Australia's Strategic Crossroads: Unpreparedness Amidst Pacific Military Buildup

Abstract

This report examines the paradox of the current large-scale US-led military exercises in the Pacific, which, while projecting allied strength and deterring China, simultaneously expose Australia's critical and concerning lack of preparedness for modern warfare. Despite its deep integration with US defence networks, making its involvement in a potential US-China conflict over Taiwan almost certain, Australia is assessed as "nowhere near ready" to withstand the initial shocks and sustained demands of such a confrontation.

Critical defence points highlighting this unpreparedness include:

• Cyber-Strategic Vulnerability: Australia risks digital isolation within hours due to its reliance on just 15 undersea cables for 99% of its internet traffic, which are easily susceptible to sabotage.

• Lack of Missile Defence: The country is "completely bereft" of missile defence systems, leaving key infrastructure exposed to targeted attacks.

• Precarious Fuel Security: With only 60 days of reserves and 90% of supplies transiting through the vulnerable South China Sea, Australia is highly susceptible to energy disruptions.

• Exposed Defence Assets: Billions of dollars worth of military aircraft are visible via public satellite imagery, making them easy targets for low-cost drones and precision strikes.

• Modernization Lag: Despite significant defence projects, completion timelines are "still years away," creating a dangerous "capability gap" in the short-to-medium term.

These systemic vulnerabilities necessitate a significant increase in the defence budget (up to 3-3.5% of GDP) and an urgent, comprehensive transformation of Australia's defence posture to ensure its deterrence capability and national resilience in an increasingly tense geopolitical context.

by Gabriele and Nicola Iuvinale

Executive Summary

The Indo-Pacific region is currently witnessing an unprecedented display of military might, spearheaded by the United States and its allies. The "Resolute Force Pacific" (REFORPAC) exercise in Guam, the largest combat exercise ever seen in the region, and Australia's concurrent "Talisman Sabre" drills, explicitly signal a heightened focus on potential conflict, particularly with China. These exercises are designed to test the rapid mobilization of air power across vast distances under contested conditions, projecting an image of robust preparedness and clear strategic intent from the US and its partners.

Paradoxically, these very demonstrations of collective military strength starkly illuminate Australia's profound and critical lack of readiness for modern warfare. Despite its deep integration with US defence networks, which makes its involvement in a potential US-China conflict almost certain, Australia is assessed by leading defence experts as "nowhere near ready" to withstand the initial cyberattacks, targeted missile strikes, and logistical challenges such a conflict would entail. Critical vulnerabilities persist across its digital infrastructure, missile defence capabilities, fuel security, and the protection of high-value defence assets.

This report underscores a fundamental contradiction: while the outward projection of alliance strength is being honed, the internal reality for a critical member like Australia reveals systemic fragility. This discrepancy could be exploited by adversaries, potentially undermining the very deterrence that these exercises are designed to achieve. It points to a significant gap between high-level strategic ambitions and the practical, ground-level capabilities and national resilience required for sustained conflict. The findings herein highlight an urgent imperative for Australia to undertake a rapid and comprehensive transformation of its defence posture, including a substantial increase in defence spending, accelerated modernization efforts, and immediate measures to harden critical national infrastructure, aligning its strategic rhetoric with the operational realities of a highly contested Indo-Pacific.

The Indo-Pacific Strategic Landscape: Exercises as a Bellwether

The strategic environment in the Indo-Pacific is increasingly defined by heightened military activity and explicit great power competition. The ongoing US-led military exercises serve as a clear indicator of this evolving landscape.

Analysis of US-led "Resolute Force Pacific" (REFORPAC) and "Talisman Sabre" Exercises

REFORPAC, hosted in the US Pacific territory of Guam, represents the largest combat exercise the region has ever seen, involving over 400 aircraft and 12,000 personnel from the US and allies, including Australia. The stated objective of REFORPAC is to test the rapid mobilization of air power across vast distances, under pressure, in a contested environment. Colonel Charles Dan Cooley emphasized the unprecedented "scope and scale" of the exercise, focusing on regional stability, combat presence, and readiness.

