Oceania: Geopolitics and Military Security
Oceania: Geopolitics and Military Security
1. Introduction: Oceania's New Reality
From Backwater to Centre Stage
For decades perceived as a tranquil periphery in global affairs, Oceania has decisively moved towards the centre stage of international attention over the past ten years. This heightened prominence stems not merely from the familiar narrative of great power rivalry, but from a potent confluence of factors intrinsic to the region itself and pressing global challenges. Intensifying geopolitical competition, most notably between the United States and China, casts a long shadow across the vast Blue Pacific. Simultaneously, the escalating climate crisis poses an existential threat to many island nations, amplifying their voices in global forums and demanding international action. Adding another layer of complexity is the growing confidence and assertiveness of Pacific Island Country (PIC) leaders, who increasingly demand that engagement occurs on their terms, reflecting their priorities.
Within this dynamic environment, Australia and New Zealand stand as pivotal regional actors. As established powers with deep historical, cultural, and economic ties to the Pacific, both nations are actively recalibrating their foreign and defence policies to navigate these turbulent currents. Their strategies, alliances, and capabilities are under scrutiny as they seek to secure their interests while supporting the stability and prosperity of their island neighbours. This report examines the geopolitical and military landscape of Oceania, focusing on Australia and New Zealand, within the strategic context of 2024-2025, drawing upon recent policy pronouncements, defence strategies, budget allocations, and expert analyses.
The Blue Continent's Strategic Value
Oceania's strategic significance extends far beyond its role as an arena for geopolitical competition. The 8.5 million square kilometres of ocean under the stewardship of Pacific nations constitute the largest maritime region globally. This vast expanse plays a critical role in global climate regulation, producing a significant portion of the world's oxygen and absorbing vast amounts of carbon dioxide. Its rich fisheries and potential seabed mineral resources are of increasing importance to a resource-hungry planet. Furthermore, the Pacific serves as a vital connective space between the economic powerhouses of Asia and the Americas.
This inherent environmental and resource value is becoming increasingly entangled with geopolitical calculations. While climate change represents an existential threat demanding cooperative solutions, and resources like fisheries are crucial for local economies, the intensifying competition between major powers injects a strategic dimension into these domains. Access to fisheries, critical minerals, and strategic sea lanes becomes a point of contestation. China's pursuit of "deepening blue economy" deals, encompassing maritime initiatives from deep-sea mining partnerships to port infrastructure development, exemplifies how environmental and resource spheres are being transformed into arenas of strategic competition. Consequently, environmental policy, resource management, and climate action in Oceania cannot be divorced from the broader geopolitical and security dynamics shaping the region.
Defining the Scope
This analysis centres on Australia and New Zealand, examining their roles, strategies, and military postures within the wider Oceania context. It acknowledges the significant diversity across the Pacific's sub-regions – Melanesia, Polynesia, and Micronesia – and considers the perspectives and agency of Pacific Island Countries as they interact with larger powers and navigate shared challenges.
2. US-China Competition in the Pacific
Mapping the Competition
The geopolitical landscape of Oceania is increasingly defined by the strategic rivalry between China and the United States, along with its key allies and partners in the region, including Australia, New Zealand, France, the United Kingdom, and Japan. This competition manifests across diplomatic, economic, and security dimensions.
China has significantly expanded its footprint, employing a strategy centred on economic engagement – offering substantial aid, trade, and investment, particularly through its Belt and Road Initiative (BRI), which gained significant traction following the 2018 APEC Summit in Port Moresby. Beijing seeks access to the region's abundant natural resources, including timber, minerals, and fisheries, while simultaneously pursuing geostrategic objectives aimed at diminishing US military influence, complicating allied defence planning, and establishing its own presence. Its diplomatic messaging often contrasts perceived US distance and neglect with China's proximity and the economic benefits it offers to partners, provided they align with its interests. The rapid expansion of China's diplomatic network, including the swift establishment of new embassies, underscores this push.
In response, the United States and its allies have intensified their engagement. Washington frames its strategy around safeguarding US national interests, bolstering deterrence against China, and promoting a "free and open Indo-Pacific". This involves strengthening alliances and partnerships, increasing diplomatic presence through initiatives like opening new embassies in Solomon Islands, Tonga, and Vanuatu, enhancing security cooperation (including training and agreements with Compact States like FSM, RMI, and Palau), providing development assistance, and launching collaborative frameworks such as the Partners in the Blue Pacific (PBP). Shared democratic values are often emphasized as a point of contrast with China.
Key turning points have sharpened this competition. China's success in signing up most PICs to the BRI by 2018 marked a significant expansion of its economic influence. More recently, the signing of a secretive security agreement between China and the Solomon Islands in 2022 sent shockwaves through Washington, Canberra, and Wellington, accelerating Western counter-efforts. This deal was seen as mirroring China's playbook in other strategic locations like Djibouti and Sri Lanka, potentially enabling greater power projection capabilities.
Pacific Agency and Strategy
Crucially, Pacific Island Countries are not passive bystanders in this geopolitical contest. Leaders across the region have demonstrated increasing confidence and assertiveness, determined that their nations' interests are not sidelined by those of larger powers. They actively seek to leverage the rivalry between major powers to maximize development assistance and secure better terms for cooperation. The oft-stated policy of being "friends to all, enemies to none" reflects this desire to maintain autonomy and avoid being forced into exclusive alignments, although navigating this path proves challenging given the diverse relationships and security ties across the region. PIC leaders have pointedly rejected overtures from traditional partners like Australia and the US to rely less on China, emphasizing their need for development assistance from all available sources.
The rationale behind this approach is clear: PICs face immense development challenges, including a significant infrastructure deficit estimated at an additional $US2.8 billion by 2030, coupled with the need for $US300 million annually for climate change adaptation. Highly vulnerable to global economic fluctuations, many were severely impacted by the COVID-19 pandemic's economic downturn. In this context, all offers of assistance, including those from China, are generally welcomed to address pressing needs.
