MINISTER FOR DEFENCE
                        THE HON DR BRENDAN NELSON MP

11 December 2006

                   “CHALLENGES FOR AUSTRALIA”

                        SPEECH TO THE
                     HARVARD UNIVERSITY

                              (Check against delivery)


Amongst the many family photos, mementos, letters and iconic Australian images
framed on the walls of my Parliament House office in Canberra, hang the portraits
of three great American Presidents.

The first of these is Thomas Jefferson. When asked to nominate his greatest
achievement, Jefferson didn‟t say being President. He said his most important
legacy was co-founding the University of Virginia. When asked why, he said
because “education is the defence of the nation”.

With that in mind, it is a privilege for me to be here today at Harvard University,
rated by the 2006 Academic Ranking of World Universities as the best university
in the world.

I am honoured also to be giving this address at the School of Government named
in honour of John F. Kennedy.

In his 1961 inaugural speech, Kennedy defined the real struggles for his
generation as being against tyranny, disease, poverty and war. To these we might
add the need for human kind to start living on environmental interest rather than
capital, as remaining the struggles for ours.

Kennedy is the second president framed on my office wall with an inscription of
his quote that “a man does what he must – in spite of personal consequences, in
spite of obstacles and dangers and pressures – and that is the basis of all human

For those of us who aspire to a role in shaping our future, this is an ideal by which
we should strive to live.

For those more conservative in their politics, you‟ll be pleased to know the third
President on my wall is Ronald Reagan. His photo is superimposed over the
magnificent aircraft carrier named after him and the motto “Peace through
Strength”. Peace through strength – including military strength, economic
strength and strength of confidence and character – is a policy that has worked
before and which the free world needs to succeed again.


The America’s Cup

Prior to 1983, yachting was a sport to which most Australians were indifferent.
But our America‟s Cup campaign of that year had every ingredient to capture the
imagination of the Australian public:

        We were up against a well resourced American team, led by a brash
         skipper exuding great confidence.

        We were up against the establishment. Australia‟s interest in this
         contest was fuelled by the very public protests of the New York Yacht

          Club about the legality of our innovative winged keel.

       We were up against the odds. The America‟s Cup was the world‟s
        oldest sporting trophy which in its 132 year history, America had never
        lost. After the first four races in the best of seven final, Australia faced
        the daunting task of coming back from a 3-1 deficit.

When Australia II came from behind to beat Liberty in the deciding seventh race,
the nation erupted in spontaneous euphoria. Each of us remembers where we were
when she crossed the finish line.

Many things about that America‟s Cup campaign remain a part of Australian
folklore, including the yacht‟s emblem (the boxing kangaroo), the team‟s theme
song (“Land Downunder”) and that morning‟s televised impromptu declaration by
Prime Minister Bob Hawke, that “any boss who sacks anyone for not turning up
today is a bum”.

I doubt there are many Australians who would actually remember the specific
details of the race. What mattered was the sense of excitement as we came
together, to support our own as we took on the best in the world – the United
States of America.

Lamb Tariffs

In 1999 Australians came together again to rally in support of our own, following
a decision by the United States Administration to impose tariffs on Australian

Mirroring popular sentiment, Sydney‟s best read newspaper, the Daily Telegraph,
depicted President Clinton as a wolf in sheep‟s clothing under the front page
headline “Damn Ewe” (spelled E.W.E). Along with several pages of outraged
articles under the banner “The Great Lamb Betrayal”, readers were encouraged to
jam Whitehouse fax machines with “Lambograms”.

On one level, the outcry could be explained by the importance of sheep farming to
our national economy and identity:

       Such was the importance of wool and lamb to our early economic
        development that it was said Australia “rode on the sheep‟s back”.

       Even today, following our transformation to a modern, service
        economy, our continent of 20 million people is home to around 130
        million sheep (well over 100 times the number of sheep per capita, than
        in the US).

       A lamb roast or “lamb chop on the barbie” would both be contenders as
        our “national dish”.

But on a more symbolic level this decision offended our sense of what we‟d call
“a fair go”. Here was America, the world‟s most powerful country in the world
and our “mate”, perceived as doing the wrong thing by salt-of-the-earth
Australians. And worst of all from our perspective, America seemed oblivious to
the fuss it had caused.

