08.09.2018 Author: Vladimir Terehov

Australia Forms a New Government


A number of different events are contributing to the political puzzle in the Indian and Pacific Ocean regions. Not the least significant of these are the recent changes of government in several of the region’s countries. This journal has already looked at the possible consequences for the region of the coming to power of new governments in countries such as Pakistan and Malaysia.

The changes in the make-up of the Australian government, including the appointment of a new prime minister, is equally deserving of attention. On 23 August the previous prime minister, Malcolm Turnbull, was replaced by his colleague from the Liberal Party, Scott Morrison. Readers will remember that in September 2015 Malcolm Turnbull himself succeeded Tony Abbot, also from the Liberal Party, as prime minister.

There have thus been three prime ministers in the six years that the Liberal Party (which won parliamentary election victories in 2013 and 2016 and rules in coalition with the National Party) has been in power.

Two points should be noted in connection with Australia’s change of prime minister. Firstly, unlike the changes of government in Pakistan and Malaysia, in Australia the change was related to the personal qualities of the two men, and took place against a background of political intrigue within the government party. The change did not have any real effect on the “political essence” of Australia’s ruling elite.

The change in leadership may turn out to have an effect on that “political essence” in just under a year, following the next elections for members of the House of Representatives, Australia’s lower chamber of parliament. It is, of course, still too early to make any kind of predictions, but it is worth pointing out that Australia’s second most important political party, the Labour Party, was in power relatively recently, from 2007-2013, i.e. for two consecutive terms of office.

We shall not go into detail about the differences on matters of internal politics between the Labour and Liberal parties, but rather focus on some important aspects of various foreign policies favoured by rival politicians within the current coalition.  These policies depend on the strength of the political ties that Australia has developed with the two major world powers, the USA and China.

Although Australia has been a member of a military and political union with the USA (ANSUS, formed of Australia, New Zealand and the USA) since 1951, it is now extremely interested in developing trade and economic links with China. China is Australia’s most important trade partner, and its share of Australia’s total foreign trade is 5 or 6 times that of the USA.

No other country could replace China as Australia’s main market for such key exports as iron ore, coal and, increasingly, liquified natural gas. For both main parties, that situation serves to dampen what we could refer to as Australia’s “zeal” – real or feigned – for its fulfilment of its obligations as a US ally.

Nevertheless such “zeal” is clearly at a lower level within the Labour Party than among the Liberals. To give just one example, at the end of the last decade, when the Labour Party, headed by the pro-China Kevin Rudd, were in power,  the USA’s failed in its first attempt to persuade India, Japan and Australia to join it in an anti-Chinese military and political alliance of four. Incidentally, the USA’s second attempt, launched at the beginning of 2016, may also now be off the agenda.

This important foreign policy issue explains why next year’s Australian parliamentary elections are so important for the situation in the region. As yet, it is hard to say how the latest change of prime minister and reshuffle of the Liberal Party government will affect the results of the elections.

But one thing is certain: when the ruling party’s MPs voted Scott Morrison in as prime minister and party leader, the upcoming elections were at the front of their minds.

Equally significant is the fact that Scott Morrison was a member of the high-profile Australian government delegation, headed by Michael Turnbull, which visited China in April 2016. During that visit, the discussions focussed on developing economic ties between China and Australia. Scott Morrison, who was Treasurer at the time, made a highly complimentary speech in which he called China “our number one trading partner, and developing our relations with it will be crucial to our future economic prosperity”.

It is highly unlikely that, in the few months remaining until the elections, he will decide to stage a display of military strength similar to that of his predecessor in November 2017. Back then, a group of six Australian Navy warships, rather sarcastically referred to by journalists as a “small armada”, entered the South China Sea, 80-90% of which China considers to be its own territorial waters.

The event met with a restrained, and ironic, reaction from Beijing, which rarely misses an opportunity to call for a step back from confrontation, and, instead, an increase in bilateral cooperation in a wide range of areas.

For example, China is in favour of collaboration to provide all-round support to island nations in the Pacific Ocean. This initiative is clearly aimed at countering the attempts to give an anti-Chinese character to the so-called Pacific Islands Forum, which was held between 16 countries in the region, including Australia.

Observers also note a readiness in Beijing to increase its level of investment in the Australian economy, in which it still trails a long way behind the USA, Japan, and the EU. However, as yet the Australian government has not demonstrated any willingness to increase the opportunities for the flow of Chinese capital into its economy. This is particularly true for facilities which are considered to be important for Australia’s national security, or for the protection of its competitive advantages in international markets. That fits in with the general strategy of imposing limits on China’s “economic expansionism” , which has, in recent years, been followed by all western nations, including in Europe.

Foe example, in August 2016 a request by the Chinese state electricity distribution network for approval to buy 50.4% of the shares in its Australian equivalent, Ausgrid, for the huge sum of 7.7 billion dollars.

This August, the well-known Chinese companies ZTE and Huawei, among the world’s leading manufacturers of contemporary communications systems (Huawei, has an annual turnover of almost 80 billion dollars), both met with a unceremonious rejection. They had offered to set up the joint manufacture of 5th-generation mobile phone equipment in Australia.

In general, the current Australian government’s refusal to enter into a highly promising collaboration with China, in various aspects of international relations, so far seems rather artificial. And it is unlikely that the “reshuffled” Liberal government will decide to make any radical changes in its policy towards China in the run-up to the 2019 parliamentary elections.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region, exclusively for the online magazine “New Eastern Outlook”.

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