“China’s conventional military build-up is the most significant military build-up that we have seen – conventional military build-up – that we have seen since the end of the Second World War. And it shapes the region in which we live.” – Richard Marles
On 16 June the Deputy Prime Minister gave the following address to the Defending Australia 2025 Summit in Canberra:
Can I acknowledge both The Australian and The Adelaide Advertiser, and thank Michelle Gemma for the contributions you’ve made in putting on today. It really is an annual event now, which is very important in the national discourse around defence policy. I know that for a participant in that discourse, it is something which is greatly appreciated.
I am very fortunate to have been the Labor spokesperson for defence, for eight of the last nine years. Stability, continuity in this area of policy, in this portfolio has been absolutely fundamental. It has afforded us the opportunity to ask foundational questions about what is our strategic landscape, exactly what is our strategic threat? The kind of defence force that we need to build in order to meet it and the way in which we resource it. It has afforded us the opportunity to gain strategic clarity and to go after it, and since we came to office in 2022 that’s exactly what we’ve been doing.
The Defence Strategic Review is the most significant root and branch review of our strategic landscape, of our defence posture, since Paul Dibb did his work back in the mid-80s. Think about that for a moment.
Our defence force, its strategic settings over that period of time have really been rooted in an analysis that was undertaken at the height of the Cold War when strategic contest was between America and Soviet Union when we faced a nuclear arms race. Today, that great power contest is different.
For starters, there are different contestants contesting it in a different part of the world, but there is escalation. China’s conventional military build-up is the most significant military build-up that we have seen- conventional military build-up that we have seen since the end of the Second World War. And it shapes the region in which we live, and it means that Australia’s geography today is more relevant to great power contest than it has been at any point since the end of the Second World War, arguably at any point in our history.
In terms of our own defence capability needs, our risk is not so much the invasion of the continent. We are fortunate that we are an island nation surrounded by oceans, but on the other hand, we are deeply reliant on our sea lines of communication. The supply of the country- almost all of our liquid fuels are imported by sea, but also through export revenues. And so that is our strategic risk. It’s the disruption of those sea lines. It’s the coercion that could result because of the disruption of such sea routes, it is that, and the stability of the region in which we live.
Because the defence of Australia is intimately connected with the peace and stability of the Pacific, the peace and stability of Southeast Asia, of Northeast Asia, of the Northeast Indian Ocean.
All of that is the clarity that comes from the Defence Strategic Review. And the insight of that is that if you look at the geography of our national security, it lies much less along the coastline of the continent, as it does further afield. And so when we think about the kind of defence force that we need to meet the strategic moment, it is all about capabilities that project.
- A much more capable set of Northern bases, which can send our Air Force further.
- Much greater cyber capability.
- A much more capable surface fleet, with a new surface combatant coming into operation in this decade.
- A more mobile, a more amphibious Army.
- Longer range missiles.
- And of course, the Henderson defence precinct.
- The Osborne Naval Shipyard, which in turn, will build Australia’s future long range submarine capability that will be the successor to the Collins class.
These are the capabilities which we are pursuing.
Now in the 2023 budget and the 2024 budget, we have put in place significant increases to our defence spending, which sees that relative to what we inherited from the Coalition, relative to what we actually committed to in 2022 today, defence spending over the next ten years will be $57 billion more than that, more than $10 billion over the forward estimates.
In this financial year or last financial year, we spent more on defensive procurement than we ever have, and we will spend more again in this financial year. Now think about that in a historic context.
The last time there was a significant increase in the Defence budget dates back to 2016 as a result of the then 2016 Defence White Paper, when there was an additional $30 billion put into the Defence budget over a period of ten years. But within just a few years of that, the Coalition took $20 billion out of that away. So there’s just $10 million- that’s what we inherited.
If you want to go back prior to that, we’ve got to go right back to 2007 when the Howard government committed an additional $14 billion over the decade from that period of time. It means that what we have done over the last few years is the single biggest increase in Defence spending in peacetime Australia in our history.
But as significant as the quantity is, so too is the priority of that spending. Because in the Integrated Investment Program in 2024 we re-prioritized $73 billion worth of capabilities. We made really difficult decisions. We had intended to purchase 450 infantry fighting vehicles, most of which would never have been able to leave the continent. But if the invasion of the continent is not the threat, what was the purpose of that? And so we scaled that back to 129 which, if you like, meets our amphibious needs. But in the process, tens of billions of dollars which have been invested into projection capabilities.
This is just one example of why the Prime Minister has been so insistent about the idea that the way in which we think about funding defence is through first articulating what our defence needs are, what our capabilities are, and then resourcing that. I understand that there will inevitably be a focus on another.
We benchmark other countries around the world based on their expenditure as a proportion of GDP, and other countries will benchmark us in the same way, but when it comes to our own defence planning, our own defence spending, the only logical way we can do it is to think about what our needs and our capabilities are, and then to go off and resource those needs.