Risks of Competition
While increased attention brings potential benefits in terms of resources, the intensifying competition carries significant risks for the region. Pacific leaders express deep concerns that great power rivalry could lead to the militarisation of Oceania, subordinate Pacific priorities to the geostrategic agendas of external actors, and divert crucial development resources away from vital areas like health, climate adaptation, and infrastructure.
There is a tangible danger that the "heat of competition" will exacerbate domestic discord within Pacific nations. Unmanaged competition for influence can compromise good governance, transparency, and regional solidarity. Aid channelled directly through political figures, rather than robust institutional mechanisms, presents a particular risk of fueling corruption and political instability. The 2021 riots in Honiara, partly sparked by concerns over Beijing's influence on local politicians, serve as a stark warning of how external rivalries can ignite internal tensions.
This dynamic presents a dilemma for traditional partners like Australia and New Zealand. While seeking to counter China's influence, they aim to align their assistance with Pacific priorities and uphold high standards of aid effectiveness, accountability, and good governance. However, these principles can sometimes clash with the speed and ease of access to finance often highlighted as advantages by non-traditional donors like China, whose aid may be perceived as less encumbered by conditionality, even if aimed at currying elite favour.
The very dynamic of geopolitical competition, therefore, risks becoming counterproductive for all external actors seeking stable and reliable partners in the Pacific. The influx of aid and strategic attention, driven by the rivalry, inherently strains the limited administrative and governance capacity within many PICs. This pressure incentivizes donors—potentially including Western nations feeling compelled to compete directly—to prioritize swift engagement and securing influence over the slower, more complex processes required for ensuring good governance and local ownership. Such dynamics can inadvertently empower elites who manipulate external partners for personal or political gain, foster corruption, and deepen societal divisions. Consequently, the competitive process itself, fueled by the strategic objectives of outside powers, can weaken the very governance structures and social cohesion necessary for long-term stability, potentially leading to outcomes—like increased fragility or state failure—that ultimately undermine the interests of all external players, including those like Australia and New Zealand who champion good governance.
Furthermore, recent fluctuations in US policy and perceived commitment levels may be inadvertently creating strategic opportunities for Beijing. China actively monitors and likely seeks to capitalize on periods of perceived uncertainty regarding US reliability in the region. Actions such as pauses or reviews of US foreign assistance, particularly development aid which forms a large part of US engagement in the Pacific, can create damaging perception challenges among regional partners who value presence and consistent relationships. This dynamic appears to be influencing the strategies of key US allies. Australia, for instance, has recently adopted a noticeably more assertive and arguably transactional approach in its immediate neighbourhood, securing bespoke bilateral agreements with Tuvalu, Nauru, and Papua New Guinea that contain explicit security provisions designed to limit China's ability to gain strategic footholds. This shift towards proactive, bilateral "strategic denial" can be interpreted not only as a response to China's growing assertiveness but also as a potential hedge against anxieties about the consistency of US engagement, compelling Canberra to take more direct action to secure its sphere of influence, potentially diverging from broader multilateral frameworks if necessary.
3. Australia's Pacific Strategy
Strategic Pillars: Alliances and Regional Focus
Australia's strategic posture in the increasingly contested Indo-Pacific rests firmly on two interconnected pillars: its long-standing alliance with the United States and a sharpened focus on its immediate region, particularly the Pacific Islands. The alliance, formalized under the ANZUS Treaty, remains central to Canberra's security calculus, providing a bedrock of military and diplomatic support. Australian strategic thinking emphasizes diplomacy as the nation's frontline, but explicitly states this must be underwritten by credible military capability.
Key multilateral security arrangements amplify Australia's strategic weight. The AUKUS partnership with the UK and US is a cornerstone initiative, focused on delivering nuclear-powered submarines (Pillar I) and fostering collaboration on advanced technologies like AI, cyber, and hypersonics (Pillar II). The Quadrilateral Security Dialogue (Quad) involving Australia, India, Japan, and the US provides another platform for cooperation on regional security and development challenges. Both AUKUS and the Quad are widely seen as mechanisms aimed, at least in part, at balancing China's growing power and influence.
Geographically, Australia defines the Indo-Pacific as the region where its core interests – security, stability, and prosperity – are most directly engaged. Within this vast area, the Pacific Islands represent Australia's immediate neighbourhood. Canberra views becoming the "partner of choice" for Pacific nations as fundamental to its own security and stability, aiming to empower neighbours to meet their own security needs.
Pacific Engagement Policy ("Step-up" Evolution)
Australia's engagement with the Pacific has evolved significantly since the announcement of the "Pacific Step-up" in 2016. The current policy framework integrates diplomatic, development, economic, and security elements, focusing on shared priorities identified in consultation with Pacific partners. Key areas of collaboration include boosting economic growth, enhancing security and policing capabilities, protecting vital fisheries resources, fostering cultural connections through initiatives like sports diplomacy, and, critically, addressing the existential threat of climate change.
Several specific initiatives underpin this engagement:
The Pacific Engagement Visa (PEV) aims to deepen people-to-people links and provide new migration pathways, responding directly to Pacific requests for greater regional mobility.
The Australian Infrastructure Financing Facility for the Pacific (AIFFP) provides grants and loans for quality infrastructure projects.
The Pacific Fusion Centre, based in Vanuatu, enhances regional security awareness by providing training and intelligence sharing among Pacific security officials.
Significant climate finance contributions, including a foundational $AUD100 million for the Pacific Resilience Facility (PRF) and $AUD50 million for the Green Climate Fund (GCF), target climate mitigation and adaptation needs.
The Pacific Policing Initiative, announced in 2024 alongside Pacific leaders, aims to strengthen collective security through regional police training centres.
Support for Pacific Trade Invest (PTI) networks facilitates business growth and export opportunities for Pacific businesses.
