Episode 384: AUKUS and the New Reality of Indo-Pacific Security with Jennifer Parker
In this episode of the International Risk Podcast, host Dominic Bowen is joined by Jennifer Parker, principal and founder of Barrier Strategic Advisory, with affiliations at various universities and think tanks. Jennifer examines the rapidly changing security environment across the Indo-Pacific and explains why maritime competition, strategic deterrence, and AUKUS matter far beyond defence circles. Drawing on her experience as a former Royal Australian Navy warfare officer and defence strategist, she explores the growing risks posed by China’s military expansion, the future of Australia’s submarine capability, and why governments and businesses alike must rethink their assumptions about global security.
We discuss:
- Why the Indo-Pacific has become the world’s most strategically contested region
- What AUKUS is designed to achieve and the risks and opportunities it presents
- How China’s expanding military capabilities are reshaping regional security – Why businesses should understand their supply chain and maritime dependencies
- What a Taiwan crisis could mean for Australia, global trade, and international stability
- Whether Australia is becoming too dependent on the United States for its defence
This is a timely conversation on deterrence, maritime security, and the new reality of strategic competition in the Indo-Pacific.
The International Risk Podcast brings you conversations with global experts, frontline practitioners, and senior decision-makers who are shaping how we understand and respond to international risk. From geopolitical volatility and organised crime to cybersecurity threats and hybrid warfare, each episode explores the forces transforming our world and what smart leaders must do to navigate them. Whether you’re a board member, policymaker or risk professional, The International Risk Podcast delivers actionable insights, sharp analysis, and real-world stories that matter.
Dominic Bowen is the host of The International Risk Podcast and Europe’s leading expert on international risk and crisis management. As Head of Strategic Advisory and Partner at one of Europe’s leading risk management consulting firms, Dominic advises CEOs, boards, and senior executives across the continent on how to prepare for uncertainty and act with intent. He has spent decades working in war zones, advising multinational companies, and supporting Europe’s business leaders.
Episode 384 Transcript: AUKUS and the New Reality of the Indo-Pacific with Jennifer Parker
00:02.52
Dominic Bowen
Most of the goods we consume, the energy we use, and of course, the technology and our economies, they all depend on travel through, over or beneath the world’s oceans. And nowhere is this more important or perhaps more contested, and I’m not talking about the Strait of Hormuz, but actually the Indo-Pacific region. And this region contains some of the world’s busiest shipping routes, critical ports, subsea communication cables, and strategically important waterways. And this is where Chinese military power is expanding. It’s where tensions around Taiwan, tensions actually right across the South China Sea continuing to grow.
00:38.25
Dominic Bowen
And it’s where the United States, Australia, South Korea, Japan are all investing heavily into preserving deterrence and of course, what we call freedom of navigation. Now for Australia, the answer has been AUKUS, which is a multi-decade partnership between the US, the United Kingdom and Australia. Now supporters see AUKUS as an essential investment in deterrence and Australia’s national resilience. Critics see it as a costly, technologically uncertain and actually increasing Australia’s dependence on the United States.
01:10.81
Dominic Bowen
I’m Dominic Bowen and I’m host of the International WIS podcast where we unpack the topics that really matter. And joining us today to unpack all of this is Jennifer Parker. She’s ah an adjunct professor of practice at the University of Western Australia’s Defence and Security Institute. And she’s also a non-resident fellow at the Lowy Institute.
01:28.82
Dominic Bowen
Jennifer, welcome to the International Risk Podcast.
01:31.76
Jen Parker
Hey, thanks so much for having me on.
01:34.66
Dominic Bowen
Jennifer, whereabouts in the world do we find you today?
01:37.62
Jen Parker
So I am in Canberra and it’s freezing cold here. Now, ah for those of you listening to the podcast around the world that live in real cold climates, you’ll have no sympathy for me. But I grew up in a place called Broken Hill, which is in the desert in the middle of Australia. And I now live in Canberra, which is our nation’s capital. Sydney is not the capital of Australia, by the way. Sydney is not the capital of Australia.
01:59.71
Jen Parker
Canberra is the capital of Australia. And it was one degree this morning. So, um yeah, it’s pretty cold in Australia’s national capital right now.
02:08.31
Dominic Bowen
Yeah, Canberra certainly does have some some extreme temperatures, was we were talking about but before. But yes, not not as extreme as as maybe Sudan or ah as Sweden in in the winter. but But for Australia, it’s extreme. And interesting, I think a lot of our podcast listeners right now will be Googling the what is the capital of Australia, because most people think it’s Sydney. They think it should be Melbourne, but it actually is Canberra. So no thanks for clarifying all of that for us.
02:33.74
Jen Parker
It’s a great trivia question. I just helped all of you. So you’re welcome.
02:38.26
Dominic Bowen
Now, a very serious deterioration in the Indo-Pacific region would affect shipping unquestionably. A lot of the crisis management exercises we run, a lot of the contingency planning and the scenario development we do for European countries actually revolves around shipping, insurance, energy prices, technology supply chains, investment decisions, and business continuity all coming out of the Indo-Pacific regions.
03:02.81
Dominic Bowen
But there’s still a lot of companies that are ah poorly prepared for the the speed of which strategic competition could increase in the region. Can you talk to us about what you’re seeing, what you’re seeing change in the region? You’ve spent your career on the water and in land exploring the Indo-Pacific region. What do we need to know about what’s happening there today?
03:22.80
Jen Parker
I guess, you know, when I think about the Indo-Pacific region, of course, the Indo-Pacific in itself being ah a contested concept, right? It’s a geographical concept. It demonstrates the maritime connectivity of the Indian Ocean to the Pacific Ocean and through Southeast Asia and Oceania. But also it’s a strategic concept about the inclusion of India into this region. But it is predominantly a maritime domain. and I think that’s really important when we think about what are the trends that are changing this region. From a security perspective, what we’re seeing is this increasing contestation in the maritime domain. And we see that manifest in a number of ways. We see that manifest most obviously in the South China Sea, where we see China’s nine-dash line claim, which 10th anniversary of the 2016 Arbitral Tribunal ah last week, this week, this week, which the Arbitral Tribunal reaffirmed that China’s nine-dash line claim, which is a claim to 90% of the South China Sea, is invalidated, not consistent with international law. But we still see China prosecuting that with naval vessels, coast guard vessels and maritime militia and quite aggressively towards the Philippines and within the Philippines exclusive economic zone.