While the official rhetoric often frames these exercises in terms of general stability, experts are unequivocal about their true focus. Leland Bettis, director of the Guam-based think tank Pacific Centre for Island Security, stated that there has been "very little disguising the fact that this exercise is directed at China". He further clarified that despite a "cloak of deterrence," the operational activities are "built around fighting". This sentiment is echoed by the US Air Force's own social media accounts, which promoted the exercise as proof of how it would "fight and win in tomorrow's battlespace". The scale of this allied military activity is further demonstrated by REFORPAC coinciding with the Talisman Sabre exercises in Australia, which involve 40,000 troops from 19 countries.

Guam's Strategic Importance and the Shift Towards Distributed Operations

Guam holds immense strategic value for the United States, identified by US Defense Secretary Pete Hegseth as the country's "most important strategic base in the region". However, REFORPAC also reflects a critical understanding of the island's potential vulnerability in a conflict. The US is actively practicing how to quickly disperse its forces, a strategic shift that acknowledges the increasing sophistication and proliferation of long-range precision strike capabilities possessed by potential adversaries like China. Large, static military installations, despite their importance, become highly attractive and vulnerable targets in a high-intensity conflict, making a concentration of forces a liability rather than an asset.

This strategic pivot is evident in the presence of significant aviation assets in nearby US territories like Tinian and Saipan. US contingency planners anticipate using a "distributed and dispersed plan," moving assets around with the explicit expectation that "Guam assets will not be available in conflict". This fundamental re-evaluation of force posture implies that future conflicts will be characterized by highly contested environments where traditional large bases cannot be relied upon for continuous operations. It necessitates significant investment in hardening, concealment, and the development of austere, rapidly deployable forward operating locations, fundamentally altering the logistics and command structures of regional military operations. The sheer "massive scale of the Pacific" presents significant operational challenges, as highlighted by Colonel Matt Johnston, commander from Eielson Air Force Base, who noted the logistical demands for fighter jets requiring multiple refueling operations over vast distances to accomplish objectives.

Broader Geopolitical Context: US Strategic Realignment and Reduced "Soft Power"

The current military buildup in the Pacific occurs against a backdrop of significant shifts in US strategic priorities, notably the Trump administration's multi-billion-dollar cuts to USAID. This reduction in non-military engagement, such as economic aid and diplomatic initiatives, correlates with an increased reliance on military presence, exercises, and security partnerships as the primary tools of influence and projection of power. Leland Bettis warns that the absence of "soft power" diplomacy "would pave the way for development supporting a military purpose, instead of direct assistance to nations". He starkly concludes that "the face of America in our part of the world wears a uniform," suggesting a dominant military-centric approach.

This strategic rebalancing could lead to a more militarized and potentially confrontational Indo-Pacific, where military signaling overshadows diplomatic efforts. While "peace through diplomacy" is often stated as the primary objective, the operational emphasis appears heavily weighted towards "prepare for war", which may inadvertently limit the space for diplomatic solutions and increase the risk of miscalculation. China's anticipated response, with surveillance ships monitoring the war games, underscores the escalating tensions. Concurrently, Australian Prime Minister Anthony Albanese's visit to China for a meeting with President Xi Jinping highlights a complex diplomatic tightrope walk, potentially indicating a divergence in strategic emphasis between Australia and the US, where Australia still actively seeks diplomatic engagement amidst heightened military posturing.

Australia's Inevitable Entanglement: A Strategic Reality

Australia's security posture is inextricably linked to that of the United States, a relationship that, while foundational to its defence, also presents a strategic dilemma in the context of regional conflict.

Examination of Australia's Deep Integration with US Defence and Intelligence Networks

The depth of Australia's integration with the US defence and intelligence networks is profound. Mike Pezzullo, former Deputy Secretary of Defence, unequivocally states that Australia's "military, ports, bases, intelligence systems - they’re all deeply tied to America’s". This high degree of interoperability, shared intelligence, and mutual reliance forms the bedrock of the Australia-US alliance. This profound operational and intelligence integration means that a conflict involving one ally immediately implicates the other. It is not merely a political decision to join; the very fabric of Australia's defence infrastructure and operational planning is interwoven with that of the US.

