Albanese signals flexibility on defence spending but there’s a catch

Australia’s defence spending is back in the spotlight, and the debate is heating up.

With global tensions simmering and our allies calling for bigger military budgets, Prime Minister Anthony Albanese has found himself at the centre of a high-stakes conversation.

Should Australia ramp up its defence spending to 3 per cent of GDP—or even more?

And, perhaps more importantly, who should make that decision?

Defence dollars: Who’s calling the shots?

In a recent address at the National Press Club, Mr Albanese made it clear he’s open to increasing defence spending.

But the decision, he said, would be made in Canberra—not in Washington, not in London, and certainly not at the request of former US President Donald Trump.

‘I think that Australia should decide what we spend on Australia’s defence. Simple as that,’ Mr Albanese said.

His remarks come amid growing pressure from the United States and the federal Coalition.

The Trump camp has called for Australia to lift its defence spending to a hefty 3.5 per cent of GDP.

Meanwhile, the Coalition has pledged to reach 3 per cent.

For comparison, Australia’s current defence budget is projected to reach 2.33 per cent of GDP by 2033—so the demands are significant.

Capability over politics

Mr Albanese’s key message is that any boost in spending should reflect Australia’s strategic needs—not arbitrary targets or political posturing.

‘Arbitrary figures lead to a cul-de-sac,’ he warned, noting the risks of setting spending goals without a clear plan for how that money will actually strengthen our military.

Former defence chief Angus Houston, who co-authored the government’s Defence Strategic Review, shares a similar perspective.

He argues that the Australia–United Kingdom–United States (AUKUS) partnership—Australia’s trilateral security pact with the US and UK—must be a ‘net addition’ to our capability.

That, in his view, would mean increasing defence spending to 3 per cent of GDP by the 2030s.

Mr Albanese described Mr Houston as ‘a friend’ and someone whose advice he respects.

Still, he was quick to point out that no one outside Australia should dictate our defence policy.

The global context: Why now?

So why is defence funding back on the national agenda? The world has grown more uncertain in recent years.

Russia’s invasion of Ukraine, tensions in the Indo-Pacific, and China’s growing assertiveness have pushed national security to the forefront.

Australia’s allies are watching closely. US Defence Secretary Pete Hegseth has called on Australia to increase its defence budget to 3.5 per cent of GDP.

The Coalition has echoed this call. Australia’s Defence Chief, Admiral David Johnston, has also suggested that the Defence Department may seek further funding in the next biennial review.

‘The opportunity we have with the biennial cycle now is to keep coming back and reviewing the strategy… putting the case to the government to increase the defence expenditure where we believe it is needed,’ he said.

Balancing the books: Defence vs domestic priorities

Of course, every dollar spent on defence is a dollar not spent elsewhere.

Mr Albanese has reminded Australians that his government was elected with a focus on healthcare, housing, renewable energy, and cost-of-living relief.

‘Our government’s vision and ambition for Australia’s future was never dependent on the size of our majority,’ he said.

‘But you can only build for that future vision if you build confidence that you can deliver on urgent necessities.’

It’s a careful balancing act—keeping the country safe while meeting the everyday needs of Australians.

What happens next?

With Donald Trump expected to attend the G7 summit in Canada on 15 June, Mr Albanese will have the opportunity to speak with him directly. But don’t expect any major announcements just yet.

The Prime Minister appears in no hurry to commit to a new defence target—unless he is convinced it serves Australia’s best interests.

Your say: Should Australia spend more on defence?

As discussions around Australia’s defence budget continue to evolve, the conversation remains centred on balancing strategic priorities with fiscal responsibility. 

While calls for increased spending grow louder both domestically and abroad, the government’s cautious stance suggests a more measured approach to long-term security planning.

What are your thoughts on Australia’s current defence spending—should it be increased, maintained, or redirected to other national priorities? Do you believe international pressure should play a role in shaping our defence strategy, or should decisions remain strictly in line with local needs and capabilities? We invite you to share your views in the comments below.

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