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Nobody has ever said that defending Australia will come cheap. Following a big year for defence budgeting and the national accounts in particular, this has come to the fore, but with the next half of this decade set to be more challenging, what is the true cost for defending the nation?
From the Cold War era to the modern challenges of a contested Indo-Pacific, the ebbs and flows of investment in defence reflect Australia’s efforts to balance economic constraints with the growing demands of an increasingly complex global and regional environment.
Naturally, Australia’s defence and national security spending has experienced significant fluctuations over the past four decades, shaped by shifting geopolitical dynamics, economic conditions and evolving strategic priorities.
In the 1980s, the nation’s defence strategy was anchored in the formalisation of the “Defence of Australia” doctrine, outlined in the 1987 Defence White Paper.
This shift in strategy focused on and prioritised self-reliance and the protection of the continent’s northern approaches, leading to investments in maritime and air capabilities such as Collins Class submarines and F/A-18 Hornet fighter jets. However, spending remained modest, reflecting the relative geographic insulation and isolation of Australia from major global conflicts.
The 1990s brought a period of fiscal tightening and strategic realignment following the end of the Cold War, with no imminent threat on the horizon and the uncontested global dominance of the nation’s great and powerful friend, the United States, defence budgets were reduced, and focus shifted to peacekeeping and humanitarian missions, such as those in East Timor and the Solomon Islands.
This period emphasised regional stability but required less capital-intensive commitments, as Australia, like many across the Western World, embraced the “Peace Dividend” and began winding back “big defence spending” in favour of a boutique force designed for niche, peacekeeping operations rather than high-intensity conflict.
However, the events of 2001 marked a pivotal shift, the September 11, 2001, attacks and subsequent global war on terror prompted Australia to ramp up spending on counter-terrorism, expeditionary operations, and intelligence capabilities across Australia’s defence and national security ecosystem.
By the 2010s, Australia’s focus increasingly shifted to the Indo-Pacific, driven by rising tensions with China, strategic competition in the region, and the emergence of new threats such as cyber attacks.
The 2020 Defence Strategic Update and 2020 Force Structure Plan, which earmarked $270 billion worth of spending from 2020–30, accelerated a move away from the “Defence of Australia” doctrine towards a strategy emphasising a desire for the nation to “shape, deter, respond” the future of the Indo-Pacific.
Bringing us to the 2024 National Defence Strategy and Integrated Investment Program, which have been described as the most ambitious realignment of Australia’s defence priorities in decades and have set aside $330 billion in spending out to 2033–34.
In order to deliver this, Deputy Prime Minister and Defence Minister Richard Marles said, “The inaugural National Defence Strategy sets out a clear and priority-driven approach to protecting against threats to Australia and our interests. The National Defence Strategy outlines how we are transforming the ADF and equipping it to survive in a much less-certain world.”
The strategy emphasises strengthening sovereign defence capabilities, including the multibillion dollar, multi-decade plan to acquire conventionally armed, nuclear-powered submarines, enhancing cyber and space operations, and rapidly acquiring long-range strike capabilities, such as hypersonic missiles.
“The 2024 Integrated Investment Program is a complete rebuild of the integrated investment programs of the past. While it contains more money, it also required the reprioritisation of $22.5 billion over the next four years and $72.8 billion over the decade,” the Deputy Prime Minister said.
The central doctrine of the National Defence Strategy is founded on the concept of “National Defence”, a shift in the nation’s approach to defence, in a doctrine that “harnesses all arms of Australia’s national power to achieve an integrated approach to our security”.
Underpinning this is the “reprioritised” Integrated Investment Program which also earmarks record funding for emerging technologies like artificial intelligence, autonomous systems and advanced surveillance, underscoring Australia’s commitment to technological superiority.
Today, Australia’s defence spending is at its highest levels since World War II, reflecting the urgency of preparing for a contested Indo-Pacific and an increasingly volatile regional and global landscape.
However, Australia faces increasing concerns about the long-term fiscal sustainability of the government’s future spending with a total deficit out to 2027–28 estimated to tip $220 billion, baking in serious structural financial challenges for future governments as the nation positions itself to navigate an era of intensifying strategic competition.
This isn’t a GDP debate
Much of the debate around the nation’s defence spending emphasises the headline defence spending figure, or more simply put, defence spending expressed as a percentage of the nation’s gross domestic product (GDP).
But for reference, Australia’s Defence spending is expected to rise from its approximately 2 per cent figure (between 1.98 and 2.11 per cent of GDP) today to 2.4 per cent of GDP by 2033–34 or approximately $100 billion, an increase of AU$50.3 billion as outlined by Minister Marles during the launch of the 2024 National Defence Strategy and Integrated Investment Program.
The Deputy Prime Minister said, “This financial year spending in Defence will be $53 billion. These increases will see annual Defence spending almost double over the next 10 years to $100 billion in the financial year 2033–34.
“It will see Defence spending as a proportion of gross domestic product projected to increase to around 2.4 per cent by 2033–34. Prior to the government commissioning the Defence Strategic Review in 2022, the previous trajectory of the Defence budget over the same period was to plateau at around 2.1 per cent of GDP.”
Australia’s Defence spending is expected to hit $100 billion by 2033–34, a truly astronomical figure for the nation, but still only a fraction when compared to programs like the National Disability Insurance Scheme (NDIS), which is expected to hit (at least) AU$200 billion over the next four-year forward estimates period.
With this in mind, one can’t help but ask, just how much is enough to defend the nation?
Defending the nation is more than just the military
What makes the question of “how much” it will take to defend the nation a more challenging question is the rise of grey zone and hybrid warfare, which is increasingly dragging in (often kicking and screaming) once uninvolved areas of a nation into the domains of warfare.
This has, in large part, been driven by the People’s Republic of China and Russia and, to a lesser extent, the likes of Iran and North Korea, as they seek to undermine the traditional strengths of the US and allies like Australia, capitalise on fissures within these nations while blurring the traditionally understood lines of peace and war.
Equally influential is the rise of asymmetric actors, whether criminal organisations, mercenaries both in the physical world and in cyber space that add further layers of complexity and cost for policymakers to grapple with and account for. This is further compounded by “natural” challenges like natural disasters, both terrestrial and extraterrestrial (no I don’t mean ET, I mean space weather, just to clarify) that have the capacity to lay the nation and its citizens low.
So clearly defending the nation is only going to become an increasingly costly endeavour as the lines are increasingly blurred and the nation’s military will play an increasingly central role, purely by its centre of mass for key sensors, effectors and brain power, returning us to the question, how much is enough to defend the nation?
Final thoughts
Australians, despite much rhetoric, appear at best hesitant – or at worst, unaware – that the world is shifting towards a more “multipolar” reality. Nowhere is this more evident than in the Indo-Pacific, which has rapidly become one of the most contested regions globally.
Economic decline, coupled with the worsening balance of global and regional power and the increasing politicisation of daily life, has deepened a sense of disconnection, apathy, and helplessness among Australians. This mindset fosters a growing belief that we are hurtling towards an inevitable fate, leaving both the public and policymakers feeling disempowered in the face of daunting challenges with little perceived benefit and significant risks.
This attitude has bred a widespread complacency, where both the general public and decision makers appear content with mediocrity. The lack of ambition, perhaps driven by convenience or a fear of change, has left the nation drifting without a clear or bold vision for its future.
If Australians – both citizens and leaders – fail to confront the illusion of the “End of History” and remain wrapped in the false comfort it provides, the nation risks facing a harsh new reality. In such a world, Australia would no longer be the master of its destiny, forced instead to navigate an increasingly uncertain and perilous global landscape.
Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at
