“The numbers do not lie. Australia’s current defence spending of barely 2 per cent of GDP is well below that of comparable nations, despite facing greater strategic threats than most,” said John Storey, Director of Law and Policy at the Institute of Public Affairs.
Today, the IPA has released research exposing the true nature of Australia’s under-investment in defence. It comes as federal government spending is on track to rise to its highest level in 40 years outside of the pandemic. The research shows:
- Australia’s defence spending has stagnated at just 2 per cent of GDP since 2021.
- Comparable nations have increased their defence spending. Australia’s defence spending level is much lower than the average levels of:
- High-income economies (such as South Korea and Poland): 2.66 per cent of GDP.
- OECD nations: 2.42 per cent of GDP.
- Global aggregate: 2.35 per cent of GDP.
- The most recent federal budget shows it will take nearly a decade for Australia’s investment in defence to reach 2.3 per cent of GDP.
“Our leaders are asleep at the wheel. Australia faces the most dangerous strategic environment since the Second World War, yet the investments we need in our own defence are not being made,” said Mr Storey.
Insufficient investment in defence has left Australia vulnerable and open to intimidation, as illustrated by recent Chinese live-fire drills between us and New Zealand. Worst still, this lack of investment in defence is seeing Australia being left behind by our allies:
- The United States has explicitly called on Australia, and other allies, to increase their defence spending to 3-5 per cent of GDP.
- The United Kingdom has a smaller landmass than Australia, shorter coastline to defend, and, unlike Australia, has many nearby allies. Yet, the UK already spends 2.26 per cent of its GDP on its defence.
- Importantly, the UK government has now committed to spending 3 per cent of GDP on defence in the next parliamentary term.
“IPA research shows, since the end of the Cold War, Australia has dramatically underinvested in its own defence when compared with comparable nations. Australia cannot continue to free-ride off allies, particularly, the United States when it comes to our own defence,” said Mr Storey.
“Australia is being asked to step up, however, even if the federal government actually implements its proposed extra defence funding by 2033, Australia will still be below the level of defence spending that comparable nations are making today.”
The IPA’s research underscores that an increase to at least 3 per cent of GDP during the next term of parliament is both achievable and necessary.
“Over the next decade, increasing Australia’s defence investment to at least 3 per cent of GDP would provide an additional $206 billion investment in defence. This far surpasses the government’s inadequate plan, which amounts to just $50.3 billion,” said Mr Storey.
“This will allow for the stockpiling of munitions and equipment, as well as building defence personnel levels. It will also mean we can invest in supply chains and local defence manufacturing to ensure we can defend ourselves if our supply lines are cut during a regional conflict.”
“Investment in Australia’s security cannot be sacrificed in the name of budget pork-barrelling. Defence is a fundamental responsibility of the federal government and without urgent action, we risk being left unprepared in an increasingly unstable world,” said Mr Storey.
To download the IPA’s research click here.
