Prime Minister Anthony Albanese has not dismissed the possibility of significantly increasing Australia’s defence spending in light of pressures from the Trump administration for allied nations to boost their military budgets. During an interview on the Today show, following Defence Minister Richard Marles’ visit to Washington, Albanese reaffirmed the government’s commitment to raising the budget for the Australian Defence Force by an initial $10 billion, while leaving the option for further increases open.
Albanese emphasized that the government would prioritise the necessary assets and capabilities for national defence. He highlighted a recent $10 billion contract with a Japanese firm for new naval vessels as a step towards enhancing the Royal Australian Navy’s capabilities. Furthermore, he mentioned ongoing discussions around increasing the projected defence spending from 2.02% of GDP to 2.33% by the 2033-2034 fiscal year.
However, US officials, including Defence Secretary Pete Hegseth, are advocating for Australia to aim for a target of 3.5% of GDP in defence expenditure, which would translate to approximately $97 billion annually. This increase could necessitate finding an additional $40 billion, which would potentially strain other government funding programs.
The Trump administration has made it clear that allies in both the Indo-Pacific and Europe are expected to contribute more to collective security efforts, thereby lessening the reliance on the US military. This follows President Trump’s earlier success in persuading NATO member countries to allocate 5% of their GDP towards defence.
The urgency of these discussions is underscored by concerns regarding China’s military ambitions, particularly regarding Taiwan, which the US views as a threat to global stability. The administration encourages regional allies, such as Australia, to enhance their defence initiatives to address these emerging security challenges.