Australia remains the largest development partner in the region, committing a record $AUD2 billion in Official Development Assistance (ODA) to the Pacific in 2024-25. However, reflecting broader trends, Australia's overall Official Development Finance (ODF) mix has seen an increasing share of loans alongside traditional grants since the pandemic.
A notable recent development is Australia's negotiation of bespoke bilateral agreements with key Pacific partners, signifying a more assertive and tailored approach to securing its interests and countering external influence. These include:
The Falepili Union with Tuvalu: A landmark treaty providing climate adaptation support, migration pathways with dignity for Tuvaluans facing sea-level rise, and a mutual security guarantee restricting Tuvalu's security arrangements with third parties without Australian agreement.
The Nauru-Australia Treaty: Aimed at bolstering Nauru's economic resilience and security, ensuring access to vital banking services, and underpinned by mutual security commitments requiring consultation.
The Bilateral Security Agreement with Papua New Guinea: Elevating the longstanding security relationship, ensuring consultation on security developments, and reinforcing Australia's role as PNG's primary security partner.
These agreements, particularly the security components limiting partners' engagements with other nations, represent a significant tactical shift within Australia's broader strategy. While framed as partnerships responding to Pacific needs (like climate mobility for Tuvalu), they incorporate explicit 'strategic denial' elements designed to proactively counter China's perceived attempts to gain influence in Australia's immediate neighbourhood. This move was likely spurred by the alarm generated by the China-Solomon Islands security pact. While potentially effective in specific bilateral contexts, this assertive approach risks being perceived by the wider Pacific community as undermining regional solidarity or forcing nations to choose sides, potentially conflicting with the collective spirit championed by the Pacific Islands Forum.
Defence Strategy: National Defence Strategy (NDS) 2024
Released in April 2024, Australia's inaugural National Defence Strategy (NDS) marks a significant evolution in defence thinking, driven by the assessment of a rapidly deteriorating strategic environment characterized by increased competition, reduced strategic warning times, and the heightened prospect of conflict. The NDS mandates a shift for the Australian Defence Force (ADF) from a 'balanced force' prepared for various contingencies to an 'integrated, focused force' designed specifically to address the nation's "most consequential strategic risks".
The foundational concept is "National Defence," which calls for a coordinated, whole-of-government and whole-of-nation approach, integrating all elements of national power – diplomatic, economic, strategic, and military – to defend Australia and advance its interests.
The cornerstone of Defence's contribution to National Defence is the adoption of a "Strategy of Denial." This strategy aims to deter potential adversaries by convincing them that the costs and risks of hostile action against Australian interests outweigh any potential benefits. The focus is on possessing the capability to defeat aggression, particularly within Australia's northern maritime approaches, thereby denying an adversary the confidence of achieving its objectives.
The NDS outlines five key strategic objectives for the ADF:
Defend Australia and its immediate region.
Deter through denial any attempt to project power against Australia via its northern approaches.
Protect Australia's economic connection to the region and the world.
Contribute with partners to the collective security of the Indo-Pacific.
Contribute with partners to the maintenance of the global rules-based order.
ADF Capabilities, Budget, and Deployments
To implement the Strategy of Denial, the NDS and the accompanying 2024 Integrated Investment Program (IIP) mandate a substantial uplift in ADF capability, backed by significant long-term funding increases. The Defence budget is projected to nearly double over the decade, reaching approximately $AUD100 billion annually by 2033-34, equating to over 2.3% of GDP. The 2024-25 budget stands at $AUD55.7 billion, roughly 2.02% of GDP. However, a significant portion of the announced new funding ($AUD50.3 billion over the decade) is backloaded, falling outside the immediate four-year forward estimates period.
Investment priorities reflect the focus on denial and projection:
Maritime: This domain receives the largest share of investment (38% of IIP). The centrepiece is the acquisition of nuclear-powered submarines (SSNs) through AUKUS Pillar I, representing the single largest capability project ($AUD53-63 billion planned investment over the decade to 2033-34). The IIP also includes funding for an expanded surface combatant fleet.
Long-Range Strike: Acquisition of capabilities like the Tomahawk land-attack cruise missile, High Mobility Artillery Rocket Systems (HIMARS), and the Precision Strike Missile (PrSM) is prioritized to hold adversaries at risk from greater distances.
Other Priorities: Include enhancing autonomous systems, strengthening cyber capabilities, hardening northern bases, and improving logistics and targeting enterprises.
This reprioritization has involved difficult decisions, including cancelling or scaling back other programs, such as reducing the number of planned Redback Infantry Fighting Vehicles from 450 to 129.
ADF operational tempo remains high, focused on demonstrating presence and enhancing interoperability. Regional Presence Deployments (RPDs) involve regular maritime and air deployments throughout the Indo-Pacific. HMAS Hobart conducted an RPD in early 2025, participating in exercises like the French-led La Perouse. HMAS Brisbane returned in January 2025 after a five-month deployment that included Australia's first live-firing of a Tomahawk missile. Indo-Pacific Endeavour (IPE) serves as the ADF's flagship regional engagement activity, involving multiple assets and engaging numerous Southeast Asian and Northeast Indian Ocean nations annually. Australia also participates actively in major international exercises like Talisman Sabre (with the US and others, including Japan), Pitch Black (air combat exercise), and Malabar (with Quad partners).
A critical challenge for implementing the NDS is workforce. The ADF faces significant recruitment and retention hurdles in achieving the growth targets needed for the integrated, focused force. The NDS calls for exploring options like recruiting non-Australian citizens and improving retention initiatives.
The heavy reliance on long-lead time, high-end capabilities, particularly the AUKUS submarines, creates a potential strategic vulnerability. While the NDS acknowledges reduced strategic warning times, the cornerstone capability intended to address this – the SSN fleet – will not be fully realised for decades (first Virginia-class planned for early 2030s, first Australian-built SSN-AUKUS in early 2040s). This creates a potential medium-term 'capability gap' where Australia is investing massively but lacks the central deterrent envisioned by its strategy. Simultaneously, the profound technological and operational integration required by AUKUS deepens Australia's dependence on the US and UK. While framed as enhancing sovereign capability, the immense cost and reliance on allied technology, training, and potentially basing may paradoxically constrain Australia's independent foreign policy options, potentially tying its strategic decisions more closely to its AUKUS partners than the rhetoric of self-reliance might suggest.
