When I worked in DIO, our five-year projections were usually very accurate although there was always the possibility of something unforeseeable arriving out of left field to undermine them, such as the global financial crisis in 2008 or Covid in 2019.
First, the intensifying rivalry between the US and China. This competition is now entrenched. It is about technology, military access, alliances, and influence across the Indo-Pacific. For Australia, it means withstanding sustained pressure to align more closely with Washington while trying to maintain our economically vital trade relationship with Beijing.
Second, the Taiwan Strait as a potential flashpoint. Even without war, increased military exercises, air and naval harassment, and cyber operations raise the risk of miscalculation by China, the US, or Taiwan. Any serious crisis would disrupt shipping, insurance, and trade flows across Asia. Australia would also face immediate US expectations to provide diplomatic, logistical or military support.
Third, Russia’s war footing becoming permanent. Whatever the outcome in Ukraine, Russia is emerging as a heavily militarised state aligned more closely with China, Iran, and North Korea. This hardens global blocs and diverts Western attention and resources. Great-power cooperation is likely to depend on President Trump’s mood on the day and US military support for allies cannot be guaranteed.
Fourth, “grey zone” conflict becomes normalised. Cyber attacks, disinformation campaigns, economic coercion, sabotage of undersea cables, and interference with satellites sit below the threshold of open war. Australia is highly exposed being digitally connected, trade-dependent and reliant on vulnerable infrastructure. Defence in 2026 is as much about resilience and intelligence as warships and aircraft.
Sixth, AUKUS moves to deeper commitment. AUKUS will be less of an abstract concept. Decisions about nuclear-powered submarines, workforce skills, shipyards and budgets will start to bite. This extravagant program will shape Australia’s defence posture for decades – and attract sharper scrutiny from neighbours uneasy about strategic competition entering their region.
Seventh, instability in the Middle East spills outward. Conflict involving an expansionist Israel, radical Iran, or their proxy groups could disrupt energy markets and global shipping. Australia may again face calls to deploy naval assets or provide intelligence support far from home, testing both our capacity and public patience. The ‘world leading’ Boeing M8-28 Ghost Bat drone has completed the first round of testing and over $500 million will be thrown at its development.
Eighth, North Korea rattles the cage. Because of its paranoia about being attacked by the US and South Korea, North Korea regularly launches test missiles and enhances its nuclear capability. While Australia is not a target, the effect is a greater strain on US and South Korean forces and a cause of regional concern.
Ninth, climate change as a defence issue. Former CDF Chris Barrie has frequently drawn attention to the fact that rising sea levels, extreme weather and humanitarian crises in the Pacific will increasingly draw on ADF resources. Disaster response and helping neighbours are not sexy from a military perspective but are becoming core responsibilities.
The uncomfortable truth is that we cannot distance ourselves from what’s happening internationally. Geography matters, but it no longer guarantees our security. In 2026 and beyond, the political challenge will be safeguarding Australia without being drawn into situations that go against our national interest.
*Professor Clive Williams MG is a former Australian Army and Defence intelligence officer. (clive.williams@terrint.org) MG is a former Australian Army and Defence intelligence officer. (clive.williams@terrint.org).