04:37.08
Jen Parker
04:59.48
Jen Parker
ah For Australia, we’ve largely lived in a region where not many countries could reach out and touch us. We often talked about the protection of distance. This is Achilles heel because we’re dependent on the maritime domain, but I’ll come back to that.
05:12.44
Jen Parker
But we’ve recently seen the Chinese Navy circumnavigate Australia in 2025.
05:15.27
Dominic Bowen
Mm-hmm.
05:17.60
Jen Parker
Australia, by the way, if you need to look at a map, is not on its way to anywhere. Like unless you’re going to visit the penguins, it’s not on its way to anywhere. So this was a clear demonstration of capability. So we see increased naval operations. and We certainly see increased contestation in the Indian Ocean. We see China conducting a lot of survey operations, obviously precursors to increasing… submarine operations We also, of course, see other countries building up their militaries. We see India building up its military. We see Southeast Asian and Northeast Asian countries building up in their military. And we see Australia ah building up their military. So we see all of these dynamics happening in the Indo-Pacific. which is changing the maritime domain, and the maritime domain is increasingly contested. And you don’t need to look any further than the 4th of March this year, where we saw um a US Virginia-class submarine actually torpedo an Iranian warship 40 nautical miles to the south of Sri Lanka on what is one of the most critical sea lanes in the Indo-Pacific, which effectively connects the Middle East and Europe through to the Strait of Malacca and into Southeast Asia. so
06:28.06
Jen Parker
All of those dynamics, China’s increasing aggressiveness, China’s growing military capability, the broader region’s growing military capability. And I think the final thing I’d add to that is a global trend that is impacting the Indo-Pacific, which is the increasing willingness of states to use military force to achieve their foreign policy objectives. Now, we see that ah in Venezuela. We’re seeing that in the Middle East right now. We saw that in Russia and Ukraine. We see that in China’s actions in the South China Sea. Equally, we saw that last year between India and Pakistan, Thailand and Cambodia. I could keep going on. But all of those things are making this maritime region increasingly contested.
07:11.00
Dominic Bowen
Yeah, very much. and And we saw last year, we actually did a couple of episodes on the International Risk Podcast in in February last year when Australia had ah a spy plane flying in in international territory, not over Chinese territory, um but there was a chinese ah a Chinese military intercepted it. There was some provocation. And then a few days later in the Tasman Sea, in between Australia and New Zealand, ah very, very quickly, ah China was able to conduct a live fire exercise as ah what we assume was ah was a show of strength in in relation. But the speed of which China was able to respond and the the the demonstration, I think, caught quite a few people by surprise at the time.
07:47.74
Jen Parker
It did. Now, I’d probably contest some of those comments. Australia’s aircraft was a P-8, which is a maritime patrol aircraft. it’s It’s not a traditional spy plane.
07:55.77
Dominic Bowen
Okay.
07:57.46
Jen Parker
It doesn’t have those capabilities. It is very much designed around detecting capabilities in the maritime domain and predominantly anti-submarine warfare as well. um I think that China’s gunnery exercise in the Tasman Sea in March last year was was a demonstration of capability I don’t think it was in direct relation to Australia’s P-8s operating in the South China Sea. you Australia’s P-8s and prior to that P-3s have operated in the South China Sea for decades. They fly out of Butterworth. We work with Malaysia there. We have forces based there under the Five Power Defense Agreement. But either way, I think that China’s circumnavigation of Australia, which would have been planned in advance because China does not
08:38.56
Jen Parker
apart from to the Red Sea as part of their kind of counter piracy counterpiracy patrol, they don’t tend to deploy extended distances.
08:42.69
Dominic Bowen
Mm-hmm.
08:46.71
Jen Parker
So I think they would have planned that. But either way, the gunnery firing, yes, demonstration capability. i do think that the world overreacted to it a little bit. um It was 340 nautical miles from Australia, so outside of Australia’s exclusive economic zone. And even under international law, if it was in Australia’s exclusive economic zone, that would be perfectly legal.
09:06.30
Jen Parker
I would also add as ah as a warfare officer, the ships actually do gunnery firings really regularly. Like on my deployments, we tend to do them every two weeks at sea.
09:12.96
Dominic Bowen
Mm-hmm.
09:16.10
Jen Parker
I think where it became an issue is twofold. One, Australia is not used to seeing naval task groups deploying around Australia. um And that was a demonstration of capability. As I mentioned before, it’s not on its way to anywhere unless you’re going to visit penguins.
09:33.31
Jen Parker
Two, the gunnery firing, look it was too close to an airline. And having done many gunnery firings all over the world, and probably boring those people who don’t care about gunnery firings, but generally you should be 10 nautical miles from an airline. They were very clearly under a key airline between New Zealand and Australia and caused 18 international flights to divert. Now, whether that was intentional, unintentional, open question.
10:00.63
Dominic Bowen
Yeah, interesting. And that takes us into AUKUS. You know, what is the AUKUS actually designed to achieve? You know, and but then we get to the point of it. Can Australia actually deliver it? And what ah what is it that business leaders around the world? Certainly our Australian audience has probably heard a lot about it in t he media. But those listening from around the world, how does this impact the the maritime balance of power across the Indo-Pacific region?
10:25.37
Jen Parker
Yeah, look, that’s a great question. I think yeah it’s important to start with what is AUKUS? AUKUS, A-U-K-U-S, Australia, UK, US, s not AUKUS as in ah the whales. they are This conversation is often confused. So so just to clarify, um look, it is Australia’s plan to acquire nuclear-powered submarines. It is more than that. So there is Pillar 1.
10:46.22
Jen Parker
acquisition of nuclear-powered submarines, pillar two, which is working on more advanced technologies between the three countries. So quantum sensing, uncrewed underwater vehicles, ah those kind of areas. um What does it mean and how should the business community interpret it ah The first thing is, look, Australia has wanted nuclear-powered submarines since the 1960s, right?
11:09.25
Jen Parker
This has been an ongoing conversation.
11:09.93
Dominic Bowen
Okay.
11:11.38
Jen Parker
But no Australian government has honestly been willing to ask the question, and no US government has been willing to transfer the technology, realistically. Now they are. What does that mean?