The Assessment of an 80% Probability of Australia's Involvement in a US-China Conflict over Taiwan

Due to this deep integration, Pezzullo asserts that Australia "don’t really have a choice" regarding involvement in a major regional conflict. He assesses "at least an 80 per cent chance Australia would be drawn into any conflict between China and Taiwan if the US becomes involved". This high likelihood transforms Australia's potential involvement from a hypothetical scenario into a highly probable strategic reality. Pezzullo further cautions that such a conflict "might start there... But I can assure you, it won’t end there", implying a broader and more protracted regional conflagration that would further entrench Australia's participation.

The Strategic Implications of Australia's "No Choice" Scenario

This "no choice" scenario means Australia must plan for conflict not as a distant contingency but as a highly probable strategic reality. Any attempt at neutrality would likely compromise its own defence capabilities and intelligence sharing, effectively isolating it. This elevates the urgency of addressing its preparedness gaps from a national security concern to an existential imperative. Furthermore, it raises profound questions about the long-term implications for Australian strategic autonomy and its ability to balance its security alliance with its economic interests, particularly with China. The statement that the conflict will likely expand beyond the initial flashpoint further emphasizes that Australia's defence planning must account for a sustained and widespread engagement.

Australia's Critical Vulnerabilities: A State of Unpreparedness

Despite its participation in major joint exercises, Australia faces a stark reality: it is "nowhere near ready" for modern warfare, as assessed by Mike Pezzullo. This section details the specific and critical vulnerabilities that expose the nation to severe risks in a regional conflict. These vulnerabilities are not isolated issues but form a cascading chain of failure, where an initial attack can disable critical national infrastructure, making subsequent kinetic strikes more effective and exacerbating existing logistical and defence gaps. This interconnectedness creates a systemic fragility that could lead to rapid national incapacitation.

Cyber Warfare and Digital Isolation

Pezzullo warns that any future conflict would likely commence not with conventional weaponry, but with "cyberattacks designed to cripple Australia’s digital infrastructure," leading to a "degradation of the internet". Australia faces the chilling prospect of digital isolation "within hours" because a staggering "99 per cent of the nation’s internet traffic flow[s] through just 15 undersea cables that enemy submarines could easily sever". The severing of these critical cables would cut off communications, banking, emergency services, and the digital backbone that modern Australia relies on to function, effectively paralyzing the country before a single missile is fired.

Absence of Missile Defence Capabilities

Following cyberattacks, "targeted missile strikes would likely follow, aimed at key infrastructure including air bases, radar facilities and defence logistics". Critically, Australia "have no missile defence systems," leaving it "completely bereft in that area". This fundamental gap means that critical infrastructure would be exposed and undefended against precision strikes, further degrading Australia's ability to respond or sustain operations.

Precarious Fuel Security

Australia's energy security presents another critical weakness. "90 per cent of Australia’s oil and petrol flow[s] through the South China Sea – the very region where any Taiwan conflict would likely unfold". This makes its energy supply highly susceptible to disruption. Compounding this vulnerability, Australia "only store[s] enough for 60 days" of fuel, a critically low strategic reserve that could quickly lead to operational paralysis in a prolonged conflict.

Exposed Defence Assets and Drone Threats

A significant, yet often overlooked, intelligence vulnerability stems from the public availability of detailed satellite imagery of critical defence assets. "Billions of dollars’ worth of defence aircraft are sitting exposed on tarmacs, visible to anyone with access to Google Maps satellite imagery". Professor David Kilcullen notes that "Everything visible from space or aircraft is available on Google Earth, NASA Worldview, or other public systems". Marc Ablong of the Australian Strategic Policy Institute confirms this, stating, "Unfortunately, Google Maps shows almost everything... You can see the base infrastructure, people on the base, where the guard posts are. You can determine access points, weak points in fence lines".