As a nation, we didn‟t want to cop that. Our Government challenged the tariffs in
the World Trade Organisation and Australians banded together to express outrage.

September 11

Two years later, following the tragically heinous events of September 11, our
Prime Minister summed up majority public opinion when he said to Australians
“this is no time to be an 80% ally”.

Invoking the then-50 year old ANZUS Treaty provisions, he said:

      “If that treaty means anything, if our debt as a nation to the people of the
      United States in the darkest days of World War II means anything, if the
      comradeship, the friendship and the common bonds of democracy and a
      belief in liberty, fraternity and justice mean anything, it means the ANZUS
      Treaty applies and that the ANZUS Treaty is properly invoked.”


These snapshots say much about our relationship with our largest ally, which can
be likened to a close family relationship. We don‟t agree on everything and it is
important for us to be self reliant. Indeed, from the perspective of the average
Australian, to demonstrate we are independent. Sometimes, we engage in spat.

But at the end of the day, we are from the same „family‟, with a commitment to
core values of freedom, democracy, rule of law and respect for others. When it
matters most, we stand by each other.

Australia is a free country today, not only because of the heroic sacrifices of
Australians and our allies in that part of the Pacific during World War Two, but
because the United States stood firm, especially in the Coral Sea, as part of what
we today describe as the Battle of Australia. No Australian should ever forget
this. None ever will.

                         THE AUSTRALIAN PSYCHE

These three snapshots also say something about the Australian psyche.

Whether it is due to our origins as a British penal colony, our development
through agrarian labour and land intensive industries, hardships during the great
depression and sacrifice in war, Australians are imbued with: a practical outlook
on life; a healthy mistrust of establishment and of authority; an affinity for the
underdog; and a sense of togetherness with our fellow traveller.

This sense of togetherness is reinforced by our “middle ranking power” status. As
Australians take pride in our strengths and capacity to take on the world, we are
also conscious that the world is intensely competitive.

We accept and to a large extent embrace globalisation, recognising that
isolationism – economic, cultural, or political – will never make us safer. But we
also stick together.

Our patriotism is expressed less through symbols, than by identification with a
unique set of national values – a national ethos – that includes:

        A sense of togetherness and support of one another – “mateship”.

        A belief in fairness – “a fair go”.

        A belief in having the courage to do your best, take initiative, drawing
         on resilience and resourcefulness – “having a go”.

                       CHALLENGES FOR AUSTRALIA

Australia is a nation confident in itself and its place in the world, but far from
complacent. Among our challenges, are to build:

       1. A prosperous future.

       2. A cohesive and confident future.

       3. A secure future.

                             A PROSPEROUS FUTURE

Australia‟s recent economic performance has been the envy of the world. Over
the past decade:

        Our GDP growth averaged 3.6%, compared to 3.3% for the USA, 2.7%
         for the OECD and 2.2% for the European Union.

        We have moved past Canada, Germany, France, Belgium, the
         Netherlands, Denmark and Japan, to rank number eight among OECD
         for standard of living (GDP per capita).

        A Budget Deficit inherited by our government in 1996, was equivalent

          to 1.9% of GDP. It has been turned around. Most recently, we had a
          surplus to the tune of 1.5% of GDP.

        The $96 billion government debt also inherited by our government –
         equivalent to around 20% of GDP – has been completely repaid.

Australia‟s economic strength has been built by the Howard Government‟s
determination to maintain focus and discipline with budget and policy settings.
Simultaneously, we have delivered on social contracts and made smart
investments in innovation, industry, small business, trade, education and

But it has also been our willingness as a government and a country to back
Australians – their hard work, idealism and self sacrifice.

        Having largely dismantled tariff barriers, we no longer hide behind the
         curtains, in fear of prowling Asian tigers.

        In taxation reform and reducing income tax, replacing inefficient
         indirect taxes with a broad based consumption tax, we have removed
         many penalties on hard work and initiative.

        Through reforms to workplace relations, we have made it easier for
         employers and employees to step outside a combative union versus
         employer dichotomy and a one size fits all award system, to negotiate
         the arrangements that best suit them. Australians must have no less a
         right to negotiate their own working arrangements, supported by an
         industrial safety net, than they do to join and be represented by a trade

The productivity gains flowing from these and other reforms mean that it now
takes just four hours to produce, what it took five hours to produce a decade ago.

