
US urges Australia and regional allies to increase military spending, warning that time is running out to deter Beijing
With the 80th anniversary of the end of World War II in the Pacific looming, the Pentagon has issued a clear message - deterrence against China must become a collective priority.
Senior US defence officials are looking to fortify military ties across the Indo-Pacific, with a pointed focus on Canberra and Tokyo.
'We need our allies to step up,' a US defence official told the Australian.
'How does it make sense for our Asian allies to sit back while the Europeans are stepping up and committing to 5 per cent of GDP to deal with Russia, which is one tenth the GDP of China?'
While NATO members agreed in June to lift defence spending to five per cent of GDP, Washington sees Asian partners as lagging behind.
South Korea has been singled out as a model ally, praised for its robust defence budget and substantial standing forces.
Australia, by contrast, is facing criticism from US officials who argue Canberra is not investing enough, even to fulfil its commitments under AUKUS Pillar 1, which involves acquiring at least three US-built Virginia-class nuclear submarines.
'On defence spending, the objective analysis is that the Australian government is not spending enough on defence, even for Pillar I,' the official continued. 'This is a very real near-term problem. We have essentially no time in defence terms before 2027.'
The year 2027 is viewed within the Pentagon as a key strategic benchmark, with intelligence suggesting Beijing could be in a position to launch an attempt to take Taiwan by then.
In Washington, there's growing unease that Australia may not be pulling its weight. Prime Minister Anthony Albanese's recent Curtin Oration, in which he praised former PM John Curtin for resisting pressure from wartime leaders Churchill and Roosevelt, has reportedly triggered concerns among Trump-aligned figures.
The speech was seen as a subtle signal of resistance to rising American expectations, especially in light of mounting calls for Australia to commit more resources to AUKUS and the wider regional deterrence posture.
Inside the Pentagon, key strategic goals include strengthening homeland defence, reinvigorating the US industrial base, countering China's growing assertiveness, and ensuring allies 'do more to pick up slack'.
The ongoing AUKUS review, led by Pentagon policy chief Elbridge Colby, is being described as 'fact-based, rigorous, and empirical'.
It covers both Pillar 1 and Pillar 2, the latter focused on sharing advanced defence technologies with Australia and the UK.
'I think the main thrust of the review is to give people a real brass-tacks, clear-eyed understanding of where things stand,' a US official explained.
Australia has already pledged $1.6 billion to support the US shipbuilding sector under the AUKUS framework.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Perth Now
10 minutes ago
- Perth Now
Reason Aussies are $3k worse off
Australians are $3000 a person worse off as a lack of competition among businesses adds to the country's productivity woes. That's the view of the Reserve Bank's latest research paper, which shows everyday Aussies are paying the price for the nation's lack of competition. The paper argues a core problem in Australia in the lead-up to the Covid-19 pandemic was the domination of big business, which led to higher prices. A lack of competition among businesses is costing households. NewsWire / Simon Bullard. Credit: News Corp Australia This in turn had negative impacts on productivity, incomes and the welfare of Australians as well as a misallocation of resources between firms. The RBA estimates that by 2017, this misallocation reduced productivity between 1 to 3 per cent, with the upper end of this range equating to every Australian being $3000 worse off today. 'Declining competition and productivity may be linked,' the RBA's report said. 'A decline in the degree of competition has the potential to weigh on productivity through a number of channels. 'It can blunt firms' incentives and ability to invest, innovate, improve and adopt new technologies.' The fall in productivity was not uniform across the economy. According to the paper, much of the falls were in 'upstream' industries, including manufacturing, wholesale trade and professional services. The RBA suggests the flow-on impacts could have reduced the goods and services businesses produce by as much as 40 per cent and households' quality of life by 20 to 30 per cent. Australia's Cash Rate 2022 The RBA's paper came out just days after the central bank's latest statement on monetary policy, which estimates productivity will continue to fall to just 0.7 per cent. According to the Australian Bureau of Statistics, Australia's long-term productivity has slumped. In 2003-2004, productivity grew at 1.8 per cent a year; in 2022-2023, it was down to just 0.9 per cent a year. The ABS graph shows Australia's falling productivity: Picture ABS Credit: Supplied To put a dollar figure on it, the Productivity Commission estimated that full-time workers would be $14,000 a year worse off by 2035 if Australia couldn't rediscover its previous growth and continued on its current trend. RBA governor Michele Bullock explained why the central bank cannot solve the productivity issue. Christian Gilles / NewsWire Credit: News Corp Australia When asked about productivity at a press conference, RBA governor Michele Bullock repeatedly pointed out it wasn't the central bank's issue. 'Businesses are looking at what they can do to take themselves out of the productivity slump,' she said 'There's nothing the Reserve Bank can do. 'All the Reserve Bank can do is make sure we have low and stable inflation, and if we have full employment, both of those things are very stable environments for businesses to think about how they might improve productivity, how they might produce more for the same amount of labour and capital input.' Australian politicians, industry experts and economists will soon meet in Canberra for a three-day forum aimed at lifting productivity. The roundtable has a focus on regulation, taxes, AI and even the amount of hours Australians should be working.

