iscover
Opinion: Lieutenant Colonel (Ret’d) Philip Pyke OAM warns that amid rising threats, the Albanese government’s defence underinvestment leaves Australia vulnerable, the ADF underprepared, and our troops without the tools to fight, win, and come home.
Over my years of witnessing China firsthand at many levels, including government and military, I have long stated China seeks the following aims in relation to Australia:
- To dominate militarily.
- To shape politically.
- To control economically.
- To influence socially.
- To lead culturally.
As the Albanese government sleepwalks Australia backwards in relation to Defence capability, the risk is Australia’s current defence spending trajectory and capability gaps pose significant strategic risks amid rising regional tensions. At this stage, the government’s reaction has shades of Dickens’ Oliver Twist.
With defence expenditure stagnant at approximately 2 per cent of gross domestic product (GDP), critics argue the Australian Defence Force (ADF) faces critical vulnerabilities in readiness, workforce shortages and industrial capacity.
The Australian Strategic Policy Institute’s (ASPI) Cost of Defence report, which was much criticised with government, warns Australia risks falling behind peers like NATO members, which are moving towards 5 per cent of GDP targets, while China’s military modernisation accelerates. Key risks include:
Near-term preparedness gaps
The ADF’s reliance on long-term projects like nuclear-powered submarines (2030s+) leaves a “paper force” ill-equipped for immediate threats.
Current shortcomings include:
Inadequate munitions stockpiles: limited sovereign production capacity for guided weapons, forcing dependency on foreign supplies.
Workforce shortages: recruitment and retention challenges persist, with the ADF’s small size (57,346 active personnel) undermining sustained operations.
Vulnerable northern bases: underinvestment in integrated air/missile defence leaves critical infrastructure exposed.
Deterrence credibility
China’s military exercises near Australia, combined with public warnings via 60 Minutes Australia from PLA-linked figures (e.g. claims Australia would lose a conflict due to insufficient ships/aircraft) highlight perceptions of weakness. ASPI analysts noted Australia’s “boutique” force structure lacks the mass needed for high-intensity conflict, relying too heavily on expensive, low-quantity platforms.
Alliance strain under ANZUS
While the ANZUS Treaty doesn’t mandate automatic military support, it requires allies to “act to meet common dangers” through consultation. The US has explicitly tied burden-sharing expectations to Australia’s spending levels, with Defence Secretary Pete Hegseth recently demanding 3.5 per cent of GDP. Prime Minister Albanese has pushed back.
Failure to boost investment risks
Reduced interoperability: ANZUS historically prioritised US-compatible systems (e.g. AEGIS), but funding shortfalls could hinder joint operations.
Strategic misalignment: Perceived free riding may weaken US commitment to regional security, particularly under a Trump administration focused on transactional alliances.
In delving deeper into Labor’s supposedly calculated risk, gaps in underinvestment, workforce shortages and delayed modernisation have been identified. These weaknesses risk undermining deterrence, alliance commitments and the ability to respond to immediate threats.
In contrast, the Albanese government bets delayed spending avoids economic strain while maintaining alliance cohesion. However, this approach faces bipartisan criticism with the Coalition pledging 2.5 per cent of GDP within five years, framing Labor’s plan as inadequate. ASPI noted Australia’s defence investment lags behind inflation, eroding real capability gains.
It’s noted the Prime Minister recently stated increases in Defence spending may occur on a capability needs basis – raising the image of the little boy in Oliver Twist (being Defence) with his bowl asking the master (the government) for more gruel.
This is now a begging process and a path service chiefs may be reluctant to take knowing there will most likely be an enforced offset elsewhere.
Australia’s key vulnerabilities
Workforce and readiness shortfalls
Under 2023 data, the ADF has 57,346 active personnel, with recruitment and retention failing to meet targets. These failures limit sustained high-intensity operations, particularly given China’s rapid military expansion and capacity for prolonged conflict.
Skills gaps
Across STEM fields (e.g. cyber security, AI) weaken technological adaptation, leaving the ADF ill-prepared for modern warfare’s demands.
Munitions and industrial deficits
Sovereign guided weapons production remains a decade behind schedule and Guided Weapons and Explosive Ordnance (GWEO) enterprise can’t rapidly replenish stocks, forcing reliance on foreign supplies vulnerable to disruption. Stockpiles of critical systems like the Precision Strike Missile (PrSM) and Tomahawk Land Attack Missile are insufficient for prolonged conflict.
Northern infrastructure exposure
Key bases in northern Australia lack integrated air/missile defence (IAMD), leaving them exposed to long-range strikes. Despite warnings in the 2023 Defence Strategic Review, investment in interceptors like those under Project AIR 6500 remains delayed.
Fuel storage, medical facilities and supply chains in the north are inadequate for sustained combat operations.
Dependency on external systems
The ADF relies on US and commercial space assets for surveillance and communications, creating vulnerabilities if access is denied during conflict. Over-reliance on platforms like the F-35A Joint Strike Fighter (with fleet reductions reported) and delayed AUKUS submarine deliveries (2030s+) exacerbate near-term gaps.
Boutique force structure
The ADF’s small, high-cost platforms (e.g. Hobart Class destroyers) lack the mass needed for attritional conflicts. Autonomous systems could offset this but are being acquired at low volumes, mirroring traditional procurement pitfalls.
Strategic and alliance risks
ANZUS strain: The US has explicitly tied alliance credibility to Australia increasing defence spending to 3.5 per cent of GDP – a benchmark the Albanese government’s 2.4 per cent target (by 2033–34) fails to meet. This strain risks reduced interoperability and weaker US commitment, particularly under a potential Trump administration focused on burden-sharing.
Deterrence erosion: China’s recent live-fire exercises near Australian waters and public dismissals of ADF capabilities highlight perceptions of vulnerability. ASPI warns Australia’s “impactful projection” strategy relies on capabilities that won’t materialise for years.
Labor’s spending gamble
As indicated earlier, the Albanese government’s plan to cap spending at 2.3–2.4 per cent of GDP by 2033–34 faces criticism for:
Under-prioritising immediate needs: redirecting funds to AUKUS has forced cuts to maritime replenishment, mine warfare and infantry vehicles.
Economic short-sightedness: ASPI estimates deterring conflict is cheaper than fighting it, yet current budgets sacrifice readiness for future capabilities.
Political vulnerability: the Coalition’s pledge to reach 2.5 per cent GDP within five years frames Labor as weak on defence ahead of elections.
Australia’s strategic dilemma mirrors ASPI’s warning: “Deterring a bully is cheaper than fighting one.” While Labor’s fiscal caution reflects domestic pressures, the compounding risks of underinvestment – military unpreparedness, alliance friction and emboldened adversaries – suggest urgent recalibration is needed.
With ANZUS cohesion and regional stability at stake, incremental spending hikes may prove insufficient to address both near-term vulnerabilities and long-term ambitions.
However, outside the academic aspects of the debate and budget issues, there’s one key element even the Prime Minister has failed on – and that’s providing the young people of Australia, as in those who will fight the wars, the best equipment possible to win the battles, keep them safe and bring them home.
At this point, the Prime Minister, Defence Minister and the Australian Labor Party are failing current and future members of the Australian Defence Force and their families.
And that is not acceptable by any standard.
Phil Pyke is a strategic communication specialist and retired Lieutenant Colonel. He resides in Tasmania.
