The Australian Defence Organisation’s budget is under pressure, and Defence must make choices, Admiral David Johnston, the chief of the defence force, said on 4 June when asked whether more money was needed.
In preparation of the 2026 National Defence Strategy, ‘it’s my job and that of the department to give government that frank advice and a view of what we need to be doing,’ Johnston told the 2025 ASPI Defence Conference.
‘We’re having to reconsider Australia as a homeland from which we will conduct combat operations,’ he said as part of a panel moderated by ASPI senior fellow Marc Ablong.
The question on the defence budget came from Bloomberg reporter Ben Westcott. Extracts from the panel discussion follow:
Marc Ablong: Given the clarion call for action in the National Defence Strategy, what does genuine national preparedness look like in today’s strategic environment and how can a nation like Australia mobilise whole of society capabilities in and beyond the Defence Force? Admiral Johnston, if you’d like to start.
David Johnston: I thought I’d start because I think it’s important context setting for what we will do over the course of this panel to give you a view of what does the strategic environment look like in the terms of preparedness or readiness from a defence perspective, and then perhaps some insights into what then does the consequences of that judgement have for us.
Marc made a comment that strategic warning time is no longer 10 years and that was a critical judgement, first in 2020 and then reinforced in 2024, which had the impact of removing a very comfortable security blanket that we had. That meant that some problems that we knew we would have to address in national readiness or preparedness, we had time to be able to organise ourselves to do so.
With the removal of that judgement, that meant we’ve had to take quite a fundamentally different approach in defence and, of course, not limited to it.
Other aspects of it are the pace of technology change, and we talk repeatedly that that is significant in a number of tech sectors. It’s increasing. The consequence of that is the type of judgments we make of, ‘Where do we put our investment now? Do we fill warehouses with equipment that we think technology will quickly overtake?’ And uncrewed systems, countering uncrewed systems are examples where that technological evolution is rapid. In Ukraine, the cycle is somewhere up to 12 weeks before tech investments becomes irrelevant because of counter strategy. So a real consciousness that we need to be very clear about where we make judgments about our technical investment.
… For many good reasons, I think, like industry and many other partners, we’d established in defence an arrangement where we prioritised efficiency and that meant we sought the lower overheads in how many warehouses locations do you maintain or adopting a just-in-time approach to being able to ensure we’ve got the munitions or supplies or critical stores.
But we are now having to rethink. Perhaps if you are after a resilient approach, effectiveness or efficiency is not the driving judgement that you are dealing with. We’ve learned through everything from the COVID pandemic through to the circumstances we see with conflict in multiple regions, there’s an interconnectedness effect of it. And at the same time, we as a nation might be seeking to uplift. Other nations are seeking to do the same and that brings a degree of competitiveness to our ability to access the critical stores, tech, or expertise that we might need.
And perhaps, finally, we’re having to reconsider Australia as a homeland from which we will conduct combat operations. And that, again, is a very different way almost since the Second World War about how we think of national resilience and preparedness of we may need to operate and conduct combat operations from this country. And that’s everything, from our northern infrastructure, our supply chains, how we integrate with industry states and territories is quite a different answer to that notion of operating from the homeland.
…
Ben Westcott: We had the coalition wanting to raise military spending to 3 percent during the election. We’ve had Pete Hegseth pressing the government to raise levels to 3.5 percent or potentially even 5 percent. Now, without going into specific levels, does the panel think there is a need for such an increase, large increase in military spending, and is it as simple as ‘more money equals better outcomes’ in defence?
David Johnston: It is an important subject. And of course, defence spending is an opportunity cost for government on a range of other outcomes. I think that, and yes, you’ve heard what Secretary Hegseth said at Shangri-La [the Shangri-La Dialogue on 31 May and 1 June] and our own national debate similarly has been dealing with this question.
But I would say Defence is fully expending its budget at the moment. That’s a good thing, as we’ve uplifted our acquisition delivery, workforce is improving, our view of what we need to do around readiness. That does put pressure on a budget that we have to make choices on.
It is helpful now that we have a biennial strategy cycle, so unlike the past where the frequency of structure reviews or white papers was an open-ended proposition, the opportunity we have with the biennial cycle now is to keep coming back and reviewing the strategy, looking at the opportunities or where the investments are required, putting the case to government to increase the defence expenditure where we believe it is needed to meet particular outcomes.
Last, the defence strategy was in 2024. The next one, of course, will be next year. We’re in the process of doing that work and building that advice to government now. So, the mechanism to come back and ensure our appreciation of the environment, the strategy we deal with it, and the budget that accompanies it, is the mechanism available to it, then that’s where it’s my job and that of the department to give government that frank advice and a view of what we need to be doing.
