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Creative accounting or record investments? Labor unveils 2026 National Defence Strategy

Missiles are seen on display next to the F-35A Lightning II fighter jet (AAP)

Missiles are seen on display next to an F-35A Lightning II fighter jet Source: AAP / JAMES ROSS

The Australian Government has unveiled the 2026 National Defence Strategy, outlining reprioritised investments in drones, missile defence and undersea warfare capabilities. While the government claims the new strategy includes record defence spending allocations, the opposition has accused Labor of artificially inflating the numbers.


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TRANSCRIPT

At a time of increasing global insecurity, Defence Minister Richard Marles has unveiled Australia's new national defence strategy.

“The Albanese Government is pursuing every avenue of increasing defence capability quickly: mostly through bigger defence appropriations but also through accessing private capital. The result is that we are now seeing the biggest peace time increase in defence spending in our nation’s history. And it's not mere rhetoric.”

According to the government, the new strategy recognises that past assumptions about Australia's security environment are no longer valid.

“We live in a deeply interconnected world where a war in Eastern Europe has profound consequences here in the Indo-Pacific and where a conflict in the Middle East has disrupted the energy supply of our region. As an island trading nation our sea lines of communication literally define our national security. And so, as I've been saying for some time, the geography of our national security lies well beyond our coastline or even our immediate waters.”

Under the new strategy, an additional $53 billion will be set aside for defence over the next decade.

The government argues this will boost Australia's total defence spending to three per cent of GDP by 2033, using methodology defined by NATO.

However, Opposition defence spokesman James Paterson says the government is artificially inflating the numbers.

“Accounting tricks do not make our country safer, and changing the rules about how we measure defence spending is pulling the wool over the eyes of the Australian people, not being upfront and honest with them about exactly how much we are spending. We have not previously counted things like military pensions towards our defence expenditure. And if we're now going to do so, the government should be utterly transparent about how that has changed the figures.”

With intensifying great-power competition between China and the United States, as well as rapid military modernisation in the region, the government says preparedness and capability are crucial.

Among the priority areas listed, the strategy details stronger investment in undersea warfare capabilities and the expansion of long-range missile defence systems.

It also outlines further investment in uncrewed and autonomous capabilities, such as drones.

James Paterson says this reprioritisation is a late but welcome move.

“It does appear the government has now belatedly acknowledged that modern warfare has changed four years after Russia's invasion of Ukraine and the war in Iran, and that we are now living in an age of missiles and drones. It's clear that even the government recognizes Australia is not adequately prepared for that era, and that we need to increase our investment in both offensive and defensive capabilities in this space to protect Australians.”

With Australian businesses already producing world leading drone capabilities, Mr Marles says billions of dollars will be spent on drones in the coming years.

However, despite stressing the importance of self-reliance, the Defence Minister also made clear that this strategy was not about departing from historic alliances.

“A greater focus on Australian self reliance should not be confused with military self sufficiency. This is not about jettisoning alliance relationships. To the contrary, alliances, especially with the United States, will always be fundamental to Australia’s defence.”

While accusing China of threatening the global rules based order, the Defence Minister simultaneously praised the United States, saying their presence in the Indo-Pacific is fundamental.

“The global rules based order would not have existed without American leadership based on an enlightened conception of its own self-interest. Now I understand US frustrations that allies might seek to free ride on this US leadership or believe that the order acts as a substitute for hard power. It does not. Any rules-based order can only prevent conflict when it is underpinned by the hard power necessary for collective deterrence.”

Mr Marles welcomed the US 2025 National Defence Strategy and National Security Strategy, which he says sets out a critical US commitment in the region.

Michael Shoebridge is the founder and Director of Strategic Analysis Australia at the Lowy Institute.

Speaking to SBS News, he says the strategy ignores the reality of what is listed in the US Defence and Security strategy.

“They show that America is now focusing in very different ways. It's focusing its unilateral power in South America, and it's behaving very aggressively in the Gulf, but the idea that we're in some shared security endeavour here in the Indo Pacific centred on Chinese power is absent from those documents, and yet, our strategy still pretends that's the case.”

Mr Shoebridge says Australia is dealing with a weakened, distracted America that doesn't value alliances.

“The strategy is wilfully blind when it comes to the changed America we see. I couldn't see one mention of President Trump or the Trump administration in about 200 pages of documentation from the government. There's a page on the US alliance. Doesn't mention the America first unilateralist America we see now. It doesn't mention the dismissive attitude to allies. It pretends America is unchanged. And that's a fundamental weakness of this strategy.”


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