Keynote Address, Hudson Institute, Washington DC

**Check against delivery**
 

Thanks Ken for that very warm welcome. It is a pleasure to be at the Hudson Institute among those who value the great friendship between Australia and the United States.
A friendship whose singularity and depth left absolutely no doubt in anyone’s mind during the recent state visit of Prime Minister Morrison.
 
So great is that friendship that we in Australia like to call it mateship in recognition of the very special bond between our two nations. As friends, as mates, we have entered our second century of unbroken mateship and friendship. We are in our 80th year of diplomatic relations, and have enjoyed nearly 70 years of ANZUS cooperation. It is a bond that has seen Americans and Australians fight side by side across the globe, from the battlefields of France in World War One, to the mountains of Afghanistan.
 
A bond that has not only endured, but one that has consistently proven its worth against new threats and challenges. It is a bond based on the understanding that democratic stability is based on two mutually reinforcing pillars – peace and prosperity. A bond that draws its energy from the values and the democratic freedoms we both cherish. A bond that must be renewed by every generation.
 
For me, it is also a very personal bond. My grandfather, Alfred Reynolds, served in World War One as a stretcher-bearer, from the first Gallipoli landing in 1915 to the trenches of the Western Front in 1918. It was at the Battle of Hamel in France where he first met and served alongside American soldiers. It was there he taught his new “dough boy” mates how to survive in the trenches. And he taught them about the reality of stretcher-bearers having to make decisions – amid the unspeakable slaughter – about who to save and who to leave. He could well have been among those in the photograph of US and Australian soldiers, serving side by side at Hamel that my friend Secretary Esper presented to me at the August Australian-US Ministerial Consultations meeting in Sydney.

My grandfather lived the mateship that underpins the unique Australian-US relationship – a legacy I am proud to have stewardship of now - as the Minister for Defence.
 
In considering our alliance in my remarks today, I’ll be mindful of the mission Herman Kahn set this great institution: namely, to think about the future in unconventional ways. I’ll aim to do so though without being too unconventional, which I hope you can forgive me for as the bearer of a public office. But I’ll do so frankly – because the relationship we have built over more than a century, means that we can do that with each other.

In this speech I address four things:

1. Present a vision of the US-Australia Alliance looking into the future;
2. Describe that future as one that holds challenges fundamentally different from the ones we have addressed together in the past;
3. I will explore how we can best address those challenges through our respective strengths, shared values and in ways that are always complementary; and finally
4. I will demonstrate how we can draw on our diverse backgrounds, no less than on our shared values, to maintain – true to Hudson's motto – a secure; free; and prosperous future.

But let me very blunt up front - our collective challenge is to establish a rules-based order, one that is fit-for-purpose in the 21^st Century. One that continues to deliver regional and global peace and also prosperity.
 
Australia has a very clear and engaged view of the Indo-Pacific region – and for very good reason. As a three-ocean nation with the Indian Ocean to our west, the Pacific to our east, and the Southern Ocean – really Down Under, even to us – we lie at the heart of the Indo-Pacific. Over the past half-century, we have seen, and been part of, momentous changes in the region – changes that have delivered unprecedented peace and prosperity. Importantly, these changes have been realised. But they have been realised not by chance, but as a result of decisions made by governments to pursue their interests in a rules-based order. Drawing authority from institutional arrangements that had their genesis at the height of World War Two.

In the Indo-Pacific region, economic prosperity has been the focus of diplomatic efforts for several decades.
 
The region’s growth has been boosted by economic integration and liberalisation facilitated by forums such as the Asia-Pacific Economic Cooperation forum. Initiatives like an expanding network of free trade agreements and the Regional Comprehensive Economic Partnership, currently being negotiated. This has seen economic growth across the Indo-Pacific outstrip that of advanced economies, without any signs of abating. Before the next decade is out, four of the world’s five largest economies - in purchasing power parity terms - are likely to be in Asia: China, India, Japan and Indonesia.
 