11:23.03
Jen Parker
That means that both of those countries see a deteriorating region in the Indo-Pacific where they view the fact that Australia does really need that capability. So I think that’s kind of the first thing to take away from it, that the reason for AUKUS is really because of how much this region has changed.
11:41.62
Jen Parker
That’s why we now see political support for something that, you know, the Australian Navy has wanted since since the nineteen sixty s I think the second element of it is this is Australia really recognising and leaning into its maritime vulnerability.
11:56.22
Jen Parker
And I think that’s something that countries around the world are increasingly thinking about. Of course, we’ve seen a number of attacks on attacks on subsea cables and pipelines. We’ve seen increasing attacks on shipping, straight off Hormuz very clearly right now, but that is not the only example. We see attacks on from ah the Black Sea, both Ukrainian and Russian attacks. We saw the blockade around Venezuela, et cetera. So Australia realizes its vulnerability in the maritime domain.
12:24.95
Jen Parker
The third thing I’d say, and probably less relevant for business, but but why is Australia leaning into nuclear-powered submarines? Well, Australia has the third largest exclusive economic zone in the world.
12:37.69
Jen Parker
um We import ah well over 90% of our goods through the maritime domain, including critical goods like ah fuel, fertiliser, helium, ah all of this critical stuff that keeps the economy going. and I think that the…
12:54.62
Jen Parker
acquisition nuclear-powered submarines. And that’s not all Australia is doing in defence, by the way. Sometimes it’s overhyped a little bit because Australia is doing a lot more than that. But it is a recognition of that dependency and vulnerability for an island nation like Australia.
13:08.57
Dominic Bowen
And the Indo-Pacific often, and I really appreciate you mentioning a few other countries before when you introduced the Indo-Pacific region, but often when we read the news, if we read The Economist or Bloomberg or New York Times, you would be fooled into believing it is only a competition between Washington and Beijing. But as you’ve started to talk about it, it’s so much more. There’s these critical sea lines, there’s these manufacturing centres in many, you know, you spoke about Malaysia before, of course, you’ve got Singapore, India, um many other really important countries. nations, you’ve got energy routes, ports, digital infrastructure, and companies and consumers all around the world ah depend on them.
14:05.08
Dominic Bowen
But Help us understand why shouldn’t our listeners, you know, why should a chief executive in in London or Stockholm or Frankfurt or New York care about the changing balance of power in Indo-Pacific region? India increasing its naval size, Australia acquiring nuclear-powered submarines, China increasing its deep water fleet. Why does that matter?
14:24.20
Jen Parker
Well, look, I think that, you know, when you talk about the globalized nature of supply chains, which, you know, if we think of the recent example of, it’s not so recent now, but COVID, right, really brought home to us how globalized supply chains are.
14:40.34
Jen Parker
um A lot of companies, and look, i’m not I’m not an economist, I’m not a CEO, I’m a strategist, but a lot of companies have made the assumption that, look, it makes sense to, you know, maybe package your things in China and things like that.
14:52.26
Dominic Bowen
Mm-hmm.
14:53.04
Jen Parker
But you’re making that assumption in a low risk geopolitical environment. But the risk is changing. And so the, guess, cost or expense of diversifying or expanding how you do those things or bringing that production home versus the risk of not having access to that because you have contested sea lines of communication. because ships can’t get through, go off to be at certain choke point as we’re experiencing ah right now. um That is where you need to think about how that risk that you’re accepting is changing because of this contestation in the Indo-Pacific. And what would happen if there was a crisis or if there was a regional conflict? And if I go back to what I said about one of the key trends that is changing the world, but dramatically impacting the Indo-Pacific, This fact that states are increasingly willing to use force to achieve their foreign policy objectives. Now, since the 90s the end of the Cold War, there was this assumption about the end of history that a globalized economy would mean that it was too much of a risk for countries to go to war because of the economic impact on them. If we look at much of the recent conflicts, and in fact, 2024, by the way, here’s a grim statistic, more state-on-state conflict in 2024 than any other time since World War ii
16:14.84
Jen Parker
The nature of globalized economies, the economic impact of disrupting that is not stopping states from entering conflict. So this is a risk that I think whatever business you’re in, if it’s a globalized business, you need to be factoring into your planning.
16:30.94
Dominic Bowen
And I think, you know, we’re seeing Chinese military exercises around Taiwan becoming much larger, much more frequent and with much less predictability. ah China’s built and militarised artificial islands across the South China Sea. We’ve seen confrontations between Chinese and Filipino vessels. They’re becoming increasingly aggressive. We’re seeing ramming of of ships around disputed reefs and shoals. And at the same time, you know, obviously we’ve spoken about submarine fleets are expanding, defence spending is rising. And that that balance of power is is shifting.
17:03.06
Dominic Bowen
But I think business leaders really need to distinguish between what’s persistent strategic competition and actually a genuine deterioration that demands their attention. So how would you, when you’re speaking with your clients and and business leaders, is the Indo-Pacific region becoming more dangerous? Or is this something that’s more at the political level or the defense establishment level and something that they need to worry about?
17:27.93
Jen Parker
No, I think it’s something that everybody needs to worry about. Is it becoming more dangerous? Yes. And we’ve already gone through a number of the key KPIs that indicate that things are dramatically changing in the Indo-Pacific region. um And this isn’t, as of yesterday, this is now a trend of the last decade, to be honest. I mean, we saw China’s ah rapid island building in the South China Sea in 2013, 2014. We saw them those islands in is about…
17:56.50
Jen Parker
ah preparations. In 2020, from an Australian perspective, Australia reviewed its national defence strategy. It released what was called a Defence Strategic Update. And for the first time since World War II Australia said, we no longer have 10 years strategic warning time. Now, The concept of 10 years strategic warning time is ah in some ways a force design concept in Australia, which is you can design a military force around the fact that you’d get 10 years notice if there’s going to be a major conflict and you can fix the gaps and accelerate capability, et cetera.
18:28.76
Jen Parker
Six years ago, Australia said, we don’t have 10 years notice. So I guess what we’re saying here is, you know, this is not a theoretical thing of, look, the risk is changing. This is genuinely, there is potential, not inevitable, but there is potential for major crisis or conflict in the Indo-Pacific region. And look, there are a range of flashpoints. Now, one of them you’ve mentioned is China and Taiwan.
