Australia may boost defence budget if US asks for more ‘capability’, minister says

A senior minister has hinted the Albanese government could budge on the Trump administration’s call to hike defence spending.

The Albanese government could boost defence spending if the US asks for more Australian “capability”, a senior minister says.

Anthony Albanese has resisted Washington’s call to lift the defence budget to 3.5 per cent of GDP despite alarm bells over China’s military build-up.

The Prime Minister has held firm that Australia would first determine its defence needs and then fund them.

But all NATO members bar Spain agreed to increase defence spending to 5 per cent of GDP this week, highlighting Australia as an on outlier in the West.

Home Affairs Minister Tony Burke hinted on Sunday that could change.

Home Affairs Minister Tony Burke has hinted Australia could lift defence spending if the US asked for more Australian ‘capability’. Picture: Jason Edwards / NewsWire

“We make decisions on behalf of Australia and on behalf of Australia’s national interest,” Mr Burke told Sky News.

“We have mature, decent, respectful conversations with the United States.

“But as I say, the conversation doesn’t start with the dollars at our end – it starts with the capability.

“It is true … now that the world is a less stable place than it was, that means the conversations you’re having now about capability are different to what you would have had.”

Pressed on whether a US request for more capability rather than a flat GDP figure would free up the funds, Mr Burke said it might but that the Albanese government would “look at it from the perspective of if Australia requires more capability”.

“We look at what capability’s required, and that so far has meant, over time, we’ve been spending more money on defence than happened before Labor came to government.”

Prime Minister Anthony Albanese has resisted the Trump administration’s call to boost defence spending. Picture: Martin Ollman / NewsWire / Nicolas Tucat / AFP

US Defence Secretary Pete Hegseth directly called on Australia to set the 3.5 per cent target in a meeting with Deputy Prime Minister Richard Marles earlier this month.

It ignited a major debate in Canberra and fuelled criticisms that Australia is ill-prepared to defend itself against an increasingly aggressive China.

While the Albanese government has committed record cash for the defence budget, much of it will not kick in until after 2029.

With Australia itself predicting a major global conflict by 2034 and some analysts warning of a US-China conflict before 2030, critics have argued the money is not flowing fast enough and instead tied up in longer-term projects at the cost of combat-readiness.

Mr Albanese’s resistance to Washington’s call has also fuelled worries he has mismanaged the relationship with the US.

Appearing on Sky after Mr Burke, opposition defence spokesman Angus Taylor repeated the Coalition’s demand for a 3 per cent target.

Opposition defence spokesman Angus Taylor says Labor is not funding its own defence goals. Picture: NewsWire / Martin Ollman

He said Mr Albanese “is right” not to base Australia’s defence spending on a figure set by another country, but accused the government of not funding the needs set by its landmark defence strategic review.

“It should be based on need, but its own defence strategic review, has laid out where the money needs to be spent and it’s not being spent,” Mr Taylor said.

“I mean, this is the point. This government’s not even meeting its own goals.”

He added that “recruitment numbers … are way below where they need to be” and that Australia’s “naval surface fleet is not where it needs to be”.

“It’s clear that trying to get the balance right between the imperative of AUKUS and other defence spending is not working right now,” Mr Taylor said.

Originally published as Australia may boost defence budget if US asks for more ‘capability’, minister says