Stung by criticism of Australia’s low defence spending, the Labor government this year decided to do something it has never done — add in non-capability spending, such as military pensions, to inflate the headline figure from around 2.3 per cent of GDP to 2.8 per cent.
This, the government said, showed that according to NATO standards, they were performing above most of the Alliance. The US has, unsuccessfully, urged Australia to raise spending in line with the NATO target of 3.5 per cent by 2035.
At Defence Minister Richard Marles’ last press conference in London, I asked him about his intentions — or not — to raise defence spending. But the official transcript issued by his office and posted on the Department’s website rendered nearly all my questions ‘inaudible.’
Given I was standing about a metre from the Minister, it’s unfortunate that the official transcribers were able to hear my questions. Granted, the Australian diplomatic service chose for some mystifying reason to hold the press conference in the middle of Regent St, St James at 0800 during a windstorm, so I’m giving the transcribers the benefit of the doubt.
However, in the interests of posterity and the ongoing debate about whether governments are funding their militaries adequately or not given the increasing security threats, I have reproduced them here.
LATIKA M BOURKE: On your own defence spending, Minister, you’ve now switched to this NATO accounting. As you know, the NATO accounting also includes things that aren’t core defence, so when will Australia reach 5 per cent, which is non-core and core under the new NATO standard?
DEFENCE MINISTER RICHARD MARLES: Well, I saw what you’ve written in your commentary. I mean, it is wrong, factually wrong. We, we increased defence spending in terms of capability by $40 billion over the forward estimates, by $53 billion over the decade in the National Defence Strategy this year alone over the decade. That is a $53 billion injection, and that’s in terms of capability, not the other stuff that you’re talking about, is the single biggest injection in terms of Australian defence spending in decades, more than anything that occurred during the Coalition period.
And in total, in terms of capability increases, we’ve increased spending on capability in the ‘23 budget, in the ‘24 budget, with the 25 MYEFO, and in the ‘26 budget. A total of $117 billion dollars- 12 times as much in as what the Coalition over a period of time-
LMB: But my question was about when you will get to five?
MARLES: So, that is the focus of how we account for defence spending. Actually, we’ve always felt that the best measure is through the actual dollars that are being put in. Now, if you’re going to do international comparisons, which is where the percentages of GDP come in, it makes sense to do it on the basis of the international standard, which is NATO. In terms of how NATO measures core defence spending, we are at 2.8 [per cent]. It’s the only point that we’re making.
LMB: Are you including in your defence accounting things like uplifting skills that we need for AUKUS? And are you including the shipyard upgrades?
MARLES: What we’re including in that is what is included in the NATO standard. If you are comparing like-for-like, Australia versus other countries in terms of the NATO standard, we are at 2.8. And if you’re comparing about what Australia is doing today versus what Australia has been doing over the last, you know years-
LMB: No, no, I’m comparing what we’re doing in the future.
MARLES: Well, or what we’re doing in the future over the next decade, what we are doing is injecting $117 billion more over the planning ten-year period, which is how defence spending is planned, which of itself represents the biggest increase in defence spending in peacetime Australian history. Now that’s actually the facts, and that’s not talking about all the other issues that you’ve mentioned. It is talking about bricks and mortar, actual capability-
LMB: So what would help everyone is if you actually released what you’ve calculated in all your defence (spending), would you do that?
MARLES: Well, I mean, we’ve done that, and it’s there for people to look and analyse, and we do plenty of briefings on all of that. And we’re happy to do briefings for you if you want, Latika. But we do we release all of that information. In fact, if you look at what we release, in the IIP and the National Defence Strategy in April this year, it is absolutely extensive in terms of the information.
LMB: Okay, so given all that, when will you get to 3.5 and when will you get to five, including the non-core?
MARLES: Well, in terms of the core spending, we are at 2.8 now. The point that I made-
LMB: And when will you get to 3.5?
MARLES: And we’re at 2.8 right now. If you look at that, relative to countries in NATO, it’s at the upper end. If you look at that relative to countries in the Indo-Pacific, it is almost at the top. So compared to other countries in the world, compared to other American allies, we are spending more with respect to defence than almost any other American ally. We have made it clear that we get to 3 per cent by 2033. Now that’s not a commitment that’s in press release that is actually in the Budget, which has gone through the Parliament. And the point I’d make-
LMB: And 3.5? You’re still not answering the question I ask?
MARLES: The point I’d make again, is that if you look at what we have done in respect of increasing defence spending, you have seen successive increases in each of the last four years. That’s never happened before in Australia. Like it’s never happened before. I mean, during the entirety of the Coalition government, they increased defence spending once, and then you know took the $20 billion of the $30 billion they put in out of defence spending two years later- they went to it once. We’ve done it in each of the last four years, and the accumulated total now is the biggest peacetime increase in defence spending in Australia’s history.
To read the article that Marles was referring to (and disputed) you can find it online at The Nightly here.