18:52.36
Jen Parker
And I think all about all of your listeners would be familiar with that. But I think it’s important to highlight, you mentioned Taiwan’s exercises. I would actually call them demonstrations slash rehearsals. You know having having been a a naval exercise planner, i had this really great job when I was much younger, i got to fly around the entire world and plan naval exercises. It was fantastic. I was platinum on all airlines. It was great. um These are not exercises.
19:17.14
Jen Parker
The intensity of the activities they do around Taiwan about twice a year, they are very much rehearsals for different scenarios. And one of the things that China has often been critiqued on is being vulnerable when it comes to getting its joint, so its army, air force, navy, and rocket force to work together. Now, since 2015, they have generated theater commands that are joint commands, so all of those entities working together.
19:44.85
Jen Parker
And since Nancy Pelosi’s visit to Taiwan 2022, they have been increasingly upping the ante and rehearsing operations around Taiwan, testing those theater commands. So I think that when we say they’re an exercise, it’s kind of like everybody has an exercise, right?
20:01.88
Jen Parker
These are rehearsals. Now, I’m not saying that China is about to invade Taiwan, and I certainly think that Anyone who sits there and says that we know it’s all going to happen in 2027, the famous kind of misquoted often Davidson window, um are really kind of oversimplifying the fact. But certainly we know that Xi Jinping has told the PLA to have the capability.
20:24.93
Jen Parker
to potentially conduct those operations by 2027. seven You know, I think that’s military option is his least preferred option. um But we also know that he has said very clearly that he does intend to reunite China and Taiwan. So that is a real flashpoint. But we also see other flashpoints across the South China Sea. We see a range of dangerous operations by the Chinese military, not only towards the Philippines military, in their exclusive economic zone.
20:51.93
Jen Parker
In 2024, we saw In fact, Philippine sailor lose fingers during an altercation with the Chinese Navy, sorry, Chinese Coast Guard. Now, it’s easy to confuse the Chinese Coast Guard and Navy, by the way. China’s Coast Guard, biggest Coast Guard in the world. One of its ships called the Monster Ship is about 12,000 tons. That’s three times the size of your average naval frigate.
21:15.15
Jen Parker
So it’s more of a Navy called a Coast Guard. But we also see, know, whenever European countries deploy military assets to the South China Sea, whenever Australia deploys military assets to South China Sea, which Australia has been doing for for decades, we see these unsafe interactions, Chinese helicopters flying directly in front of Australian helicopters. deploying chaff, deploying flare in front of the engines of maritime patrol aircraft. Ships ah effectively attempting to T-bone other ships. In 2023, we had an incident in Japan’s Exclusive Economic Zone where a Chinese destroyer dangerously approached an Australian vessel that was stopped in the water. Under international law, it was signalling that it was diving to to free a net from its props.
21:59.10
Jen Parker
ah And it continued to radiate its sonar, which every mariner knows is unsafe for divers and injured Australian divers. So so that’s another flashpoint, right? But there are a range of flashpoints across the Indo-Pacific. So I guess going back to that point I made before…
22:14.89
Jen Parker
How should business leaders think about the risk in the Indo-Pacific? Well, certainly, is, if definitely not theoretical, is not just a defence or military issue because of our globalised economy. And all you need to do is look at the straight-up Hormuz right now and the impact that war is having on the global economy.
22:32.86
Jen Parker
Anything like that that occurred in the middle of the Indo-Pacific, which is kind of the engine room for the global economy these days, um would have a dramatic impact.
22:41.91
Dominic Bowen
And I think for a long time, at least a decade, you know, we’ve we’ve seen sort of trying to take two steps forward and at best be pushed back one. But when you’re seeing these, what you’ve just described in in really helpful detail, so thanks very much for Jennifer, but also, you know, building these artificial islands, you know, we’ve seen that occur. We we saw the dredges move in. We saw the runways being built.
23:04.18
Dominic Bowen
Why hasn’t or why can’t As a former naval officer and now someone that advises on strategy, why haven’t we, being the international community, done more to slow China down or push China back from from these activities?
23:18.78
Jen Parker
Well, look, I think that there are a lot of challenges globally, and I think that there are a lot of priorities. Again, not all countries disagree with some of China’s actions, or they have their own priorities that they are they are focused on, especially in countries that are really struggling when it comes to economic growth and lifting their own people out of China.
23:39.28
Jen Parker
ah poverty But I think certainly um until about 2015 when it became clear that China had militarized the islands in the South China Sea. um and And why does this matter, by the way, if you can’t yeah picture a map of the South China Sea? I think it matters twofold. One, it means that it will allow them to dominate and control the South China Sea, which a significant amount of the world’s shipping goes through.
24:03.26
Jen Parker
Two, I think it’s an indication of China preparing for the prospect of a crisis or conflict, generating strategic depth. But why hasn’t there been such a pushback? Look, I think that there have been a number of – sorry, let me go back – I think that, to be honest, until 2015, people wanted to believe in the peaceful rise of China, right?
24:26.94
Jen Parker
Which, look, may still be, but we certainly see a very militarized, very aggressive China, which is not what we were thinking when China entered the World Trade Organization in the early two thousand s
24:36.66
Dominic Bowen
Mm-hmm.
24:38.14
Jen Parker
I think post 2015 until about 2020, till COVID hit, I think most countries didn’t want to deal with that problem. They knew what was happening, so they weren’t ignoring it anymore, but they really didn’t want to talk to the public about it. And they really didn’t want to have that conversation in business about what that would mean.
24:58.04
Jen Parker
I think COVID, certainly in Australia, COVID, some of the things that occurred around that for Australia, it was economic coercion by China, um increased incidents with our vessels in the South China Sea.
25:10.46
Jen Parker
For Australia, 2020 was kind of the wake up call that you know The fallacy of the peaceful rise of China, and look, I’m not saying that this is about to be a ah major conflict, um but what I’m saying is the idea that ah China would economically rise and not militarily rise as well was was an absolute fallacy.
25:29.62
Jen Parker
And so I think it took a lot of countries a long time to wake up to that. I think post-2020, look, the world has had a number of things that they need to focus on, whether it is the impact of COVID, whether it is Russia’s illegal invasion of Ukraine and the impacts that is having across Europe, whether it is the multiple crises that have occurred in the Middle East, there are a lot of challenges that have meant that it has been difficult to unite against what is seen as China’s military aggression in the Indo-Pacific.