Australia has been, and will continue to be, a net beneficiary of this growth, as export markets to our north continue to expand and diversify. That said, not all changes in the region have been positive. The absence of major conflict has been a hallmark of the Indo-Pacific’s more recent history. However this reality has required hard work, and does not, in and of itself, guarantee future stability. It is fair to say that regional security architecture in East Asia – with the exception of key bilateral alliances that I will turn to shortly – has been less of a focus than economic liberalisation.
 
The emergence of a collective regional voice through ASEAN has delivered stability between its members and underpinned regional prosperity. And the formation of the East Asia Summit as a forum for pursuing a more broad-ranging, ambitious agenda, has assisted in managing changing geopolitics in our region. But the overall security architecture, based on the ASEAN Regional Forum and the East Asia Summit, is yet to develop a track record of addressing and managing major security challenges.
 
The past decade alone has seen numerous developments of very real strategic concern. North Korea has developed and tested nuclear weapons and ballistic missile capabilities. We have seen continued militarisation of disputed features in the South China Sea, despite parties publicly undertaking not to do so. Terrorism was able to gain a physical foothold in the southern Philippines, and remains a serious threat there and elsewhere in South East Asia. Tensions have continued to rise over competing territorial claims in East Asia, directly engaging sea and air assets with ever increasing frequency. And military modernisation has seen an exponential increase in the region, most notably by China.
 
To be blunt, while the Indo-Pacific has had a strong focus on developing its prosperity, the region’s security has not received the same attention. But we know that peace and prosperity are inextricably linked.
It is time to redress the balance.
 
So what does all this mean for those of us in the region? Australia is very clear-eyed about three key implications from these developments. The first key regional implication is that the benign strategic environment that we’ve been long accustomed to is no more. It is not coming back. Australia’s strategic environment is now more contested – across all three oceans. What is more, it is being contested in ways that go well beyond the conventional military terms I have just alluded to. Economic coercion, foreign interference, use of civil militias and cyber-attacks are among the sorts of tools and measures we have seen employed. Employed to avoid direct conflict and preserve a veneer of deniability in pursuing strategic objectives.
They are commonly referred to as grey-zone tactics. Many of these tactics are hitting us in Australia and across the region, including influence operations, foreign interference and cyber espionage.
Australia is leading the world in counter-foreign interference laws. The steps we have taken to secure our critical networks and infrastructure, in particular Australia’s 5G networks, are designed to combat such tactics. Just as our foreign investment review process and intangible technology transfer controls are designed to protect our economic sovereignty. Grey zone challenges are eroding the rules-based systems that have underpinned the lives of our generation, and are undermining state sovereignty. And they are creating an uneven playing field for strategic competition that cedes new advantages to technologies and behaviors not adequately bound by existing laws and norms.
 
The second key regional implication is that China matters in ways that will require clear and deft handling. China’s economic dynamism and our trade complementarities make Australia and China natural economic partners for securing the prosperity of our respective nations. This also applies to broadening and intensifying our partnership where it can bring benefits for the region. Because China’s engagement is vital for strengthening institutions that underpin the free flow of trade and investment and increase security for our people. Australia is focused on ensuring that China’s engagement – like any other country’s – augments, not hinders, those institutions’ ability, to operate as fora for equitable decision-making with tangible, positive impacts.
We will also seek to cooperate with China wherever we can to enhance regional security. We do so from a clear position that our values are what define us as a nation, and that maintenance of them is not negotiable.
 
The third key regional implication is that all national aspirations matter – they matter a great deal. We need to listen, really listen, to concerns and different perspectives, and take account of regional sovereign aspirations and interests. Australia does not take for granted a regional default inclination towards the advantages of existing rules-based systems – nor should the United States. As clear as those advantages are to us, we must constantly prove them to others. Through actions and demonstrable sovereign respect, not just words.
 
That is why Australia is so actively championing regional trading arrangements whether existing, or through the creation of new ones, such as the Trans-Pacific Partnership. That is why we are building capacity to support good governance, infrastructure development and economic growth in regional counties through our aid and financing programs – most visibly, through the Pacific Step-Up. And that is why we are maintaining and expanding defence cooperation with regional countries, alongside a strong operational presence by the Australian Defence Force. We must ensure our partnerships are true co-partnerships, with the ‘co’ standing for consultation, collaboration and, wherever possible, consensus.

