Australia was a major contributor to, and beneficiary of, the rules-based world it helped “underwrite for the two decades between the Berlin Wall coming down, and the global financial system blowing up,” he said.
That “congenial” world had been “upended by the 2008 financial crisis, severe recessions in the U.S. and Europe, an uncertain recovery that ended with COVID, and a subsequent spike in inflation which crested not long ago.”
Lingering inflation, weak growth in China, population decline and a slowing in other large economies, the risk of higher oil prices due to the Middle East conflict, the continuing Ukraine war, and fragmenting supply chains all posed ongoing risks.Integration of Economic and Strategic Goals
Noting that U.S. National Security Adviser Jake Sullivan had last year given a speech at Brookings Institute saying Biden’s Inflation Reduction Act was as “much about security as prosperity.”“Just as when the Australian treasurer fronts the Lowy Institute 13 days from a budget, it tells you something about the fusion of Australia’s international and domestic ends and the integration of the government’s economic and strategic means.
Recent governments had assumed an artificial distinction between prosperity and security, but the current government was determined to “erode if not erase” this view.
“We recognise that in facing the most challenging strategic environment since World War II, economic resilience is an essential component of assuring our national security,” Mr. Chalmers explained.
“This is part of what our government means when we talk about the need for unprecedented coordination and ambition in our statecraft, harnessing all elements of our national power to advance Australia’s interests.”
The next decade would see heightened geostrategic competition, an international system under pressure, demographic change, greater risk of major shocks to supply chains, and a restructuring of global trade from the net zero transformation, the treasurer predicted.
“All these challenges require us to be engaged in the world and in our region,” he said. “But we also need to rethink how we act at home.
“The scale of subsidies in the three major global economies of course dwarfs anything Australia can offer ... but it would be preposterously self-defeating to leave our policies unchanged in the face of all this industry policy taking shape and taking hold around us.”
Australia’s opportunities lie at the intersection of industry, energy, resources, human capital, and its ability to attract and deploy investment, the treasurer said.
The government’s goals included aligning the country’s national security and economic security interests and making Australia “a renewable energy superpower and an indispensable part of the global net zero economy.”
