Lift defence spending to serve the national interest

In rebuffing Donald Trump’s demand that Australia aggressively lift defence spending to 3.5 per cent of GDP, Anthony Albanese insists his government will “continue to invest in whatever capabilities Australia needs”. That is the contradiction at the heart of the Prime Minister’s position.

The central issue is a simple proposition of jumping to the White House’s tune, although most NATO allies have recognised the need to step up by lifting defence spending to 5 per cent of GDP. As European Commission president Ursula von der Leyen says, in the “most momentous and dangerous of times” Europe is prepared to act “with the speed and the ambition” needed “in an era of rearmament” to “massively boost its defence spending” and take on much more responsibility for its own security.

Mr Albanese says what matters is looking after Australia’s defence and security interests. But Labor’s current trajectory to take defence spending to 2.3 per cent of GDP in the next decade is far short of the nation’s requirements, experienced experts agree, such as former Defence Force chief Sir Angus Houston, co-author of the Defence Strategic Review presented to the government in February 2023, and former Department of Defence secretaries Dennis Richardson and Mike Pezzullo.

In May, former defence minister and ambassador to the US Kim Beazley wrote that Australia needed to “be able to deter hostile developments in our area of direct military interest. We are headed towards spending 2.3 per cent of GDP on defence, in large part to pay for nuclear submarines. I believe as time goes by we will move to 3 per cent of GDP”.

Australia is in a new era, facing our most complex strategic environment since World War II and the need to modernise defence capabilities, as Defence Minister Richard Marles has pointed out numerous times. Given those circumstances, and shortfalls in defence preparedness, the cost of increasing those capabilities may exceed 3.5 per cent of GDP. Meeting the ADF’s need for drones, counter-drones, missile and air defences and offensive missiles would more than absorb an increase in the defence budget from 2 per cent to 2.5 per cent of GDP, Greg Sheridan wrote earlier in June.

The Ukraine war has demonstrated the strategic power of drones, which need to be elevated as an ADF priority along with missiles. “We also have almost no ground-based missile defence systems,” Sheridan noted. “Our northern air bases, our air force squadrons, much of our naval assets could be destroyed on the first day of conflict, especially if we weren’t given notice, by conventional missiles.”

The ADF is also seriously undermanned. As Mr Marles told The Australian’s Defending Australia summit, while our nation was not under threat of invasion by China, it would play a key role if war broke out between the US and China. Mr Richardson agreed that if the US and China went to war over Taiwan, Australia would be unable to avoid being dragged into the conflict. “Whether it be Pine Gap, whether it be the disbursement of US forces, we would be involved,” he said.

Earlier in June, Chief of the Defence Force David Johnston said Australians needed to prepare for more regular Chinese naval exercises off the ­nation’s coastline as Beijing’s powerful navy honed its war plans. And the nation needed to consider the prospect of conducting military operations from home soil, Admiral Johnston told an Australian Strategic Policy Institute conference. “Perhaps, finally, we’re having to reconsider Australia as a homeland from which we will conduct combat operations,” he said.

The implication of those revolutionary comments, Sheridan wrote, is that “there is now a potential adversary that, with missiles, could hit any part of Australia. And that Australia needs to be able to defend itself.” Doing so would be problematic, however, with “a modernised version of exactly the same defence force we had in the 1980s – 100 fast jets, six submarines, six battalions, a surface fleet of 10 or 12. Except most of our force now, apart from our air force, is old and decrepit.”

What is missing in the current debate is any sense of urgency from the government, including Mr Albanese, about responding to changing strategic demands. Mr Trump’s threat to Spain to increase tariffs for its wanting “a little bit of a free ride” in refusing to increase defence spending beyond 2.1 per cent will resonate with Australians.

Questioned about the issue on Friday, Mr Albanese preferred to talk up the political priorities he took to the May 3 election, especially impending boosts to the superannuation guarantee, the increase in paid parental leave and paying superannuation on paid parental leave. With net debt of federal, state and territory governments on track to exceed $1.2 trillion in the new financial year, the government has little room for extra borrowing and would be reluctant to cut social spending.

On Thursday, Defence Industry and Pacific Island Affairs Minister Pat Conroy announced the government was delivering on its commitment to double funding for aerial surveillance under the Pacific Maritime Security Program. Re-energising Australia’s traditional support for our Pacific Islands allies is an important and welcome aspect of the Albanese government’s security strategy, both for our Pacific neighbours’ interests and our own.

It is money well spent. But as China seeks to expand further its largesse and influence across the region through Belt and Road and similar soft-power initiatives, the commitment is likely to cost Australia more. Our commitment to the region also helps the US, which should be underlined in future discussions with Mr Trump and his officials.

The threat Beijing poses to stability in the Asia-Pacific region demands a more robust response from all nations interested in preserving a favourable balance of power, Charles Edel, the inaugural Australia chair at the Centre for Strategic and International Studies in Washington, tells The Australian on Saturday. That will mean greater efforts, resources and commitments by Australia, Japan, New Zealand, South Korea and the US. “Leaning into defence should be a natural response to the deteriorating security environment and an urgent matter of national interest,” he says.

Mr Albanese should bring that understanding when he finally sits down with Mr Trump, as head of our most important security alliance. The Prime Minister needs to avoid being noticed at the White House for the wrong reasons.