25:46.12
Dominic Bowen
Mm-hmm.
26:02.66
Dominic Bowen
Yep. No, I think that’s ah a really good summary. So thanks very much for that, Jennifer. And I’ll take the moment just to remind our listeners that if you prefer to watch your podcasts, the International Risk Podcast is always available on YouTube. So please do go to YouTube and search for the International Risk Podcast. And don’t forget to subscribe to our content. That really is important for our success.
26:22.49
Dominic Bowen
Now, with all that said, Jennifer, that makes a really clear argument about the environment that Australia is operating in and why countries like the UK, US s and of course, even NATO now is is interested in what capabilities allies have in the Indo-Pacific region. Now, supporters of AUKUS have argued that nuclear-powered submarines will provide Australia with this capability of unprecedented range and endurance, which sounds important and it sounds cool.
26:50.42
Dominic Bowen
But critics are countering that this program increases dependence on US s technology, US maintenance, US weapons, intelligence and US political approval, which at any time is you know perhaps a risk. But certainly in a current administration where we see the Trump administration is much more transactional.
27:08.54
Dominic Bowen
That certainly increases the risk. Now, both arguments can be true. It can be a fantastic capability. It can also be a risk. Now, where do you sit on the on the argument and how do you view the what the AUKUS brings to Australia?
27:23.37
Jen Parker
So it’s interesting. When when ah Australia’s plan to acquire nuclear-powered submarines was announced in September 21, was actually working in enforced design and we got an indication that within the Australian Department of Defence, and we got an indication that something big was going to be announced, but we didn’t actually know. It had been kept secret from the majority of the Department of Defence for 12 18 months.
27:45.34
Jen Parker
ah When it was an announced, I was kind of surprised and I kind of thought, well, I don’t know if this is a great idea. The reason I thought that though is less about many of the arguments made by AUKUS skeptics right now, because I think a lot of those arguments are, to be honest, quite weak and we we can talk through why, and more about, for me, whether it unbalanced the maritime force within Australia,
28:10.98
Jen Parker
focus too much on submarines and of course Australia being an island nation it needs a broad maritime capability. I guess my fears around that were allayed slightly in 2024 when the Australian government actually announced the expansion of Australia’s surface combatant fleet, which is the first Australian government ah to do that since since World War II. Now, that expansion is not happening until the 2030s, and I won’t get into detail on that because we are talking about nuclear-powered submarines. But I think the point there is Australia is doing much more than just nuclear-powered submarines, and there is a real focus on nuclear-powered submarines. One, it’s different. We will be the eighth country in the world to get nuclear-powered submarines. Now, for those that are nuclear-powered submarines geeks, you’re going to be like, no, Australia is the seventh, right? You’ve got the US, you’ve got China, you’ve got Russia, you’ve got the yeah UK, you’ve got France, you’ve got India. Australia is the seventh.
29:03.99
Jen Parker
No, Brazil is the seventh. And I’m going to make a point about this, right? So Brazil has a nuclear-powered submarine program. They announced it in 2008. It is significantly delayed, but they are expecting ah to have their first one, indigenously built nuclear powered submarine in the water in 2029, commissioning a few years later I make that point because I think that when we talk about AUKUS, we have to also acknowledge that there is a significant amount of, in my view, information warfare there is associated with this. So right now, the IAEA, the International Atomic Energy Agency, is actually considering both Brazil and Australia’s application for nuclear-powered submarines. But nobody talks about Brazil’s plan to get nuclear-powered submarines.
29:49.18
Jen Parker
I guess when we then go to kind of the criticisms of AUKUS, look, it is expensive. um the government The Australian government put out a figure of $368 billion dollars um in 2023 when the optimal pathways, the plan that Australia has to acquire nuclear powered submarines was released. And that figure is big.
30:11.85
Jen Parker
It’s also often misunderstood. So that’s not $368 billion dollars for eight nuclear-powered submarines, which is Australia’s current plan. It’s $368 billion dollars to build the workforce, pay the workforce, build the infrastructure,
30:28.60
Jen Parker
ah buy three Virginia class submarines, build our own submarine industrial base, build those submarines, and then operate and sustain them through to 2055. So when we think about that figure that I’ve mentioned, it is not just acquisition, it’s acquisition and sustainment. And a term that we use in Defence in Australia in all of the other fundamental inputs to capability. So workforce, training, infrastructure, et cetera.
30:56.22
Jen Parker
ah The second element is that ah fifty there is a 50% contingency in that figure. So what does that mean? Well, defense ah costing, costing of defense acquisition is really hard to do, right? Because technology evolves. and this is This is one of, not the only reason, but this is one of the reasons defense projects often have blowouts, because they get the costing wrong, because it’s hard.
31:18.04
Jen Parker
ah So in defence circles, you often apply what is called a contingency, basically a fudge factor. So if you’ve assessed it’s going to cost you $10 billion dollars over 10 years, then you might apply 10% contingency.
31:32.25
Jen Parker
So you’re going to say, i’m going to put $11 billion aside, just in case. Most defence projects in Australia have a 5% contingency. So you might say, i’m going to put a half a billion aside. So AUKUS has a 50% contingency. So that figure I gave you, a $368 billion, $120 billion of that is, hey, we don’t know. It might have been different in the next 31 years, right? So a lot of the critics, of the reason I break this down is a lot of the critics of AUKUS say, well, it’s $368 billion, dollars but it’s going to blow out.
31:58.94
Jen Parker
it It may, but $120 billion of that is fudge factor already over 31 years. The second thing I would say on the costs, and then I’ll move on because the cost conversation is boring, but it’s important because it’s one of the biggest things that is often misquoted.
32:10.14
Dominic Bowen
Mm-hmm.
32:12.18
Jen Parker
is when we look at Australia’s plan to acquire the previous submarines, and if you’re listening to this podcast and you live in France, you might know something about this conversation. Australia had a very expensive deal with Naval Group, who are the submarine builders in France, to acquire a submarine, which is a nuclear-powered submarine design that we were going to take the nuclear power out of and turn into a conventional submarine, which just doesn’t sound very great.
32:36.61
Jen Parker
But anyway… Most people in Australia say, well, that was going to cost $90 billion dollars and AUKUS is $368 billion. dollars And you look at the order of magnitude of difference, you’re like, wow.
