DON BRASH - The pros and cons of AUKUS: Submission to Australian public inquiry

Australia is currently holding a “Public inquiry into AUKUS” . The five members of the panel holding the inquiry are:

• Peter Garrett AM FTSE, chairman, a former federal minister;

• Admiral Chris Barrie AC, RAN rtd., former Chief of the Australian Defence Force;

• Dr Carmen Lawrence, Australia’s first female State Premier and Treasurer, and a former federal minister;

• Karina Lester, a second generation survivor of the 1953 British nuclear tests at Emu Field; and

• Leanne Minshull, co-CEO at the Australia Institute

I was invited to make a submission and appeared before the Inquiry earlier today.

Thank you for your invitation to submit to this inquiry into the pros and cons of AUKUS.

Your invitation is all the more appreciated because I am not an Australian. I was born and brought up in New Zealand. But I have a deep affection for Australia: I spent four years at the Australian National University in Canberra in the mid-60s doing my PhD in economics there, and my younger son and his wife have lived in Sydney for many years. I retain a number of close friends in Australia.

It is relevant to my submission that I have had close ties with both the United States and China during my career.

I lived for five years in Washington D.C. when employed at the World Bank, and during that time served on the staff of the Commission on International Development (Pearson Commission) and was employed in the staff department of the bank's president, Robert McNamara. In the years since that time, I have been, for 10 years, the chief executive of an investment bank in New Zealand in which Wells Fargo Bank of San Francisco was a substantial shareholder, and have visited the United States at least once a year in various capacities for at least half a century. During the 14 years in which I was Governor of the Reserve Bank of New Zealand, between 1988 and 2002, I had a close relationship with the US Federal Reserve Board.

I first visited China in 1986 when I was the Chief Executive Officer of the New Zealand Kiwifruit Authority. Since that visit I have visited China some fifteen times - when I was Governor of the Reserve Bank, when I was leader of the New Zealand Parliamentary Opposition, and as the chairman of the New Zealand subsidiary of the Industrial and Commercial Bank of China (a position I have held since 2013).

I make two submissions:

First, AUKUS makes no sense as a way of defending Australia.

In arguing this I rely heavily on the speech by former Australian Prime Minister Paul Keating, who argued to the Canberra Press Club that for the cost of buying the eight nuclear-powered submarines involved in the AUKUS proposal it would be possible to buy some 30 conventionally powered submarines.

He argued that since it was rarely possible to have more than one third of a fleet of submarines at sea at any given point in time, it would be vastly preferable to have 10 conventionally powered submarines defending Australia's coast than two nuclear-powered submarines - craft which only make sense as part of a U.S. fleet patrolling in the South China Sea. In other words, as a means of defending Australia, the AUKUS submarines are a very long way from being optimal.

But it is explicitly understood in both Washington and Canberra that the AUKUS deal involves Australia signing up to whatever war plans the United States has for the Asian region. And it has been made abundantly clear for some years, re-emphasised by U.S. Secretary of Defence Pete Hegseth in his speech to the Shangri-La conference in Singapore earlier in the year, that the U.S. has every intention of endeavouring to maintain its dominance throughout the Pacific region. Put more bluntly, the US has every intention of keeping China pegged down behind the first island chain. In signing up to AUKUS, Australia is explicitly endorsing that American ambition.

But surely, it might be argued, China is an expansionist power and would threaten Australia if America were not there to protect against that threat. In fact, there is not much reason to believe that China is an expansionist power, though it clearly wants to reunite Taiwan with the mainland and has made no secret of that ambition. With the exception of some militarised islands in the South China Sea, China has only one military base outside its immediate vicinity, in Djibouti. There can be little doubt, however, that China resents its encirclement by US forces in South Korea, Japan, Guam, Palau, the Philippines, Papua New Guinea, and Australia. It is not hard to imagine how the U.S. would react if China had forces in Canada or Mexico. Certainly, those of us old enough to remember the Cuban Missile Crisis of 1962 well understand the likely American reaction to such encirclement.

Might China attack Australia in the absence of Australia’s having a close military alliance with the United States, if not AUKUS? It is very hard to imagine what the motivation for such an attack might be: Australia already provides most of what China wants from Australia through mutually beneficial two-way trade.

By remaining in AUKUS, Australia effectively delegates its foreign policy to Washington. If the US chooses to go to war with anybody in the Pacific region, Australia is effectively obliged to follow.

Looking back over the last 60 years and reflecting on Vietnam, Afghanistan, Iraq, and now Iran – all unmitigated disasters from every point of view - handing authority to Washington for Australia's foreign policy seems absolutely absurd. This is especially true with the current Administration in Washington, an Administration which appears to see nothing improper in kidnapping the president of Venezuela, blockading Cuba, sinking umpteen small craft in the Caribbean on the suspicion that drugs were being smuggled, threatening the takeover of Greenland and attacking Iran, twice, while negotiations were underway. Why Australia would want to pre-commit to supporting American foreign policy in Asia by proceeding with the AUKUS deal is beyond my comprehension.

But supposing I am wrong and China really does intend to go to war with the United States. Surely under those circumstances Australia should be allied to the United States? It is a reasonable supposition that if a war between China and the United States went nuclear, there would be no winners. Even though the United States has a substantially larger arsenal of nuclear weapons than China does, China still has enough nuclear weapons to inflict enormous damage on the United States.

And if a US-China conflict did not go nuclear? According to Hugh White, Professor of Strategic Studies at the ANU, such a war would be likely to be won by China partly because China now has a vastly superior shipbuilding capacity to that of the US and partly because China would be fighting over very much shorter supply lines. What Australia could contribute to such a fight is very unlikely to make a fundamental difference to the outcome.

So it is extraordinarily hard to see the upside for Australia in being part of the AUKUS arrangement. It effectively defines Australia's largest trading partner as an enemy when Australia has absolutely no reason to do that. In the absence of AUKUS, China has no reason to see Australia as an enemy. AUKUS simply paints a target on Australia's back and hands the trigger to Washington.

Better by far to adopt the approach which Singapore has been following for some time: a friend of both the United States and China and an enemy of neither.

But the second point I want to make is that AUKUS is also a headache for New Zealand, not because we are a member of AUKUS (though the current New Zealand Government has been giving consideration to being part of the so-called AUKUS Pillar 2) but rather because we have a close military relationship with Australia. At the emotional level that has been true since April 1915 at Gallipoli. But that relationship has been formalised a number of times since then and it is almost inconceivable that New Zealand would sit on the sidelines if Australia were under attack.

So, in subcontracting Australia's foreign policy to Washington, Canberra is also committing New Zealand to a similar stance vis-à-vis the United States and China.

Of course, there are those in the New Zealand Government and in the New Zealand defence, intelligence and foreign affairs establishment who are only too happy to subcontract our foreign policy to Washington. Our Prime Minister was very reluctant indeed to make any critical remarks about America's recent attack on Iran while, incredibly, our Minister of Foreign Affairs has attempted to make cheap political points at the expense of the relationship with the country which, for us too, is our largest trading partner by a very considerable margin.

So for as long as New Zealand has a close military relationship with Australia, AUKUS is a serious threat not just to Australia but also to New Zealand.

Those of us who care deeply about foreign policy would very much prefer to see Australia withdraw from AUKUS. There must be many better ways of spending A$360 billion.

Don Brash

Governor of the Reserve Bank of New Zealand, 1988-2002

Leader of the New Zealand National Party, 2003-2006

24 August 2026