That’s how other countries do it without saying anything about the future, historically, that is how we’ve done it when we have been preparing for conflict.
And to simply think about a number means there is no debate around the quality of that spend, which in turn, is so important in terms of the numbers over the last few years which has been more important.
I can understand the level of analysis and the debate there has been around the quantity of the defence spend. It critically is important. But just as important is the quality of that spend. And in the absence of debate on that, I think, was part of what led to the utterly hopeless announcement that we saw from the Coalition during the election campaign. In seeking to chase just a number, what they did was make a $21 billion announcement, and yet at the same time, could not answer the most basic question about what any of that money would be spent upon. An announcement of that kind, frankly, left the country short.
Now, to be honest today, we do live here in Australia in a more partisan, contested defence debate. And part of that is unashamedly about the fact that we, Labor, seek to contest the idea that some would perceive that the Coalition have a brand advantage when it comes to national security and defence. I don’t think they’ve earnt it. I don’t think that the policies of the past that they have put in place bear any of that out. In fact, we would make the argument that the really significant steps forward in our national security history are decisions that have been taken by Labor governments. Certainly today, we assert Labor as being the natural party of Defence.
Now, if a more contested environment leads to the Coalition being more thoughtful, more analytic, deeper, well then that is a really good outcome. But if what we’re left with is the shallow policies that we saw during the election, and frankly, the rank politics that went with it, then that really does sell the country short.
And I think here, there is something of a challenge for the new Shadow Minister for Defence; about whether he spends his time learning about the defence portfolio and policy, about whether he takes the time to have the real privilege of seeing our service, men and women in action, or whether his time is instead spent in breathless press conferences and tabloid press releases. Thoughtfulness will be the test of the liberals.
Now in our first term, we have all been about strategic clarity, increasing defence resources and reprioritising the defence spend to get a much greater quality in outcome of defence capability. As we look forward to our second term, that process of re-prioritization will continue.
In 2023, Jan Mason and Jim Miller undertook the Defence Estate Audit, and they handed that order to government in December of 2023. It’s really a fantastic and impressive piece of work, to be honest, it’s given us a much bigger agenda in what has been a much overlooked space than we expect that that ultimately is a good thing. We’ve been working on it since, and as we look forward to this term, putting in place and responding to the Estate Audit will be a critical priority. We’ve not released the Estate Audit yet, and we will respond in due course. But I do want to just quote one paragraph from it:
“Defence is constrained by the weight of its past when it comes to management of the estate. Today’s estate footprint comprises numerous legacy sites without a clear ongoing link to current or future capabilities. Urgent interventions are needed to correct the unsustainable trajectory that has resulted from decades of deferred decisions on contentious estate issues.”
This is an example of policy which has been overlooked.
And there is the opportunity here to save billions of dollars on the one hand, and reprioritise them back into much needed areas of defence, whilst on the other ensuring that we have a defence estate which properly supports the contemporary Australian Defence Force, and today, I can announce that the new Assistant Minister for Defence, Peter Khalil, will lead the government’s work this term in responding to the Defence Estate Audit.
As we look forward to the next term, delivery is fundamental to what we must achieve.
- We need to be delivering a General Purpose Frigate into the surface of our Navy this decade.
- We need to be delivering the Guided Weapons and Explosive Ordnance Enterprise.
- We need to be delivering on existing project platforms such as the Hunter class frigates and the infantry fighting vehicles.
- We need to deliver on the Henderson Defence Precinct, on the naval Osborne shipyard, and of course, we need to be delivering on building our future nuclear-powered submarine under the banner of AUKUS.
But all of this has been a historic challenge for Defence. When we came to government, there were 28 different projects running a combined 97 years over time.
Now that did represent a failure of leadership on the part of the former Coalition in government, but it also says something about the challenge which is in front of us now to ensure that the Defence establishment is fit for purpose to achieve this delivery outcome.
And so in ensuring that it is fit for purpose, I say today that everything is on the table, including bureaucratic reform of the Department of Defence, of the Australian Defence Force, and of defence agencies.
And of course, during the course of this term, we look forward to the National Defence Strategy next year in 2026. As part of the Defence Strategic Review, what we indicated is that we would now have a process of two yearly reviews of our strategic landscape and a two year refresh of the Integrated Investment Program.
And next year’s NDS-26 will be the moment when we again assess the needs of the Australian Defence Force, what capabilities we have to bring into service, and as the Prime Minister has said to them, make the decision to resource it.
As we look forward to the next three years of this term, what we offer on the part of the Labor Government is what we have done over our last three years in office.
What we offer is thoughtful, analytical, prudent and calm management of defence policy management, which will keep Australia safe.
Thank you.
