iscover
Prime Minister Anthony Albanese has responded to growing questions about the nation’s defence spending, reinforcing his belief that platforms and capabilities defend the nation, not arbitrary spending figures. But this leaves us with more questions than answers, particularly if we start looking at what has been “reprioritised”.
Australia’s recent defence reform agenda had been anchored by the 2023 Defence Strategic Review (DSR), 2024 National Defence Strategy (NDS), Integrated Investment Program (IIP), and Surface Fleet Review, marking what the government has sought to position as a decisive shift in strategic thinking, driven by the trends and demands of a significantly more contested regional environment.
The 2023 DSR challenged long-held assumptions about the time available to prepare for conflict, declaring the end of the 10-year warning period. It emphasised that Australia now faces its “most complex and dangerous strategic circumstances since the Second World War”.
This now-ubiquitous and frankly tiresome statement is now well established as the justification for a sweeping suite of reforms, contentious “reprioritisations” and cancellations, seeking to drive the Australian Defence Force (ADF) to become more agile, lethal and capable of operating across greater distances, particularly within the northern approaches and Indo-Pacific region.
Meanwhile, the 2024 National Defence Strategy, building on these findings, set out the foundations for a “strategy of denial” as the central organising principle for Australia’s future defence planning. This approach is focused on deterring potential adversaries from projecting force against Australia and its interests throughout the region by developing a military posture that can impose high costs and operational risks on any aggressor.
At the core of this shift towards a “strategy of denial”, the NDS also highlighted the importance of strengthening both regional and global alliances and partnerships, particularly through initiatives such as AUKUS and expanded regional cooperation through organs like the Quad.
To support these strategic priorities, the 2024 Integrated Investment Program outlines AU$330 billion in planned defence spending over the next decade. It prioritises investments in long-range strike capabilities, maritime and air power, cyber and space technologies, and the enabling infrastructure necessary for a faster and more robust response. Enhancing northern basing and logistics infrastructure is a key part of this effort, ensuring the ADF can sustain operations across Australia’s vast approaches.
Finally, the Surface Fleet Review complemented this shift by proposing an expanded and more lethal naval force, recommending a future surface combatant fleet of 26 major warships, with the intent to enhance the Navy’s capacity for sustained joint operations, deterrence and maritime security missions in Australia’s surrounding waters and the broader Indo-Pacific.
Together, the government has sought to frame this series of reviews as a fundamental reorientation of Australia’s defence posture away from a focus on continental defence as outlined and advocated for in the 1986 Dibb report and subsequent 1987 Defence of Australia Defence white paper, shifting from an over-emphasis on a long-term warning time towards a proactive, regionally focused force with credible deterrent capabilities and the resilience to respond to short-notice crises.
Against this backdrop, growing pressure from the US Trump administration about Australia’s defence spending as a proportion of gross domestic product (GDP) has seen the recently returned Albanese government seemingly walk back its criticism (at least in principle) of the Coalition’s election commitment of increasing defence spending to 3 per cent of GDP.
While this backtrack is welcome, particularly given Prime Minister Albanese’s recent comments where he pushed back against US Defense Secretary Pete Hegseth who, during the Shangri-La 2025 Dialogue in Singapore, called on Australia to lift its defence spending, with the PM saying, "What we’ll do is we’ll determine our defence policy, and we’ve invested just across the forwards, an additional $10 billion in defence. What we’ll do is continue to provide for investing in our capability but also investing in our relationships in the region.”
Yet despite this and growing calls for Australia to rapidly increase its defence spending in order to achieve the ambitions outlined in the aforementioned review splurge beginning in 2023, there is a growing recognition that Australia must do more, despite what the Prime Minister told reporters yesterday during his address and following questioning at the National Press Club, where he outlined his government’s second term agenda.
A major mismatch – Rhetoric v reality
The Prime Minister responded to questioning about the state of Australia’s defence spending and the capability being delivered, saying, "Well, we have $57 billion over 10 years. Ten billion dollars over the forwards of additional investment. It seems to me that if the health minister or the comms minister or the infrastructure minister came to us and said, ‘We want you to spend X percentage of GDP but we won’t tell you what it’s for,’ that – they wouldn’t get far in an ERC process. And there is no reason why defence shouldn’t be governed by anything other than one factor. What do we need? What is the capability we need to keep us safe? Our capability will always be supported, any submissions, by myself as prime minister.”
Going further, the Prime Minister added, "Yeah, of course [Defence spending as a proportion of GDP could go up]. We will always provide for capability that’s needed. But you saw the alternative. You don’t have to theorise about it. You saw it during the election campaign, an announcement of AU$21 billion by the Coalition. They couldn’t say where it was coming from or where it was going to. Australians voted on 3 May against a, frankly, unprepared for government opposition, which was unprepared in so many ways.”
But by far, the most important part of the Prime Minister’s response is this key statement, "The only area in which they were prepared was in rhetoric and you can’t defend a country with rhetoric. You defend it with assets.”
