We have to be careful what we wish for—it will cost more.
For decades, Australia has quietly traded resilience for efficiency, offshoring its manufacturing and refining capabilities in pursuit of cheaper goods and frictionless commerce. Now, as Middle East tensions ripple through global freight and fertiliser markets, the nation confronts a reckoning long deferred: the cost of dependence on systems it cannot govern. Governments are moving to rebuild sovereign capacity, but the deeper question is not logistical — it is a matter of what a society is willing to pay, and sacrifice, for the security of its own continuity.
- Rising freight costs and fertiliser prices driven by Middle East conflict have exposed how little buffer Australia has built into its supply chains after decades of cost-cutting optimisation.
- Empty supermarket shelves in Western Australia — triggered by something as local as a flooded Nullarbor — reveal that a system engineered for efficiency has no capacity to absorb even modest shocks.
- The federal government's National Reconstruction Fund signals intent to rebuild advanced manufacturing on home soil, but officials are candid that neither the private sector nor the public purse can absorb this cost painlessly.
- Experts warn that genuine resilience means accepting higher grocery bills, narrower product choice, and a deliberately less optimised economy — a trade-off Australians have not yet been asked to formally endorse.
- The political and social conversation about what the country is willing to pay for self-reliance is only just beginning, and its outcome remains genuinely open.
The disruptions spreading outward from the Middle East have landed in Australian supermarkets and fuel bowsers, making visible a vulnerability that has been quietly accumulating for half a century. At an ABC Radio Perth forum on national resilience, the question was put plainly: how much has Australia given away in the pursuit of cheap and efficient global trade?
Andrew Hastie, the opposition's voice on sovereign capability, argued that the country has offshored too much — advanced manufacturing, fuel refining, the industrial foundations of a functioning modern state. His remedy was to treat national capability the way Australians treat household insurance: a cost you bear not because you expect disaster, but because you cannot afford to be unprepared when it arrives.
The government pointed to the National Reconstruction Fund as evidence that rebuilding is already underway. But Minister Matt Keogh was candid about the obstacle: this kind of resilience carries a real price tag, one the private sector will not willingly absorb when cheaper offshore options exist. The public, he acknowledged, would need to be part of the decision.
Supply chain academic Liz Jackson provided the structural diagnosis. Fifty or sixty years of relentless cost optimisation have produced supply chains of remarkable efficiency — and almost no redundancy. Every buffer, every reserve, every layer of slack was stripped out because it looked like waste. It was waste, in the narrow accounting of normal times. In a crisis, it is the difference between shelves that hold and shelves that empty.
The honest reckoning Jackson offered was this: Australians have grown used to cheap food, abundant choice, and frictionless consumption. Resilience asks them to accept less of all three. The war in the Middle East has made the question urgent. Whether the country will actually answer it — and pay what the answer costs — is still unresolved.
The Middle East is burning, and Australia is feeling the heat in its supply chains. Freight costs are climbing. Fertiliser prices are climbing faster. The disruptions have exposed something uncomfortable: this country, for all its resources and wealth, has become dangerously dependent on a global system it cannot control.
At an ABC Radio Perth forum on national resilience, Andrew Hastie, the federal opposition's spokesperson for industry and sovereign capability, laid out the problem with clarity. Australia has offshored too much—advanced manufacturing, fuel refining, the things a modern nation needs to function. "We've become a very trade-exposed nation," he said. His solution was direct: invest heavily in bringing capability home. He framed it as insurance, the way Australians insure their houses and their lives. Why not insure the nation itself?
The government, for its part, says it is already moving. Matt Keogh, the minister for veterans' affairs and defence personnel, pointed to the National Reconstruction Fund, established after COVID as a tool for rebuilding sovereign capacity. It was not just about masks and medical supplies, he explained, but a broader push to resurrect advanced manufacturing on Australian soil. The work is underway. But Keogh was careful to name the obstacle: cost. "There's a cost to government, there's a cost to the taxpayer," he said. The private sector will not bear this alone. They will look for profit margins and cheaper options. That is how the economy works.
Liz Jackson, an associate professor of supply chain management at Curtin University, offered the historical context. Supply chains have been engineered over fifty or sixty years with one goal in mind: cutting costs. They are marvels of efficiency, stripped of anything that looks like waste. But efficiency and resilience are not the same thing. Buffers—the inventory, the reserves, the redundancy that would let the system absorb a shock—are expensive. They look like waste. So they were removed. Now, when the Nullarbor floods or a war disrupts shipping, supermarket shelves in Western Australia empty. The system has no give.
Changing this will not be quick or painless. Jackson was blunt about the trade-off. Australians have grown accustomed to cheap food, cheap products, and an almost infinite variety available on demand. Building resilience means accepting higher prices and narrower choice. "We have to be a bit careful what we wish for," she said. The cost of self-reliance is not abstract. It will show up in the grocery bill, in the price of fuel, in the everyday friction of living in a less optimised economy.
Keogh acknowledged that the public would have to come along for this ride. It is not a decision the government can make alone. It requires a conversation about what Australians are willing to pay for security, and what they are willing to give up for it. The war in the Middle East has made the question urgent. But the answer—whether the country will actually accept the cost—remains unwritten.
Notable Quotes
Australia has become a very trade-exposed nation and has offshored advanced manufacturing, fuel refining, and other key capabilities.— Andrew Hastie, federal opposition spokesperson for industry and sovereign capability
There's a cost to government, there's a cost to the taxpayer. The private sector won't bear this entirely because they look for profit margins and cheaper costs.— Matt Keogh, minister for veterans' affairs and defence personnel
The Hearth Conversation Another angle on the story
Why does Australia feel so vulnerable right now? It's a wealthy country with resources.
Because we stopped making things. We optimised for cost, not resilience. We outsourced manufacturing, refining, the infrastructure that keeps a country running. When global supply chains hiccup, we have no backup.
So the solution is to bring manufacturing back home?
That's what the government is trying to do with the National Reconstruction Fund. But it's not simple. You have to rebuild factories, train workers, accept that things will cost more.
More expensive than what?
More expensive than now. We've gotten used to incredibly cheap food, cheap products, endless variety. That only works because someone else is making it cheaper somewhere else. If we make it here, we pay more.
Could we keep some global supply chains and just add buffers—reserves, backup stock?
Yes, but buffers are expensive. They look like waste. For fifty years, companies have been cutting them out to maximise profit. Adding them back means accepting costs that don't show up as profit.
Who pays for that?
Everyone. Government, taxpayers, consumers. The private sector won't absorb it willingly. They'll look for cheaper options. That's how the economy works.
So this is really a question about what Australians are willing to accept?
Exactly. The government can invest in factories and funds, but unless people accept higher prices and less choice, it won't work. That conversation hasn't happened yet.