Richard Marles leaves door open to heeding US call to boost defence spend

Defence Minister Richard Marles has left the door open to lifting defence spend after a key Trump administration appointee called for a massive rise in Australia’s military spending.

Defence Minister Richard Marles with SA premier Peter Malinauskas at the Osborne Naval Shipyard. Picture: RoyVPhotography

The Albanese government has opened the door to boosting defence spending after one of US President Donald Trump’s key Pentagon appointees called for a massive rise in Australia’s military spending from 2 per cent to 3 per cent of GDP.

Defence Minister Richard Marles revealed the government was ready for an “ongoing conversation” with the Trump administration about lifting defence spending further than the government’s promised $50bn boost over a decade.

With national security set to be a prominent theme of the upcoming federal election, Mr Marles said it was “completely reasonable that America is asking its friends and allies around the world to do more” to safeguard their security.

“We’re totally ready to engage in that conversation with the United States, which we’ve already started when I met with my counterpart, Secretary Pete Hegseth, a few weeks ago,” Mr Marles told The Australian’s Defending Australia summit in Adelaide.

“We talked about defence spending, and there was a total acknowledgment of what we are doing in terms of lifting that trajectory. I think this ends up being an ongoing conversation.”

Mr Trump’s nominee for head of policy at the Pentagon, Elbridge Colby, said on Wednesday that Australia needed to lift defence spending to at least 3 per cent of GDP.

Elbridge Colby, President Donald Trump's nominee to be under secretary of defense for policy. Picture: Getty Images/AFP

Mr Colby also sounded a note of caution about the nation’s AUKUS preparations, warning the US faced “a very difficult problem” in meeting its pledge to supply three Virginia-class boats to Australia, due to its slower-than-expected submarine production.

But Mr Marles said he was confident the Trump administration would honour the US’s AUKUS commitments, saying he and Mr Hegseth had a “shared sense of mission around our alliance, very much including AUKUS”.

Opposition defence spokesman Andrew Hastie said he believed AUKUS was “a lock” under Mr Trump, but he said it was vital the government “demonstrate a strong hand in future negotiations”. He said this could include a Ukraine-style offer of US access to Australia’s rare earth resources. “We’ve also seen in (Mr Trump’s) exchange with President Zelensky, that America is keen on rare earths,” Mr Hastie told the summit.

“So there’s a couple of things that we could be doing with the United States to strengthen our hand as things unfold … like a geopolitical off-take agreement with our rare earths.”

The government is under growing pressure to boost defence spending after Britain’s Prime Minister Keir Starmer led calls for both Britain and European nations to sharply increase defence spending for what he called a “generational challenge” in global security amid fears of an ascendant Russia and China.

Mr Trump has called on European nations to lift their defence spending to 5 per cent of GDP and Mr Colby’s comments are the first time a senior Trump Pentagon appointee has targeted Australia’s $55.7bn defence budget as inadequate to deal with the growing China threat.

US Navy officers stand guard aboard Virginia-class fast attack submarine USS Minnesota. Picture: Colin Murty - Pool/Getty Images

The Coalition has said it will increase the defence budget, but has refused to say by how much.

“We’ve already indicated very publicly that we will increase defence expenditure,” Mr Hastie told the summit.

He said he and Opposition Leader Peter Dutton had already given a hint to that with a pledge to spend at least $3bn on a fourth squadron of the F-35 joint strike fighter, “but we’ll announce our full costings and our budget plan ... closer to the election”.

Asked where the money would come from, he said “we’ve got our plan. We’re going to announce that in due course.”

Under Labor, defence spending is forecast to come in at 2.03 per cent this financial year, 2.02 in 2026-27 and 2.12 in 2027-28, before eventually rising to 2.3 per cent in 2033-34 – around the same time Australia is scheduled to get its first Virginia-class submarine from the US.

Mr Colby told his confirmation hearing that Australia was a “core ally” to the US and military ties between the countries were “excellent”. But he said Australia needed to massively increase its defence budget to be in a position to deter China.

“The main concern the United States should press with Australia, consistent with the President’s approach, is higher defence spending,” Mr Colby told the US Senate Armed Services Committee.

“Australia is currently well below the 3 per cent level advocated for NATO, by NATO Secretary General (Mark) Rutte, and Canberra faces a far more powerful challenge in China.”

He said AUKUS was “a great idea” but if there was a conflict with China over Taiwan it would be “absolutely essential” for the US to have as many Virginia-class submarines as possible.

Mr Colby said he had told Australia and the UK that restoring the US’s submarine-building capacity was a top priority “so we don’t have to face these awful choices”.

In Adelaide on Wednesday, Mr Marles unveiled a new AUKUS industry strategy to underpin the program’s business and investment cases, and develop the skilled workforce that will be required to build nuclear submarines in South Australia.

Mr Marles and SA Premier Peter Malinauskas also announced a $500m investment in a shipbuilding skills and training academy, scheduled to open in 2027-28.