Coalition recommits to defence spending boost

Opposition Leader Sussan Ley has re-committed a Coalition government to spending 3 per cent of GDP on Defence within a decade. Despite continuing speculation over the Coalition leadership in the wake of the dumping of the net zero emissions reduction target, Ms Ley gave a major speech on Thursday evening where she also promised to spend more on missile defence, drone manufacturing and military satellites and boosting ADF recruitment. Ms Ley who was providing an address to the Menzies Institute in Melbourne said increased defence spending was justified because Labor’s failure to sufficiently boost spending had left a “deterrence deficit’’ at a time when regional security was drastically worsening. Ms Ley’s comments come after former Opposition Leader Peter Dutton first unveiled the 3 per cent pledge during the 2025 election campaign. The comments also open up a gap on the Albanese Government’s level of Defence spending which stands at just over 2 percent of GDP. Even though the Albanese Government is promising to spend an extra $70 billion over the decade this will leave it short of 3 per cent of GDP target. US president Donald Trump gave Prime Minister Anthony Albanese an unexpected leave pass when the two met in October in Washington when he said while he would like Australia to spend more on Defence the close ally could only do so much. The comments came after US War Secretary Pete Hegseth had urged Australia to increase Defence spending to at least 3 per cent of GDP, primarily to counter the threat posed by China. Deputy Prime Minister Richard Marles says if the NATO Defence spending standard is applied, then Australia’s spending is already 2.8 per cent of GDP. DPM Marles has also promised the Albanese Government will review Defence spending in 2026 when it is due to release a new National Defence Strategy.

Mandated minimum content for SMEs

AIDN CEO Mike Johnson has called for the introduction of mandated minimum share of Defence contracts for small and medium defence contractors. Mr Johnson made the call in an opinion piece published by prominent Defence thinktank the Australian Strategic Policy Institute. Writing for the ASPI blog, The Strategist, Mr Johnson said too many Australian SMEs faced prohibitive barriers when dealing with Defence. Complex tendering rules, excessive compliance requirements and cumbersome export processes discouraged participation and stifled innovation. He said continuing to rely so heavily on complex global supply chains and foreign decision-makers to sustain defence needs, and failing to fully mobilise SMEs, risked Australia surrendering the very autonomy sought in spending on defence. He said a stronger Australian Defence industry including mandated minimum content quotas would enhance national security and power the economy. Defence manufacturing created thousands of skilled jobs, many in regional areas where Defence facilities serve as economic anchors. Every dollar invested circulated through the broader economy, supporting apprenticeships, advanced manufacturing and supply chain innovation. Mr Johnson also reaffirmed AIDN calls for an increase in Defence spending to at least 3 per cent of GDP, in response to a more threatening strategic environment.

ASIO boss warns of growing spy threat

Australian Security Intelligence Organisation boss Mike Burgess has warned Australia’s Defence industry to harden its defences against the growing threat of international espionage. Mr Burgess in a speech this week said Australia’s defence industry was facing an increased espionage threat as foreign intelligence services were more aggressively targeting companies developing critical military technologies. The Australian Security Intelligence Organisation (ASIO) has urged defence businesses to harden their security as new data reveals the economic toll of espionage. A joint ASIO–Australian Institute of Criminology report, The Cost of Espionage states that espionage stripped $12.5 billion from the Australian economy in 2023–24 – a figure analysts believe significantly understates the true scale of the damage. Director General Burgess said foreign governments had developed “an unhealthy interest” in Australia’s maritime and aviation capabilities as well as dual-use technologies emerging from the defence industrial base. He said Australia’s Defence sector was a top intelligence collection priority for foreign governments seeking to blunt Australia’s operational edge, gain insight into readiness and tactics and better understand the capabilities of allies.

GSC program reaches another milestone

Defence’s Global Supply Chain (GSC) Program continues to secure more opportunities for local business, generating more than $2.35 billion worth of contracts for 307 Australian Defence suppliers. Assistant Secretary Industry Policy and International Engagement Branch Liane Pettitt said the GSC Program continued to expand and deliver important outcomes. She said in 2024 the number of major Defence companies involved in the program had grown from seven to 13 enabling more Australian businesses to diversity there revenue streams – leading to a more sustainable sovereign industrial base. Ms Pettitt said over the past 12 months the GSC program had seen an increase in contracts of nearly 30 per cent, exceeding $412 million in value and welcoming around 50 new Australian suppliers. Ms Pettit said the expansion provided Australian businesses with greater access to export markets and ensured an ongoing pipeline of work and growth. As a demonstration of the benefits and progress of the initiative, Boeing, the first major Defence industry partner to join Australia’s GSC Program, passed the milestone of awarding $1 billion worth of contracts to Australian suppliers.

Exercise Malabar strengthens regional security

Australia this week joined India, Japan and the United States for Exercise Malabar, a key Indo-Pacific maritime activity designed to deepen interoperability between regional partners. The Royal Australian Navy (RAN) Anzac-class frigate, HMAS Ballarat and a RAAF P-8A Poseidon maritime patrol aircraft also took part in the exercise, flying missions from the US Andersen Air Force Base in Guam. Chief of Joint Operations, Vice Admiral Justin Jones AO, CSC, RAN, said with regional security challenges evolving rapidly, partnerships and joint exercises were more important than ever. Through complex drills in anti-submarine warfare, air defence and replenishment at sea, participating nations-built trust, interoperability and readiness to respond to collective security challenges. Exercise Malabar was established as an annual bilateral training activity between India and the United States in 1992. Australia first took part in the exercise in 2017 and hosted the exercise for the first time in 2023.