational.
- About the author: Daniel Kowalski is an American businessman with interests in the USA and developing markets of Africa.
- Source: This article was published by FEE