4. New Zealand's Pacific Strategy
Foreign Policy Framework: Independence and Partnerships
New Zealand's foreign policy operates within a distinct framework characterized by a long-standing commitment to an "independent foreign policy". This principle, often seen as differentiating Wellington from Canberra's closer alignment with Washington, is considered a source of diplomatic strength and credibility, particularly within the Pacific region where it allows New Zealand to act as a "trusted bridge builder". Its nuclear-free legislation, enacted in 1987, remains a cornerstone of this identity.
However, this independence coexists with deep and strengthening ties to traditional partners. New Zealand is a core member of the Five Eyes intelligence-sharing alliance (with Australia, Canada, UK, US) and maintains close security relationships with Australia (its only formal ally), the US, and other like-minded nations including Japan, South Korea, and European partners engaging in the Indo-Pacific, often through NATO frameworks. Wellington shares the broad strategic assessments of its partners regarding the deteriorating global security environment.
The current National Party-led coalition government, under Prime Minister Christopher Luxon, has initiated a "Foreign Policy Reset". This entails sustaining the deep focus on the Pacific region while significantly increasing engagement with Southeast Asia (including ASEAN), India, and North Asia. It also involves reinvigorating relationships with traditional partners and targeting multilateral efforts on issues of direct national interest or core values.
A key point of discussion and debate within this framework is New Zealand's potential participation in Pillar II of the AUKUS agreement, which focuses on cooperation in advanced military technologies. The government has expressed interest and is exploring options, seeing potential benefits for defence industry and alignment with strategic policy settings. However, critics raise concerns that joining would compromise New Zealand's independent foreign policy, draw it into a US-led containment strategy against China (its largest trading partner), damage its unique Pacific identity, and potentially conflict with its non-nuclear principles, given the integration of Pillar II technologies with Pillar I's nuclear submarines.
Pacific Focus: The "Pacific Reset" and Development Leadership
New Zealand places a strong emphasis on its role within the Pacific family, guided by principles of partnership, mutual respect, and long-term sustainability. This commitment is reflected in its development assistance program, with approximately 60% of its International Development Cooperation (IDC) budget allocated to the Pacific region.
Key development initiatives include:
The Recognised Seasonal Employer (RSE) scheme, a significant labour mobility program benefiting both the New Zealand economy and Pacific workers through remittances (estimated over $NZ100 million annually).
Substantial climate finance, with half of New Zealand's global climate-related development assistance dedicated to the Pacific, supporting resilience and adaptation efforts.
Support for sustainable fisheries management through assistance to the Forum Fisheries Agency (FFA) and direct monitoring, control, and surveillance efforts to combat IUU fishing.
Contributions to regional stability and peace processes, such as historical involvement in Bougainville and the Regional Assistance Mission to Solomon Islands (RAMSI).
Following a review in 2024, New Zealand is refining its IDC approach to achieve greater strategic impact. This involves focusing on fewer, larger projects, increasing collaboration with partners like the US, Australia, Japan, and European nations to leverage additional support for the region, and working more strategically with Pacific governments to strengthen their own service delivery systems. The overarching goal remains supporting sustainable development and stability in its Pacific neighbourhood.
Defence Modernisation: Defence Capability Plan (DCP) 2025
Released in April 2025, the Defence Capability Plan (DCP) 2025 represents a major shift in New Zealand's defence posture. Acknowledging a more challenging and dangerous strategic environment, the plan aims to rebuild the New Zealand Defence Force (NZDF) after years of underfunding and high personnel attrition rates.
The most significant aspect is a substantial increase in defence funding. The government has committed to lifting defence spending from just over 1% of GDP towards a target of over 2% of GDP within the next eight years. The plan allocates $NZ12 billion for capability and support over the four years from 2025 to 2028, including $NZ9 billion in new funding. This funding level is described as a "floor, not the ceiling," with the DCP to be reviewed every two years to adapt to changing circumstances.
The DCP 2025 outlines key objectives for the NZDF:
Become combat capable with enhanced lethality and deterrent effect, including acquiring enhanced strike capabilities.
Act as a force multiplier with Australia and be interoperable with key partners, involving deeper integration and alignment.
Be innovative and possess improved situational awareness, exploring new technologies like uncrewed systems, space capabilities, and enhanced cyber defence.
NZDF Capabilities, Budget, and Operations
The increased budget outlined in DCP 2025 funds a range of capability enhancements and replacements planned for 2025-2028:
Maritime: Replacing the SH-2G(I) Super Seasprite maritime helicopters (est. >$NZ2bn); sustaining the two Anzac-class frigates (est. $NZ300-600m); acquiring persistent maritime surveillance through uncrewed surface vessels (est. $NZ50-100m).
Strike: Investing in enhanced strike capabilities (est. $NZ100-300m), potentially including missiles for P-8A Poseidon aircraft and frigates, or land-based options.
Land: Upgrading Javelin anti-tank missiles; implementing the Network Enabled Army program (digital communications, EW systems, est. $NZ300-600m); replacing light/medium vehicles; acquiring counter-UAS systems (est. <$NZ50m).
Air/Space: Acquiring long-range remotely piloted aircraft (drones) for persistent ISR (est. $NZ100-300m); replacing the two Boeing 757 strategic transport aircraft (est. $NZ600m-1bn); investing in space-based capabilities (communications, surveillance, navigation, est. $NZ300-600m).
Enablers: Enhancing cyber security; improving intelligence functions; modernizing digital services, logistics, and the defence estate (including accommodation); boosting Defence Science & Technology and establishing a Technology Accelerator.
