The Critical Role of Northern Australia in Australian and Indo-Pac Defence
Australia’s north holds immense strategic significance for Australia’s security, economic prosperity and regional influence. Amid the global impact of conflict in Europe and rising tensions in the South China Sea and over Taiwan, northern Australia—with its military bases and critical minerals—should be a key factor in any Australian national-security or economic-security strategy. Yet northern Australia policy continues to be bedevilled by the region’s unique economic, social, climatic and geographic challenges.
Northern Australia is broadly defined as the region north of latitude 26° South and accounts for nearly half of Australia’s landmass. It plays a pivotal role in national security and defence strategy. The region hosts key defence assets, including air bases, naval facilities, and surveillance installations essential for monitoring and responding to security threats. As the importance of the Indo-Pacific grows, so too does the geostrategic and economic importance of northern Australia.
The great potential of northern Australia extends well beyond being host to a network of hardened bases and training grounds, or a ‘lily pad’ from which Australia can project force or defend our maritime approaches. Its proximity to key maritime trade routes and regional partners positions it as a crucial node for engagement with allies and strategic partners in the Indo-Pacific. The region is rich in natural resources, particularly in energy and minerals, significantly contributing to Australia’s economic security. The development of those resources not only strengthens national resilience but also enhances Australia’s position as a reliable supplier in global markets.
If Australia is to leverage the maximum benefits from its north, then it must resolve a development challenge that’s existed since Federation. How does Australia support the development of the kind of infrastructure and scalable sovereign industry base that enhances economic prosperity, promoting security and growth?
A defence lens
The 2024 National Defence Strategy envisions defence facilities across northern Australia as a networked posture aligned with the 2023 Defence Strategic Review’s focus on deterrence and power projection. Northern Territory bases ensure forward presence, enable air–maritime surveillance, and facilitate allied training. Western Australia’s northern bases support air and space operations, while Queensland bases enable rapid amphibious deployment and foster allied interoperability.
Darwin stands as a steadfast symbol of Australia’s deep alliance with the US, hosting a permanent rotational presence of US Marines alongside joint military exercises and infrastructure support, underscoring a shared commitment to regional security. Its strategic location provides the US with a crucial refuelling point and launch pad for operations across the Indo-Pacific, reinforcing interoperability and ensuring a forward-deployed presence in the region. The Port of Darwin and nearby facilities serve as critical refuelling and logistical hubs, extending the US’s operational reach. Darwin not only strengthens military coordination between the two nations but also acts as a launch pad for rapid response, reinforcing the alliance amid an increasingly contested geopolitical landscape.
But much of northern Australia’s defence infrastructure is ageing and facing maintenance challenges exacerbated by supply-chain delays, remote logistics and workforce shortages. Although significant investment is earmarked for northern air bases, progress has been slow due to supply-chain issues and contractor shortages.
The Defence organisation has been reluctant to proactively engage with the region’s economic realities. In northern Australia, Defence must work even closer with industry if it’s to successfully secure the industry capacity it needs at the time it’s needed. Moreover, it needs to increasingly engage in broader regional development measures.
An infrastructure lens
Northern Australia’s deep-sea ports are vital for economic resilience, national security and Indo-Pacific engagement, but historical planning has underestimated demand, hampering maritime readiness and forcing ships south for logistical support.
The Port of Darwin, adjacent to the Larrakeyah Defence Precinct, is a key hub for defence, mining and energy, supporting Australian and allied naval ships. Yet its limited moorings restrict RAN operations, and security concerns have been raised over its foreign control. The Northern Territory Government’s development of Middle Arm Peninsula as an industrial hub, and its investment in the yet to be built Darwin Ship Lift facility, could well see the port play a critical role supporting AUKUS.
But there’s a challenge here, too.
Much has been written about the 99-year lease of the Port of Darwin to a foreign-owned company: Landbridge. Most commentary ignores the fact that the lease means a Chinese-owned company has a significant voice in how the port will, or won’t, be developed over the next 89 years, which might or might not align with our national interests.
That means key decisions about infrastructure upgrades, operational priorities and access could be shaped by commercial or strategic interests that don’t necessarily align with Australia’s national-security objectives. For example, Landbridge could prioritise commercial shipping over defence-related expansions, delay or obstruct projects that enhance military readiness, or limit access to certain parts of the port and thereby potentially constrain the port’s ability to support RAN or AUKUS-related activities in the long term.
