LATIKA M BOURKE: Anthony Albanese open to raising defence spend after US demands

Prime Minister Anthony Albanese is not ruling out raising defence spending, it can be revealed.

In recent days, Mr Albanese has appeared to dismiss calls made by US Defence Secretary Pete Hegseth and the head of the Australian Strategic Policy Institute that Australia lift its game.

That has given the impression that Mr Albanese is resistant to spending more on defence.

But The Nightly understands the Prime Minister is open to an uplift.

However, he will avoid being forced into setting a target and instead focus on funding new and extra capabilities.

This view is in line with previously unreported comments that he made during the election campaign in a wide-ranging interview with The Nightly focusing on foreign policy, national security and Australia’s defences.

Under Labor defence spending is only projected to increase to 2.3 per cent by 2034.

During that interview, he defended his current budget and was asked if that meant he would not consider further increases to defence spending in the next term.

“No, I’m not saying that at all,” the Prime Minister said at the time.

“I’m saying that we’ll always consider, and we will always do what is necessary to defend Australia.

“We have announced a serious policy going forward.

“We’ve got real dollars for real assets, and we’re doing two things — we’re investing in our capability, and secondly, we’re investing in our relationships — in the region and in the world as well.”

Mr Albanese believes specific capabilities, or new weapons systems or resources that the Australian Defence Force needs should be funded accordingly, rather than a carte blanche figure of GDP assigned.

This is particularly acute given the Defence Department’s poor record on delivering on major procurement programs in time, and its brass-heavy structure.

Professor Peter Dean, who advised former Labor defence minister Stephen Smith and wrote the Defence Strategic Review said an increase to 3 per cent by 2030 was the target Labor should hit but backs the Prime Minister’s “capability first” approach.

He said the shopping list for Australia’s defences was already extensive and needed government purchasing power.

The list includes land and air missile defences, accelerating funding of the northern bases, stocking up on fuel and munitions in the case of an attack, spending more on keeping current weaponry ready to use, recruiting and keeping more frontline military personnel, speeding up Australia’s capabilities to strike at a long-range or beyond the borders, boosting surveillance via space, investing in next-generation programs like drones — which have been a feature of the Russia-Ukraine war — and spending money on specific new weapons being developed with the UK and US under AUKUS such as hypersonic missiles.

Mr Albanese also said during the interview that the “great honour” of being invited to deliver the Shangri-la Dialogue’s keynote address in 2023 was in recognition of “the work that we were doing as the defence strategic review”.

He described the Shangri-la Dialogue as the “most important national security event in the entire Asian Indo-Pacific region, and perhaps only second to NATO, the most significant defence event that occurs in the world”.

On the weekend, US Defence Secretary Pete Hegseth asked Australia to raise its spending to a new level of 3.5 per cent of GDP when he met his Australian counterpart on the sidelines of this year’s Dialogue in Singapore.

“On defence spending, Secretary Hegseth conveyed that Australia should increase its defence spending to 3.5 per cent of its GDP as soon as possible,” a Pentagon statement about his meeting with Australian Defence Minister Richard Marles read.

This is above the 3 per cent previously suggested by Eldridge Colby, a Pentagon adviser, who has also expressed doubts about AUKUS, but now says he backs the program.

Mr Marles had declined to provide Australian reporters with the figure requested when asked earlier, but said he was “up for a conversation” about the Trump Administration’s request.

Mr Albanese was more vague on Monday when asked about the most recent US demand.

“Which one?” he said.

“There’s been a range of things going forward.”

Last week, he openly bristled when asked about the Australian Strategic Policy Institute report that said current defence spending did not match the threats facing the region and Australia.

The report was authored by Marc Ablong, a senior fellow at ASPI and former defence official who spent 31 years in the Australian Public Service.

But Mr Albanese took aim at ASPI’s director, Justin Bassi, a former aide to former Liberal Cabinet ministers Marise Payne and George Brandis.

“That’s what they do isn’t it, ASPI, I mean seriously, they need to, I think, have a look at themselves as well and the way that they conduct themselves in debates,” he said.

“ASPI regularly produce these sorts of reports, you know, run by people who’ve been in a position to make a difference in the past as part of former governments.

“I think it’s predictable, frankly.”

Former Labor Defence Minister Joel Fitzgibbon backed Mr Albanese’s critique of ASPI.

“ASPI for example should spend more of its taxpayer funded resources undertaking deep research rather than advocacy and public commentary,’ he said.

“Our US friends are right to demand its allies and partners lift their game, particularly NATO members.

“While that principle must also apply to Australia, we need to make our decisions independently and our other contributions — joint facilities, AUKUS, and northern basing — must be recognised.”

He said the government needed “to do more still” but that there were entrenched limitations on how fast new investments could bear fruit.

“The real issue at this point is not so much the size of our investment as a percentage of GDP, but the Defence Department’s ability to spend its allocation effectively and efficiently,” he said.

“Right now, both history and forward guidance tell us that spending smarter and better must remain the key focus.”