Australia to Boost Defense Spending Amid U.S.-China Tensions

By Mike Cherney

SYDNEY--Australia is boosting its defense budget and rethinking its defense plans as strategic competition between the U.S. and China heats up in the Indo-Pacific region.

Australia's government said Wednesday that it plans to invest an additional 50 billion Australian dollars, or roughly US$32 billion, into defense over the next decade, with defense funding expected to rise to 2.4% of gross domestic product by 2033-2034 compared to 2.1% in 2024-2025. Defense spending is projected to grow from about A$55 billion in 2024-2025 to about A$100 billion in 2033-2034.

The key U.S. ally also outlined plans to overhaul its military forces. The idea, officials said, is to deter any potential adversary's attempts to project power through Australia's northern approaches.

Officials said they want Australia's military to be a more focused force that can address the country's most significant strategic risks. That means Australia plans to develop a larger and more lethal navy, an army that can operate better in littoral environments, a better air force, as well as more cyber and space capabilities.

Immediate priorities, according to a new national defense strategy that was released Wednesday, include a plan to acquire nuclear-powered submarines through the trilateral AUKUS partnership with the U.S. and the U.K., enhance long-range strike and missile manufacturing, and strengthen key bases in the north of the country.

"China is improving its capabilities in all areas of warfare at a pace and scale not seen in the world for nearly a century," according to Australia's new defense strategy. "This is happening without transparency about its strategic purpose."

China's leaders have vowed to absorb Taiwan by force if necessary, and U.S. officials say the Chinese military has been instructed to be ready to invade the democratically self-ruled island by 2027. Washington, meanwhile, has sought to boost its network of alliances in the region to deter Beijing.

Australia has deepened its defense cooperation with the U.S. in recent years, and militaries from the two nations frequently train together and buy the same equipment. It recently joined with the U.S., Japan, and the Philippines in naval exercises in the disputed South China Sea.

At the same time, Australia's left-leaning government under Prime Minister Anthony Albanese has sought to thaw diplomatic ties with China, its largest trading partner. High-level dialogue between Australia and China has resumed since Albanese won an election in 2022, and Beijing has recently moved to lift trade restrictions on Australian goods, including wine.

"While Australia and China have different values and political systems, a stable and constructive relationship is in the interest of both nations," the new defense strategy said.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

April 17, 2024 00:33 ET (04:33 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.