Dr Ross Babbage (CEO of Strategic Forum) and Michael Pezzulo (Former Secretary of the Department of Home Affairs) made the comments during the ‘Navigating geopolitical risk in defence industry’ session at the Australian Defence Industry Accelerator Summit, held at the National Convention Centre Canberra on July 16.
Dr Ross Babbage (CEO of Strategic Forum) said that the current defence landscape is in a “markedly different” position than it was in recent years, and that the nation is facing challenges unseen since World War II.
He notes that China’s goals to “undermine, weaken, corrupt, and divide the West” are putting Australia and its allies in a place of serious risk for involvement in the event of a major conflict.
“My view is that we are very likely to be involved and we will be taking hits,” he said.
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Former Secretary of the Department of Home Affairs Michael Pezzulo adds that China’s position is likely “impatient” and through Australia’s ten-year defence spending plans, this may put the nation at a “chokepoint of risk” within the next two years as China’s threat accelerates against Taiwan, the Indo-Pacific, and the South-China Sea is expected to grow.
He says that Australia would be "less prepared than in 1941".
Though a conflict involving Australia is a “low probability", if it happened, it would have a "huge impact”.
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He compares the uncertainty Australia would face in this event would be similar to the start of the Covid-19 pandemic, where government, industry, and everyday people were overwhelmed and unsure of how to address the stark impacts.
Babbage warns China’s mercantile growth puts Australia in a position where local industry is being “killed”, and in the event of warfare, this will severely impact the supply chain for everyday Australians.
He says that the defence and government industries need to “build a free trade agreement amongst coalition members”, “build harmonized information systems to assist importers”, and “examine supply chains for all important products and inputs”.
He also added that Australian defence industries need to ensure that “strong preference” is provided to “domestic supply chain contributors or those from the Trusted Liberal Economy Coalition”, made up of nations such as the USA, Japan, Germany, the UK, and France to name a few.
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