South Korea puts pedal to metal on nuclear subs, looks to accelerate Defence spending, leaving Australia in its dust

Budget allocations and procurement priorities now emphasise long-range strike, advanced air and naval platforms, and a rapid uptake of AI, cyber and unmanned systems – a reflection of both the growing threats on the peninsula and Seoul’s ambition to escape narrow dependency on increasingly questionable alliance guarantees.

A visible sign of that shift is the dramatic expansion of shipbuilding and submarine ambitions. Seoul has steadily modernised its conventional submarine fleet with the domestically built KSS series, but recent diplomacy with Washington has moved the debate into a new stratum: the two countries have agreed to “move forward” on a partnership that will let South Korea build and operate nuclear-powered attack submarines (SSNs), backed by US approvals and an associated industrial package.

That decision marks one of the most consequential capability changes in east Asia. It not only elevates South Korea into a small club of SSN operators but also signals an effort to combine strategic reach with homegrown defence industry growth while also leveraging from its own domestic nuclear power industry.

Several forces drive these developments. North Korea’s expanding missile and naval programs remain the immediate catalyst, but a broader regional logic is also at play: Beijing’s maritime assertiveness, Russia’s strategic behaviour, and accelerating great-power competition have convinced Seoul that deterrence must be credible, resilient and technologically sophisticated.

Political leadership in Seoul has coupled this security calculus with an industrial agenda, using defence investment as a lever to develop sovereign research and development, secure critical supply chains and expand arms exports.

The result is a twin track of spending and capability: near-term investment in advanced conventional systems and force modernisation, and a longer-term bet on transformational platforms, most notably SSNs, to give South Korea strategic depth, deterrent flexibility and an indigenous high-technology sector able to compete regionally and globally.

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In the Australian context, this once again raises the question about the level of Australia’s defence spending, particularly as it relates to the updated NATO floor of 3.5 per cent of gross domestic product (GDP) and the claims of “AUKUS as well as increased spending” as has been advocated by former prime minister Scott Morrison when testifying to Congress.

“It wasn’t [meant to be] ‘AUKUS instead’, it was ‘AUKUS as well’,” he said of Australia’s defence capability. “And ‘AUKUS as well’ was at least going to add another half a per cent of GDP, at least ... [or] possibly more," Morrison said.

So where does that leave Australia?

Australia playing catch-up

With South Korea, a nation broadly comparable to Australia on specific metrics of economic size and position within the post-Second World War geopolitical paradigm and charitably (in Australia’s case) industrial and military power, clearly setting course for increased defence spending and nuclear-powered submarines, Australia is undoubtedly left playing catch-up.

The steady shift away from the United States’ longstanding role as the world’s “global policeman”, a trend that accelerated after the collapse of the Soviet Union and was further entrenched under the Trump-era “America First” approach, carries significant implications for Australia.

Canberra has long relied on the strategic umbrella provided by Washington, but emerging disagreements over defence spending are increasingly being shaped by the expectations of the current Trump administration, particularly its insistence that allies shoulder a greater share of the defence burden.

Reporting by Paul McLeary and Daniel Lippman highlighted how the second Trump administration is reorienting US defence priorities. Pentagon officials are now proposing that the Defence Department focus primarily on protecting the US homeland and the wider western hemisphere, reversing years of emphasis on countering China as the primary strategic challenge.

A draft of the new National Defense Strategy, already circulated among senior officials, places domestic and regional missions ahead of confronting adversaries such as China and Russia.

This shift is occurring as tensions grow between Australia and the United States over Australia’s defence expenditure. Prime Minister Anthony Albanese has remained firm on keeping defence spending within current projections, despite sustained public and expert commentary urging a more substantial increase. The government’s reluctance to lift defence spending beyond the projected 2.3 per cent of GDP by 2033–34 stands in contrast to US expectations that allies contribute more to collective security.

McLeary and Lippman also outlined how the Trump administration’s proposed changes would represent a major break from the traditional bipartisan consensus on US defence and national security policy.

The move departs sharply from the strategic foundations of the 2018 National Defense Strategy, which prioritised deterring China as America’s foremost military task and highlighted intensifying great-power competition involving China and Russia.

