Australia's Defence Spending Debate: Is 3.5% of GDP Realistic?

Introduction

There is a broad consensus in Australia regarding the need to increase defence spending. Both major political parties, alongside a significant portion of the defence commentary community, agree that a financial boost is essential. Recently, US Defence Secretary Pete Hegseth made a strong case for this, advising Australian Deputy Prime Minister Richard Marles that Australia should elevate its defence spending to 3.5% of its GDP as quickly as possible.

Current Commitments and Financial Implications

Although the specifics of defence spending as a percentage of GDP can be unreliable, the current Australian government has committed to raising defence expenditure to 2.4%. The previous Liberal Party government expressed plans to elevate this figure to 3% within a decade. Transitioning from a current expenditure of just over 2% to Hegseth's recommended 3.5% would represent a substantial increase, necessitating the government to borrow more, cut spending, raise taxes, or implement a combination of these strategies. However, neither political faction appears willing to undertake such drastic measures.

Arguments For Increased Defence Spending

Supporters of augmented defence budgets offer several arguments:

• Strengthening Relations with the United States: Australian Shadow Defence Minister Angus Taylor argues that more spending is needed to "carry our weight" within the US alliance framework. Historically, Australia has avoided significant pressure to contribute more, but recent remarks from Hegseth imply this leniency is waning.
• Shifting Perceptions on US Military Reliability: A more compelling reason for increasing Australia’s defence spending may arise from perceptions of declining US reliability. Critics emphasize that if Australia is to pursue a self-reliant defence strategy, it may be prudent to reconsider commitments such as the AUKUS submarine agreement.

The Question of Threat

Ultimately, the rationale for increasing defence expenditures hinges on perceptions of external threats. Recent policy documents from both major political parties acknowledge a growing threat from China, though a detailed analysis of this threat remains conspicuously absent from defence discussions.

Defence commentators have yet to produce comprehensive research quantifying China's military threat capabilities against Australia. As such, the apparent urgency for escalating defence budgets presents an ironic contradiction in the absence of thorough threat analysis.

Validity of Current Defence Strategies

While China's military might is certainly formidable, long-standing judgements regarding Australia’s defence requirements remain valid. Defence experts have consistently maintained that any significant military action against Australia would require crossing the extensive sea-air gap to the north. Consequently, Australia should focus its efforts on defending this critical zone, concentrating on forces capable of intercepting air and maritime threats rather than simply increasing financial resources.

Conclusion

Australia faces complex decisions regarding its defence budget. While there is a clamour for higher spending driven by international pressures, a critical evaluation of how defence funds are allocated may prove more beneficial than merely increasing overall expenditures. To meet its national security goals effectively, the exploration of more strategic resource deployment is essential.