Election campaign brings defence policy to the forefront
Australia’s defence budget has emerged as a central issue during the final week of the federal election campaign, with both major parties presenting ambitious funding plans that demand financial and strategic scrutiny as global tensions rise.
The Coalition has pledged to increase defence spending to 2.5 percent of GDP within five years and to reach 3 per cent within a decade, positioning itself as committed to bolstering Australia’s security in a shifting geopolitical environment.
Labor, currently in government, has committed to a more modest target of 2.3 per cent of GDP over the next ten years, maintaining its support for defence expansion while signalling a more cautious fiscal approach.
AUKUS agreement intensifies pressure on defence planning
The 2021 signing of the AUKUS pact with the United States and the United Kingdom has added urgency and complexity to Australia’s defence priorities, introducing advanced military technologies such as nuclear-powered submarines while deepening strategic alliances.
Despite limited public debate, both sides of politics endorsed AUKUS, though critics questioned the wisdom of relying heavily on one platform and deepening military dependence on the United States in an era of increasing geopolitical instability.
The nuclear submarine program, while central to AUKUS, represents a long-term project with delivery timelines stretching beyond the current decade, raising concerns about immediate capability shortfalls and broader defence readiness.
Figure 2: Both sides of politics signed up to AUKUS with very little debate
Funding commitments raise concerns about distribution and strategy
Defence expert Marcus Hellyer noted that the Albanese government had announced $50 billion in new defence spending over the next ten years, but said almost all of it would be directed to just two areas: nuclear submarines and general-purpose frigates.
- $50 billion in new defence funding over ten years
- $49 billion directed to submarines and frigates
- $1 billion allocated to all other capabilities
“All of that, except for $1 billion, goes on two capabilities,” Hellyer said, warning that this limited focus risks starving other critical programs of funding and leaves the Australian Defence Force (ADF) vulnerable in the short term.
He emphasised that the navy’s shipbuilding programs have lagged so far behind schedule that the fleet is at risk of becoming non-operational, saying, “Our ship building programs have been so slow that the navy’s at risk of becoming a navy without any ships.”
Hellyer said the submarine program has already distorted broader defence planning, with spending on submarines this year exceeding the entire acquisition budget for the Royal Australian Air Force.
Strategic clarity must accompany increased investment
Hellyer stressed that any increase in defence spending must be tied to a coherent, bipartisan strategy that defines what Australia seeks to achieve with its military posture and capabilities, as a fragmented or reactive approach risks wasting taxpayer funds.
He said, “If we want to dramatically increase defence spending, we need a major structural change in our budget,” adding that more taxes may be necessary to support such a shift without undermining other critical areas of government responsibility.
Hellyer identified two key questions guiding defence investment:
- What capabilities should Australia prioritise to hedge against AUKUS-related delays or failures?
- Where should the nation aim for greater self-reliance instead of relying on the United States?
He said Australia will never be fully independent in producing fighter jets or nuclear submarines, but can and should invest in domestic production of smaller-scale but vital consumables such as drones, munitions and missiles.
Coalition’s defence plan lacks financial clarity and detail
Opposition Leader Peter Dutton said a Coalition government would direct additional defence spending to areas such as drone technology, cyber defences, frigates and guided weapons, saying these were critical to Australia’s operational readiness.
Defence spokesperson Andrew Hastie emphasised the importance of sustainment and personnel, saying, “We need to spend more on sustainment and on personnel,” though the plan did not include detailed costs or program schedules.
Dutton said funding would come from repealing Labor’s $17 billion in tax cuts and from broader economic growth, but experts have called this approach insufficient given the scale of the proposed defence expansion.
Hellyer noted that while Labor had adjusted or cut back some programs, the Morrison government’s defence wishlist was “just too big for the amount of money that they wanted to spend,” highlighting structural budget limitations.
Labor’s defence roadmap faces its own limitations
While Labor has pledged large sums for defence over the next decade, most of the funding is deferred and already committed to nuclear submarines and frigate programs, leaving limited flexibility for other initiatives in the short term.
Figure 3: Labor’s defence roadmap leaves limited flexibility for other initiatives in the short term
Hellyer noted that almost no new funds would support emerging technologies, ground force modernisation or supply chain resilience, all of which are crucial to ensuring the ADF remains responsive and effective.
He warned that without immediate investment in more diverse capabilities, Australia risks becoming overly reliant on a handful of complex programs that may not deliver on time.
Cultural politics complicate defence narrative
Cultural controversies have complicated the Coalition’s defence messaging, particularly after neo-Nazis disrupted an Anzac Day Dawn Service in Melbourne during a Welcome to Country ceremony, drawing national condemnation.
Also Read: Neo-Nazi Disruption Sparks Outrage at Melbourne Anzac Day Dawn Service
Peter Dutton, who previously opposed Welcome to Country funding and walked out on the Apology to the Stolen Generations, said, “I’ve said before that Welcome to Country is an important part of official ceremonies, and it should be respected.”
Critics noted the inconsistency between Dutton’s past positions and his calls for respect, arguing that the Coalition’s cultural stance undermines its broader appeal on issues of national unity and defence leadership.
Defence spending requires sustainable planning and clarity
While both major parties agree that Australia must spend more on defence in a shifting global environment, the financial and strategic details remain unclear.
Current defence plans are heavily centred around AUKUS-related capabilities, leaving other needs underfunded and potentially weakening operational balance in the short term.
Hellyer said, “Certainly, I think 3 per cent is the sort of goal we should be heading towards,” but cautioned that without structural budget reform and clear strategic objectives, any spending increase risks failing to deliver meaningful security outcomes.
With polling suggesting a possible historic low for the Coalition’s primary vote, the viability of its defence policy may be academic, but its influence on shaping public debate remains significant as voters consider Australia’s role in a changing world.
