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Belt and Road map

Victoria takes wrong track with China’s Belt and Road Initiative

By Anthony Bergin

The Chinese are weaponising federalism by driving a political wedge between the federal and state positions on the Belt and Road Initiative.

That’s the conclusion to be drawn from Daniel Andrews’ ­recent announcement that Victoria has struck a new deal with China under its BRI.

Last month, Andrews signed an agreement with China’s National Development and Reform Commission that will focus on infrastructure, innovation and trade development and market access. This agreement followed Victoria’s memorandum of understanding with China on the BRI last year.

The federal government hasn’t signed up to the BRI, saying that it will consider individual projects on a case-by-case basis.

That’s because Canberra knows the BRI is a strategic path to assert China’s growing power. Scott Morrison is urging our Pacific Islands neighbours to be cautious in their dealings with China. A large state government signing up to BRI ­undermines that message to our Pacific family.

As my colleague at the Australian Strategic Policy Institute, Michael Shoebridge, has pointed out, the federal government has agencies and insights that Victoria just doesn’t have in matters relating to security and foreign investment.

Andrews wants Chinese companies involved in Victoria’s massive $107bn infrastructure “big build”.

But as Shoebridge notes, this may involve Andrews signing up to bring a whole set of Chinese communications, control and ­collection technologies along with this big build.

It’s time to better integrate the roles of the states in our national security strategy.

The states contribute many of the powers and capabilities needed to support our overall effort in dealing with a wide range of national security issues.

Defence is constitutionally the only major area of government that is wholly funded federally.

The commonwealth has jurisdiction for external affairs. Intelligence is essentially only a federal role, although a few states have crime commissions and police have intelligence capabilities.

By and large, the same holds true for border security.

But it is the states that have a primary role in responding to many of the threats we face each day across a broad sweep of ­national security issues, particularly terrorism and countering ­violent extremism.

Issues related to protecting crowed places engage not just state governments, but capital city lord mayors and local government. State governments are increasingly vulnerable to malicious cyber activity, particularly in areas relating to critical infrastructure.

It would be naive to assume state governments have not been subject to foreign interference in the same way as commonwealth agencies.

In some jurisdictions, defence is a critical sector for economic prosperity and long-term employment.

The promotion of defence industries, and winning defence contracts, is therefore very important. It’s the states that have primary ­responsibility when it comes to emergency management.

The federal government’s role is limited to financial recovery ­assistance, facilitating co-ordination and capability enhancement, and responding to natural disasters overseas.

It will be important for the states to work collaboratively to share resources before, during and after a public health emergency. The states play a vital role in working with infrastructure operators on risk analysis and in planning for supply chain interruptions in key areas, such as liquid fuels.

As state governments proceed with asset recycling, such as electrical power grids, there’s a need to balance those sales — and other forms of foreign involvement in supply chains, outsourcing and offshoring arrangements — with broader national security imperatives.

But as the case of Victoria and the BRI shows, the states aren’t ­always in a position to identify ­national security interests and clarify joint policy positions to bring them to the Council of Australia Governments.

The country should develop an approach whereby state agencies benefit from access to each other’s skills, experience and capabilities across many security issues, as well as from the Australian government. At the same time, there will ­always be some tensions between broadly national needs in security and the desire of the states in areas such as foreign investment to make their own decisions in what they feel is in their own economic interests.

COAG should examine how to strengthen its role as a strategic forum on national security matters and work with the states to develop a more unified approach. This isn’t a case of Canberra knows best. Rather, at its core, our national security system should be intergovernmental.

COAG should examine how the states operate in the area of ­national security, in the same way it did with regulation by commissioning the seminal Hilmer ­review into national competition policy more than 25 years ago. Given the threats the country now faces, we need a federalist ­approach.

Originally published by: The Australian on 03 Nov 2019