These investments build upon recent major acquisitions, notably four Boeing P-8A Poseidon maritime patrol aircraft and five Lockheed Martin C-130J-30 Super Hercules tactical transport aircraft, which significantly enhance NZDF capability and improve interoperability, particularly with Australia which operates the same platforms.
Operationally, the NZDF maintains a focus aligned with New Zealand's foreign policy priorities. This includes maritime security patrols and surveillance within its extensive EEZ and the wider Pacific; providing Humanitarian Assistance and Disaster Relief (HADR) capabilities domestically and regionally; contributing to peacekeeping and stability operations; and supporting New Zealand's presence and scientific research in Antarctica through Operation Antarctica, a long-standing annual deployment. NZDF personnel also deploy further afield, contributing to multinational efforts upholding the rules-based order, such as commanding the Combined Task Force 150 maritime security operation in the Middle East.
Addressing personnel shortfalls is a critical enabler for the DCP 2025. The government aims to rebuild the NZDF's core after significant attrition, implementing a new workforce strategy. Encouragingly, attrition rates have fallen significantly, from a high of 15.8% in December 2022 to 7.5% in February 2025. The long-term goal is to grow the NZDF by approximately 2,500 personnel by 2040.
The substantial increase in defence spending and the clear focus on enhancing combat capability and interoperability, especially with Australia, signals a pragmatic adjustment in New Zealand's strategic posture. While Wellington continues to articulate its commitment to an independent foreign policy, these concrete military modernization steps indicate a deeper alignment with traditional Western security partners, driven by the shared perception of a deteriorating strategic environment. This practical convergence, particularly the exploration of AUKUS Pillar II involvement, inevitably creates tension with its carefully managed relationship with China and fuels ongoing domestic debate about the future trajectory and meaning of New Zealand's independence on the world stage.
There is also a potential longer-term implication for New Zealand's regional influence. Its unique Pacific identity, stemming from its Māori heritage and large Pasifika population, and its track record on indigenous rights, grants it a level of trust and influence in the Pacific that often distinguishes it from Australia or the US. This position allows it to act as an effective diplomatic bridge. However, a pronounced shift towards closer military integration with Anglosphere powers, particularly if it involves association with AUKUS (which is viewed with apprehension by some in the Pacific and seen as contrary to regional desires for demilitarisation), could be perceived by Pacific Island nations as Wellington prioritising traditional security alliances over Pacific perspectives and solidarity. Such a perception risks eroding the very trust that underpins New Zealand's distinct regional influence, potentially diminishing its diplomatic effectiveness and creating opportunities for other actors, like China, to position themselves as more attuned to Pacific priorities.
5. Australia-New Zealand Defence Integration
Foundation: Shared History, Values, and Alliance
The defence relationship between Australia and New Zealand is built upon exceptionally deep foundations. Described as "friends, family and formal allies," the two nations share geography, history, democratic values, and a broadly common strategic outlook as Pacific nations. This closeness is often characterized as "intuitive," suggesting a natural, permanent partnership where significant divergence is almost unthinkable. The 1951 ANZUS Treaty provides the formal architecture for the alliance, enshrining mutual security commitments. This commitment has been recently reaffirmed and modernized, with leaders acknowledging that a significant cyber-attack on either nation could potentially trigger treaty consultations and constitute an armed attack under Article IV, requiring a joint response determination.
Deepening Defence Cooperation: Policy and Practice
Driven by shared concerns about the increasingly complex and challenging strategic environment, Australia and New Zealand are actively pursuing deeper defence integration. Formal mechanisms like the annual Australia-New Zealand Foreign and Defence Ministerial Consultations (ANZMIN) provide high-level direction for this agenda.
A key outcome of the December 2024 ANZMIN meeting was the signing of an updated Joint Statement on Closer Defence Relations (CDR). This document sets contemporary objectives for the bilateral defence relationship, explicitly reaffirming the commitment to modernize the alliance, strengthen defence cooperation, and progress towards an increasingly integrated 'Anzac' force. This concept signifies a move beyond traditional interoperability towards a state where the two defence forces can "plan together, procure together, and operate together in a much more significant way," effectively acting as a combined force in defence of shared interests.
The CDR outlines five Shared Defence Objectives and commits the two nations to tangible actions aimed at achieving greater integration:
Increased coordination, alignment, and interoperability: Ensuring forces can work seamlessly together.
Stepped-up combined operations and activities: Increasing joint presence and operational tempo, particularly in the Indo-Pacific.
Common, complementary, and interoperable capability: Prioritising combined defence procurement and leveraging mutual recognition of defence industrial bases.
Enhanced information sharing: Improving secure communication and intelligence exchange.
Improved policy, diplomatic, and industrial coordination: Aligning strategic planning and supporting defence industry integration.
Practical manifestations of this deepening integration are already evident. High-level military officer exchanges are in place, with an Australian one-star officer serving as Deputy Commander Joint Forces New Zealand and a New Zealand two-star officer commencing as Deputy Chief of Joint Operations in Australia. Combined participation in major exercises like Pitch Black (Air Force) and Talisman Sabre (Joint) is increasing. Service-specific integration plans, such as the Army's Plan Anzac and the Air Force's Plan Astra, are being implemented. Joint initiatives in the Pacific, like the establishment of the Pacific Response Group for HADR coordination, are underway.
Strategic Rationale and Challenges
The primary driver for this enhanced integration is the shared assessment of a deteriorating strategic environment, marked by great power competition, military build-ups, and challenges to the rules-based order. By acting together, Australia and New Zealand aim to be a "force multiplier," enhancing their collective strategic weight, improving their capacity to respond to regional contingencies, and strengthening collective deterrence. Addressing shared non-traditional threats, particularly the impacts of climate change in the Pacific, also necessitates closer cooperation.
