Hitting the gym: Australia’s path to middle power relevance in the 2030s

For middle powers like Australia, Canada, Italy, France and the United Kingdom (despite their nuclear arsenals), this reality comes as quite an abrupt and disconcerting shock to the system and their respective policymaking communities.

Where once in the post-Second World War “global rules-based order” they held positions of prominence, influence and prestige under the protective aegis of the United States, they are increasingly finding themselves and their positions usurped by the emergence and, in some cases, re-emergence of the new tier of great and super powers.

While the United States remains the world’s pre-eminent economic, political and strategic power, the People’s Republic of China, India, Russia, Turkey, Brazil and Indonesia, in aggregate, dwarf the power of the United States and its middle-power partners are radically and irrevocably upending the economic, political and strategic order that the last eight decades of peace, prosperity and stability have been built upon.

In response, some of these powers have sought to chart a new path forward, albeit within the guise of maintaining and “reinforcing” the post-World War II order, through what Canadian Prime Minister Mark Carney has termed “middle-power strategy” while acknowledging and adapting to a “new”, but in truth, “old” reality.

“We knew the story of the international rules-based order was partially false that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically. And we knew that international law applied with varying rigour depending on the identity of the accused or the victim,” he said.

Prime Minister Carney would go on further to detail the reality of what he borrowed from Finish President Alexander Stubb, “values-based realism”, which he explained in greater detail, saying, “We aim to be both principled and pragmatic – principled in our commitment to fundamental values, sovereignty, territorial integrity, the prohibition of the use of force, except when consistent with the UN Charter, and respect for human rights, and pragmatic and recognising that progress is often incremental, that interests diverge, that not every partner will share all of our values.”

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Against this backdrop, it becomes clear that Australia, much like our Canadian cousins, have a rare opportunity to leverage the emerging middle-power coalition concept to establish genuine strategic autonomy by 2030.

Rather than oscillating between great power dependencies, Australia must deliberately construct an independent posture anchored in economic diversification, integrated defence capabilities and strengthened partnerships with democratic middle powers.

The window to execute this transition is narrow, the remainder of the 2020s, but the pay-off is substantial: a position of genuine strategic relevance that amplifies Australian agency in the 2030s regardless of great power volatility.

But what does this look like, particularly with uniquely Australian characteristics and solutions to distinctly Australian challenges?

The Carney doctrine and Australia’s strategic opportunity

At the core of Prime Minister Carney’s Davos address is the necessity of building strategic autonomy while maintaining values like human rights and sovereignty and calling for middle powers to work together to counter the rise of hard power and great power rivalry, regardless of theatre.

For Australia, this framing is not merely convenient rhetoric – it articulates a structural imperative that has accumulated over the past decade but remains incompletely addressed in strategic planning.

Australia’s fundamental challenge is not capability deficit; it is capability dispersal. The nation possesses sufficient economic weight, technological capacity and security resources to punch above its demography, yet these assets remain partially mobilised across competing objectives.

The default posture – maintaining privileged access to American security while hedging through multilateral institutions – has become increasingly untenable as great-power competition has not only intensified but diversified as the bipolar and monopolar world has become truly multipolar.

Prime Minister Carney’s “variable geometry” concept, wherein coalitions of middle powers cooperate on specific issues without requiring full alignment across all domains, offers Australia a more durable framework, but that is all it is, a framework.

The question is not whether to adopt middle-power positioning. Australia has always been a middle power.

The question both Australia’s policymakers and public must ask is whether to actively construct and reinforce that positioning or permit it to degrade through incremental strategic drift and the continued domestic politics of managed decline.

The 2030s will reward deliberation; the late 2020s demand decision.

Economic independence and resilience

Australia’s economic strategy for the 2030s must prioritise genuine diversification alongside value-chain sovereignty in critical sectors. The nation has become excessively dependent on commodity volatility (particularly iron ore and liquefied natural gas) and faces structural vulnerability to demand shocks emanating from China.

This is not a China problem; it is a distinctly Australian problem, one where our long celebrated cultural identities of “she’ll be right” and the “Lucky Country” moniker have metastised into a near terminal economic, political and strategic culture of always looking for the easiest and cheapest way out.

Executing economic middle-power positioning requires seven concurrent initiatives:

• Critical mineral sovereignty: Australia possesses extraordinary endowments in rare earth elements, lithium cobalt, and other minerals essential to energy transition and defence systems. Rather than exporting raw ores, Australia should legislatively mandate downstream processing within the nation, creating integrated supply chains that capture value domestically and position Australia as an indispensable partner to the United States, Japan, South Korea and European allies. The rare earth-processing sector should achieve 70 per cent vertical integration by 2028, with dedicated state and Commonwealth capital alongside private sector participation.
• Advanced manufacturing corridors: Defence-adjacent manufacturing, ranging from aerospace components, marine systems, electronics and composite materials should be consolidated into geographically distributed clusters with integrated supply chain architecture. Singapore and South Korea have demonstrated that middle powers can compete in sophisticated manufacturing when policy is coherent and consistent and the regulatory environment is quick and easy to navigate, balanced and predictable. Australia should establish three dedicated advanced manufacturing hubs (one in each of south-eastern Australia, South Australia and Western Australia) with sustained tax incentives, workforce development pipelines, and preferential access to government procurement contracts through to 2032.
• Heavy industry reinvigoration and domestic integration ties Australia’s traditional aluminium smelting and steel manufacturing to decarbonised renewable energy, establishing competitive advantage where energy costs previously made these unviable, which includes a specific target (35 per cent of regional aluminium demand by 2030) and emphasises government acting as anchor customer for defence and infrastructure procurement. This creates manufacturing at scale while vertically integrating raw commodity exports into higher-value intermediate goods.
• Artificial intelligence and industrial productivity positions Australia as a Pacific region hub for applied AI (manufacturing optimisation, supply chain, resource extraction) rather than competing with Silicon Valley on foundational research. This includes a 60 per cent labour productivity improvement target across Australian manufacturers and crucially emphasises data sovereignty and avoiding dependency on foreign cloud or algorithmic infrastructure. The AI institutes in each manufacturing hub create a cross-cutting productivity multiplier across all economic pillars.
• Energy system: Australia must complete its renewable energy transition not as a response to climate activism but as a part of a rational economic strategy, where cost and reliability are the other anchors of the triad of metrics, ultimately meaning that Australia must remove its ban on nuclear energy and embrace it wholesale. By 2030, Australian renewable, because Generation IV nuclear generation is widely considered to be renewable, removes a vulnerability vector (energy dependence) and creates an economic asset. This should also be used to develop domestic petrochemical stockpiles and strategic reserves, both for fuel and industrial chemicals, pharmaceutical and agricultural precursors dramatically enhancing economic resilience and security.
• Institutional diversification: Australia’s trade exposure to China should decline from 38 per cent of total trade (current) to 22 per cent by the end of 2030 through deliberate cultivation of alternative partnerships with India, ASEAN members, South Korea, and European economies. This is not isolation; it is portfolio rebalancing. India’s strategic autonomy makes it a natural partner, however, we must avoid simply replacing Beijing with New Delhi, while ASEAN’s continued economic dynamism and growth offers opportunity and European partners seek Indo-Pacific supply chain alternatives.

Strategic partnerships not vassalage

Prime Minister Carney’s model explicitly rejected the notion that middle powers must choose between competing great powers. Instead, it proposed intentional construction of partnerships that preserve agency.

For Australia, this translates to three operational pillars:

• Quadrilateral Security Dialogue evolution: The Quad (Australia, India, Japan, United States) remains critically important, but Australia must be rigorous about preventing it from simply becoming an anti-China coalition. By 2028, the Quad should establish a permanent secretariat, joint capability development initiatives and integrated regional security exercises. However, we have to understand and accept that India’s history of “non-alignment” (read self-interested duplicity) is a feature, not a bug, and Australia and it’s other non-Indian Quad partners should prepare accordingly.
• Middle-power coalition infrastructure: Canada has begun articulating institutional mechanisms for middle-power coordination. Australia should actively participate in formalising these arrangements, including designation of an Australian ambassador specifically responsible for middle-power network coordination. This role should span the Quad, AUKUS (Australia-United Kingdom-United States alliance), Five Eyes intelligence sharing, ASEAN partnerships, and emerging multilateral forums. The objective is to reduce isolation while maintaining discretion over commitments.
• Indo-Pacific architecture shaping: Australia’s diplomatic and defence resources should be dedicated to preventing any single great power from achieving hegemonic control over regional institutions. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, regional development finance initiatives, and maritime security frameworks should all be subject to careful curation to ensure middle powers retain agenda-setting capacity. By 2030, Australia should lead a coalition (ideally involving Japan, South Korea, and ASEAN members) to establish a permanent Indo-Pacific security coordination mechanism independent of great power structures.

All of this “soft power” ultimately leads into the necessity of the realpolitik that is “hard” military power and true tactical and strategic sovereignty, albeit within the auspice of larger, multinational and trusted partnership frameworks.

Building defence and technological sovereignty

Strategic autonomy is ultimately underwritten by defence capability and technological independence. Australia’s defence strategy must transition from procurement-focused posturing to genuine capability sovereignty across critical domains.

