Australia and US in tug of war on defence spending as Hegseth calls on Marles to boost funding to 3.5 per cent of GDP

Sky News AU

2 days ago

The United States has called on Australia to boost its military budget to 3.5 per cent of GDP 'as soon as possible', but Prime Minister Anthony Albanese has refused to change his policy position.
Defence Minister Richard Marles met with US Secretary of Defence Pete Hegseth on the sidelines of the Shangri La Dialogue in Singapore last week to discuss the key priorities of the US-Australia alliance.
In a US Department of Defence readout released on Sunday, the figure requested of Australia was revealed, with the key focus areas being advancing defence industrial base cooperation, creating supply chain resilience and accelerating US force posture initiatives in Australia.
'The Secretary looks forward to continuing to work with Deputy Prime Minister Marles to maintain peace through strength in the Indo-Pacific,' the statement read.
The US has been telling allies around the world, in Europe and across the Indo-Pacific, to increase defence spending instead of relying on the American military.
In his address at the summit, Hegseth echoed the Trump administration's motto of maintaining 'peace through strength' and stressed the importance of restoring the 'warrior ethos'.
"There's no reason to sugar coat it. The threat China poses is real, and it could be imminent," Hegseth said, in some of his strongest comments on the Communist nation since he took office in January.
In his address at the Shangri La Dialogue, Mr Marles said the assurance from the US that it saw the Indo-Pacific as a strategic priority was 'deeply welcome'.
'But we cannot leave it to the United States alone,' he said.
'Other countries must contribute to this balance as well, and Australia is investing in a generational transformation of the ADF to ensure we are not only in a position to deter for projection against us, but also to contribute to an effective regional balance.'
However, Sky News Sunday Agenda reported Mr Albanese would not bend to US pressure and stand by Labor's existing policy of increasing defence funding to 2.33 per cent of GDP by 2033.
'What we'll do is we'll determine our defence policy, and we've invested just across the forwards, an additional $10 billion in defence,' Mr Albanese said on Sunday.
'What we'll do is continue to do is continue to provide for investing in our capability but also investing in our relationships in the region.'
Mr Albanese's highly-anticipated meeting with US President Donald Trump appears likely to occur at the G7 Summit in Kananaskis from June 15 to 17, 2025.
Before Mr Marles' meeting with Mr Hegseth, the Prime Minister lashed out at the Australian Strategic Policy Institute (ASPI) after it published a report criticising the government's funding trajectory.
'Seriously, they need to, I think, have a look at themselves as well and the way that they conduct themselves in debates,' Mr Albanese told ABC Radio.
'We've had a Defence Strategic Review. We've got considerable additional investment going into defence - $10 billion."
ASPI Executive Director Justin Bassi defended the report, saying the government was failing to meet the urgency of the global threat landscape.
'ASPI was set up to deliver the hard truths to the government of the day,' Mr Bassi told Sky News.
'Unfortunately the world has these threats that do impact Australia and to counter these threats we need to, unfortunately, spend more money in the area."
Mr Marles revealed the US Secretary of Defence had already nudged Australia to increase defence spending, but stopped short at disclosing by how much.
'On Friday, in our bilateral meeting, Secretary Hegseth did raise the question of increased defence expenditure on the Australian side,' Mr Marles said on Sunday.
'Of course, we have already engaged in the last couple of years in the single biggest peace time increase in defence expenditure in Australia's history. So we are beginning this journey.'