Despite the strong momentum towards integration, potential friction points remain. Historically, Australia and New Zealand have sometimes held different perspectives on strategic threats – the "different nightmares" analogy. Managing expectations, particularly Canberra's occasional frustration with perceived lower levels of New Zealand defence spending (though this is now being addressed by Wellington's DCP 2025), can create underlying tensions. Furthermore, Australia's deeper commitment to the US alliance and its membership in AUKUS Pillar I creates a structural difference compared to New Zealand's more nuanced positioning, which requires careful management within the alliance framework.
The deliberate push towards an "integrated Anzac force" signifies a qualitative shift in the trans-Tasman defence relationship. The language used in official statements – "integrated," "seamless," "plan together, procure together, operate together" – points to an ambition that transcends standard alliance interoperability goals. It suggests an aim for near-operational fusion, maximizing the collective military capacity of the two nations in response to perceived heightened regional threats. Achieving this ambitious vision, however, presents significant practical challenges. It necessitates deep alignment not only in capability development and procurement but also in doctrine, training, command and control systems, intelligence sharing protocols, and logistics. This level of integration inevitably creates new dependencies and may require compromises on national procurement preferences or operational autonomy, deepening mutual reliance in ways previous cooperative arrangements did not.
While the strategic alignment is strengthening, subtle but persistent differences remain in how Canberra and Wellington publicly articulate their defence priorities and regional roles. Australia's 2024 NDS is explicitly framed within the context of US-China competition, emphasizing a Strategy of Denial focused on deterring state-based aggression in its northern approaches. Its recent bilateral security pacts in the Pacific also reflect this hard security focus. In contrast, New Zealand's 2025 DCP, while significantly boosting combat capability, continues to give strong prominence to HADR, Pacific partnerships, and upholding the global rules-based order. New Zealand officials also frequently emphasize the nation's distinct Pacific identity and its role as a diplomatic bridge-builder. Thus, even as practical military integration accelerates, driven by shared threat perceptions, Australia's public discourse tends towards great power competition and deterrence, while New Zealand maintains a relatively broader framing that incorporates development, diplomacy, and its independent voice alongside security concerns.
Table 1: Comparative Defence Postures: Australia vs. New Zealand (2024-2025)
6. Climate Change: The Major Security Threat
Climate Change as the "Single Greatest Threat"
Across the Pacific, there is unequivocal consensus among regional leaders and institutions that climate change represents the most profound and urgent security threat facing their nations. This view, formally enshrined in regional declarations like the Boe Declaration on Regional Security, is explicitly acknowledged and echoed by key partners, Australia and New Zealand.
The impacts are not distant projections but present realities, manifesting in diverse and damaging ways across the Blue Continent. Accelerating sea-level rise poses a literal existential threat to low-lying atoll nations such as Tuvalu, Kiribati, and the Marshall Islands. Coastal inundation and erosion are widespread, degrading land and infrastructure. Saltwater intrusion contaminates vital freshwater lenses, crucial for drinking water and agriculture on small islands. Ocean warming and acidification bleach coral reefs, jeopardizing the fisheries that underpin food security and economies, and reducing natural coastal defences. Changes in rainfall patterns lead to more intense storms and prolonged droughts. These environmental pressures directly undermine human security, impacting health, livelihoods, and food and water security across the region. Recent reports indicate sea level rise in parts of the western tropical Pacific is occurring at nearly twice the global average rate.
Security Dimensions
The security implications of climate change in Oceania are multifaceted. Environmental degradation acts as a potent "threat multiplier," exacerbating existing vulnerabilities such as poverty, resource scarcity, and potential political instability. Direct security concerns include heightened competition over diminishing resources like freshwater and arable land, and the widespread damage to critical infrastructure from extreme weather events and sea-level rise.
One of the most significant security challenges is climate-induced displacement and migration. As islands become uninhabitable or livelihoods unsustainable, populations may be forced to move, both internally and potentially across borders. This raises complex issues related to land tenure (often customary), resource strain in host communities, potential social tensions, and the very definition of statehood and maritime boundaries for nations facing inundation. Recognizing this challenge, Pacific nations are actively working, under the auspices of the PIF, to develop a regional, rights-based framework on climate mobility – a pioneering effort globally.
The increasing frequency and intensity of climate-related disasters also place a growing burden on regional defence forces, including the ADF and NZDF. These forces are increasingly called upon to provide Humanitarian Assistance and Disaster Relief (HADR) capabilities, both domestically and across the Pacific. While a vital function, this rising operational tempo for HADR tasks risks diverting resources and training focus from core warfighting competencies and preparedness.
Regional and Partner Responses
Pacific Island nations are at the forefront of global advocacy for climate action, utilizing platforms like the PIF to amplify their concerns and push for international commitments. This includes high-level engagement at the United Nations General Assembly on sea-level rise and pursuing advisory opinions on state obligations regarding climate change from international legal bodies like the International Court of Justice (ICJ) and the International Tribunal for the Law of the Sea (ITLOS).
Australia and New Zealand, as key regional partners, have made specific commitments to support Pacific climate resilience. Both nations have pledged significant funding to the Pacific Resilience Facility (PRF), a Pacific-led initiative designed to provide accessible finance for community-level resilience projects. Australia has rejoined the Green Climate Fund (GCF) and is investing in renewable energy transitions and climate adaptation programs across the region. New Zealand dedicates a substantial portion of its climate finance to the Pacific. The Australia-Tuvalu Falepili Union stands out as a unique bilateral response, directly addressing climate mobility alongside adaptation support.
However, challenges remain. Accessing international climate finance effectively remains difficult for many PICs, highlighting the need for simplified processes and grant-based funding rather than loans. Furthermore, global crises, such as conflicts in Ukraine and the Middle East, risk diverting donor attention and resources away from climate action.