Over the course of the last decade, real wages have grown by 18%, unemployment
has plummeted to 4.6% (its lowest level in over 30 years) and industrial
disputation is at the lowest level in a century.

Securing Australia‟s future prosperity demands:

        Sustaining our commitment to economic reform.

        Investing in human capital.

        Rising to the challenge of an aging population and collapsing age
         dependency ratios.

Sustaining our Commitment to Economic Reform

In the same way that an athlete or artist‟s performance is not dependent on luck,
but dedication to training and practice, Australia‟s economic strength is the
product of disciplined commitment to economic reform.

Prosperity today is a product of hard decisions we have taken previously. Our
prosperity tomorrow will be dependent on us maintaining that commitment and
resisting the temptation to drift back into the comfort zone – political timidity.

Investing in Human Capital

In the space of a decade, Australia has been transformed from a country with a
shortage of jobs, to a country with a shortage of workers. In one sense, this is a
good problem to have. But we face a challenge in ensuring we have the capacity
to maintain economic growth.

In Plato‟s Republic, Socrates concluded two bases for society. The first he said
was “mutual need”. We need one another. The other he identified was difference
of aptitude. We are all good at something, but we are different.

Australia has, unfortunately, over the space of a generation told its young people
in all kinds of ways that their lives are valued by the educational choices they
make. Too many have been led to believe that if they do not excel in senior high
school and obtain a university eduction, they are of lesser value than those who do.

The human and economic price we have paid includes unacceptably high
university dropout rates, skills shortages in a variety of technical trades and
disengagement from school and life by a significant minority of young people who
feel there is no place for them in the future presented. Ambitious parents too often
project their own, unfulfilled ambitions onto their children to be what they are not.
Compounding this has been a society apparently obsessed with value rather than
values and the accumulation of material wealth.

Slowly but surely, our Government is making a difference. In ten years, the
number of apprentices in training has nearly tripled. More recently, the Howard
Government has set about establishing 25 Australian Technical Colleges in areas
of skills shortages around the country to supplement our state based Technical and
Further Education system.

Preparing for the Impacts of an Aging Population

Most western countries are facing the challenge of an ageing population. The
USA is perhaps in the best placed, with a fertility rate of 2.0 children per woman –
just under replacement level of 2.1. Australia is around 1.8 and in significantly
better shape than Germany, Greece, Italy, Spain and Japan, whose fertility rates
have plummeted to 1.3.

But according to the Australian Bureau of Statistics, the age dependency ratio will
decline from 5.1 working aged people for every 1 person of non working age this
year, to a ratio of 2.3 to 1 in 2050.

In late 2004, the Productivity Commission‟s 40-year forecast for Australia
concluded that in the absence of significant improvements in productivity growth,
Australia will face a 7% fiscal gap. In other words, the gap between expenditure
in our country and income is likely to increase by 7% of GDP. This means, that
unless we can sustain annual productivity growth in excess of two per cent, we
would need to increase taxes by 23%.

Our workforce needs to develop generic skill sets that are able to be transferred
seamlessly across industry - nationally consistent and transferable skills that are
nationally recognised.

As well as working to ensure these productivity increases and to ensuring more
working age people make a contribution, Australia faces a challenge in offsetting
these effects, by encouraging more people to have more children. Over ten years
the Government has addressed some practical issues by, for example more than
doubling the number of subsidised child care places. And in 2004 the Government
introduced the baby bonus, which now provides $4,000 to new parents, to help
meet some of the considerable expenses involved in having children.

But in the long term, I believe the willingness of people in western societies to
have children depends in part on the degree of confidence people have in the
country and the world into which these children will be born.


John Stuart Mill, one of the philosophical fathers of liberalism, offered two bases
for any society. One is a desire on the part of people to be governed together, that
they see themselves as one grouping of people. The other is a commonality of
feeling, deeply rooted in language, literature and history.

Any visitor to Washington sees the ideals and values of America carved in granite,
sandstone and marble. They are not pinned to noticeboards as evidence of a
contemporary fad. Some things are meant to endure.

A nation is built on a foundation of history, within an established culture and
mores, under the umbrella of a shared set of values. There is a clear expectation
that you need to abide by the rules of the house.

