Sounding the alarm that the AUKUS nuclear submarine deal will eat into non-naval priorities, the former head of the Australian Defence Force today called for a significant boost in defense spending, up to 3 percent of GDP, Breaking Defense reports.
Sir Angus Houston was Australia’s top military officer from 2005-2011 and was tapped to co-lead the recent Defense Strategic Review, making him a key, respected voice on matters of defence. While the DSR TKTKT, his comments today reflect what he sees as changed situation. The review and its Integrated Investment Plan projected a $55.5 billion AUD budget for 2024-25, rising to $67.9 billion in 2027-28 — roughly 2.2 percent of GDP.
Part of that is simply acknowledging that the world is much more dangerous than when the review was completed in early 2023. When the strategy was published Houston made headlines with his claims that Australia faced the most dire strategic situation since World War II, and the situation has only expanded, with the ongoing conflict in Ukraine, the back and forth between several actors in the Middle East, a modernized and aggressive China and the increasingly close ties between North Korea, China, Russia and Iran.
But in comments at the US Studies Centre here, Houston made clear he wasn’t just talking about spending more because of the threats. He made an important structural point, that Australia must increase its defense spending so that buying and building nuclear powered attack submarines — the AUKUS program with the US and UK — does not consume too much of the defense budget.
Houston said the AUKUS boats “must be a net addition to Australia’s military capability. The only way they can be a net addition to Australian military capability is to increase our defense spending by 3 percent plus of GDP as we move into and through the 2030s.”
If that does not happen, it will mean the military can only buy the subs “through the cannibalization of other military capability. So that is the challenge for us. And I don’t think either side of the body politic in Australia has really come to terms with that.”
The question of whether AUKUS will eat up other programs for the Australian defense community has been an open one ever since the project, the most expensive endeavor in the country’s history, was launched. Officials have largely towed the line that the Lucky Country can do everything.
For instance, Richard Vagg, the service’s head of Land Capability, told Breaking Defensein October that he was not concerned about losing out to AUKUS, noting “we’ve made some very, very considered decisions about our investment plans from a ADF perspective, and are quite comfortable where we’re sitting in terms of our land projects.”
However, there may be signs of budget pressure emerging already. Earlier this month, Australia killed a $5.3 billion AUD satellite contract with Lockheed Martin, with one analyst saying more cuts will likely have to happen as the true cost of AUKUS emerges.
The current government in Canberra has pledged to increase defense spending by $50.3 billion over the next decade, with the plan being to hit $100 billion by 2033. That would put the country at 2.4 percent — well below what Houston believes is needed.
Relations With Trump
Earlier in the conference, US Deputy Secretary of State Kurt Campbell, who won’t have a government job after Jan. 20, urged the incoming Trump administration to work closely with Australia and New Zealand to counter a “relentless” China and not to turn inward.
“China is relentless. They want to build bases. They want to extend their power there. We are going to have to do more, and do more with Australia and New Zealand,” he told the conference on a feed from Washington.
“This is a time right now to be innovative, to be optimistic, to work, to make the argument about why common purpose is in our best interests, and why the United States should not withdraw from the world, from partnerships, to work more closely than ever with Indo-Pacific partners. Nowhere is that more important than Australia.”
RELATED: AUKUS faces little threat from Trump, Aussie officials say
Campbell made a direct appeal to the presumptive Secretary of State in the Trump administration, Sen. Marco Rubio of Florida. Trump has talked about large cuts to the State Department and other parts of the US foreign policy structure and his public rhetoric is about America First, which could mean ignoring or withdrawing from engagement in the Indo-Pacific. “My hope is that Senator Rubio, the Trump administration, will recognize that this is a moment of acute strategic competition,” the deputy said.
A range of speakers from Japan, the United States and Australia said at the conference they thought the Trump White House would support AUKUS, citing the incoming president’s penchant for transactional diplomacy. Australia is spending billions to buy and build nuclear-powered attack boats, is helping the US expand its industrial base and Trump is likely to recognize that, they said.
Unlike some NATO countries, which Trump has criticized for spending too little, Australia has committed more than $6 billion USD to expanding the tripartite sub industrial base and plans to spend a total of $368 billion on Virginia- and SSN AUKUS-class subs.
