Picture this. You’re standing beside a loved one’s hospital bed. The doctor has just told you that they know how to treat your loved one, but can’t because the hospital is out of intravenous (IV) fluids.
Watching your loved one weaken, you feel a wave of helplessness because the hospital doesn’t have what is essentially salt water in a bag.
Without adequate fluids, humans die. IV fluids are regularly required in all aspects of routine and emergency healthcare.
They are essential for replenishing the body’s hydration in cases of severe blood loss and are often required to rapidly deploy antibiotics. If you’ve ever been in a hospital, you’ve seen IV fluids.
This scenario is far more likely than you think. The ongoing critical shortage of medical intravenous (IV) fluids is happening now and is the latest tragedy caused by Australia’s dangerously fragile approach to national security
Our national security relies on far more than just our military forces, it is all things required for the resilience and stability of Australia.
How we sustain our production of energy, food and medical supplies are all important elements of our national security. Together these interconnected domains protect our way of life
In all of these areas, we underestimate (and therefore underinvest in) the events that are unlikely to occur but cause existential damage when they do. We saw during the 2020 pandemic how a lack of preparation results in a significant drop in our standard of medical care – and the rise in injury and death that results.
Over 90 per cent of our medications are imported because we haven’t made the investments necessary to manufacture these domestically. It’s these types of outlier events that shape our future, and too often Australia is caught in a chaotic scramble.
The most important element of national security is sovereign capability, our ability to independently develop, produce, and sustain the goods and services required for our quality of life.
Sovereign capability ensures we can withstand external pressures, supply chain disruptions, or geopolitical conflict without compromising our self-determination. This requires fostering domestic industries and maintaining a skilled workforce.
In many of these areas, Australia scores poorly. The fact that Australia’s ‘strategic’ petroleum fuel reserves are geographically located in the USA is another example of our farcical approach to national security.
According to the latest Australian Petroleum Statistics, as of September 2024, Australia had only 50 days of fuel held onshore.
Why does this matter? No fuel means empty grocery stores and pharmacy shelves.
Private capital is not going to solve this problem. The role of private capital is to maximise its returns and so we get situations where doctors are competing with pseudo-wellness companies for access to IV fluids.
Most private investors focus on efficiency, not resilience. Building and maintaining sovereign capability involves higher costs due to the need for local production and compliance with more stringent regulations.
Private investors also face pressures from global competition and shareholder expectations, which drive them to optimise for immediate cost efficiencies rather than the long-term resilience and autonomy associated with sovereign capability.
As a result, boosting Australia’s sovereign capability requires public capital – sovereign capital – to bear the higher costs and risks that private capital won’t.
We need a different balance between efficiency and resilience. Sovereign capital requires generational ambition. We have examples to learn from such as Singapore’s Economic Development Board and South Korea’s Economic Planning Board.
The ambition and actions required to protect our way of life are constantly undermined by actors like the Productivity Commission, which argued that Australia’s relative size means that “it is not optimal for us to invent everything domestically”, so “many ideas and technologies will come to Australia from overseas.”
This lack of imagination condemns Australia to a future of poverty and servitude to foreign nations.
We simply cannot approach economic growth purely from the perspective of efficiency. Given that Australia’s productivity as a nation has declined every year, one might question the productivity of the Productivity Commission.
Australia occasionally flirts with Sovereign capital. Main Sequence was seeded by it. Breakthrough Victoria is doing great work with the right ambition but is burdened by the slings and arrows of opportunistic political critics.
The $15 billion National Reconstruction Fund also has the right ambition, with Prime Minister Anthony Albanese outlining that growing domestic manufacturing is crucial to enabling Australia “to be more resilient … to stand on our own two feet” to achieve national security through economic sovereignty.
The NSW Government is conspicuously missing in action. More resources are needed, as is a better standard of discourse about why public funds are needed. Private capital will take care of efficiency, sovereign capital is needed for resilience.
We have the people and treasure means to chart our own path. As we shape Australia’s future, our choice is between remaining meekly reliant on foreign imports or investing in domestic assets that safeguard our national security.
Australia enjoys an influx of intelligent, skilled immigrants attracted by our quality of life. With a better distribution of our resource-rich prosperity, we have an opportunity to develop critical technologies onshore which will secure our future as a self-sufficient nation.
Unlike at the start of this article, you can take action. Write to your local elected state and commonwealth members and voice your concern about Australia’s inability to make bags of salt water. Politicians listen when voices get louder.
Also, if you’re ready to build a company to tackle these opportunities, let’s talk. At UNSW we use philanthropy to help entrepreneurs start and grow new ambitious Australian businesses.
Do you know more? Contact James Riley via Email.