In northern Queensland, the ports of Cairns and Townsville anchor RAN operations in the north. The Port of Weipa, located on the Gulf of Carpentaria, while primarily a mineral export hub, provides a naturally deep anchorage, and its proximity to our northern approaches make it a potential logistics asset for defence in a crisis, supplemented by its relatively proximity to RAAF Base Scherger (although access will need to be hardened to mitigate wet-season flooding). But, as Rio Tinto continues to wind down its operations, the future of this port is in question, especially if dredging operations cease.
In northern Western Australia, civilian-focused ports such as Hedland, Dampier, Broome and Walcott have limited military use, but the proposed Gascoyne Gateway near Exmouth, with its multi-user design and proximity to defence assets such as the Harold E Holt naval communication facility and RAAF Learmonth could provide naval support for Australian and allied forces.
To ensure that multi-user port facilities continue to be available across northern Australia, Defence will need to engage more proactively with the private sector and with state and territory governments.
Northern Australia’s road, rail and logistics networks are critical to national defence preparedness and resilience and economic prosperity. The networks serve as a national lifeline for Australia’s northern communities as well as Defence, but they’re extremely vulnerable to climate change, extreme weather events, and distance and capacity limitations.
The Great Northern, Stuart and Bruce highways connect key hubs such as Darwin and Townsville to ports and defence bases, yet single-lane stretches, seasonal flooding and ageing infrastructure delay deliveries, isolate communities and create opportunities for adversarial disruption. Too often, remote communities are cut off for extended periods, when roads and bridges are closed, exposing the fragility of national supply chains and increasing pressure on the ADF to provide disaster assistance. Heavy military use, such as during Exercise Pitch Black and Talisman Sabre, creates congestion, accelerates wear and disrupts civilian supply.
The Darwin–Tarcoola rail line links the Port of Darwin to southern markets but lacks intermodal terminals and sidings, restricting freight transfers from road to rail. The absence of rail connections to key bases such as Tindal slows resupply, undermining sustained operations during crises. Expanding terminals and sidings would ease road congestion, reduce transportation costs and strengthen logistics resilience, which is critical for Australia’s northern defence posture. Targeted investment in flood proofing roads, sealing rural routes, expanding rail infrastructure and developing a coordinated hub-and-spoke freight network aligned with government and military needs is essential to strengthen logistics resilience and balance military and civilian priorities in northern Australia. The combined needs of national resilience and preparedness, defence and economic prosperity make such investment far more attractive.
Northern Australia is a critical hub for Australia’s defence operations, hosting major joint exercises and permanent military rotations. Each year, around 2,500 US Marines deploy to the Northern Territory for six to eight months as part of the Marine Rotational Force—Darwin (MRF-D). Every two years, Exercise Talisman Sabre sees the arrival of about 30,000 personnel from 13 nations, while Exercise Pitch Black brings together about 4,400 personnel and more than 140 aircraft from 20 countries. Regional partners, including Indonesia, Japan, Singapore and France, also conduct training in the Northern Territory and Queensland. Those activities place significant strain on water, energy and sewerage infrastructure not designed to accommodate such immense surges.
Despite the increasing operational tempo, Defence investment beyond the wire hasn’t kept pace with demand. In Darwin, a power grid reliant on gas and solar struggles with surge loads, increasing the risk of brownouts and forcing greater reliance on diesel generators—an expensive and unsustainable stopgap. RAAF Base Tindal, which is dependent on microgrids, is vulnerable to power disruptions if fuel supplies are interrupted, affecting both military operations and civilian communities. Without targeted investment, future operational surges will amplify those risks, undermining military readiness.
Water infrastructure is equally strained. Dry-season exercises in Darwin push water reserves to critical levels, while Katherine’s limited treatment capacity can’t support sudden demand increases, risking shortages and pressure drops. During past surges, Defence has been forced to rely on bottled water or tanker imports—a costly and temporary solution. Without infrastructure upgrades, future exercises could face severe logistical constraints.
Sewerage capacity is another growing concern. Darwin’s system was designed for a population of 150,000 but is already at its limit. The establishment of the MRF-D military camp has increased demand, which increases by another 20% during peak training, leading to system overloads, backups and untreated discharge. Those problems are exacerbated during the wet season, when infrastructure is already under pressure. As Defence activity expands, failure to invest in sewerage capacity will heighten environmental and public-health risks.
Town planning models don’t account for the episodic surges in demand that military operations create. Assuming that unmodified civilian infrastructure can absorb such spikes without consequences is a flawed strategy. A long-term, integrated approach is needed to ensure that Defence facilities remain operationally viable and don’t strain local communities. Without decisive action, infrastructure shortfalls will continue to pose a critical vulnerability to national resilience and preparedness, economic prosperity and defence readiness.
