Trump admin to Australia: spending $56 billion on defence isn’t enough by half

“Australia is currently well below the 3 per cent level advocated for NATO, by NATO Secretary General [Mark] Rutte, and Canberra faces a far more powerful challenge in China.”

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This is the first time a senior Trump administration official has explicitly called for Australia to spend more on defence.

Colby is a China hawk who has previously been sceptical of AUKUS, calling the prospect of the US selling nuclear submarines “crazy”.

On Wednesday, Colby said he supported the pact but wanted to see more evidence that US submarine stocks would not be depleted by the plan to sell three to five Virginia-class submarines to Australia.

A raft of experts, including former Australian Defence Force chief Angus Houston, former Defence Department boss Dennis Richardson and former Home Affairs Department boss Mike Pezzullo, have also called for Australia to lift defence spending to 3 per cent of GDP.

Marcus Hellyer, a leading defence economist, estimated defence spending would rise from the current $56 billion annually to a nominal $130 billion a year in a decade, if funding increased to 3 per cent of GDP.

Defence spending is projected to rise from 2.02 per cent of GDP this year to 2.33 per cent by 2033-34 under the government’s projections.

Marles said the government had increased defence spending significantly above the levels forecast by the previous Coalition government.

“The budget papers show the Albanese government is increasing defence spending to record level,” he said. “We have provided an additional $50 billion over the decade since we came to office.”

Opposition defence spokesman Andrew Hastie pledged to go further.

“The Coalition has long been calling for a greater increase to defence spending. A Dutton-led government will increase defence spending above its current level to meet the challenges of our strategic environment,” he said.

However, the Coalition has not outlined its plans, and party insiders reject speculation that Opposition Leader Peter Dutton would be able to go as high as 3 per cent of GDP.

Peter Dean, who co-authored the government’s defence strategic review, said Colby’s comments were “entirely in line with the Trump administration’s thinking”.

“Percentage of GDP is a very crude measure, but it signals intent and it reflects the absolute need to spend more on defence in a time of major power strategic competition, a changing global order and international disruption,” Dean said.

Lowy Institute executive director Michael Fullilove backed Colby’s intervention, arguing current defence spending was inadequate because the US looks increasingly unreliable, China is asserting itself and AUKUS is stretching the defence budget.

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British Prime Minister Keir Starmer last week announced he would boost UK defence spending from the current 2.3 per cent of GDP to 2.5 per cent by 2027, with a plan to reach 3 per cent by 2029.

Starmer said he regretted cutting foreign aid to pay for the increase but that “the defence and security of the British people must always come first”.

Trump did not mention Australia by name in his State of the Union-style address to Congress on Wednesday, as he name-checked India and South Korea as nations he believed were taking advantage of the US on trade.