Only then can we be sure of preserving and extending the region’s diversity, founded not just on mutual respect, but also on practical support for sovereignty and resilience.
 
This brings me to the crucial role played by the United States in the Indo-Pacific.

The United States has been key to the Indo-Pacific success story – for both peace and the prosperity. And the future of both hinge on sustaining and, deepening US engagement. US military power – bolstered by sophisticated alliance networks with Australia, Japan, the Republic of Korea, the Philippines and Thailand – has long underwritten the region’s peace and security. But this is about more than committing military strength, as crucial as this has been and will continue to be. It is about fostering economic growth and strengthening democratic institutions. Doing it in ways that empower nations - small and large - to freely make their own sovereign choices.

US investment in the region, and the attraction of US soft power, play a vital role to this end. They are of equal interest to me as the Minister for Defence as is allied hard power.  Our defence men and women are superb ambassadors for our nation.
 
Recognition by the US of the intrinsic connections between economics and security is not new. The US has long championed economic development in the name of both peace and prosperity. Take for example the US Lend-Lease Act of 1941. In 1941 Winston Churchill referred to this Act as “the most un-sordid Act in recorded history”.  The most un-sordid Act in Recorded History. A big call for a Prime Minister fighting for his nation’s very survival. The Act was instigated by President Roosevelt “to promote the defence of the United States". This was in response to a plea by Winston Churchill for the US, then a neutral nation, to provide Great Britain with the tools to finish the war.

I frequently refer to this short Statute because - as astonishing as this un-sordid act was to Churchill - the motives, which effectively ended a decade of US neutrality, were complex, pragmatic and ultimately far-sighted. And they still have great significance and relevance today. It was clear that as early as 1941-42 Roosevelt and Churchill were thinking, not just about how to prosecute and win the war – but also how to reconstruct a post-war economy and security architecture, to avoid the mistakes made after WWI. Amongst its many positive consequences, the Act paved the way for the Marshall Plan.
 
In Australia, Sir Robert Menzies, who would become our greatest PM, in 1942 was also clearly considering post-war peace and prosperity. He made this observation about the Lend Lease Act, and I quote “A world war makes us a world nation; not a parochial community, but a world community. Nothing so contributes to peace among men as the maintenance of ordinary, decent commercial relations, and these relations can be restored only by the most liberal statesmanship when the war is over.” The ability for leaders to simultaneously manage peace and prosperity for today, and for the future, is just as relevant today, as it was then. Australia makes no apology for its relentless advocacy of deep, broad-based and ongoing US regional engagement.

How we hold to this commitment in an increasingly competitive environment, will define success. So too will how we call out unfair and inconsistently applied rules and coercive behaviour. This is Australia’s pathway in the region.
It is squarely in Australia’s interests for our great friend and closest ally to remain the partner of choice. A partner who remains deeply invested in the region, and in an open global economy and a rules-based trading system. No less than in a security presence with potent deterrent capability.
 
What then does this mean for the future of the Australia-United States Defence Alliance? Let me touch on three key areas of focus where we can adapt our alliance for the twenty-first century, in accordance with our shared values and democratic principles. These are;

1. Ensuring our deterrence and deterrent capabilities adapt to new challenges;
2. Maintaining a strong and responsive Indo-Pacific focus; and
3. Strengthening our military and technological advantage.
    

Firstly, deterrence. Australia, like the United States, is committed to maintaining a credible hard power deterrent. One that only military capability can deliver. The Morrison Government knows the cost of credible deterrence – and is prepared to pay it. That is why we are investing more than $200 billion in a modernised, more capable, agile and potent Australian Defence Force. This is why we are committing 2 per cent of Australia’s GDP to defence funding. This means having high-end platforms integrated across all five domains – land, air, sea, cyber and space. That said, effective deterrence is about more than capabilities – it is about our resolve to use them. Australia has clearly demonstrated its willingness to defend and deter attacks against the rules-based order. We do this through hundreds of Australian Defence Force deployments, exercises and operational presence across the globe.
And, importantly, we have always done so alongside the United States and other allies and partners. It is impossible to overstate the importance of this. For deterrence is a joint responsibility for a shared purpose – one that no country, not even the United States, can undertake alone. 

