US Defence Secretary Pete Hegseth’s demand for Australia to nearly double defence spending to 3.5 per cent of GDP has gone down like a lead balloon in Canberra.
Anthony Albanese, who chose to ignore the Coalition’s calls earlier this year for him to travel post-haste to Washington and prostrate himself before President Donald Trump to secure Australia a tariff exemption, feels his judgment has been vindicated.
Donald Trump and Anthony Albanese could meet in Canada next month.Credit: Marija Ercegovac
Fresh from being re-elected with a historic majority, Albanese is in no mood to bow down to the Americans, especially when dislike (or at least distrust) of the current US administration aided Labor’s victory.
At present, Australia spends about 2 per cent of GDP on defence, or about $59 billion a year, and that figure will rise to 2.3 per cent by 2030. Going to 3.5 per cent would mean spending an extra $40 billion each year, approximately the annual cost of the entire NDIS.
Delivering this would require significant tax rises or a big increase in federal borrowing – maybe both – and potentially swingeing cuts to the expanded social programs that Australians just voted for.
The prime minister’s response on Monday was cautious, measured and a polite rejection of our closest ally’s request.
“What you should do in defence is decide what you need, your capability, and then provide for it. That’s what my government’s doing ... we’ve provided an additional $10 billion of investment into defence over the forward estimates [four years],” he said.
“What we don’t do is do what the opposition did during the election campaign, where they announced an amount of money, they couldn’t say where the money was coming from and they couldn’t say what it was for. That makes no sense.”
Albanese’s private view is harsher.
He has told cabinet colleagues that if the health or education minister walked into cabinet and demanded spending in their portfolio had to reach a certain percentage of GDP, without any details about what the additional spending should target or what it would achieve, they would be laughed out of the room.
So why should Defence, which perhaps more than any other department has a reputation for wasteful spending and cost blowouts, be given carte blanche?
That means, despite defence hawks backing the rise, Hegseth’s call is unlikely to be met, at least for now.
The speed of the dismissal is unfortunate, as there is a sensible debate to be had about whether Australia’s pursuit of nuclear submarines has pushed back the acquisition of other war-fighting kit, such as infantry fighting vehicles for the Army or minesweepers for the Navy, into the never-never. At an uncertain time, this should be an ongoing debate, though one that examines what the country needs rather than an arbitrary percentage of GDP, as Albanese said.
But there is every chance the conversation could return to the fore. In a couple of weeks, Albanese will fly to Canada for the G7 summit, marking his first opportunity to meet Trump face to face.
Trump has already shown he doesn’t mind confronting other world leaders – and tearing strips off them – as the cameras roll.
To avoid this, Albanese might well choose to have something in his back pocket to mollify the president.
But if his public comments and private observations are any guide, the prime minister has no intention of simply rolling over to have his tummy tickled by the leader of the free world.
He might point instead to Australia’s significant contribution to US defence through its technologically advanced military, critical infrastructure in Darwin and at Pine Gap, and through the Five Eyes defence partnership.
Former prime minister Malcolm Turnbull stood up to Trump. The president hated the refugee swap deal made under the Obama administration, but honoured it. Albanese’s moment to stand up to Trump could be fast approaching.
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