Pride in where we come from is a precondition to having confidence in where we
are going.

For a period in our recent history, Australia‟s leaders offered an ambiguous,
poorly defined sense of what it means to be an Australian.

Many Australian secondary schools do not teach Australian history – certainly not

in any depth. For example, one state Education Minister recently failed to identify
Australia Day – the 26th of January – as marking the arrival of the First Fleet in
1788. She instead said it commemorated the federation of states.

Overwhelmingly, the cultural diversity brought to us by those who have come
from around the world, enriches our society and is warmly embraced by
Australians. While we celebrate this diversity however, it is important Australians
maintain and promote a sense of shared identity.

We are Australians by virtue of our shared language, literature, history and values.
Our identity is enriched by cultural diversity, but in the end we are who we are by
virtue of our institutions, laws, triumphs, failures, adversities, heroes and villains.
It is essential each of us feels a connection to Indigenous Australians and our non-
Indigenous ancestors – their courage in settling a harsh land is a legacy given to
our generation.

Just as there are some things that define you as proud Americans, so too we have
defining Australian values and characteristics that make us who we are.

In responding to an American DJ complimentary of her song, “Poster Girl” and
Australian soldiers, Australian country music singer Beccy Cole said by e-mail
last month;

     “My Australia is a country of fiercely loyal buggers who stand by their mates
     and who won‟t back down from their beliefs.”

                               A SECURE FUTURE

There is a natural tendency for many Australians to think first of security within
Australia, both in terms of upholding law and order and domestic security
measures to keep us safe from terrorism.

The average Australian would then think of our borders and what we need to do to
prepare for the possibility of invasion, to make sure that people don‟t breach our
sovereignty to steal fish, or threaten our gas and oil platforms. And to make sure

that people who come to Australia, whom we welcome irrespective of their
background, politics or religion, do so lawfully and in an orderly way.

But we recognise that securing our country also means our region and most
immediately, the arc of instability extending from East Timor to the south-west
Pacific Island states.

While military support of our region requires a significant investment,
indifference would be far more costly.

In many other ways, ranging from: counter-terrorism memoranda of
understanding, free trade agreements, regional forums, joint training exercises and
considerable foreign aid, Australia works very hard to foster co-operation with
countries in our region. We do so, because it is in our national interest.

Finally, on our national security, it would be fair to say that a majority of
Australians do not currently support our continued involvement in Iraq, or even
perhaps Afghanistan. But the Australian government believes it is our
responsibility to prosecute the argument that what is happening in these countries
today has everything to do with the future.

Afghanistan has always been the crossroads to Asia, but it is today the crossroads
to a modern world.

To reinforce that point, in 1986, 1987 and 1991 three men named Mukhlas,
Hambali and Samudra undertook training in camps established by religious
extremists in Afghanistan. In 2002, these three men and others played a key role
in murdering 88 Australians in Bali.

On my last trip to the US, I had the honour of laying a wreath at the memorial for
USS Arizona, sunk in the attack on Pearl Harbor on 7 December 1941. I‟ve never
heard anyone question America‟s response to that attack, which was to go on the
offensive against the hateful ideology responsible for this aggression – fascism –
on a number of fronts across the world. Again, had America not responded in this
way, Australia would not have survived World War Two.

Five years after another attack on America, we‟re engaged in another fight, across
a number of fronts, against another aggressive, hateful ideology – a form of
Islamic extremism that is incompatible with a peaceful world.

According to Osama bin Laden, the key front of this fight is Iraq. In 2004, Osama
bin Laden said of Iraq that that‟s where the “third world war…is raging”. In 2005,
Al Zawahiri (bin Laden‟s lieutenant) described Iraq as “the place for the greatest

In a letter to Osama bin Laden in 2004, Al Zarqawi, the former al Qaeda leader in
Iraq, set out a very deliberate strategy of fomenting sectarian violence when he
said: “the only solution is for us to strike the religious, military, and other cadres
among the Shia, with blow after blow” and that “the solution that we see…is for
us to drag the Shia into the battle because this is the only way to prolong the
fighting between us and the infidels”.

On 22 February 2006, al Qaeda struck such a blow, with the destruction of the
thousand year old Askariyya Shrine, which had housed the remains of the tenth
and eleventh imams and was one of the most important buildings to Shia Muslims
around the world. In doing so, they also struck a blow against peace and stability
in Iraq which has since been blighted with a more than tenfold monthly increase in
sectarian incidents.