This leads me to the second area, a strong Indo-Pacific focus. The Indo-Pacific, and the particular nature of its emerging security challenges, cannot afford alliances and partnerships that are not mission-focused and appropriately resourced. Australia is strongly committed to working with the United States as detailed in our respective and complementary Indo-Pacific strategies and commitment to regional institutions. To that end, Prime Minister Morrison recently announced that Australia and the United States would develop a new mechanism to align and strengthen coordination of our Indo-Pacific strategies. This will serve not only to bolster our alliance architecture, but also to better focus it’s activities for greater effect. Further, the Alliance needs to be not just in the region – it must be of the region, and be seen as for the region. All countries in the Indo-Pacific have sovereignty at the core of their national interest.

As regional neighbors we seek to provide choice, and do so in a way that is respectful of all partners’ sovereignty. Choices that build resilience and protect, not diminish, sovereignty. Choices that nurture, not limit, the pluralism. Choices that acknowledge and support the right to seek to adapt the rules, as well as the right of all to shape that process. For Australia, that means being the security partner of choice of countries closest to us across the South West Pacific. It means committing resources to build resilience in those countries, as we have undertaken to do as part of Australia’s Pacific Step-Up. And it means leveraging and networking our alliances in new ways. 
The tone we adopt with sovereign nations is critically important.

The third area for enhancing our alliance is in further strengthening our military and technological advantage. Most in Australia and the United States do not realise how deep the collaboration is between our defence forces and our industrial bases.
We already partner in programs with the United States to research and develop new capabilities that will benefit both countries. These include programs relating to the P-8, Triton, the Heavy Weight Torpedo, the Joint Strike Fighter, and the Next-Generation Jammer. Importantly, closer industry partnerships arising from these programs will strengthen and safeguard our supply chains. And Australia’s inclusion in the US National Technology and Industrial Base will further bolster our respective industrial bases and collaboration well into the future. More effective industry cooperation will be a critical component of the more potent combined effect we will need for deterrence purposes. Australia and the United States are also collaborating on leading-edge technologies. Technologies that will significantly boost the capability of our armed forces, including in hypersonics, space and cyber. This will enable us to maintain our capability edge and prepare for the more complex, high-tech conflicts of the future.

It will also enable us to deepen our interoperability in new systems and platforms from their inception.
 
I have described to you today a vision for the future of the Australia-US Alliance.
It is a vision based on an Australian analysis of the region. And I have described how, learning from our past cooperation and based on our shared values, we can respond to the challenges ahead by taking forward our cooperation. 
How we manage deterrence, regional engagement and technological advantage – will enable us to maintain a secure, free and prosperous future. This is what you would expect from an alliance that is steeped in shared values, underpinned by dogged determination, and driven by clear understanding and imagination.
 
There are many personal stories in the history of our alliance. Let me conclude with just one of them that ties all of these strands together. USS Growler was lost seventy-five years ago next week. This submarine and her brave crew made a significant contribution to the Pacific War. USS Growler conducted multiple war patrols, from Brisbane, in World War Two. In 1943 in an action against the enemy that earned her Commander a posthumous Medal of Honor, 20 feet of her bow was bent at right angles. After limping back to Brisbane she underwent extensive repairs by Australian dockyard personnel before she returned to the fight.
And when she did return – and for the rest of her days – she had on her new bow two nickel plated kangaroos. Two figureheads that earned her the nickname the Kangaroo Express, and reminded all that Australia and the United States were partners in the fight for the future of the region – for the future of our shared democratic values.
 
That story captures much about our alliance – about our two nations, our two defence forces, and about the strengths of our mutually supportive defence industries. An alliance based on shared values, friendship and trust. An alliance that must remind future generations of the lessons of the past. So that we never take our great alliance for granted. So that we keep reshaping it - to ensure it addresses shared challenges and continues to contribute to regional peace and prosperity.
 
Our alliance needs to be preparing now, for future challenges - just as it always has. Thank you.