Albanese government announces $53 billion boost
An extra $53 billion will be poured into defense over the next 10 years as the Albanian government seeks to refute claims that the country’s military is dangerously unprepared for the age of modern warfare.
The government will claim that defense spending will reach 3 per cent of gross domestic product by 2033 – the level demanded by a number of military experts – but that the definition traditionally used in Australia to calculate this effective figure will be scrapped.
Even using the new method to calculate defense funding, the figure remains below the 3.5 per cent target of GDP that Trump’s War Secretary Pete Hegseth has called for Australia to spend on defence.
The budget increase, which includes an extra $14 billion for defense over the next four years, is a win for Defense Minister Richard Marles and Defense Industry Minister Pat Conroy, who have argued in the cabinet that a significant increase is needed at a turbulent time when countries are increasingly using force rather than diplomacy to resolve disputes.
But many defense experts and the Coalition are likely to argue that the increase is still inadequate to the level of funding required to ensure Australia can pay for the AUKUS nuclear submarine program without depleting the rest of its defense force.
The extra defense spending, which represents an increase of about 5 percent over the next four years, comes on top of an additional $50 billion in defense funding over a decade that the government will announce in 2024.
The government has signaled it will have to cut, cancel and delay some planned defense programs to accommodate extra spending on drones and other advanced technologies, although it has not yet announced its goals.
Defense Minister Richard Marles will tell the National Press Club on Thursday that the government has made “the largest peacetime increase in defense spending in the history of our nation.”
“International norms that once restricted the use of force and military pressure continue to erode,” Marles will say, according to speech notes.
“More countries are engaged in conflict today than at any time since the end of the Second World War, and this is occurring in every region of the world.”
Marles will say the new defensive strategy is “not a change of direction, but a strengthening of resolve with a greater focus on self-reliance.”
Marles said the government is seeking to leverage alternative forms of defense financing, including equity-based financing through government agencies and private sector investment.
Speaking ahead of the announcement of the new defense strategy, former defense ministry boss Dennis Richardson said: “If you keep all the existing capabilities we have, and on top of that have nuclear-powered submarines, you will spend more than 3 per cent of GDP on defence.
“Anyone who argues differently is trying to pull the wool over people’s eyes.”
Australia spends around 2 per cent of GDP on defence; This figure is expected to rise to 2.33 percent by 2033 under the financing plan announced two years ago.
The government will claim defense spending will reach 3 per cent of GDP by 2033, using a definition from the North Atlantic Treaty Organization (NATO) that differs from Australia’s traditional calculation and includes money spent on military pensions and a broader definition of military infrastructure.
Marles argued last year that Australia already spent 2.8 per cent of GDP on defense using the NATO definition, reflecting the significant difference between the two methods.
The opposition, which went into the last election promising to increase defense spending to 3 percent of GDP, is likely to accuse the government of using accounting fraud to claim a large increase when the ratio of defense spending to GDP has not increased dramatically.
Details of the financing were given to journalists on the condition that they did not seek comment from third parties.
Speaking before the figures were released, retired major general Mick Ryan said he feared the ADF was too focused on naval capabilities such as frigates and submarines, arguing that the army and air force should not be marginalised.
“The threat is here now, and we need to spend heavily by the end of the decade to help prevent a more catastrophic situation in our region than what we saw in Ukraine and Iran,” he said.
Retired senior officer Ian Langford, who held senior positions in the ADF, said: “The government’s narrative that Australia faces the most dangerous security situation since the Second World War does not match the sources.”
