Secretary of State Marco Rubio’s recent Munich Security Conference speech, and much of the reaction to it, focused on the transatlantic alliance. Yet his warning that weak allies ultimately weaken the United States applies even more urgently in the Indo-Pacific, where U.S. strategy increasingly depends on allied endurance.
As Washington deepens military integration with Australia under the Australia, United Kingdom, and U.S. partnership, the central risk is not immediate confrontation with China but alliance erosion: the gradual loss of partner capacity that narrows U.S. options before conflict begins.
Few U.S. allies possess Australia’s natural insulation. An island continent surrounded by oceans and rich in resources, Australia was born with an inherited strategic advantage: a moat in Warren Buffett’s terms.
But a moat is not a guarantee. It is a margin. In alliances, unused margin is not neutral; risk migrates from the protected state to the guarantor. Geography buys time, but only preparation turns insulation into endurance.
U.S. alliance planning assumes warning time, logistical depth, and partner endurance before a crisis begins. Australia has long functioned as a strategic constant, an ally whose geography was assumed to guarantee resilience against coercion.
When that assumption degrades, risk compounds. U.S. contingency planning becomes more complex, force posture less flexible, and redundancy begins to resemble vulnerability.
Australia’s 2023 Defence Strategic Review contains a warning Washington should not ignore: “Australia does not have effective defence capabilities relative to higher threat levels.” It also states that the long-assumed 10-year warning window for conflict no longer exists, meaning the strategic buffer underpinning allied planning has already eroded.
Australia currently spends just over 2% of GDP on defense, below the higher readiness expectations now emerging in Washington.
U.S. deterrence now depends on whether allies can hold long enough for U.S. forces to arrive. When partner endurance weakens, Washington shoulders risk earlier, narrowing its strategic choices while Beijing gains leverage without escalation.
Australia’s net overseas migration peaked at over 500,000 in 2022–23, among the highest rates in the developed world relative to population, and has remained elevated. Growth at that scale risks outpacing housing and infrastructure capacity, reducing the margin available to absorb external shock.
Rapid demographic change can also generate internal mobilization pressures. As domestic stability becomes a governing priority, political attention shifts inward, narrowing the margin available during periods of external coercion.
Declining productivity reduces the fiscal and industrial base required to sustain defense spending under pressure. Labor productivity fell 3.5% in 2022–23, the sharpest decline since the current data series began, with only a modest recovery since, while GDP per capita has repeatedly stalled as population growth outpaces output.
Australia’s economic base is highly concentrated. Iron ore accounts for roughly one-fifth of exports, with China the dominant buyer. As Beijing diversifies supply, it trades efficiency for resilience and Canberra loses leverage. Allies that lose economic margin do not merely weaken. Rather, they become more expensive to defend.
Much of post–Cold War industrial restructuring was appropriate. The failure was not deindustrialization itself, but the loss of judgment about which capabilities could be surrendered and which underpinned national endurance.
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Energy security illustrates the consequence of that misjudgment. Australia holds one of the lowest fuel reserves in the OECD, measured in days of net imports. In a maritime theater, disrupted supply lines could immobilize air and naval operations, creating a first-order strategic liability.
In contrast, the absence of margin imposes discipline. Israel has no moat and no insulation. Under persistent constraint, choices carry immediate consequences, and decisions become irreversible bets.
Australia operates at the opposite end of the spectrum. Comfort defers cost, allowing risk to accumulate while the gap between confidence and capability widens.
Australia still retains strategic choice, but only while margin remains. Resilient states convert advantage into capacity, align growth with productivity, and reinforce defense credibility before inherited advantages become liabilities.
Rubio declared in Munich that the U.S. is no longer prepared to subsidize complacent allies. The Indo-Pacific may test that principle before Europe does.
Alliances succeed less through promises than through preparation. When advantage is mistaken for security, deterrence becomes someone else’s responsibility.
Stephanie Campbell is an Australian lawyer and strategist focused on geopolitics, deterrence, and alliance strategy. Her work has appeared in the New York Sun and elsewhere.