In a speech to the Lowy Institute on Tuesday night, the prime minister said Australia needed to be active in the international arena so it was “not just observers of the interplay of others”.

Spruiking the government’s efforts to rebuild regional ties, Mr Albanese pointed to the security pact struck with Tuvalu.

He described this as the “most significant piece of Pacific diplomacy” Australia had been a part of since the nation supported Papua New Guinea’s bid for independence.

“What Australia says and does on the world stage matters – to our security, our prosperity, to the strength and stability of the region we call home,” Mr Albanese said.

The prime minister, who became the first Australian leader to set foot on Chinese soil in seven years last month, said the “patient, calibrated and deliberate” approach had delivered a stabilisation in the relationship.

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But the government remained clear-eyed about China’s ambitions, and the rapprochement didn’t mean “compromising any of Australia’s core interests or values”.

On the increasing tension and competition between the US and China in the region, the prime minister said the nation could support the “fundamental guardrail of dialogue” between the two great powers.

Mr Albanese reaffirmed his government’s position on the Israel-Hamas conflict following the October 7 attack, saying “every innocent life matters”.

He drew clear distinctions between Hamas who he labelled the “enemy” and the Palestinian people.

“There can be no role for Hamas in the future governance of Gaza,” the prime minister said.

A protest was held outside the Sydney Town Hall, where Mr Albanese delivered his foreign policy speech, calling on the government to adopt a permanent ceasefire in Gaza position.

Mr Albanese said Australia would achieve better outcomes when it could deal “directly and honestly” with other nations by placing dialogue at the core of international and regional engagement.

“When Australia invests in our region and the world, we get a return,” he said.

“It’s not a matter of Australia opting-out of the hard work of defence and security.

“And like every other nation that has benefited from this framework of freedoms and fairness, Australia has a responsibility to uphold it and defend it.”