Australia has embarked on a historic A$25 billion defence spending spree, ordering fleets of autonomous aircraft and submarines, Japanese-designed frigates, and transforming a key shipyard as part of the country’s most ambitious military overhaul since World War II. The move comes amid growing concerns over Chinese military exercises in the Pacific and mounting pressure from the United States for allies to strengthen regional security.
Defence Minister Richard Marles highlighted the urgency of the effort, stating that Australia now faces “the most complex, in some ways, the most threatening strategic landscape that we have had since the end of the Second World War.” The spending surge follows a landmark review emphasizing the need to reduce reliance on allies and prepare for “major power strategic competition” in the Pacific.
Key elements of the program include a A$10 billion contract with Japan’s Mitsubishi Heavy Industries to build up to 11 Mogami-class frigates, part of a wider A$55 billion investment in the surface fleet. The plan also features the Hunter-class frigates, being built by BAE Systems in Adelaide, and a A$12 billion upgrade to the Henderson shipyard near Perth to build and service these vessels and future nuclear-powered submarines.
In the air, Australia is developing MQ-28A “Ghost Bat” drones under a A$1 billion contract with Boeing. These autonomous “loyal wingman” aircraft will accompany crewed jets, marking the first military aircraft designed in the country in over 50 years. Additionally, Canberra has signed a A$1.7 billion deal with US defence firm Anduril to produce a fleet of “Ghost Shark” autonomous underwater vehicles for intelligence, surveillance, reconnaissance, and strike missions.
Further investment includes a decade-long A$1.3 billion anti-drone program with operations systems supplied by US company Leidos. Economists predict defence spending will rise to 2.25 percent of GDP by 2028, potentially reaching 3 percent within a decade as the Aukus trilateral security pact with the US and UK delivers nuclear-powered submarines and other capabilities.
Analysts warn that while the strategy is comprehensive, it may still be underfunded. Steve Baxter, founder of defence investment fund Beaten Zone Venture Partners, said, “Defence spending is still lax… the strategy is right but it’s not been funded.” Experts also note that Australia must balance deterrence with its trade ties to China, the nation’s largest trading partner, while preparing for the possibility of hostilities close to home.
“This is a historic and high-tech investment in Australia’s security,” Marles said. “We are equipping our forces with the capabilities needed to operate effectively in the modern, increasingly contested Indo-Pacific environment.”
The defence buildup reflects Canberra’s attempt to navigate a complex geopolitical landscape: deterring Chinese aggression while maintaining crucial economic relationships, all while preparing the country for a scale of military engagement not seen in decades.
