Prime Minister Anthony Albanese has reaffirmed that Australia will determine its defence spending based on its strategic needs, not external pressure, following a request from US Defence Secretary Pete Hegseth for Australia to raise its defence budget to 3.5% of GDP.
“What you should do in defence is decide what you need, your capability, and then provide for it,” Albanese told reporters on Monday, adding that his government has already committed to fast-tracking A$10 billion in defence spending over the next four years. He noted that Australia is already on a path to reach 2.3% of GDP in defence spending by 2033.
The comments come after Secretary Hegseth met with Australian Defence Minister Richard Marles in Singapore on the sidelines of the Shangri-La Dialogue, Asia’s premier security forum. According to a Pentagon statement, the meeting focused on accelerating US defence capabilities in Australia and deepening industrial cooperation between the two allies. Hegseth also urged Australia to increase its defence spending to 3.5% of GDP “as soon as possible.”
Despite the US appeal, Albanese has yet to announce any changes to defence funding in the latest national budget. His government had already unveiled a sweeping A$50 billion boost over the next decade and is committed to spending A$368 billion over three decades through the AUKUS pact to acquire and build nuclear-powered submarines.
Analysts say Albanese is positioning ahead of his first meeting with US President Donald Trump, aiming to assert Australia’s independence in setting its own defence priorities. “He wants any decision on a defence boost to be seen as sovereign—not one imposed by Trump,” said Peter Dean, director of foreign policy and defence at the United States Studies Centre at the University of Sydney.
Dean also pointed out that while Australia’s defence spending has declined from around 3% of GDP in 1987 to 2% in 2025, rising regional threats—particularly from China—are likely to push costs higher. “To achieve self-reliance in the modern era, it’s going to cost more money,” Dean said, noting that the US itself is set to spend 3.5% of GDP on defence this year.
While the path forward remains under discussion, Albanese’s government appears firm on ensuring that Australia’s military strategy is defined at home—even amid growing regional uncertainty and heightened expectations from its closest allies.
Melissa Enoch
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