And herein lies the crux of the issue and a metric from which we can measure just how committed to defending the nation and enhancing its capability it truly is, because as the Prime Minister very, very clearly articulated, one can’t defend a country with rhetoric, you can only defend it with assets – so, why then have we gone backwards?
Don’t believe me? Well, let’s take a methodical, objective look not just at cancellations, reductions and reprioritisations, but how much the government has genuinely delivered and what was the delivery of announcements from the previous government.
A tale of the tape
While the government has framed much of the cancellations, reductions and reprioritisations identified in the 2023 DSR, 2024 NDS, IIP, and Surface Fleet Review respectively, but, speaking to anyone involved in Australia’s defence industry and more broadly the defence and national security commentariat, one is frequently reminded that we are, in fact, going backwards.
Given the scale of Defence, I am going to have a look at just a few examples – the planned acquisition of two large Navy support vessels was scrapped, with government reasoning that support ships, while useful, were not aligned with the immediate need for maritime strike and combat readiness.
This decision redirected funding towards more lethal surface combatants and missile systems; however, we still have seen the retirement of two Anzac Class frigates and two Huon Class mine hunters. Meanwhile, on the missile front, the purchase and integration of the Naval Strike Missile and the Tomahawks into the surface fleet were both signed off on by the previous government, so really, given the long lead time for the delivery of these systems, I will let you be the judge.
None of that accounts for the fact that neither the Hobart and Hunter class are set to increase their missile capacity beyond what is publicly known (48 vertical launching system and 32 VLS, respectively) despite frequent and repeated concerns about the requirement to do so, particularly for the still in construction Hunter Class frigates, although we MAY get six Large Optionally Crewed Surface Vessels again with only 32 VLS and, of course, we can’t forget the new General Purpose Frigate program (that is yet to have a determined winner), again with a maximum of 32 VLS.
Hardly the significant uplift in offensive firepower and capability we have been promised and more of the status quo.
Similarly, the Army’s light helicopter program for special forces (Land 2097 Phase 4) was cancelled, with the rationale being that existing or soon to be in service platforms, namely the growing Black Hawk fleet and incoming Apaches, alongside the in service Chinooks, already covered the intended operational roles, and a new light fleet would be redundant and inefficient.
Now this seemingly makes sense, after all, we have recently committed to the acquisition of both the reliable, adaptable and highly capable UH-60M Black Hawk and despite the hyperventilating rhetoric, the highly capable Apache, why would we add a new rotary wing asset to our order of battle? Well we don’t need to. Both Sikorsky and Boeing provide special forces-focused variants of both the Chinook and Black Hawk and would deliver far more capability, commonality and effectiveness for Australia’s special operations community without detracting combat capability from the regular Army.
Bringing me to a very contentious cancellation/delay (we’re not quite sure) of the AU$7 billion JP 9102 military satellite communications project, which has been widely seen as a major blow to Australia’s sovereign defence space capabilities, with the justification being that the solution presented by Lockheed Martin (just months after being awarded the contract) lacked the resilience and distributed security required in the contemporary threat environment.
Rather, the government advocated for the shift from the “single-orbit” satellite system towards exploring a distributed, multi-orbit commercial and dual-use solutions instead, leaving Australia’s domestic and military space industry in a state of complete disarray and Defence dependent upon US and other allied satellite communications capability, while industry continues to atrophy.
Meanwhile, a planned AU$1.4 billion program to upgrade Defence infrastructure in Canberra was also shelved, with investment redirected to critical operational bases in northern Australia, such as Darwin, Townsville and Learmonth to enhance forward deployment and force projection through the region – no major issue with this shift, but the delay in defining, scoping and beginning this infrastructure hardening says more than enough.
Bringing us to the suite of scaled back capabilities announced by the Albanese government over the past three years, beginning with the number of Arafura Class offshore patrol vessels which was cut from 12 to 6 as outlined in the Surface Fleet Review, based on a reassessment of their utility, which identified that while useful for constabulary duties, they lacked the systems needed for serious maritime combat roles.
Again, fair enough, at least at face value, but surely there was a way of enhancing the combat capability and self-defence capability of the remaining ships while establishing the baseline for an upgrade program for the already built vessels (think a Capability Enhancement Program [CEP]) that could resolve the issues surrounding the main gun, adding containerised munitions, including self-defence capabilities and let’s not forget the “cancellation” of SEA 129 to provide the Arafura Class with a ship-borne ISR-focused autonomous system.
Then we get to the Hunter Class frigate program that had been described as the central pillar of Australia’s future surface naval capability when originally announced in 2018, with a planned fleet of nine advanced, anti-submarine warfare frigates (or destroyers given their displacement, combat system and advanced anti-air/missile warfare capabilities) while pushing out the delivery date of the first ship planned for commissioning in 2032.
The reduction of the original order from nine to six ships, combined with repeated concerns about the performance characteristics, including speed, endurance and the relative firepower of the vessels defined as a “Tier One” surface combatant, particularly when compared to the “Tier One” surface combatants of other nations (think Arleigh Burke, Renhai, Sejong the Great and Kongo classes, respectively), with concerns about these issues frequently dismissed and obfuscated by Defence and BAE Systems alike.
