Australia is making fundamental changes to its strategic orientation and defence capabilities in order to adapt to a changing security landscape in the Indo-Pacific. This goes beyond military hardware purchases and important issues such as includes defence diplomacy and building regional relationships (including among ASEAN countries). Australia new defence plan, 'The Defence Strategic Update', launched on July 1, has been the subject of much debate already.

Following on from (not superseding) the 2016 Defence White Paper, The Defence Strategic Update outlines the challenges in Australia’s strategic environment and their implications for Defence planning. Acccording to the Ministry of Defence, this new strategy (along with the capability investments needed to deliver it), "provides a new strategic policy framework to ensure Australia is able– and is understood as willing – to deploy military power to shape our environment, deter actions against our interests and, when required, respond with military force."

Its strategic pillars are the key objectives of 'Shape-Deter-Respond',

to shape Australia’s strategic environment;

to deter actions against Australia’s interests; and

to respond with credible military force, when required.

Practically, this translates into the Australian government investing about $270 billion over the coming decade in new or upgraded Defence capabilities, including more potent and long-range combat systems (missiles) and more secure supply chains.

The new strategy has been heralded as a new paradigm, signaling a major shift in Australia's defence posture - what some commentators have described as an 'aggressive' or 'bellicose' new stance. This is not necessarily meant in a negative way but reflects the recognition of a fundamental change in Australia's geopolitical and strategic security situation, brought home by PM Morrison invoking the 1930s as a parallel for the seriousness of the situation.  Defence Minister Reynolds stated at the launch of the Update that a recent review of the 2016 Defence White Paper had found that the region was facing the most profound strategic realignment since WWII: “Our security environment has deteriorated far more rapidly and in ways we could not have predicted four years ago...Major power competition, militarisation, disruptive technological change and many other new threats are all making our region less safe.” In this regard, it is notable that the new strategy takes into account state-on-state conflict as a realistic possibility for future ADF deployments in the region. 

For the past years already, security experts and policy makers had been discussing an increasing shift towards the 'conflict end of the grey-zone spectrum', in terms of Australia's future relations with adversarial great powers. Many voices were openly acknowledging that there was a need for change in Australia's defence posture, illustrated for example in the Chief of the Australian Defence Force's 2019 speech on political warfare that warned of a 'new generation of political warfare' confronting Western nations.

The so-called 'Grey Zone' is a key pillar underpinning this new conflict paradigm - indicating a shift towards a much less predictable spectrum of competition and escalation. As one definition highlights,

"Gray zone conflict is best understood as activity that is coercive and aggressive in nature, but that is deliberately designed to remain below the threshold of conventional military conflict and open interstate war. Gray zone approaches are mostly the province of revisionist powers—those actors that seek to modify some aspect of the existing international environment—and the goal is to reap gains, whether territorial or otherwise, that are normally associated with victory in war."

This spells a particular challenge for liberal democracies as these practices run contrary to their founding tenets and values, and those of the rules-based international order - and are much more the purview of authoritarian states. While the rhetoric of the Update is not directly aimed at China, it is a natural inference. Otherwise, 'revisionist powers' are usually shorthand for  non-liberal states actively working to overturn the geopolitical status quo and existing power hierarchy in the international system, Russia and China being cases in point  in the international system. Organizationally and conceptually, operating in this Grey Zone between peace and war is therefore seen as a major challenge - requiring an overhaul of existing capabilities and a profound strategic re-orientation.

While the 'Grey Zone' requires all the elements of national power of the modern nation-state ( such as diplomatic, informational/cyber and economic means - what is also known as 'statecraft') to play a key role in countering the spectrum of coercive Grey Zone activities, 'hard' military power to achieve parity with major competitors is still key. For Australia, China's power projections across the Indo-Pacific, evident for example in its recent attempts at asserting dominance over Hong Kong or Kashmere, therefore highlight the stark need for counter-action.

Accordingly, this Defence Strategic Update signals a clear move towards a more assertive posture intended to show Australia as capable of deterrence, also by offensive action if need be. This is encompassed in the Update's clear pivot towards the Indo-Pacific as the geographical focus for Australia's defence activities (away from the more expeditionary orientation of previous decades that saw Australia's deployment of troops in the Middle East and Afghanistan as a part of its strategic priorities).

This of course has a major impact on Australia's relations with the major powers, its allies and alliances/partnerships with other neighboring nations such as Japan, India, Indonesia and also through ASEAN. As the Australian federal MP and former diplomat Dave Sharma highlighted, "Defence and diplomacy work towards the same goal – the security of the nation – but using different means. If Australia is to effectively shape our strategic environment, we need a diplomatic step-up to match our military step-up."

The immediate question raised was what the re-orientation may mean for the future trajectory of Australia's relationship with the US - as one expert described the Update presenting a “paradox of both less and more reliance on America”.

Self-reliance and co-dependence have for a long time been the axes of the debate around the ANZUS security alliance. It appears this has only gotten more complex now as the Update points to unresolved questions in regards to the need for nuclear capabilities and more importantly, whether Australia and the US are even able to hold a sustained technological advantage in the Indo-Pacific.

But increased engagement with like-minded nations to build cooperative networks around the shared goal of an open Indo-Pacific extends further.

Accordingly, as NATO and the EU are also configuring new defence capabilities and reorient their strategies to adapt to the major strategic realignment underway, Australia may well be looking for new working relationships. The increasing engagement between NATO and Australia, culminating in the Individual Partnership and Cooperation Program Agreement signed on Secretary General Stoltenberg's 2019 Australian visit may signal deepening engagement in the Indo-Pacific.