As Australia emerged from the carnage of WW2, one phrase came to define the country that we became in the post-war period: “Populate or Perish”.

Many believed that Australia had come very close to being invaded by Japan and serious concerns were raised about whether a population of 7.3 million people could defend a continent. So in 1947, the Chifley Labor government launched an ambitious immigration and infrastructure scheme to help populate Australia. Within 8 years, 1 million people had immigrated to Australia, forming 11% of the country’s population. It set up Australia’s current immigration led growth which, following the repeal of the White Australia Policy in 1972, is why I was born where I was.

Once again, Australia finds itself emerging from a catastrophic global crisis. And the phrase which defines Australia’s post-pandemic future must be “Diversify or die”. While Australia is prosperous, the trends which brought us this prosperity are unlikely to continue.

The first trend is the large share of coal and natural gas in Australia’s exports. Coal and natural gas together make up around 20% of Australia’s total exports. In many parts of Australia, such as the Hunter Region of NSW and regional Queensland, much of the business investment, employment, and economy is driven by natural resources. But fossil fuels are increasingly becoming a costly, irrelevant power source. Domestically, renewable energy has far outpaced the best case cost and uptake projections from the Australian Government’s 2017 National Energy Market Review. Internationally, Australia’s three largest trading partners (China, South Korea, and Japan) have all committed to net zero emissions by 2050 and are in the process of decarbonising their economies.

While Australia’s government (and some more eccentric members of the opposition) have buried their heads in piles of coal dust, the corporate sector is less ignorant. Coal miners across Australia are cutting jobs as prices fall and coal increasingly becomes uneconomical. More recently, Fortescue Metal Group’s Andrew Forrest announced a significant pivot from his traditional iron ore mining into renewables. Coal and natural gas are on their way to a well deserved grave and Australia might find itself following in their footsteps.

The second trend is Australia’s overreliance on China. A third of Australia’s exports go to China (compared to 9% for 2nd place Japan). This concentration is one of the biggest reasons that Australia went 29 years without a recession pre-Covid, the developed world’s largest uninterrupted economic growth streak. However, this overreliance is one that Australia can no longer ignore. In recent months, Australia has found that China is a less than cooperative trade partner who is willing to use its economic power to coerce countries who do not kowtow to its demands. When Australia led a global call for a UN inquiry into the origins of, and response to, Covid-19, China’s ambassador to Australia responded with covert threats. Those threats have now come to be true. China’s trade war with Australia has seen delays, tariffs, or import bans on numerous Australian exports including coal, barley, cotton, beef, timber, and even lobsters. It’s not hard to imagine that this coercion will happen again in the future as China increasingly flexes its strength in the Asia-Pacific region.

It is for these reasons that Australia must “Diversify or Die”. So how should Australia do that?

Australia needs to diversify its economy. From an energy perspective, that means setting a clear renewable energy target and committing to net zero emissions by 2050. It means setting up a transition plan so that communities and people employed in fossil fuels receive employment in good high paying jobs that build up the infrastructure our country needs.

More broadly, Australia needs to diversify its economy by investing in technology and advanced manufacturing. We need to increase funding for the CSIRO and other public sector research in Australia and reorient our economy towards the economy of the future. This also needs to be supplemented with a boost in funding to our vocational sector (e.g. TAFE), to build the skilled labour force that will be needed for such a transition (similar to what Germany has).

Internationally, Australia is making good progress on diversifying its exports by entering into regional trade deals through the TPP and RCEP. However, these will not be successful unless the Australian government, and exporters, make a concerted effort to win in markets that have been traditionally neglected by Australia, such as Indonesia.

Australia has a choice to make on whether we decide to “Diversify or Die”. Let’s hope we make the right one, before we have no say in our destiny.