Australia to Boost Defense Spending by $30 Billion to Counter China-US Tensions

Australia boosts defense spending by $32B to counter China-US tensions, focusing on nuclear subs, missiles, and northern bases.

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Nitish Verma
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Australia Boosts Defense Spending by $50 Billion to Counter China-US Tensions

Australia Boosts Defense Spending by $50 Billion to Counter China-US Tensions

The Australian government has announced a substantial increase in defense spending, allocating an additional A$50.3 billion (US$32 billion) over the next decade to bolster its military capabilities in response to growing strategic competition between China and the United States in the Indo-Pacific region. The funding boost includes an extra A$5.7 billion over the next four years, taking defense spending to 2.4% of GDP by 2033-34, the largest growth since 1949.

The new defense strategy, outlined in the 2023 Defence Strategic Review, emphasizes the need for a shift from a balanced force to a focused force entirely dedicated to resisting coercion and maintaining Australia's way of life in an increasingly uncertain region. Key priorities include acquiring nuclear-powered submarines through the AUKUS partnership with the US and UK, enhancing long-range strike and missile manufacturing capabilities, and strengthening military bases in northern Australia.

Why this matters: The significant increase in defense spending reflects Australia's recognition of the changing strategic environment and the potential for major conflict in the region that directly threatens its national interests. The funding boost aims to ensure Australia can project power and contribute to regional security in the face of an unparalleled military build-up and intensifying competition between Beijing and Washington.

Over 40% of the new spending, up to A$145 billion, is set for the navy, including the AUKUS nuclear-powered submarine program. Around 25%, or up to A$74 billion, will go toward missile-related programs, such as new longer-range missiles for the air force and army, missile defense programs, and domestic manufacturing of guided weapons. The government also plans to allocate up to A$18 billion for upgrades to military bases across northern Australia, where US Marines are based for training and exercises.

The new defense strategy also calls for widening the eligibility criteria for the defense force to bolster recruitment, including the potential recruitment of non-Australian citizens to address workforce shortages. The government is moving hundreds of defense force personnel from southern bases to northern ones as the nation prepares for a possible conflict in the Indo-Pacific.

The Australian Army will become more amphibious and mobile to contribute to the collective security of the region. The funding boost will come at the cost of previously planned upgrades to defense facilities in Canberra, and the acquisition of two large support vessels for the Navy will no longer be carried out. The government argues the previous administration had over-programmed defense projects without adequate funding and aims to rein in this practice.

Prime Minister Anthony Albanese stated, "The Defence Strategic Review sets out a pathway for a more potent, integrated, and ready ADF that can rapidly deploy to our immediate region and beyond to support our allies and partners." The government plans to update the defense strategy biennially to keep pace with the rapidly evolving strategic environment.

Key Takeaways

  • Australia to boost defense spending by A$50.3B over 10 years to 2.4% of GDP.
  • Focus on nuclear-powered subs, long-range missiles, and northern military base upgrades.
  • Aims to project power and contribute to regional security amid US-China tensions.
  • Widens eligibility for defense force, shifts personnel to northern bases.
  • Plans to update defense strategy biennially to adapt to evolving environment.