Defence officials confirmed Australia would pay the bulk of the cost of building a military base in Papua New Guinea, and that the Navy has ramped up the tempo of its operations in the contested waters of the South China Sea.

The Chief of Navy, Vice Admiral Mike Noonan, told a Senate estimates hearing on Wednesday that Australian ships were "regularly" in the area and being challenged by Chinese ships over the radio about their presence, including the HMAS Melbourne when it sailed through the Taiwan Strait earlier this month to South Korea following a Chinese port visit.