China in our sights: Defence to get extra $50b over next decade

Defence spending is to soar to $100 billion a year within a decade — double current levels — as the Albanese government directly identifies China’s unprecedented military build-up as the biggest threat of conflict in the Indo-Pacific.

Pushing back on critics who have attacked the government for failing to boost short-term defence spending, Defence Minister Richard Marles announced the government would pump an extra $5.7 billion into the military over the next four years and an extra $50 billion over the next decade.

To help pay for nuclear-powered submarines, new warships, drones and long-range strike missiles, the government will make cuts to other defence projects, including by hitting pause on plans to add an extra squadron of joint strike fighter aircraft.

Marles described this as the biggest boost to defence spending since the Korean War as he released an unclassified version of the government’s 10-year rolling spending plan, known as the integrated investment program, and a new national defence strategy.

The national defence strategy finds that Australia’s strategic environment has deteriorated over the past year, with a rising risk of conflict in the Indo-Pacific as China rapidly builds up its military capabilities.

“The risk of a crisis or conflict in the Taiwan Strait is increasing, as well as at other flashpoints, including disputes in the South and East China Seas and on the border with India,” the strategy says.

It calls out China for employing “coercive tactics in pushing its strategic objectives, including forceful handling of territorial disputes and unsafe intercepts of vessels and aircraft operating in international waters and airspace in accordance with international law”.

“In line with its growing strategic and economic weight, China is improving its capabilities in all areas of warfare at a pace and scale not seen in the world for nearly a century,” the strategy says.

“This is happening without transparency about its strategic purpose. Some of the capabilities it is designing and deploying are highly advanced, including a growing number of nuclear weapons, new missiles, more potent warships and nuclear-powered and nuclear-armed submarines.”

Deputy Prime Minister and Minister for Defence Richard Marles.Credit: Alex Ellinghausen

The stark warning about China’s strategic risks to Australia comes as the government seeks to stabilise relations with Beijing and resume normal trading ties after China restricted imports of Australian wine, beef, barley, timber and coal.

Addressing the great power rivalry between the United States and China, Marles told the National Press Club: “This intensifying competition is creating an environment where the risk of miscalculation is more ominous and the consequences more severe ... Australia no longer has the luxury of a 10-year window of strategic warning time for conflict.”

Chinese President Xi Jinping has instructed the Chinese People’s Liberation Army to be capable of seizing the self-governing island of Taiwan by 2027, a move that could draw the world’s two superpowers, the US and China, into conflict.

Marles also gave his clearest indication yet that the government plans to allow non-citizens to serve in the Australian Defence Force as a way to boost personnel numbers.

He said the 600,000 New Zealanders who lived in Australia would be an “obvious place to start” for foreign recruits, as would Australia’s AUKUS partners, the US and UK.

The government was also looking at options to allow Pacific Islanders to serve with the ADF, he said.

Defence spending is projected to rise to 2.4 per cent of gross domestic product in 2033-34 under the government’s plan, up from the previously forecast 2.1 per cent.

The government is projected to spend $100 billion a year on defence by 2034, up from $50 billion a year currently.

Amid fears that the massive investment in the AUKUS pact will crowd out funding for other military needs, the government plans to spend between $53 billion and $63 billion over the next decade on submarines and related infrastructure – significantly more than on long-range strike or space and cyber capabilities.

Reflecting the rising status of the navy, the government plans to spend 38 per cent of the defence budget on the maritime domain over the next decade compared to 16 per cent for land and 14 per cent for air.

This compares projected spending of 28 per cent for maritime, 24 per cent for air and 20 per cent for land over a decade under the Morrison government’s 2020 force structure plan.

Planned defence programs worth $22.5 billion over the next four years and $72.8 billion over a decade will be cut or delayed to free up money for other priorities.

The government will save $3 billion by not expanding the air force’s number of joint strike fighters from 72 to 100, as well as scrapping plans to acquire two large navy support vessels.

The government will also reallocate $1.4 billion in planned enhancements for defence facilities in Canberra to fortify crucial northern bases, and will use autonomous vessels rather than human mine sweepers to identify undersea threats.

Bec Shrimpton, director of defence strategy and national security at the Australian Strategic Policy Institute, praised the government for making a “serious increase” in defence spending.

Opposition defence spokesman Andrew Hastie vowed to spend more on defence than Labor, saying the Coalition would spend at least 2.4 per cent of gross domestic product on defence if the Coalition returned to power.

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