ABC News
10 minutes ago
- ABC News
Julie Bishop rejects bullying allegations and Labor abandons the P-word
Welcome back to your weekly federal politics update, where Brett Worthington gets you up to speed on the happenings from Parliament House. It's one big happy family at the good ship government and don't let anyone tell you otherwise. In interview after interview Prime Minister Anthony Albanese and Treasurer Jim Chalmers were jumping out of their skin to tell the world just how aligned they were. We text all the time, they said. We meet in person all they time, they insisted. Don't believe what you read in the newspapers, they cried. Questions arose after the Australian Financial Review reported on Wednesday that the two men had held private talks to agree to rein in public expectations about the artist formerly known as the productivity roundtable. The paper reported any tension was mere "frisson" rather than anything serious but it prompted no shortage of rebuttals. It's been months since Albanese first announced the treasurer would hold a three-day productivity summit in August. In the time since, the rebrandings have been thick and fast, as no shortage of ideas emerge ahead of the what's now being called the three-day economic roundtable (productivity is so yesterday, it seems). There is nothing new about points of tension between prime ministers and treasurers, and there is little to suggest Albanese and Chalmers' relationship is any different to their predecessors. Treasurers have the freedom to be ambitious, while prime ministers tend to be more cautious, acutely aware of public sentiment. That's been on display here. Chalmers has bemoaned the "rule in, rule out" game, encouraging people instead to bring forward their best ideas to boost productivity (or whatever word the government is now using). Albanese, meanwhile, has been very willing to rule out proposals, whether its changes to negative gearing or adopting a four-day work week. When it was first pitched, the government vowed the roundtable wouldn't bear the hallmarks of the first term jobs and skills summit, the announcements from which seemed pre-ordained before the event. Leaked Treasury advice, revealed by the ABC on Thursday, went some way to undermining that thanks to a pre-written list of outcomes for the yet-to-be-held event. The document was prepared for the cabinet. Chalmers insists that it shouldn't be a "big surprise" that briefings had been prepared. But Opposition Leader Sussan Ley, smelling a rat, argued it showed the talks were a "stitch up". Both men say there is low hanging fruit that they hope the economic reform-nee-productivity roundtable can tackle. While it remains to be seen what fruit will be picked next week, one thing that is almost certain is that if you drive an EV, you should expect things are about to get more costly. Labor looks set to use the summit the thrash out road user charging rules to see electric vehicle owners make a greater contribution to road repairs, to help offset falling fuel excise revenue. As for why no one says productivity? Ask people in Labor and they will tell you the word tanks in focus groups. When people hear it, they think it means they need to work harder, even if the ambition is the opposite. Albanese's week started with a highly choreographed event, in which he and Foreign Affairs Minister Penny Wong pledged Australia would recognise Palestine next month. The scale of the moment can't be understated. Decades in the making, Albanese and Wong have spent recent months painstakingly preparing for the pledge, knowing all too well that once said, there'd be no going back. Shame no one told Parliament House's lawn mower, the engine of which roared so loudly that the Albanese and Wong could hardly be heard. Albanese has talked about recognising Palestinian statehood for decades and he seemed acutely aware of the moment. But telling too was how quickly he then donned a hard hat and high-vis vest. He headed to Melbourne on Tuesday to talk about housing and to Brisbane on Wednesday to talk batteries and to attend the Ekka, where he happily ate a famous strawberry sundae (maybe don't look up the pictures of the consumption). While questions about Palestinian recognition might have followed him, the image people saw was that of PM moving throughout the country, signalling his agenda was much bigger than events in the Middle East. Attracting barely a peep from the United States, the Coalition quickly announced it would repeal the recognition if it won the next election, before accusing Labor of emboldening Hamas. Shadow Foreign Affairs Minister Michaelia Cash has taken with gusto to adding theatrical flair to her pronunciation of Hamas, so much so it's almost impossible to describe. Pronunciation aside, this is where things start getting confusing. On Wednesday, Nine newspapers published comments attributed to one of Hamas's co-founders, Sheikh Hassan Yousef, praising Albanese's "political courage", comments the Coalition couldn't pounce on quick enough. But then a statement published on Hamas's English and Telegram channels denied the issuing of the statement, insisting Yousef was imprisoned without any means of communication. Awkwardly for Ley, after saying Hamas was "cheering" on the government, when told Hamas had rejected the comments she replied: "I am not responding to comments by Hamas and nor am I taking them seriously." A quick look at former foreign minister Julie Bishop's Instagram profile shows a dizzying post-political