32:47.74
Jen Parker
But that was $90 billion dollars for acquisition. not for sustainment, not for the fundamental inputs of capability. So you’re comparing apples and oranges. And when you actually look at the last stated cost in the Australian government for that, it was actually, including sustainment, $235 billion. dollars Now, over 50 years, but when you start to compare those numbers, AUKUS is expensive, nuclear powered submarines are expensive, absolutely.
33:12.30
Jen Parker
It’s not in the orders of magnitude more expensive than ah perhaps the previous submarines were. I guess the second thing that is critiqued, and you mentioned this here, which is dependency on the US. I think this is a really interesting point.
33:28.02
Jen Parker
um When Australia and the US, and in fact New Zealand, Australian New Zealand allies as well, signed the ANZUS Treaty in 1951, In the lead up to that, academics who specialize in the ANZUS treaty, which is not me, but those who have written PhDs about it will tell you that the US was reluctant to sign it because they did not want dependencies in the Indo-Pacific. They did not want New Zealand and Australia become dependent.
33:53.18
Jen Parker
um Throughout the Cold War, whether it is the Guam Doctrine in 1968, whether it’s other moments, the US reminds countries like Australia that they need to do more for their own defence.
34:07.53
Jen Parker
From the end of the Cold War, in my view, Australia became too reliant on the US, but not because the US wanted it to be, not because we made a strategic decision, but because Australia believed deeply in the concept of the end of history, the idea that globalization would reduce the chances of conflict, state-on-state conflict, and underinvested in defense.
34:29.37
Jen Parker
So Australia’s dependency on the US now, which is more dependency than i would recommend, and we talk a lot in Australia about self-reliance within the alliance, is because of a lack of spending on defence capability.
34:42.15
Jen Parker
I would say increasing Australia’s defence capability, having better ability to protect the third largest maritime domain in the world, fifth largest user of shipping in the world, which Australia also is, actually makes us less dependent.
34:55.90
Jen Parker
The second thing I’d say in terms of the technology dependency, which is the point about submarines, and I mean, this is a good point. Like the three submarines that we will buy from the US in the 2030s will be Virginia class submarines. We will rely heavily on the US to teach us how to operate those.
35:10.81
Jen Parker
Um, We already buy all of our fighter aircraft. All except one of our smart missiles, our combat systems in our destroyers, all of these vital defense technologies already come from the US. So I would argue, are we dependent on the US for military technology?
35:34.17
Jen Parker
Yes. Does that start with AUKUS? No. Does AUKUS make us more dependent on the US? In my view, not really. um I guess the other point that I would then make when you know we talk about reliability of the US to follow through with phase two of AUKUS. So if I just, you know, if you listen and say Australia’s plan to acquire nuclear-powered submarines has three phases.
35:58.14
Jen Parker
The first phase is kind of like the Crawl phase, if you use the crawl, walk, run analogy, in the crawl phase, we’ll have US submarines operating from Australia, Australian personnel on US submarines training up. We’ll certify our safety regulators, et cetera, that we’re ready for for nuclear powered submarines. That’s called Submarine Rotation Force West. Happens in 2027, next year.
36:20.77
Jen Parker
In 2032, the walk phase, we buy three Virginia class submarines from the US. And this is the phase that people focus on a lot as a key risk. And then the third phase in the 2040s is that Australia should be building and operating its own nuclear-powered submarines, which have been designed jointly with the UK called AUKUS-SSN.
36:35.32
Dominic Bowen
Thank
36:40.47
Jen Parker
When it comes to phase two, a lot of people have said, well, since the Trump administration is transactional, um how can you guarantee they’re going to sell you those three submarines? And look, in geopolitics, there are definitely no ah no guarantees.
36:55.29
Jen Parker
um But what I would say is countries work together when it’s in their national interests to do so. And the AUKUS deal is very much in the US’s national interests. And we have seen actually since the us the new US administration, ah more support for AUKUS than we had previously.
37:17.08
Jen Parker
ah We’ve seen Trump himself say it is full steam ahead. So that doesn’t mean there’s no risk. But what I would say is when you think about a lot of those criticisms of AUKUS, and, you know I mean, this is an expensive project.
37:26.67
Dominic Bowen
Thank you.
37:28.83
Jen Parker
um Absolutely, it should be debated. And there are elements of truth to all of those criticisms. But when you start to break them down, whether it is cost, whether it is making us more dependents and our overall dependency on the U.S., or whether it is kind of the transactional nature of the U.S., s When you’re assessing the risk of all those, you have to say, well, we know the risk. Are we mitigating the risk?
37:51.13
Jen Parker
Yes, it seems to be, you know, not to quote President Trump, but kind of full steam ahead right now.
37:56.38
Dominic Bowen
I think your point about these dependencies is is really solid. And of course, AUKUS is that alliance between UK, US and Australia, long term partners. And for decades, at least since the 50s, many Indo-Pacific strategies, including Australia’s, have rested on this assumption of continued American military presence, of continued engagement economically and, of course, political reliability.
38:17.79
Dominic Bowen
But US politics, US domestic politics have become much less predictable and Washington’s priorities, as we’ve seen, can change quite quickly between administrations.
38:28.43
Dominic Bowen
And taking us on to capabilities, which you also spoke about, i wonder if Australia needs to do anything else. I mean, how should Australia plan for the possibility that America’s capability, whilst it remains formidable, America’s political commitment can shift.
38:42.68
Dominic Bowen
And that’s not something new. where Trump isn’t the first US president to shift priority significantly.
38:45.59
Jen Parker
Thank you.
38:48.08
Dominic Bowen
Is there anything else Australia needs to do? We saw I was in Ukraine when the US pulled its intelligence support for for a short period of time. And it really just absolutely crippled the Ukrainians.
38:59.21
Dominic Bowen
And I was saying to to soldiers on the front line, but what about the French? What about the British? They’re supporting as well. And they just sort of looked at me and laughed and they went, no, no, no, no. Only America has this sort of intelligence that we need to do our targeting. So what else should a Australia be doing to make sure that we have the own internal capacity to step up?