Further complicating Australia’s strategic planning is the influence of Elbridge Colby, the Under Secretary of Defense/War for Policy. Under Secretary Colby has long been viewed as a prominent China hawk and an advocate for significant changes to America’s global military posture.

He has also been identified as a key obstacle to Australia’s pursuit of conventionally armed, nuclear-powered submarines under AUKUS. Colby is currently overseeing two major reviews: one examining US global force posture, basing and deployments, and another assessing theatre-level air and missile defence requirements.

These reviews will strongly shape the 2026 National Defense Strategy and are expected to influence Australia’s own defence planning and spending, irrespective of the Albanese government’s resistance. McLeary and Lippman noted that these documents will be closely interconnected and are expected to emphasise the need for allies to assume greater responsibility for their own security as the US refocuses its efforts closer to home.

Understandably, US allies are concerned that the global posture review may lead to reductions in American troop deployments in Europe and the Middle East, along with cuts to critical security assistance programs.

While Australia, if one is to take at face value what a number of people on the floor of IndoPac 2025 were saying, continues to lag behind with programs and contracts increasingly being moved to the right, pillaged for funding or shelved, indefinitely.

We need to end the ’debate’

As it stands, many a commentator, analyst and even average Australian already feel that the 2.33 per cent of GDP earmarked is leaving Australia dangerously exposed, particularly following renewed and recent revelations about yet more obfuscation and almost belittling of public concern about the traversing of the Tasman Sea by a Chinese naval task group by the government.

This feeling of obfuscation and almost lack of concern particularly by Prime Minister Albanese doesn’t mean that the central reality, that being that a more “isolationist” United States force posture, will inescapably require a dramatic increase in Australia’s defence spending, and despite what people may think, 3 or 3.5 per cent, both of which have been identified as the new “floor” for NATO defence spending, simply won’t cut it.

As a result, our current level of defence spending and investment will ultimately feel like a bargain, as the mounting pressure, potential for kinetic conflict and great power competition and coercion – not just by Beijing but by other regional great powers like India, Indonesia and others – will increasingly place pressure on Australia.

For many Australians, this will come as an immense and rude shock, particularly as many have grown up in “the shade of trees, planted by others” and a world where intense geopolitical competition, national tribalism and a host of other realities, once considered consigned to the history books, return with vengeance.

This will require Australia to markedly increase its defence spending and clearly identify and protect its national interests and security as they intersect and come under fire in the Indo-Pacific, whether we like it or not and no matter what it may cost in terms of our own domestic political sacred cows.

Unfortunately for the Prime Minister, spending 3 per cent of our national GDP looks like an unavoidable reality, while spending beyond that, and I would dare say closer to 5 per cent of gross domestic product on defence, will become the “new normal” in the not too distant future.

Final thoughts

Australians – both government and the broader public – are about to confront some uncomfortable truths if we’re genuinely serious about securing our future.

The Indo-Pacific has become the hottest contested region in the world. China, India, Pakistan, Thailand and Vietnam are all asserting new influence, while Japan and South Korea are returning to a more prominent regional role. This isn’t competition on the horizon; it has already arrived, and it’s not going anywhere. Our national strategy needs a fundamental reset to reflect this reality.

Without meaningful, sustained investment and long-term planning, we won’t simply fall behind – we’ll be overtaken by the accelerating momentum of our neighbours. If we fail to act, the next generation will inherit a nation overshadowed by wealthier, more powerful and more influential states.

For too long, successive governments have chased short-term gains and reactive fixes. But the strategic landscape is shifting rapidly. Business as usual is no longer an option. We need to look ahead, capitalise on emerging opportunities and blunt potential threats before they gather pace.

The issue isn’t whether these challenges will materialise – they’re already here. The real question is when Canberra will finally put forward a bold, detailed plan capable of rallying industry and the public around a clear national vision.

With China continuing to press its advantage, Australia faces a stark choice: remain a passenger in our own region or step up as a genuine shaper of the Indo-Pacific’s future. The decisions we make now will determine whether we prosper in this new era or find ourselves swept aside by it.

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 This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..

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.