Rise or cannibalise: Experts agree Australia must lift defence spend to 3% GDP

The vital increase is being spurred by speculation that the incoming United States administration, headed by returning president Donald Trump, will no longer absorb the entire cost of defending democratic countries around the globe.

In the US president’s previous term, there were serious questions asked about the 2 per cent baseline of GDP defence spending as established by NATO membership in Europe.

More specifically, that in 2014, NATO heads of state and government agreed to commit 2 per cent of their national GDP to defence spending, to help ensure the alliance’s continued military readiness. However, in contrast, historically, many countries had failed to meet this standard, including major Western allies such as France, Canada, Germany and Spain.

Even Australia itself has committed to an increase in annual defence spending over the next 10 years to $100 billion in FY2033–34.

“Defence spending as a proportion of gross domestic product projected to increase to around 2.4 per cent by 2033–34,” Australian Deputy Prime Minister Richard Marles said.

“Prior to the government commissioning the Defence Strategic Review in 2022, the previous trajectory of the Defence budget over the same period was to plateau at around 2.1 per cent of GDP.”

But is 2.4 per cent good enough or is Australia on track to receive a rather large shock from the current ’world police’ nation?

VIEW ALL

United States Studies Centre chief executive officer Michael Green said the new US administration, led by President Trump, is expected to crack down on nations which have defaulted in their national defence spending.

No allies of the United States will get a pass on 2 per cent defence spend of GDP, according to Green.

We expect that even close allies of the US such as Canada and those in Europe will not get a pass, he said.

Green made the comments during the recent Sydney International Strategy Forum hosted by the United States Studies Centre on 20 November.

The conference brought together US and international experts to assess the expected approach of the incoming US administration headed by Donald Trump regarding the future of American leadership and an increasingly contested Asian region.

This idea to increase the percentage of GDP defence spend from 2.1–2.4 per cent to 3 per cent was further echoed by experts such as former Australian ambassador to the United States Arthur Sinodinos AO.

“The new US administration will expect allies and partners to spend more on their defence ... and it’s in our best interest to do more,” he said at the conference.

“We need to make the ‘they need us’ pitch from Australia to the USA.”

Former secretary of the Department of Defence and Department of Foreign Policy and Trade Dennis Richardson AC, also speaking at the forum, said that Australia must work hard to assure any doubts in the US administration and US military that our nation can pull its military weight.

“Our focus now should be delivering Fleet Base West by 2027 ($20 billion was allocated to build a naval maintenance hub in WA under an announcement earlier this year) ... we must assure the doubts in the US military,” he said during the forum.

“Nuclear-powered submarines [under the AUKUS trilateral security agreement] must be a net addition to the Australian Defence Force capability.

“We must raise to 3 per cent [of GDP defence spending] to do this, because the only other way to do this is to cannibalise our other Australian Defence Force capabilities.

“This is something that neither political parties (Liberals or Labor) have come to terms with yet, I think.”

But why the rush, why does the 3 per cent increase need to be made quickly?

Former Chief of the Australian Defence Force, Air Chief Marshall (Ret’d) Sir Angus Houston, also speaking at the forum, said there was now an increasingly urgent need to combat new threats, alliances and technology that had emerged since his retirement from the military in 2011.

“Things have gotten worse, at that time, the only big war running was Ukraine [now we have wars in Ukraine and the Middle East]. We see the alignment of four countries in North Korea, China, Russia and Iran. Things are pretty grim,” he said.

“We have seen no moderation of China in the Indo-Pacific. There has been no transparency, no assurance [of their increasing military build-up].

“We routinely see incidents in the South China Sea, testing of the Natuna Islands.

“We can be very worried about the South-Pacific. There are offers being made to small island states for policing assistance (from China). We may wake up to basing rights, which would be a serious challenge for Australia.

“There is now a proliferation of missiles, even the Houthis are firing missiles now. We need to worry about the ready availability of missiles and drones from anyone.

“[In regard to the US alliance] the US and Australia have a relationship born in blood. We come up trumps there. He [President Trump] might say increase your GDP defence spend to 3.0 per cent, but I don’t think that is a bad thing.”