Is Team Australia at war with itself?
I have just returned from a whirlwind road trip meeting clients and colleagues in Sydney, Canberra, Melbourne, Adelaide and the regions. China's stalled economy, volatile US politics, our domestic policy directions and economic prospects are top of mind for business leaders, policymakers and university administrators.
Lingering underneath are a concern about the fracturing of Australian consensus on big policy issues; strained relationships between government, business and universities; and our communities that are increasingly disillusioned with all three.
Geopolitics takes centre stage, hypothetically
Geopolitics has entered the boardroom discussions in Australia, as the speed and intensity of risks call for institutional and portfolio realignment and resilience-testing. But the leaders’ attention is elsewhere, and the Australian geopolitical muscle and ecosystem are yet to be built.
It’s the economy, stupid
The sustainability of Australia-China stabilisation and China’s sluggish economy weigh heavily on both government and corporate leaders’ minds. Treasurer Dr Chalmers is in Beijing to understand how China’s slowdown (and the stimulus to arrest it) will affect Australia and our commodity prices. I subscribe to the view that China’s slowdown is structural, so the stimulus impact will be limited. But doing business with China we must, and the Government is set on continuing clearing trade hurdles and maintaining the momentum of engagement.
The US and the directions of its foreign, trade and industrial policies are also top of mind, given the stake Australia has in the US financial markets, technology, security architecture and political stability. How Australia will navigate rapidly escalating competition between China and the US to manage competing spheres of interest and shape industries and supply chains of the future is a fundamental long-term policy challenge.
The escalating wars in Ukraine, Gaza and Lebanon and technological competition are seen by many of my interlocutors outside Canberra as distant issues. But inside the policy world, these major conflicts inject much toxicity into the international system, spilling into the Indo-Pacific and, with the escalation in Lebanon, directly threatening thousands of Australian citizens there thus overcrowding the already stretched bandwidth of our policymakers.
More immediate concerns in state capitals are interest rates, commodity prices, slow economy, AI deployment, populism and the breakdown of trust between Australian business and political leaders.
(Not all) Vice-Chancellors face headwinds
For university leaders – the international student caps policy presents a major disruption. But the sector is far from united. Most agree on the policy’s pure political motivations and clumsy implementation. But university administrators are divided on its longer-term merits. Some support it as a part of the structural change towards a more sustainable higher education sector.
Others see it as undermining Australia’s successful and lucrative international students’ economy and the universities’ financial sustainability. But most university leaders agree that the new normal for universities is, on the one hand - a more interventionist government, through the new powerful regulator (Australian Tertiary Education Commission) seeking a greater alignment between universities, government policy and community expectations; and on the other -a less predictable immigration policy and international student markets.
Our universities are re-setting their domestic and international strategies (and in some cases personnel that drive them) to respond to the new reality in Australia and offshore. Strengthening, diversifying and the deepening of transnational partnerships and offshore footprints by Monash, RMIT, Melbourne and Deakin, building public and global policy capabilities in UNSW and ANU, the merger of the University of Adelaide and the University of South Australia, and even the appointment of Bill Shorten as the Vice-Chancellor of the University of Canberra can be seen in this context.
It's the elections (not policymaking) season
In Canberra, elections will dominate the next political cycle, as policy-making is giving way to politics. But the pace of geopolitical change outside Australia will keep our ministers and public servants on their toes. The war in Lebanon, the US elections, expanding defence and economic security responsibilities – will dominate the agenda, but behind the scenes. The economy, cost of living, housing, energy and immigration will rule over the headlines.
Team Australia, fractured
At a time when the government (namely Treasury Secretary Stephen Kennedy) calls for a whole-of-Australia effort to make our economy and society more resilient against the shocks of fragmentation and conflict, the divisions between us seem to be growing wider. The COVID pandemic and the Voice Referendum have exposed economic, political and societal fault lines we long seemed to ignore. Today, politicians on all sides more regularly and sometimes justifiably challenge business leaders not only on their behaviour or business practices, but their business models and internal governance. Business leaders are rightly calling out political populism and short-term policy horizons. Universities are outraged by the international student caps, and the government is annoyed with what it sees as a self-serving, overly commercial higher education sector.
But underneath it all, communities (especially our younger generations) – under pressure from rising costs of living, housing and education - are disillusioned and losing trust in our leadership to steer Australia through turbulence and the uncertainty of today’s world. Rebuilding this trust while building “Fortress Australia” and maintaining economic dynamism will be the generational task for all Australian leaders.
Finally, two things I hope we can all agree on: there is no experience more fulfilling and calming than an Australian road trip, and our sunrises and sunsets are the best in the world.
Onwards and upwards.