Australia’s fuel security is deteriorating: approximately 90% of liquid fuel is imported, and stockholdings are consistently below the International Energy Agency’s 90-day minimum requirement. The 2022 global fuel shock, driven by Russia’s war on Ukraine, exposed Australia’s vulnerabilities as global supply chains tightened, and key suppliers prioritised domestic stockpiles.
Northern Australia’s geography, sparse population and limited infrastructure exacerbate fuel shortages, particularly during military surge periods. Large-scale joint exercises place exceptional demand on aviation, diesel and maritime fuel supplies, exceeding peacetime norms. Bases in the north lack adequate fuel reserves, constraining air and maritime reach. While recent US Force Posture Initiatives upgrades have helped, capacity remains insufficient during high-intensity operations. Without further investment, fuel shortfalls will continue to undermine Australia’s ability to project force and sustain operations.
Australia’s two remaining refineries rely on imported crude and government support to meet new fuel standards, improving quality but not capacity. Diesel remains the nation’s most critical fuel, powering transport, emergency services and backup electricity for remote areas. However, Australia’s reliance on China for 90% of imports of urea (a key component of the AdBlue used in diesel vehicles to reduce emissions) creates a major vulnerability. The collapse of Australia’s last urea producer in 2022 has left transport and defence supply chains exposed to future shortages, threatening operational continuity.
Investing in domestic biodiesel production presents a strategic opportunity. Establishing decentralised biodiesel plants in Darwin and Townsville or Cairns would pre-position fuel in critical locations, mitigating logistical bottlenecks and seasonal disruptions. Sovereign production would enhance ADF readiness, cut costs and strengthen supply-chain resilience, while contributing to strengthening economic prosperity and positioning Australia as a leader in renewable energy.
A people lens
Northern Australia’s workforce, particularly in construction and manufacturing, is critical to the success of the NDS and Integrated Investment Program, both now and well into the future. The primary issues are associated with labour shortages, high costs and industry reluctance to engage in defence contracts due to complex processes and lower profitability compared to other sectors. Those issues are exacerbated by a transient workforce and a generational skills gap, especially in remote areas. In the short term, lowering entry barriers for less sensitive projects can improve participation, while a long-term strategy should focus on Defence–industry collaboration to commit to a program of works (over 5–10 years) to enable industry to invest in regional communities. Working with state and territory governments to support workforce growth and to build regional social infrastructure to encourage the workforce (also of benefit to the ADF) to remain in regional and remote locations will be essential for sustainable development and securing the labour force needed for strategic defence objectives.
Recommendations
Northern Australia is at a pivotal moment, balancing immense strategic potential with significant vulnerabilities. As a key defence hub, economic driver and gateway to the Indo-Pacific, its role in national security and regional influence is undeniable. However, ageing infrastructure, logistical constraints and exposure to both climate and geopolitical risks threaten its effectiveness. The government’s focus on a ‘strategy of denial’ and investments in defence and critical infrastructure are steps in the right direction, but progress must accelerate to close persistent gaps in readiness, interoperability and resilience. Without urgent action, northern Australia will remain underprepared to meet the demands of an increasingly contested Indo-Pacific. Therefore, the next government should take the following steps:
—Fast-track infrastructure upgrades to eliminate logistical bottlenecks and enhance rapid mobilisation. Defence bases and transport networks require targeted investment to ensure they can meet surge demands, particularly in Darwin. Integrating civilian and military infrastructure planning will enhance resilience, while flood proofing and climate-adaptive designs will safeguard reliability. Deep-sea ports must be secured and expanded. Strengthening Weipa and returning the lease of the Port of Darwin to sovereign management will enhance deterrence and ensure operational readiness.
—Acknowledge fuel security as a critical vulnerability. Reliance on imported fuel exposes Australia to supply-chain disruptions, so establish decentralised biodiesel production in northern Australia. The use of local agricultural and waste resources would enhance self-sufficiency, improve ADF readiness and sustain surge demand during military exercises or crises. That would also align with national net-zero targets while reducing logistical risks.
—Simplify Defence’s contract processes, with an objective of improving regional social infrastructure and incentivising long-term skills development. Workforce shortages continue to hinder defence and infrastructure projects. Reducing red tape to improve social infrastructure and skills would help retain and increase a stable workforce in remote areas.
Strengthening these foundations will not only enhance northern Australia’s strategic readiness but also ensure that it remains a cornerstone of Australia’s national security and regional influence. It should be a key part of any national economic-security strategy.