Defence spending to increase by $53bn over 10 years, minister reveals
Richard Marles announced that defense spending will increase by more than $53 billion over the next decade, according to forward-looking estimates, “the largest increase in peacetime”.
The Defense Minister will be outside the National Press Club in Canberra on Thursday, when the Albanian government is expected to unveil the 2026 National Defense Strategy (NDS) and Integrated Investment Program (IIP).
This comes at an unstable time for Australia, with a ceasefire in Iran in doubt and ongoing talks between Israel and Lebanon.
As long-standing tensions with China over Taiwan and the South China Sea continue to escalate, the government has sought to refocus on Australian Defense Force assets in the north of the country in recent months.
Mr Marles is expected to tell the Press Club that the Albanian government will invest $14 billion over the next four years and another $53 billion over the next 10 years, above the trajectory set in the 2024 NDS, which will be included in the 2026-27 May budget.
The increase will be funded by net proceeds from Defense as well as controversial real estate investments and alternative financing.
According to the plan, defense-wide financing will total $887 billion in 2023-26.
Approximately $425 billion of this is allocated to defense capabilities specified in the 2026 IIP; This is an increase of more than $150 billion since 2020.
Mr Marles is expected to tell the National Press Club that international norms continue to erode, more countries are in conflict than at any time since the end of the Second World War and the government is “pursuing every avenue to rapidly increase its defense capacity”.
“As a result, we are seeing the largest peacetime increase in defense spending in our nation’s history,” Mr. Marles will say.
“This isn’t just rhetoric.”
Mr Marles said the NDS was “a clear-eyed assessment of a more dangerous and uncertain world”.
“And a confident response to that,” he will say.
“This puts Australia on a path to strengthening our defense self-reliance. It strengthens the industrial and national foundations of defence. And it positions Australia firmly within a network of trusted regional and global partnerships.”
“Above all, it ensures that Australia remains secure, sovereign and prepared not only for today’s challenges but for the next decade.”
Mr. Marles says that since taking office, the Albanian Government has increased its defense spending by a total of $30 billion, according to the latest estimates, and $117 billion over the next decade.
However, Australia’s defense spending is not expected to reach approximately three percent of GDP until 2033.
NATO’s long-standing target was 3.5 percent of GDP, but last year it was raised to 5 percent under pressure from Donald Trump.
The NDS is also expected to indicate the need to leverage alternative financing, including equity-based financing and private financing through Commonwealth bodies.
Mr Marles is also expected to spend in Australia.
“Almost 80 per cent of the defense budget last financial year was spent in Australia,” he said.
“Direct employment in the defense sector has increased by 14.5 percent since we took office.
“This includes the accelerated development and acquisition of uncrewed submarine and surface ships and uncrewed aircraft, and the acquisition of cutting-edge drone and counter-drone technologies.”
