Peter Hegseth, the United States Defense Secretary, has urged Australia to increase its military spending to 3.5 percent of its gross domestic product (GDP) as soon as possible, prompting a response from Australian Prime Minister Anthony Albanese.
Albanese emphasized that his government prioritizes assessing Australia’s defense capabilities before determining spending levels.
“What you should do in defense is decide what you need, your capability, and then provide for it,” he stated while addressing reporters from a farm in South Australia amid a significant drought.
He acknowledged that the Australian government is already investing approximately 10 billion Australian dollars ($6.5 billion) into defense and aims to increase spending to 2.3 percent of GDP by 2033.
However, the Albanese government is also grappling with other financial demands, particularly in light of recent natural disasters.
Australia’s treasurer indicated that the country faces a potential financial burden of billions stemming from floods in New South Wales and Cyclone Alfred.
According to public broadcaster ABC, reaching a military spending level of 3.5 percent of GDP could amount to an additional cost of 40 billion Australian dollars ($25 billion) annually, bringing the total to 100 billion Australian dollars ($65 billion).
Matt Grudnoff, a senior economist at The Australia Institute, argued that Australia already allocates more funds to defense than is necessary, stating, “Were Australia to increase its defense spending to 2.3% of GDP, we would be the ninth biggest spender on defense and the military.”
He pointed out that such spending levels would position Australia to invest more in defense than countries like France and Taiwan, and on par with the United Kingdom.
Globally, military spending has surged by 9.4 percent in 2024, marking the largest increase since the end of the Cold War, with European nations contributing significantly to this rise, as reported by the Stockholm International Peace Research Institute (SIPRI).
The Australian government has committed to an extensive expenditure on U.S.-manufactured nuclear submarines as part of the trilateral AUKUS agreement, which could cost up to 368 billion Australian dollars ($238 billion) in coming decades.
In discussions about security, Hegseth and Australian Defense Minister Richard Marles examined issues related to advancing U.S. defense capabilities in Australia and strengthening industrial cooperation, as noted in a Pentagon statement released on Sunday.
In recent times, Australia’s role in producing military components has faced scrutiny, particularly following the ongoing conflict in Gaza, leading to protests outside local weapons factories and ports, along with legal challenges.
Meanwhile, in light of geopolitical tensions, Hegseth’s comments follow U.S. Secretary of State Marco Rubio’s assertion at the Shangri-La Dialogue that the threat posed by China is both real and potentially imminent.
Hegseth highlighted the urgency of the situation, emphasizing that there’s no reason to downplay the gravity of China’s ambitions regarding Taiwan, a matter of significant concern for the U.S. administration.
The Chinese Ministry of Foreign Affairs responded by cautioning the U.S. against using the Taiwan issue for strategic gains or to provoke further tensions.
When questioned about Hegseth’s remarks, Albanese reaffirmed that Australia will shape its own defense policy, underscoring a longstanding bipartisan commitment to maintaining the status quo regarding Taiwan.
image source from：https://www.aljazeera.com/news/2025/6/2/us-urges-australia-to-increase-defence-spending-to-3-5-of-gdp