career filled with curated images of her travelling the world, speaking at global events and attending glitzy opening nights. The former foreign minister and deputy Liberal leader retired from federal politics in 2019 after failing to replace Malcolm Turnbull as PM. In the years since, she's opened an advisory firm, joined boards and become a special UN envoy on Myanmar. Among her more prestigious appointments was becoming the chancellor of the Australian National University (ANU). For such a high-profile figure, Bishop has been noticeably quiet in the role in recent months as festering tensions at the ANU boil over amid widespread job and funding cuts. Which brings us to this week and a Senate inquiry interrogating the quality of governance at the nation's universities. Appearing on Tuesday, ANU academic Liz Allen used parliamentary privilege to accuse Bishop and other members of the executive of bullying. Allen, a staff-elected member of the ANU council until she quit earlier this year, accused Bishop of being "hostile and arrogant" to staff and suggested the previous vice-chancellor Brian Schmidt had "kept the chancellor's behaviour in check". In highly charged testimony, she spoke of the personal toll she had experienced and accused Bishop of blocking her from leaving a room after berating her. Bishop didn't appear at the hearing but issued a statement to "reject any suggestion" that she had acted in "any way other than with respect, courtesy and civility". Speaking on Wednesday, ACT senator David Pocock said "everyone in the room was really moved" by Allen's testimony and said it highlighted the human toll poor leadership and governance was having at the ANU. He's also called for Bishop to stand aside while the allegations are investigated. For now, neither Bishop nor embattled vice chancellor Genevieve Bell are budging but neither are the calls for their removal.

Sky News AU
30 minutes ago
- Sky News AU
Struggling Aussies revile 'disgusting' mega profits from Origin, IAG, CBA as cost of living pressures plague millions
Major Australian companies have unveiled massive profits, causing 'disgust' from struggling Australians suffering cost of living pressures. On Thursday, the nation's largest telco Telstra posted a 31 per cent profit jump in the 2025 financial year to $2.34 billion, Australia's largest energy company Origin lifted 26 per cent to $1.49b and profits of the third biggest bank Westpac grew 14 per cent to $1.9b. These followed insurance provider IAG's profit lifting 51 per cent and the Commonwealth Bank of Australia, the nation's largest company and the highest valued bank in the world, posting a $10.1b profit. Some of these results incensed Australians who questioned how these major companies could reap such large profits while cost of living pressures persist. 'Anyone else disgusted by the profit announcements this morning?' a Reddit user asked on Thursday. 'I thought we had a cost-of-living crisis and inflation? People are suffering and struggling, but the corporates just get away with price gouging and insane increases in profitability? 'I get inflation happens, but these figures feel real out of step with inflation. 'I run a small business and tolerate lower margins when things are tough - why shouldn't our corporates also tighten their belts when the rest of us do? An increase is good - but 25-30 per cent feels obscene.' Another lamented that the companies would be pressured to beat these results in the next quarter, while another said the lack of competition in many Australian sectors meant major companies could continue scoring huge profits. 'Highly competitive markets are a race to the bottom,' the Reddit user said. 'These listed companies enjoy very little competition or heavily manipulated markets.' IAG's profit jump came as it enjoyed higher income from insurance premiums and lower-than-expected natural disaster payouts. The company's gross written premium income rose by 4.3 per cent to $17.1b while its total payouts were $10.2b for the 2025 financial year. Meanwhile, payouts for natural disasters was $195m below what the company expected. It comes as insurance costs have surged more than 35 per cent in the three years to June. Meanwhile, Origin's profit rise followed energy costs soaring over the past few years. While various state and federal government power rebates partly covered consumers, major energy companies continued to reap massive profits as electricity prices soared. 'I really need cost of living explained to me like I'm a five year old," a Reddit user said. "Over the past twelve months, various governments gave me large sums of money via my electricity bill to help with my 'cost of living', to then pass onto Origin who records a $1.5 billion profit?' Another user claimed the government rebates were barely covering the daily supply charges or the rate increases many faced. 'So, the money went straight back to the electricity retailer,' they said. CBA's massive profit was torn into by the Finance Sector Union, which labelled the bank 'un-Australian' for slashing jobs in favour of offshore work and AI. 'CBA is Australia's wealthiest bank, yet it is systematically undermining local workers, shunting jobs offshore and replacing skilled workers with untested automation,' FSU national secretary Julia Angrisano said. Alongside these companies, JB Hi-Fi revealed a $462m profit earlier this week while Evolution Mining posted a $926m profit and Penfolds-owner Treasury Wine Estates's profit was almost $437m.