Crucially, the credibility and strategic influence of partners like Australia and New Zealand in the Pacific are inextricably linked to their own domestic and international climate policies. Pacific leaders view climate change through a security lens, and they expect their partners, especially large neighbouring emitters, to demonstrate genuine commitment to mitigation and adaptation. Australia, in particular, has faced direct criticism from Pacific leaders for what has been perceived as insufficient action on reducing its own emissions and transitioning away from fossil fuels. This perceived gap between acknowledging the threat faced by the Pacific and taking commensurate domestic action can significantly undermine trust and weaken Australia's (and potentially New Zealand's) standing as a preferred security partner. It creates a strategic vulnerability, potentially opening doors for other actors, like China, who may face less scrutiny on their climate policies from PICs prioritizing immediate development needs. To be effective security partners in the Pacific, Australia and New Zealand must demonstrably address the region's self-defined primary security threat – climate change – through both regional support and credible domestic action.
The operational realities of climate change are also forcing a practical evolution in defence planning. The escalating frequency of severe weather events necessitates the integration of climate adaptation measures into defence infrastructure planning (e.g., hardening northern bases) and resilience assessments. The growing demand for HADR is blurring the traditional distinction between constabulary/aid roles and core defence functions. This necessitates consideration of how best to structure forces to meet HADR demands without compromising combat readiness, potentially through dedicated units or enhanced civilian agency capacity. The Boe Declaration's explicit inclusion of environmental security and resilience reflects this paradigm shift at the policy level, which military forces must now operationalize.
7. Other Regional Challenges
Beyond the immediate pressures of geopolitical competition and climate change, Oceania faces a complex array of interconnected challenges that shape its security and development landscape.
Economic Resilience and Development
Economic vulnerability remains a significant concern across the Pacific. Many nations are still grappling with the economic fallout from the COVID-19 pandemic, which severely impacted tourism-dependent economies and disrupted supply chains. PICs remain highly susceptible to external economic shocks and global conditions. Inflationary pressures and rising levels of debt distress are significant headwinds for several countries.
A substantial infrastructure gap persists, hindering economic diversification and growth. The Asian Development Bank estimated an additional $US2.8 billion in infrastructure investment is needed by 2030. Consequently, the region remains heavily reliant on Official Development Finance (ODF), which constitutes a high percentage of GDP for many PICs. Analysis of recent aid flows indicates a concerning trend: while overall ODF remained above pre-pandemic levels in 2022, this was largely due to an increase in loans (both concessional and non-concessional), while grant financing actually fell below pre-pandemic levels for half the region. Loans now represent over 40% of the total ODF package, a significant increase from previous decades, raising concerns about long-term debt sustainability.
Key economic sectors like fisheries and tourism are vital but face pressures from climate change and resource management challenges. Regional efforts aim to boost economic integration and trade through frameworks like the Pacific Agreement on Closer Economic Relations Plus (PACER Plus) and PIF-led economic strategies. However, significant socio-economic challenges persist, notably high youth unemployment and a lack of sufficient educational and employment opportunities, particularly acute in Melanesian nations with large youth populations. Addressing this "youth bulge" is not merely a development goal but a critical factor for long-term regional stability. The combination of a large cohort of young people (44% under 24 in Melanesia) facing limited prospects (23% youth unemployment) creates potential for social unrest, increased crime, and vulnerability to exploitation by extremist or criminal groups. Effectively tackling this requires sustained, targeted investment in education, vocational training (such as expanding initiatives like the Australia Pacific Training Coalition), and pathways to meaningful employment, directly linking human development outcomes to regional security.
Governance, Stability, and Capacity
The intensifying geopolitical environment places significant strain on governance structures across the Pacific. As noted previously, competition for influence can magnify existing governance weaknesses, increasing risks of corruption, elite capture, and the prioritization of external agendas over local needs. The sheer volume of external engagement requests and aid projects often overwhelms the limited administrative capacity of PIC governments, hindering effective management and potentially leading to rushed decision-making.
Domestic stability remains fragile in some areas. Law and order challenges persist, and specific instances of political instability or violence, such as the Honiara riots or election-related violence in Papua New Guinea, underscore these vulnerabilities. Furthermore, achieving effective national and regional planning, including monitoring progress towards goals like the PIF's 2050 Strategy for the Blue Pacific Continent or the Sustainable Development Goals (SDGs), is hampered by significant data gaps and weaknesses in statistical systems across the region. Many countries struggle to produce core economic and social statistics regularly, hindering evidence-based policymaking.
Transnational and Maritime Security
Oceania's vast maritime domain presents unique security challenges. Transnational organized crime (TNOC) networks are active, exploiting the region's geography for illicit activities, particularly drug trafficking, which contributes to rising domestic consumption and crime rates in some countries. Illegal, Unreported, and Unregulated (IUU) fishing remains a major economic and environmental threat, depleting vital fish stocks and undermining the sovereignty of island nations. Regional cooperation through the Forum Fisheries Agency (FFA), actively supported by Australia and New Zealand with funding and surveillance assets, is crucial in combating IUU fishing. Broader maritime security, including monitoring vast Exclusive Economic Zones (EEZs) and ensuring the security of sea lanes, requires ongoing investment in surveillance, patrol, and enforcement capabilities.
While regional cooperation is often touted as the solution to many of these challenges, and proposals for deeper integration like a "Pacific Islands Community" exist, significant obstacles remain. The inherent diversity of the Pacific – encompassing nations of vastly different sizes, resources, cultures, and political systems – makes achieving deep integration complex. National interests often compete with regional agendas, and the costs and administrative burdens of enhanced regional coordination can be substantial. Furthermore, the very geopolitical competition that highlights the region's strategic importance also carries the risk of exacerbating internal divisions and undermining the unity needed for effective collective action. Limited state capacity across the region further constrains the ability to implement and sustain ambitious integration initiatives. Therefore, while regional bodies like the PIF are vital platforms, progress towards significantly deeper integration is likely to be gradual and face persistent challenges, requiring careful management and sustained support from partners like Australia and New Zealand.