This readily available Open-Source Intelligence (OSINT) allows potential adversaries to conduct detailed virtual reconnaissance, identify high-value targets, analyze base layouts, pinpoint vulnerabilities, and plan precise attack vectors without needing to deploy complex or risky traditional intelligence assets. The devastating potential of low-cost drone technology is illustrated by Ukraine’s "Operation Spider’s Web," where 117 drones destroyed approximately $7 billion worth of Russian military assets. Specific Australian examples, such as P-8A Poseidon maritime surveillance jets at RAAF Base Edinburgh and C-17A transport aircraft at RAAF Base Amberley, are "clearly visible on public satellite imagery, lined up on tarmacs with no protective cover", making them easy targets. This highlights a fundamental shift in intelligence gathering and target identification in the digital age, where traditional physical security measures are less effective against comprehensive overhead views. It necessitates a paradigm shift in asset protection, moving beyond perimeter security to include strategies like concealment, hardening, rapid dispersal, and deceptive measures.

The following table summarizes Australia's critical defence vulnerabilities and their potential impacts:

Vulnerability Area	Specific Weakness/Threat	Direct Impact
Cyber/Digital Infrastructure	99% internet traffic via 15 vulnerable undersea cables	Digital isolation, crippling of communications, banking, emergency services, and national digital backbone
Missile Defence	No missile defence systems	Undefended against targeted missile strikes on critical infrastructure (air bases, radar, logistics)
Fuel Security	Only 60 days of strategic fuel reserves; 90% supply via vulnerable South China Sea	Operational paralysis due to fuel scarcity in prolonged conflict
Exposed Air Assets	Billions of dollars in aircraft visible on Google Maps; no protective cover	Vulnerability to low-cost drone attacks and precision missile strikes, potential loss of high-value assets

Bridging the Gap: Challenges in Defence Modernization

Australia is engaged in significant defence modernization efforts, yet the timelines for these projects present a critical challenge in the face of escalating regional tensions.

Assessment of Current Major Defence Projects and Long Timelines

Australia has major defence projects underway, including AUKUS nuclear submarines, new frigates, cruise missiles, and underwater drones. However, Mike Pezzullo warns that these efforts are "still years from completion". This creates a significant and dangerous "capability gap" in the immediate to near term, as Australia is investing in capabilities that may not be fully operational until well into a period of heightened geopolitical risk. The inherent slow pace of acquiring and integrating complex, high-cost defence systems means that Australia's window of vulnerability is extended precisely when the threat environment is most acute. Pezzullo further emphasizes that while defence technology is "improving almost monthly," Australia is "playing catch-up", highlighting the rapid pace of technological evolution in modern warfare compared to the slower pace of defence procurement. This critical mismatch between the urgency of the strategic situation and the timeline for achieving desired capabilities implies that Australia cannot solely rely on long-term, capital-intensive projects to address its immediate defence needs.

The Imperative for a Significant Increase in Defence Spending

The scale of Australia's preparedness challenge necessitates a fundamental re-evaluation of its defence funding. The counter-argument that Australia should not risk its economy by confronting China, its largest trading partner, is dismissed by Pezzullo, who states that this argument "becomes irrelevant in the context of global conflict," as "We’d all suffer through the tanking of the global economy". This reframes the debate from immediate economic gain to national survival. Pezzullo recommends a substantial increase in Australia's defence budget, from its current level to "three or even three-and-a-half per cent of GDP to adequately deter adversaries and defend the nation". This is more than just a financial adjustment; it represents a national strategic pivot. Such a substantial increase would necessitate significant re-prioritization of national resources, potentially impacting other areas of public spending. It reflects a shift from a reactive, incremental approach to defence investment to a proactive, substantial commitment driven by a stark assessment of national security imperatives.

Counter-Drone Defence Underway (Partial Progress)

While significant gaps remain, some progress is being made in specific areas. Defence officials are taking the drone threat seriously, with "Project Land 156 launched late last year to develop counter-drone systems," complemented by "Mission Syracuse focusing on advanced drone intercepting technology". A defence spokesperson confirms that "The protection of Defence’s critical assets is a priority area for work and investment". Modern counter-drone systems utilize a range of sensors, including acoustic, thermal, radar, and electro-optic, for detection, with neutralization methods including signal disruption and physical destruction. Oleg Vornick, CEO of DroneShield, notes that such systems are "already active across global deployments". While this is a positive step, it represents only one facet of the multi-domain threats Australia faces.