While this has been partially offset by the planned acquisition of a yet to be determined general purpose frigate between 7 and 11 hulls, with the first three to be built offshore to accelerate the delivery time frame, along with “minimal changes” to be made in order to again speed up the delivery of the capability, however, how many ships we finally end up with remains to be seen.
Bringing us to the challenges facing Army that is all at sea about what its role is to be within the auspice of this new strategy of denial, beginning with the significant reduction of Army’s Infantry Fighting Vehicle program, which was also substantially scaled back, from a planned 450 vehicles to 129, which while enough to deliver a single combat brigade, leaves Army short of necessary depth in spares, industrial capacity and a host of other areas.
The government has frequently cited concerns about strategic mobility, namely, that the ADF would struggle to deploy such a large number of heavy vehicles rapidly across Australia’s vast distances or into the Indo-Pacific, with the reduced and revised fleet size better aligned with a forward-deployed brigade model and enables savings to be redirected towards missile and drone capabilities (most of which remain to be seen).
Then we have the planned acquisition of a fourth squadron of F-35A Joint Strike Fighters which has been deferred, with the fleet to remain at 72 aircraft for now (the exact same number of “classic” F/A-18 Hornet fleet). Instead, Defence will continue operating Super Hornets out until the middle of next decade (at least) and shift funding towards long-range strike weapons like Tomahawk and JASSM-ER (again signed off initially under the previous government), reflecting the broader move to prioritise survivable, stand-off weapons that support the ADF’s deterrence posture.
While some of these reprioritisations make some sense at face value, we are yet to actually see where the expected AU$73 billion generated as a result of reprioritisations, cancellations and deferrals will actually deliver credible combat mass and capability, beyond small supplies of long-approved missile acquisitions that remain, like many of the larger programs years away from delivery in meaningful numbers due to congested global supply chains and manufacturing bottle necks.
Don’t believe me? Just ask anyone working in defence industry.
Hollowing out
When one takes the Prime Minister’s statement, that we defend the nation with assets rather than rhetoric, seriously it becomes increasingly clear that this government, as with its predecessors, is simply a case of more of the same, a lot of style but little on substance.
Now yes, I will give them credit where credit is due, particularly around successes like the increased number of HIMARs to be fielded (building on the previous government’s HIMARS decision), various missile manufacturing deals, particularly the NSM and JSM deals, along with deals for GMLRS (although we still don’t really have a factory or supporting industrial capacity yet), but there is pretty much where this really ends.
Now for the elephant in the room: the vast “great devourer” that is Australia’s pursuit of a conventionally armed, nuclear-powered submarine force expected to cost just shy of AU$400 billion (when accounting for inflation on the original AU$368 billion) that is consuming much of the nation’s defence funding, effectively hollowing out the nation’s defence capabilities while indulging Australia’s tried-and-true approach of constantly looking for a “silver bullet” capability to solve all of our defence challenges.
The problem is that in our region and more broadly in the defence and national security context, there are no silver bullets and Australia, in particular, requires an overlapping, resilient and complementary suite of capabilities across the land, sea, air, space, cyber and grey zone domains to provide national policymakers with the options to resolve any number of challenges that we may face.
In order to deliver this, the simple and unavoidable fact is that Australia’s defence spending needs to increase and dramatically so, but it can’t simply be a case of throwing more money at the department without serious reform to maximise the efficiency, value-for-money, industrial uplift and of course, capability delivered to the Australian service personnel.
While I have only focused on a few programs and projects, it is pretty clear that we are materially going backwards and our defence and national security is only going to buckle, so Prime Minister, time to put your money where your mouth is, because as you yourself have clearly articulated, assets defend the nation, not words.
Final thoughts
If Australia is serious about truly developing and maintaining independence in the Indo-Pacific and is determined to prosper in a more contested, volatile world, we need to think bigger, act bolder and plan more strategically as a nation.
Defence spending alone won’t safeguard our future. In an era of geoeconomic competition and coercive statecraft, economic power is national power. To hold our own in this shifting global order, we must sharpen our economic edge, building resilience, expanding industrial capacity and turbocharging competitiveness.
The government’s core mission should be clear: grow the economy with purpose, create opportunity on our terms and forge an economic shield strong enough to deter coercion and withstand disruption.
This demands more than incremental reform. We need radical transparency, a culture that celebrates innovation and a new compact between government, business and citizens. Australians deserve a real stake in national strategy and a voice in shaping the choices that will define our future.
It also requires a hard look in the mirror. Are we content with the label of a “middle power,” always reacting to the moves of others? Or are we ready to lead? To earn our place at the top table and champion outcomes worthy of the next generation?
In an age of great-power rivalry and compounding shocks, we can’t afford short-termism or business as usual. Australia needs a bold, long-range vision, one that secures prosperity, hardens sovereignty and protects our freedom for decades to come.
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
Stephen Kuper
Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.
