iscover
Opinion: If you choose a metaphor for Defence in the Labor government’s second term, it might be the Titanic, warns Griffith Asia Institute’s Dr Peter Layton.
The good ship “Defence” has been sailed into a clearly discernible iceberg; the senior officers are shushing worried passengers, the band is playing, the crew are all very busy and the ship is gradually sinking.
The iceberg is, of course, the AUKUS nuclear submarine acquisition program. The scale of the program in terms of money, workforce needed and time is progressively harming the rest of the Defence portfolio.
The program is now so large it is seen by defence budget analyst Marcus Hellyer as a fourth service, serving alongside the Navy, Army and Air Force.
AUKUS is a bipartisan iceberg, created by the Morrison LNP government and now being fleshed out by the Albanese ALP government. For political reasons, neither party can stop it, nor even significantly adjust it.
Instead, the iceberg is under the direction of the US and, to a lesser extent, the UK; Australia is simply a paying passenger on someone else’s ship. Even so, AUKUS is imposing high opportunity costs and crowding out other possibilities that could better fit current strategic circumstances.
In many respects, Defence will be marking time for the rest of this decade. The Navy’s ever diminishing surface warship fleet will not start seriously rebuilding until well beyond 2030, its ageing amphibious and submarine fleets have availability issues and its two brand new oilers are both inexplicably unserviceable.
The Army is unsure of its’s place and is crafting a new “theory of army”. Billions are being spent buying new-build and refurbished mechanised vehicles, and old-design helicopters, under acquisition projects begun before the Labor government’s first term defence review. These buys could be out of sync with today’s strategic circumstances.
The Air Force is better placed in having finally received the last of its delayed F-35 fighters, even if they need updating as soon as possible. Ideally, Air Force would be starting gradually recapitalisation now, for deliveries in the 2030s, but given AUKUS, there is no money to begin this.
Fading public support
The simple answer is to give Defence more money. This is already underway. Defence spending is steadily growing but AUKUS costs appear escalating faster. The LNP proposed more money in the election’s final days albeit with 40 per cent of the extra money in five years’ time. Commendably, the LNP openly admitted this would require increasing taxes. Their proposal fell flat.
In retrospect, earlier public support for increased defence spending has been squandered. The Morrison and the first Albanese government both empathised that this decade is particularly dangerous; a major war might break out with little warning.
Having so mobilised the public, both governments then devised defence plans not delivering until the 2030s and in the case of AUKUS, well beyond. The two governments’ words and actions were contradictory. The public appears to believe it has been misled about the urgency and its attention has now shifted away.
Reinforcing this, there’s a strong public perception that Defence wastes money in that its projects are “always” late, over-budget and often fail. Naval shipbuilding is seen as particularly bad. Giving Defence yet more money, seems reinforcing bad habits.
Chances to make a difference
Acquisition decisions loom on the new frigate, army long-range fires and Ghost Bat. However, beyond this business-as-usual work, three areas stand out where the six defence ministers (of varying kinds) could make a real difference.
First, the Trump factor is overturning Labor’s first term defence plans built around ever tighter military integration with the US. The Trump administration is characterised by unceasing policy volatility.
This predilection makes the US an unreliable ally into the future. In a crisis, the US may support Australia but the uncertainty works against having long-term defence plans that literally bet the nation on strong American support. The 2025 Lowy Institute poll finds some two-thirds of Australians now distrust President Donald Trump although some 80 per cent support the alliance, albeit to varying degrees.
Many informed – and less informed – media commentors now agonise over AUKUS; it’s become almost a daily event.
Consequently, a new National Defence Strategy (NDS) and investment plan is needed and fortuitously, one is due in early 2026. It’s major thrust needs to be to robustly, comprehensively and above all, convincingly address the Trump factor. The public needs considerable reassurance to avoid the unpopularity of the President undermining support for the alliance.
The scale of the problem may mean a new grand strategy from which the new NDS can be derived. A whole-of-government reassessment is necessary given the gravity of the situation.
Second, a fundamental flaw in Labor’s first term Strategic Defence Review was minimising AUKUS in its capability development plans for the future Australian Defence Force (ADF) and being somewhat light on concerning financial aspects.
Now that AUKUS is increasingly intruding, the initially planned significant growth in defence budgets appears seriously inadequate. The impact is that the ADF’s earlier forecast long-term plans are being noticeably distorted.
For better or for worse, the ADF plan needs to be rebuilt around AUKUS. The attempt to keep the ADF’s development and AUKUS separate has failed. AUKUS is no longer just a submarine project but now the core of the future ADF and the rest of the ADF may need reshaping to compensate.
The investment plans in the 2026 NDS must reflect this harsh reality.
Lastly, in such rethinking, there’s opportunity. In the defence domain, there is a very rapid rise of robots created by, and demonstrated in, the Ukraine War.
Defence is presently trapped in the old paradigm of the large, expensive and few crewed platforms with AUKUS a leading example. Consequently, Defence is neglecting the emerging small, affordable and many uncrewed system model.
Defence has no money but Labor’s second term government could use the mostly untapped $15 billion Reconstruction Fund which handily includes defence manufacturing as a priority.
Serendipitously, the Australian defence industry is on the cusp of becoming a regional uncrewed system manufacturer whether of high-end Ghost Bats and Ghost Sharks, or of more affordable Speartooths, Bluebottles, Cerberus MI and Atlases.
Australian-made uncrewed systems have also been combat proven in Ukraine. The Reconstruction Fund could build this industry sector, helping Defence and defence industry overcome the AUKUS iceberg collision.
The Titanic can yet be saved.
Dr. Peter Layton is a visiting fellow at the Griffith Asia Institute, an associate fellow at the Royal United Services Institute, the author of Grand Strategy and co-author of Warfare in the Robotics Age.