39:16.86
Jen Parker
Yeah, and look, I think that um often the conversation around Australia’s defence kind of starts and ends with AUKUS, which I think is wrong. And I mentioned before that, um ah you know, another historic announcement of the current Australian government is the plan to double the size of the Australian Serves combatant fleet. Now, something should have happened decades ago. But um yeah Australia is doing a number of things, whether it is AUKUS, whether it is more ships, whether it is more amphibious capability for army, we are pivoting the army forward. towards being a littoral focus. Don’t call them Marines. They’ll get upset. not Marines, they’re the army. But littoral focus with a maritime strike capabilities. So Australia’s doing a range of things. But I guess, you know, and this is a point relevant for alliances. It’s also a point relevant for businesses. The thing that Australia needs to understand is what are its dependencies?
40:05.40
Jen Parker
What are its dependencies on the US? What is it comfortable being dependent on the US for? And what is it uncomfortable being dependent on the US for? And now that arent that lack of comfort, those things that it’s uncomfortable being dependent on the US for, that’s not necessarily because the US might change its priorities. It might, but the US is fairly invested the Indo-Pacific for, to be honest, economic and security reasons. But it might be that actually, you know, say Australia decides that it’s happy to be dependent on US constellations for ISR, US satellite constellations, or for satellite communications.
40:41.56
Jen Parker
And then the US is embroiled in something and actually it needs to direct those assets towards that. Now, there’s not a falling out in the relationship. The US hasn’t sold out Australia, but it needs to prioritize its assets. In that case, is Australia comfortable being that dependent? So the first thing, as I said, is does Australia understand its dependencies?
40:59.67
Jen Parker
The second thing is, okay, well, what are the things it’s comfortable being dependent on? What are the things it is uncomfortable? And if there is a gap there, then starting to build its own organic capability or develop other relationships. Australia has been doubling down on relationships with Japan, for example, with India, for example. the Australia-Indonesia relationship looks very different now than it did 10 years I go, so how does it mitigate what are really those vulnerabilities because of its dependency on certain aspects of the alliance? so I think that’s how Australia needs to think about it. And I think people aren’t wrong to say that the US will always prioritize the US. of Of course they will. I mean, countries should always put themselves first.
41:40.14
Jen Parker
um I’m not pushing for an Australia first policy. um those that That phrase is now um ruined forever. But countries should act in their own national interest. And you should expect other countries to act in their own national interest. And so you should look at how do you protect your national interest. So, yes, Australia needs a broader capability than just nuclear-powered submarines. And I think that, to be fair, Australia is doing that. One of the challenges for Australia, though, i think, is that Australian governments are still unwilling to invest in defence.
42:09.66
Jen Parker
at the levels that they need. Now, this is not just an Australian challenge. We see this conversation going on certainly all across Europe. You know, the NATO targets announced last year how many countries are actually on track for that. ah That didn’t seem to be discussed too much at the NATO summit. ah Two weeks ago, Trump said he was happy, but I suspect he wouldn’t be if he saw the numbers. Australia is not spending enough on defence. So there is a danger that the cost of all because which is expensive, my breakdown before I didn’t want to diminish the fact that nuclear-powered submarines are expensive, they are, but they’re often overhyped in terms of cost in Australia. um
42:44.28
Jen Parker
ah if we’re not spending enough on defense and we are spending on nuclear-powered submarines, what gaps does that create? Now, to be able to spend more on defense, you need to have social license, which means you need to be willing to talk to your public about how the world is changing. And I think Australia is a little bit behind in that conversation as well, compared to many European countries ah who um i mean who are viscerally feeling it, whether it’s Russia’s sabotage attacks across Europe, whether it is looking at what’s occurring in Ukraine, The civilian population in Europe very much knows that the world is changing.
43:17.23
Jen Parker
I’m not sure that civilian population and even broader industry in Australia is necessarily alive to that right now.
43:25.56
Dominic Bowen
Yeah, you’re totally right. and And for many of the Australian audience, you know, one of the the blessings in Australia, anyone going through Australian customs has experienced this firsthand is being an island, it is very protective of of the land.
43:36.59
Dominic Bowen
You don’t see in Australia the same things you see. I was in Estonia a couple of weeks ago and on ah on a government building, there was an explanation of the Estonian flag and it’s the white, blue and black stripes.
43:47.82
Dominic Bowen
And I actually went, oh, I actually don’t know what the Australian flag, what the colours represent. I should read this. So I stopped and I read and the white and the blue, you know, where they were fairly standard, patriotic. rationales But the black was described on a government building, on an official plaque, it said, the black represents our dark past and a past we must never let happen again, referring to the Soviet occupation of of Estonia.
44:07.87
Dominic Bowen
And I thought that was just so powerful. you would never hear that in Australia, you know, that risk of, you know, actually recognising in our national flag what happened just a few decades ago and what we we’re worried will happen again.
44:19.53
Dominic Bowen
So it is it is, you know, some countries are much more aware and and having a conversation. In Sweden, which hasn’t been involved in any conflict, if you meet anyone in the Swedish military, you are meeting someone who’s effectively not in the military.
44:32.08
Dominic Bowen
It’s the most casual civilian-esque military.
44:32.79
Jen Parker
ah
44:34.56
Dominic Bowen
You know, the men have their man buns and they’ll have their five-day facial growth. And, you know, it’s a very relaxed military. But the politicians have now started saying, you know, Businesses, not just people, but businesses need to be prepared for war in Europe. It is a realistic possibility. We’re not saying it’s going to happen, but it is a realistic possibility.
44:54.07
Dominic Bowen
And I’d love to to ask you, Jennifer, having spent decades in the military and in the in the Navy, can you talk to us through? Because as you said, the Taiwan crisis wouldn’t necessarily need to be a full scale involvement. invasion to disrupt the world’s economy. It could be a blockade, as we saw you know China start to demonstrate when Nancy Pelosi visited. could be a quarantine, could be extensive cyber campaigns or extended or sustained military exercises, um or even um contested inspection regimes and tariff enforcements of Taiwan. So it could take many aspects. But talk to us, if there was a serious Taiwan crisis, what would this first seven days look like for Australia? What would Australia’s involvement be? What would that mean for the military? What would we need to to consider? What would that look like?
45:38.17
Jen Parker
Yeah, look, I think yeah um you know the point you just made there that it could be many different scenarios is important. I think there is a danger sometimes that you generate group think around one certain strategic outcome and actually you start you forget that there are a range of outcomes. And in fact, in some ways, some of those more prolonged lower threshold outcomes could have an actual more significant impact on the global economy, whether that is a quarantine, whether that is ongoing cyber attacks,
46:06.41
Jen Parker
et cetera, et cetera. Look, ah my personal view is I don’t think that Xi Jinping has made the decision about what he’s going to do about ah Taiwan. I think it really depends on how the world evolves, how much confidence he has in his military, and whether he gets to the point that he thinks that it can’t be acquired any other way. So I think that it is conditions-based, not time-based. Now, I won’t go through all of those conditions for for time on this podcast because your question was what would Australia do?
