Prime Minister Anthony Albanese rebuffed U.S. pressure to raise Australia’s defense budget to 3.5% of GDP, defending strategic autonomy amid Indo-Pacific tensions.
At a Glance
- Australia plans to increase defense spending to 2.3% of GDP by 2033, rejecting U.S. calls for a 3.5% target
- U.S. Defense Secretary Peter Hegseth urged the increase amid growing concern over China’s regional assertiveness
- Albanese emphasized budget independence and noted Australia’s $238 billion AUKUS submarine commitment
- Economic constraints from natural disasters make higher defense spending politically difficult
- Despite differences, Australia reaffirmed commitment to Taiwan status quo and Indo-Pacific partnerships
Strategic Autonomy vs. Allied Expectations
Speaking at the Shangri-La Dialogue in Singapore, Prime Minister Anthony Albanese made clear that Canberra would not yield to Washington’s push for a dramatic defense budget increase. Albanese defended Australia’s trajectory toward spending 2.3% of GDP on defense by 2033, arguing this meets the nation’s capability needs.
“What you should do in defense is decide what you need, your capability, and then provide for it,” he told reporters. The comments came in response to U.S. Defense Secretary Peter Hegseth’s call for Australia to hit 3.5% “as soon as possible” in light of mounting concerns over China’s regional power projection.
Watch a report: Australian PM pushes back on U.S. defense spending demands.
Dollars, Disasters, and Diplomacy
Albanese emphasized the fiscal realities Australia faces, noting that natural disasters like floods and wildfires continue to stretch domestic resources. Boosting defense spending to 3.5% of GDP would equate to roughly AU$100 billion annually—more than triple current levels.
Economic analyst Matt Grudnoff added that “Australia already spends more than it should,” pointing to the nation’s projected status as the ninth largest military spender globally by 2033. That includes a $238 billion AUKUS submarine deal, considered one of the largest defense commitments in the country’s history.
A Balancing Act in the Indo-Pacific
While budget disagreements persist, strategic alignment remains. Albanese reiterated Australia’s support for the status quo on Taiwan, echoing U.S. positions on key Indo-Pacific flashpoints. Discussions between Hegseth and Australian Defense Minister Richard Marles also covered expanded U.S. troop rotation and logistics capabilities on Australian soil.
Albanese’s stance—“Australia will make its own decisions on defense spending”—has drawn support at home, particularly among those wary of foreign influence on national policy. Still, as regional military budgets rise, the pressure on Canberra to do more may intensify. In this emerging era of multipolar power, Australia’s balancing act between sovereignty, alliance obligations, and fiscal prudence is likely just beginning.