And while Australia has made some progress in these areas, there is still a lot of work that needs to be done for Australia to truly be capable of delivery sovereignty. This can be achieved across a couple of key pillars:

• Autonomous platform development: Australia should allocate sustained capital (minimum $4 billion annually from 2025–32) for the development of indigenous autonomous systems across maritime, air and cyber domains. For example, an MQ-30A concept, an Australian-designed, Australian-manufactured unmanned strike platform, serves as an exemplar in this category. Rather than licensing foreign designs, Australia should (where feasible and competitive) fund domestic innovation in autonomous systems, AI-enabled warfare and swarm technologies. This positions Australia as a peer-level capability developer, not merely a purchaser.
• Cyber and space capability: By 2030, Australian cyber operations capacity should rank in the top five globally. This requires establishing a permanent cyber operations command with integrated offensive and defensive capability, consolidating fragmented current structures. Similarly, Australian space capability should progress from satellite imaging and communications to autonomous on-orbit servicing and active space situational awareness. A dedicated Australian space operations command, operationally independent, should be established by the end of 2027.
• Supply chain resilience: Critical defence components, particularly semiconductors, rare earth magnets, composite materials and propulsion systems should achieve 60 per cent Australian sourcing by 2030 or possess certified alternative non-Chinese sources. This will undoubtedly require a coordinated industrial policy alongside defence investment, with government acting as anchor tenant for domestic suppliers.
• Defence export positioning: Australian defence technology should be positioned for export to Quad partners and aligned middle powers. The Autonomous Systems Centre (proposed), advanced materials and maritime systems should all have explicit export strategies. By 2030, defence-adjacent exports should represent 12 per cent of total manufacturing output, generating jobs while distributing security dividends to aligned partners.

Political and diplomatic coordination

However, none of this is achievable without aligning political economy across major parties, embedding strategy in institutional structures that survive electoral cycles and explicitly rejecting the notion that foreign and defence policy should be subject to the volatility of domestic partisan competition.

• Bipartisan strategic consensus: A formal Australian Strategic Autonomy Framework, negotiated between government and opposition and locked into legislation, should establish non-negotiable commitments to defence spending (minimum 2.5 per cent of gross domestic product through 2032), critical capability development and middle-power positioning. This removes these areas from electoral politics and signals to allies and adversaries that Australian strategy has genuine institutional durability.
• Public narrative reorientation: Australian domestic discourse has become overly dependent on external validation. Confidence in Australian capability and strategic positioning has eroded. The period 2025–30 should see deliberate investment in public narrative repositioning: celebrating Australian technological innovation, emphasising defence capability development, and articulating a coherent national strategy that derives from Australian interests rather than responding to great-power demands.
• Regional leadership in standard-setting: Australia should lead middle-power efforts to establish binding norms around critical technologies (AI, autonomous systems, space operations), cybersecurity standards, and supply chain transparency. By positioning Australia as a norm-setter rather than norm-taker, the nation establishes legitimacy and agency in the 2030s international environment.

Towards the 2030s

All of this will require some clear, concise and achievable action items that are also communicable with and understandable by the Australian public, because without that critical stakeholder buy-in, this is all just window dressing.

The transition to genuine strategic autonomy requires specific deliverables, here are just a few examples:

• By end 2026: Establish Australian Strategic Autonomy Framework legislation; establish Defence Technology Sovereignty Taskforce; formalise middle-power diplomatic coordination mechanisms.
• By end 2026: Consolidate rare earth processing to 50 per cent vertical integration; establish the three legislative, regulatory and planning frameworks for advanced manufacturing hubs; operationalise cyber operations command.
• By end 2027: Achieve 60 per cent indigenous sourcing in critical defence components; reach consensus on Quad institutional architecture.
• By end 2028: Deliver MQ-30A prototype; establish Australian rare earth export partnerships beyond current Japanese arrangements, with a specific focus on the United States and Europe; complete renewable energy system capacity expansion.
• By end 2029: Achieve on shore strategic petrochemical reserve supply; consolidate middle-power coalition into formalised institutional structures; achieve top five cyber capability ranking.
• By end 2030: Demonstrate sustained 2.5 per cent defence spending, with a clear road map to 3.5 per cent within the next five years; achieve defence-adjacent export targets; complete bipartisan strategic consensus embedded in institutional frameworks.

I could go further year by year in this, but as mentioned, these are just some high-level ideas and don’t even begin to touch things like the broader hardening of Australia’s national energy grid, the necessary investments in water security infrastructure or optimisation and modernisation of Australia’s transport infrastructure, or the legislative, regulatory and planning changes across the Commonwealth needed to boost productivity, growth and individual opportunity.

Final thoughts

Australia is going to have to accept that strategic autonomy is not isolation; it is the precondition for genuine, meaningful partnership.

An Australia entering the 2030s with diversified economic partnerships, demonstrable technological capability, proven defence competence, and institutionalised strategic coherence will be dramatically more valuable to American, European and Indo-Pacific partners than a version of Australia locked into supply chain dependency and reactive posturing.

The window is narrow. Execution requires political courage, sustained capital commitment, and unwillingness to accept convenient narratives about Australian limitations.

Prime Minister Carney’s vision has resonated with middle powers because it reflects genuine structural realities: middle powers do possess agency; they can build alternative coalitions; and the cumulative effect of deliberate positioning is far more potent than incremental adaptation to great power demands.

But ultimately, they must be independently and sustainably capable in order to deliver the maximum benefit within any coalition.

Australia has the resources, capability base and geographic position to lead this transition. The question is whether the nation possesses the strategic will to execute it.

Our 30-day (four-year) gym bro transformation begins today.

Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below or get in touch at This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..

Stephen Kuper

Author

Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.

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