Coalition promises to raise Australia's defense budget to 3% of GDP

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The Coalition would increase Australia’s proportion of defence spending to 3 per cent of GDP within a decade if elected, warning that Australia “cannot take peace for granted”.

Opposition leader Peter Dutton will unveil the Coalition’s landmark defence policy in Perth on Wednesday, as he accuses Labor of making Australia “less safe” and “ripping money” out of national security.

“The prime minister and deputy prime minister regularly tell Australians that we live in the most precarious period since the end of the Second World War, yet over the last three years, Labor has done nothing about it,” Dutton said in a statement.

“The Coalition will strengthen the Australian Defence Force and support our servicemen and women to keep us safe today and into generations ahead.”

Under Labor’s current trajectory, defence spending would grow from 2.0 per cent to 2.3 per cent of gross domestic product (GDP) by 2034.

GDP measures the value of goods and services produced within the country’s borders, typically across a year.

The Coalition’s proposal would accelerate that to 2.5 per cent by 2030, which would cost the federal budget an additional $25 to $30 billion per year.

The announcement does not reveal whether that spending would be offset through cuts or plunge the budget into a deeper structural deficit.

The Coalition has pointed to the rise of authoritarian governments and war in Europe and the Middle East as a reason to increase spending more aggressively and build a “sovereign defence industrial base”.

Shadow defence minister Andrew Hastie said “there must be a sense of urgency”.

“By increasing defence spending to 2.5 per cent of GDP within five years, the Coalition is ensuring the ADF [Australian Defence Force] can equip our servicemen and women with the capabilities needed to defend our nation,” Hastie said.

What’s in a number?

A commitment of 3 per cent of GDP on defence is a number that many defence experts believe is appropriate for the current geopolitical climate.

The Australian Strategic Policy Institute has said “Australia has plenty of money to spend on defence” but Lowy Institute’s security program director Sam Roggeveen has said it’s not necessarily about the quantity, but the quality of defence spending that matters.

Three per cent is also a number cited by US President Donald Trump, when telling NATO members and European nations more broadly to lift their defence budgets in response to Russia’s ongoing war in Ukraine, frustrated that the bulk of military aid has come from the US.

Even as Australia made a $800 million downpayment on AUKUS in February — to support the US’s delivery of nuclear submarines to Australia — the head of policy at the US Department of Defence, Elbridge Colby, called for Australia to rapidly increase its defence spend to 3 per cent.

Over the long term, AUKUS — a security partnership between the US, UK and Australia that includes the purchase of submarines from the US — is expected to cost Australian taxpayers $368 billion.

How might this impact the election campaign?

Labor has been under pressure over its national security record, after China recently conducted military drills in the Tasman Sea without prior warning and conducted an unprecedented circumnavigation of Australia.

Though both events took place in international waters, and complied with international law, it was enough to alarm experts and for the Coalition to accuse China of “gunboat diplomacy”.

Defence and national security are comfortable ground for Dutton, as recent polling suggests more Australians believe him to be competent in these areas, having served as home affairs and defence minister, and prior to that, as a Queensland police officer.

When asked during the whether his time in law enforcement had given him a “black and white view of the world,” Dutton responded that he had always been “serious” about protecting people.

“I hope what it says to people is that I’m absolutely determined and passionate about getting the best possible position to keep us safe,” he said.

Dutton is expected to make the announcement alongside Perth MP and shadow defence minister Andrew Hastie, who has taken a hiatus from campaigning after 2018 comments resurfaced, in which he said the “fighting DNA of a close combat unit is best preserved when it’s exclusively male”.

This position was rejected as inconsistent with Coalition policy, but we can expect more questions on this topic.