Strategic Recommendations for Enhanced National Preparedness

The current geopolitical climate demands a fundamental and urgent transformation of Australia's defence posture. As Mike Pezzullo aptly states, "Plan A is always peace through diplomacy. But if you want peace, prepare for war". This dictum establishes a dual-track approach emphasizing both robust diplomatic engagement and comprehensive military readiness. The "prepare for war" imperative necessitates a strategic shift from a reactive, incremental defence build-up to a proactive, rapid, and comprehensive transformation, prioritizing immediate threat mitigation alongside long-term capability development to address the existing "capability gap." This requires a whole-of-government approach, as many vulnerabilities extend beyond the direct military domain, emphasizing that national security in the modern era is not just about military hardware but about building a resilient national ecosystem capable of withstanding multi-domain attacks.

Immediate & Short-Term Actions (Within 1-3 Years)

1. Accelerated Deployment of Counter-Drone Systems and Enhanced Base Security: Australia must rapidly scale up and deploy advanced counter-drone systems across all critical defence installations, leveraging existing technologies and global deployments. Concurrently, urgent physical security measures are required to conceal and harden exposed defence assets, such as aircraft on tarmacs, from public satellite imagery and potential drone or missile strikes. This includes the rapid construction of hardened shelters, implementation of dispersal strategies, and advanced camouflage techniques.

2. Urgent Measures to Harden and Diversify Critical Digital Infrastructure: Prioritizing the protection of the 15 vulnerable undersea internet cables is paramount. This necessitates a combination of physical hardening, increased surveillance, and the rapid development of redundant or alternative communication pathways. Immediate investment in advanced cyber defence capabilities is also crucial to detect, deter, and respond to sophisticated state-sponsored cyberattacks targeting national critical infrastructure.

Mid-to-Long Term Strategies (Beyond 3 Years)

1. Prioritized Investment in Comprehensive Missile Defence Capabilities: An urgent, fast-tracked program for the acquisition and deployment of integrated air and missile defence (IAMD) systems is essential. These systems must protect key defence installations, population centers, and critical national infrastructure from targeted missile strikes. This should include layered defence systems capable of intercepting various missile threats, from ballistic to cruise missiles.

2. Development of Robust Strategic Fuel Reserves and Supply Chain Resilience: Australia must significantly increase its strategic fuel reserves beyond the current 60-day supply, establishing secure, dispersed storage facilities. Diversifying fuel supply routes and exploring domestic production capabilities are also vital to reduce over-reliance on vulnerable shipping lanes, particularly through the South China Sea.

3. Adaptation of Defence Posture for Distributed and Dispersed Operations: The Australian Defence Force must formally integrate and extensively practice distributed and dispersed operations doctrine across all branches, drawing lessons from exercises like REFORPAC. This includes investing in developing and upgrading austere forward operating locations, enhancing logistical capabilities for rapid force movement, and ensuring the survivability of assets even when primary bases are compromised.

4. Sustained Diplomatic Engagement alongside Military Deterrence: While military preparedness is paramount, Australia must maintain and strengthen robust diplomatic channels, including with China, to manage tensions, prevent miscalculation, and explore avenues for de-escalation. Reinforcing regional partnerships and alliances not only through military exercises but also through continued diplomatic and economic engagement, where appropriate, will be crucial for broader regional stability.

Conclusion: A Call to Action for Resilient Security

The ongoing, largest-ever US-led military exercises in the Pacific, while demonstrating allied resolve, concurrently cast a stark light on Australia's critical defence vulnerabilities. The current state of unpreparedness, particularly in the face of an almost certain entanglement in any major regional conflict involving the United States and China, poses an unacceptable risk to Australia's national security and regional stability.

True security and effective deterrence extend far beyond participation in large-scale joint military exercises. It demands comprehensive national preparedness across all domains – cyber, physical infrastructure, logistical resilience, and strategic depth – ensuring that Australia can withstand the initial shocks of modern conflict and sustain operations. This report serves as a forceful imperative for decisive policy action, sustained and significantly increased investment, and a unified national effort. It is essential to align Australia's strategic rhetoric with the operational reality of its inevitable entanglement, ensuring its capacity to deter adversaries and defend the nation in a future that is likely to be defined by intense geopolitical competition and potential confrontation.