The Askariyya Shrine bombing provides another demonstration of how depraved
these people are. That people like al-Zarqawi would go to Iraq to so deliberately
fester violence and chaos suggests they have a very particular fear of and
determination to stop democracy in the heart of the Middle East and creates a
critically important strategic and moral imperative. If the jihadists view Iraq as
critical to their campaign, so must we.

Al Zarqawi‟s elimination on 7 June is a blow to the terrorists‟ campaign – a blow
that would not have been struck had the Coalition of nearly 30 countries turned
our back on Iraq. Another jihadist to be recently eliminated through the
Coalition‟s persistence in Iraq was Omar al-Farouq, believed to be one of bin
Laden‟s top lieutenants in South Asia and the man responsible for establishing the
first al Qaeda training camp in our region.

A sign of progress in Iraq came in June when the southern Iraqi province of Al
Muthanna became the first of 18 provinces to transfer to full control by the Iraqi
Provincial Government, with security provided principally by Iraqi security forces.
This milestone can be attributed in part to the outstanding effort of Australian
troops. A second province, Dhi Qar also transferred to Provincial Government in

For 18 months our troops in Al Muthanna worked side by side with the Japanese
Reconstruction Force. The symbolism of Australia and Japan working together to
help another country‟s transition to freedom and democracy, sixty years after
Japan bombed Pearl Harbor and tried to defeat us in war, should not be lost on

The fact we‟re now friends with Japan speaks volumes about the transformation
that takes place when countries dispense with hateful ideology and embrace
democratic freedom. No doubt this transition was difficult for Japan (and
Germany and Italy), but surely it was worth it.

Having removed Saddam Hussein from power, 12 million Iraqis have risked their
lives to vote and in so doing, build a stake in democracy. Whatever you think of
the decision to remove Saddam Hussein from power, the relevant questions now is
whether you believe that democracy is worth defending and, if we leave, whether
this will increase or decrease the security of the Middle-East and indeed the rest of
the world?

It would be easy for Australians to think that we‟re a peaceful country, in a
relatively remote part of the world that we haven‟t had a terrorist attack on our
soil and so, we should sit this out.

All of us have to face the reality that we are engaged in a generational battle
against extremists who:

        Have hijacked the name of Islam to build a violent political utopia.

        Have an attitude to the treatment of women which is incompatible with

          a peaceful world let alone a civilised society.

       Are fanatically intolerant of people who have another point of view in
        terms of their religious affiliation if any.

       See the liberating and empowering effect of education as being a threat
        to that which they seek to impose on the rest of the world.

       Oppose nations – Christian, Jewish, Judeo-Christian or Muslim – that
        are open to other peoples, cultures and religion.

We must appreciate also, that this struggle needs to be fought as much with
capacity building, economic development and education – ignorance is our enemy.

Australia could take the view that we live in a peaceful country in a part of the
world remote from the epicentre of the conflict. We could leave it to America,
Britain and others. We don‟t because we know that to do so is delusional. We
would diminish ourselves and demean the values for which Australia has stood in
its short history.

Yes, the going in Afghanistan and Iraq is tough. But walking away would mean
letting terrorists win. It would mean giving up on democracy in the Middle East,
consigning that part of the world to a new dark age casting a shadow across the
entire free world. It would mean leaving the next generation hostage to a force it
may never control. It would also diminish US authority throughout the world. No
significant problem in the world will be solved without US sponsorship and


Mark Twain once observed that “time cools, time clarifies; no mood can be
maintained quite unaltered through the course of hours”.

Two years after we sent “Lambograms”, Australia‟s challenge to the World Trade

Organisation was upheld, the tariffs were removed and Australians moved on from
the Great Lamb Betrayal.

Four years after our America‟s Cup victory, you reclaimed your trophy and
Australians resumed their indifference to yachting.

Five years after September 11, it is all too easy to lose focus, to rationalise away
what that day represented and the challenge it posed for this generation.

Five years ago Australia and the US stood together and pledged to remove that
shadow and shine a light into the dark corners of the world. Australia will stand
by that commitment. That‟s what mates do! That‟s what we do!


To top