Of all the Generation X world leaders elected in the last few years – think Justin Trudeau in Canada, Emmanuel Macron in France, and even the 31-year-old Sebastian Kurz in Austria – it is New Zealand’s Jacinda Ardern who has the firmest sense of what kind of country she wants to lead on the world stage.

Just four months since taking office after a decade of conservative rule, and while trying to carefully balance the views of three parties in government, New Zealand is already showing signs of regaining its trademark standing as a small but confident, principled and creative presence internationally. And Australia should take notice.

Foreign policy is perpetually a balance between interests and values. But too often it is easy to focus on the security and economic imperatives of the first and forget the second, or not realise that the two are inextricably linked.

Australia used to be the gold standard for charting the right course. Our foreign policy in the 1980s and early 1990s was characterised by Gareth Evans’ concept of being “a good international citizen” which he used to say was about “no more – and no less – than the pursuit of enlightened self-interest”. Our crafting of the Cambodia Peace Plan and the Canberra Commission on the Elimination of Nuclear Weapons were two clear examples, as was our opposition to apartheid. But these were pursued within a wider understanding that our future prosperity and security was in Asia and we also needed to cement a role for ourselves in the region, not least through our founding of Apec.

If anything, New Zealand wore their values even more strongly on their sleeves, famously sending a ship with a cabinet minister on board to protest at the edge of a French nuclear testing site in 1973, and then in 1985 refusing entry to the nuclear-powered USS Buchanan (which unfortunately caused the breakdown of their involvement in ANZUS). But it is important to remember this was driven by the people.

These are clearly the days Ardern longs for.

Speaking on Tuesday before travelling to Australia she said, “Being a child of the 80s affected me in many ways and that included international events. Rather than just reading about the impact of apartheid in South Africa for instance, or nuclear testing in the Pacific, I saw instead each of these issues through the lens of our response. They weren’t history lessons, they were lessons in our values, what mattered to us, and that our size bore no relation to the impact our voice could have.”

Ardern also said that she wants the next generation of Kiwis to see their country standing up for what it believes in on the world stage. And her announcement this week that her foreign minister and deputy, Winston Peters, will also take up the ministerial title and mantle of nuclear disarmament is one of the first manifestations of that. He will push for the early entry into the landmark treaty on the prohibition of nuclear weapons, which Australia opposes despite a long history of leadership on the issue at all levels. The campaign group that just won the Nobel Peace Prize was founded in Melbourne after all.

Ardern’s focus on climate change – what she has called her generation’s nuclear-free movement – will be another. In December she said New Zealand would explore a new visa category for climate-affected Pacific Islanders, and this week Peters announced at the Lowy Institute in Sydney that New Zealand would “reset” its engagement with the region – taking a cue from the eloquent case put at the same lectern by Australia’s own Richard Marles last November. Indeed, it is telling that next week Ardern will visit the Cook Islands, Niue, Samoa and Tonga before she has been to the United States, China, Japan or Europe – New Zealand’s four largest trading partners besides Australia.

Admittedly, Ardern’s strategy to embrace the Asian Century and shore up relations with the United States and others is less clear – and here Australia excels as Malcolm Turnbull’s reception in Washington last month demonstrated. But otherwise it seems, we have lost our own compass for the world.

While most people singularly and somewhat naively focus on international aid as a measure of a country’s global heart (where, all told, we have gutted more than $11bn in recent years), there are countless other examples – not least the fact that despite taking up a seat on the UN Human Rights Council this week, our international reputation continues to suffer as a result of the treatment of asylum seekers on Manus and Nauru, and because of a lack of progress on reconciliation (a point Kevin Rudd made in these pages this week). And for all the money we spend on peacekeeping, we don’t spend a dime on peacemaking.

Even in recent years when we have become exercised about particular matters diplomatically – like our opposition to the death penalty – there is a tendency for us to only stand up for these values as they apply to those who hold an Australian passport.

Take for example the case of Andrew Chan and Myuran Sukumaran in 2015. Former Liberal MP Phillip Ruddock argued at the time that our calls for clemency probably would have been received more powerfully if we had consistently made representations on behalf of the hundreds of Indonesians on death row in the Middle East. And if anything, we should have used their tragic executions to start a new regional push against the death penalty – starting by trying to reduce the number of crimes that carry a death sentence and pushing for its removal for some crimes, with greater transparency on these executions in the meantime.

Put simply, when our values and what we stand up for are neither clear nor consistent, we cannot expect others to respect them. This was something New Zealand learnt in the 1990s when its principled opposition to a French resolution on Haiti at the UN allowed it to weather any impact to its bilateral relations – a far cry from John Key’s assertion in 2015 that sending troops to Iraq to fight Isis was simply “the price of the club”, referring to the Five Eyes intelligence network.

Unfortunately, last year’s Foreign Policy White Paper didn’t give you any sense of what as a country we believe in, or what we want to do. Understanding what we believe in as a nation, what we are good at, and what upsets us is central to crafting an effective foreign policy.

Penny Wong put it well recently when she said in a Fairfax interview that “to me, fundamentally, foreign policy is about your place in the world and how you see Australia in the world. Having a sense of what your purpose is as important as the day-to-day management.” We may be good at the latter, but we cannot expect to make much of a difference if that is all that we do.

Either way, values are not the monopoly of any one particular side of politics, or even one country. If we want to make a difference in the world, we should watch closely what happens in Ardern’s New Zealand.

Thom Woodroofe is a UN Representative with Independent Diplomat, a non-profit diplomatic advisory group. @thomwoodroofe