Table 2: Key Regional Challenges and Multilateral Responses in Oceania
8. Future Outlook
Key Trends (2025 and Beyond)
The strategic trajectory of Oceania into 2025 and beyond appears set to be shaped by the continuation and potential intensification of several key trends:
Persistent Geopolitical Competition: The rivalry between the US and China for influence across the Pacific shows no signs of abating and will likely remain a defining feature of the regional landscape. The outcomes of major power elections, particularly in the United States, could significantly alter the dynamics and intensity of this competition, potentially leading to shifts in policy approaches and regional engagement levels.
Escalating Climate Impacts: The physical impacts of climate change – rising seas, more extreme weather, ocean acidification – are projected to worsen, further solidifying climate change as the region's primary existential and security challenge. This will increase pressure for international action, adaptation finance, and potentially climate-induced migration.
Assertive Pacific Regionalism: Pacific Island Countries are likely to continue asserting their agency, utilizing regional institutions like the Pacific Islands Forum (PIF) and frameworks such as the 2050 Strategy for the Blue Pacific Continent to define their own priorities and manage external partnerships. Expect continued efforts to diversify relationships and leverage geopolitical interest for development gains.
Accelerated Defence Modernisation: Both Australia and New Zealand are committed to significant defence spending increases and capability modernization programs outlined in their respective 2024 NDS and 2025 DCP. The focus on interoperability and integration, particularly between the ADF and NZDF ('Anzac force'), will continue to deepen. Implementation of AUKUS will remain a major driver for Australia.
Enduring Development Needs: Despite increased attention and aid flows (albeit with a shift towards loans), fundamental development challenges related to infrastructure, economic diversification, governance capacity, health, and education will persist across the region.
Potential Flashpoints and Uncertainties
Several factors could introduce significant instability or alter the region's trajectory:
Major Power Conflict: While unlikely sought by regional actors, any direct military confrontation between the US and China, potentially over Taiwan or in the South China Sea, would have profound and destabilizing consequences for Oceania, disrupting trade, security arrangements, and potentially drawing regional actors into conflict.
Internal Instability: Domestic political instability within PICs, potentially triggered or exacerbated by external interference, economic shocks, or severe climate events, remains a persistent risk.
Climate Finance Shortfalls: Failure to deliver adequate, accessible, and grant-based climate finance through mechanisms like the Pacific Resilience Facility or the global Loss and Damage Fund could undermine adaptation efforts and erode trust between PICs and developed partners.
Political Volatility in Partner Nations: Significant shifts in government or policy direction in key partner countries like the US or Australia could lead to changes in regional engagement priorities, funding levels, and alliance dynamics.
AUKUS Implementation: The complex, multi-decade AUKUS program faces significant technical, industrial, and financial challenges. Delays or setbacks could impact Australia's defence strategy and regional perceptions. New Zealand's decision on potential Pillar II involvement remains a key uncertainty with implications for its foreign policy alignment.
Strategic Considerations and Pathways Forward
Navigating this complex future requires careful strategic consideration by all actors:
Genuine Partnership: External powers, particularly Australia and New Zealand, must move beyond rhetoric and genuinely align their engagement with Pacific-defined priorities, respecting sovereignty, supporting local ownership, and enhancing mutual accountability. Placing Pacific perspectives at the forefront is crucial for building trust and effective partnerships.
Strengthening Regionalism: Supporting the ongoing review and strengthening of the Pacific's regional architecture, led by the PIF, is vital for effective coordination and collective action. A cohesive regional approach offers the best defence against divisive external pressures.
Balancing Bilateralism and Multilateralism: While targeted bilateral initiatives can address specific needs, they should complement, not undermine, broader regional frameworks and solidarity.
Investing in People: Deepening people-to-people connections through education, cultural exchange, and labour mobility schemes can build lasting relationships and understanding. Addressing information asymmetries between donors and recipients is also key to empowering local actors.
Integrating Climate Action: Climate change cannot be treated as a separate issue. It must be integrated into all facets of security, development, economic, and foreign policy planning and implementation.
Managing Alliance Dynamics: For Australia and New Zealand, maintaining the cohesion and effectiveness of their alliance while navigating their distinct national interests, capabilities, and foreign policy nuances will require ongoing high-level dialogue and careful management.
Ultimately, the long-term trajectory of Oceania appears less dependent on which external power gains the upper hand in the geopolitical competition, and more contingent on the collective capacity of the region itself – Pacific Island Countries, regional institutions like the PIF, and key partners Australia and New Zealand – to manage the impacts of that competition effectively. This involves building resilience against the destabilizing pressures of rivalry while simultaneously tackling the overriding imperatives of climate action and sustainable development. Success demands genuine partnership, respect for Pacific priorities, strengthening regional mechanisms, and sustained investment in human and institutional capacity. Failure to collectively manage these interconnected challenges risks fragmentation, instability, and the erosion of sovereignty, outcomes that would ultimately serve the long-term interests of no actor, internal or external, in the Blue Pacific.
Conclusion
Oceania stands at a pivotal moment, its strategic significance undeniable yet its future path fraught with complex challenges. The intensifying geopolitical rivalry between the United States and China reverberates across the region, presenting both opportunities for development assistance and significant risks of instability, compromised governance, and the subordination of local priorities to external agendas. Pacific Island nations, however, are increasingly asserting their agency, demanding engagement on their own terms and leveraging competition to meet pressing needs, guided by frameworks like the PIF's 2050 Strategy for the Blue Pacific Continent.
Australia and New Zealand, as integral parts of the Pacific family and key security actors, are navigating this environment through significant recalibrations of their foreign and defence policies. Australia, anchored by its US alliance and AUKUS participation, is pursuing a "Strategy of Denial" backed by substantial military modernization, while also employing more assertive bilateral diplomacy in its immediate neighbourhood. New Zealand, while maintaining its commitment to an independent foreign policy and strong Pacific development focus, is also significantly increasing defence spending and deepening integration with Australia and other traditional partners, contemplating a role in AUKUS Pillar II. The trans-Tasman relationship itself is undergoing a transformation towards a more deeply integrated 'Anzac' force, designed to enhance collective weight and interoperability.