46:33.78
Jen Parker
I worry that we make the assumption when we think about the Taiwan scenario, having acknowledged there are many scenarios, that yeah that China would not use the military option.
46:49.02
Jen Parker
I think that we have a default bias that we think that states don’t use military options, right? Like they don’t do that. But when we go back to that trend that I’ve mentioned a couple of times during this podcast, actually what we’re seeing is states increasingly use military options. And, you know, that statistic in 2024, more state-on-state conflict than any other time since World War i So I worry that the option may actually be um a significant crisis overnight. So a decision to attack Taiwan as opposed to ah quarantine, as opposed to a blockade.
47:27.96
Jen Parker
I also think as a military planner that if China made the decision, and I said if, if they made a decision to attack Taiwan and invade Taiwan, well, that’s a difficult decision. That’s 100 nautical miles across the Taiwan Strait. Taiwan Strait it’s not small. It’s a lot bigger than the Strait of Hormuz. It has bad weather most of the year.
47:44.41
Jen Parker
If you’re going to make that decision, you are not, as a military planner, going to allow ah US and Japanese missiles sitting to the north of you or US missiles sitting to the south of you in the Philippines. So I worry that actually the calculation will be a quick regional conflict striking US bases in the Philippines and US and potentially Japanese bases in Japan with potential crisis on the Korean Peninsula.
48:11.29
Jen Parker
In the event of that scenario, I think Australia’s role in the Australian military is actually to keep Australia functioning. It’s less about operating up threat in the Taiwan Strait.
48:23.57
Jen Parker
It’s more about keeping Australia functioning because for our friends and partners in the region, Australia provides strategic depth. Whether it’s Japan, whether it’s South Korea, whether it is the Philippines, Australia or the US, Australia provides strategic depth. Australia provides a place where you can move your drone production. You can move your ship production. So keeping Australia protected and keeping the ability for trade to come to Australia And also supporting our partners and allies in the region with our critical exports. australia Australian exports are actually critical to ah energy security to a number of countries across this region. I think that’s the role of the Australian military in that large crisis scenario that I’ve explained.
49:11.06
Dominic Bowen
Thanks very much for unpacking that. And there’s so many more questions I’d love to ask you, Jennifer, but as we come to a close, I think it would be remiss if we didn’t talk about pillar two of the AUKUS agreement. And I think these capabilities might be seen much more quickly. And for many of our listeners, they might be more interesting as well. They’re around artificial intelligence, autonomy, cyber, quantum technologies, electronic warfare, undersea systems. We saw US deploy its first attack drone in the Strait of Hormuz recently.
49:40.31
Dominic Bowen
Can you talk to us about what excites you the most, just briefly, what excites you the most about this second pillar of the AUKUS Treaty?
49:47.10
Jen Parker
Yeah, no, absolutely. I guess I’m just saying one more point on the first pillar to wrap it up. i’m going to be that person. I don’t want people to think that there is no risk associated with Australia’s plan to acquire nuclear power submarines. There is significant risk.
50:00.12
Jen Parker
But as those who operate in business know, there is always risk. The question is, do you understand the risk and are you taking actions to mitigate the risk? And my view of Australia’s plan right now is they understand the risk and actions are in place to mitigate the risks.
50:14.33
Jen Parker
Now, when it comes to AUKUS pillar 2, look, it’s hard to actually say what’s happening in AUKUS pillar 2. One explanation for that is that ah these technologies and collaboration on them are so highly classified that there’s not going to be a lot in the public domain. Now, we saw one announcement this year, which was about the three countries working together on payloads for uncrewed underwater vehicles. So offensive payloads, potentially communications payloads, et cetera.
50:40.76
Jen Parker
um The second element is I do worry, back to that damn money conversation, is there’s not necessarily a lot of money behind AUKUS Pillar 2. But I think in terms of what excites me the most, look, I do think that working on collaborating on solving some of the problems in the underwater domain, ah which clearly has been a focus for three countries, how do you communicate with uncrewed underwater vehicles, for example, I think that’s very interesting. Now, many of you listeners are like, what are you talking about and why do you care about that? um
51:13.02
Jen Parker
The underwater domain, we didn’t get into transparent ocean theory, the idea that submarines can be obsolete and all that sort stuff. The underwater domain is a really difficult domain. One of my jobs many years ago now in 2014 was as the N3, so the current ops manager in our joint headquarters, sadly searching for MH370 in the Indian Ocean. And people were like, how can you not find that?
51:38.24
Jen Parker
You know, the underwater domain is a very difficult domain to be able to see and act in. So the idea that those countries might be working on and cracking the nut about how you might communicate through the underwater domain, I think that’s pretty exciting.
51:51.45
Dominic Bowen
Yeah, fantastic. And Jennifer, just in the last 30 seconds, one question that we ask all guests on the International Risk Podcast is when you look around the world, what are the international risks that concern you the most?
52:04.88
Jen Parker
Look, I think the one that concerns me the most right now, I think that countries are learning this and companies are learning this, but do countries, do global companies understand their dependencies, where their inputs come from and where the risks are associated with that? And I think that if you think about how much of that is dependent on an uncontested maritime domain,
52:27.90
Jen Parker
Well, that has fundamentally changed. And whether you’re talking about subsea cables and the data that runs through them, or you’re talking about the goods that come on ships, you cannot assume that in certain areas of the world that will be uncontested.
52:41.24
Dominic Bowen
Fantastic. Thanks very much for explaining that, Jennifer. And thank you very much for coming on the International Risk Podcast today. Well, that was a great conversation with Jennifer Parker, and I really appreciated hearing her thoughts on the future of AUKUS, on geopolitics, and of course, the associated risks and opportunities of the current alliance.
52:46.68
Jen Parker
Thanks so much for having me on.
52:59.46
Dominic Bowen
Today’s episode was produced and coordinated by Celia Irving. I’m Dominic Bowen, your host. Thanks very much for listening. We’ll speak again soon.