Speech to the National Press Club

I would also like to acknowledge the aviators of the Australian Defence Force currently patrolling the skies of the Middle East to help protect the United Arab Emirates, including tens of thousands of Australians, from Iranian missile and drone attacks over much of the last month.

Their work has been totally professional, highly capable and extremely valuable. Danger has been an ever present companion. And as always they have done honour to their uniform and served their nation with distinction.

The current ceasefire in the Middle East is a critical opportunity to move back from the brink, open the Strait of Hormuz, restore the global fuel supply chain and place events on a path to peace. Australia will do all within its power to help make this temporary ceasefire permanent.

The central thesis of the 2023 Defence Strategic Review, the 2024 National Defence Strategy and now the 2026 National Defence Strategy – NDS 26 – is to establish a defence force which is completely focused on the challenges of the Indo-Pacific. And the Albanese Government remains utterly committed to this.

Yet the conflict in the Middle East – while unexpected – does highlight other truths which are also contained in NDS 26 and which contextualise this thesis.

We live in a deeply interconnected world where a war in Eastern Europe has profound consequences in the Indo-Pacific and where a conflict in the Middle East has disrupted the energy supply of our region.

As an island trading nation our sea lines of communication literally define our national security. And so, as I have said before, the geography of our national security lies well beyond our coastline or even our immediate waters. We therefore need a defence force that can be out there: that can engage in impactful projection.

And there is now a more stark economic asymmetry to modern warfare. Cheap one-way drones can overwhelm multi-billion dollar air defence systems. And so there is a need to integrate crewed and uncrewed systems, in which a small number of high-end platforms are augmented by autonomous systems to provide mass.

NDS 26 affirms that Australia faces its most complex and threatening strategic circumstances since the end of World War II.

International norms that once constrained the use of force and military coercion continue to erode. More countries are engaged in conflict today than at any time since the end of World War II, and this is occurring across every region of the world.

In the face of this the Albanese Government is pursuing every avenue of increasing defence capability quickly: mostly through bigger defence appropriations but also through accessing private capital.

The result is that we are now seeing the biggest peace time increase in defence spending in our nation’s history.

This is not mere rhetoric.

The Integrated Investment Program – the IIP – which sits alongside NDS 26 contains an increase in defence spending of $14 billion over the forward estimates and $53 billion over the next decade. This will be contained in next month’s Federal Budget.

And in turn this means that since coming to office the Albanese Government has increased defence spending by a total of $30 billion over the next forward estimates and $117 billion over the next decade.

To place this in context, the former Coalition Government, which governed during a period when all the trends we are wrestling with today were just as present then, increased defence spending by just $10 billion over the decade. Which is to say, this Labor Government has done 12 times as much in four years as the Liberals did in nine.

And so every time you hear the Liberals carp about defence, remember this fact. Every time you hear a former Liberal Prime Minister chest-beating, remember that while they maybe lions in the cheap seats they were mice when they were in office. And when you hear the Leader of the Opposition talking a big defence game, just remember that he was a member of cabinet in a Liberal Government that gave us a lost defence decade when we could least afford it.  

There is so much commentary about the levels of defence spending from people who have never sat around the ERC table – who have never won a single dollar for defence. And quite frankly a lot of this commentary is worthless.

Because increases in defence spending do not happen as a result of think tanks, or former generals, or washed up bureaucrats. It happens by winning arguments around the ERC table where every dollar is hard-fought as it should be. And the truth is that the ERC table the Liberals convened failed our nation’s defences and left Australians less safe.

The Albanese Government is spending more on defence over the decade, more over the forward estimates and more right now.

Indeed today we are spending 2.8% of GDP on defence. That is the most of any comparable like-minded country in the Indo-Pacific and it is more than most of the countries of NATO including the UK, Germany, France, Italy and Canada.

Based on current GDP projections we now have spending committed in the Budget that will take us to a defence spend of 3 per cent of GDP by 2033. And it is much more than this when you include other supporting investments in critical infrastructure, the defence of networks, civil preparedness and resilience, innovation, and the full strengthening of our defence industrial base.

NDS 26 firmly embeds the two-year drumbeat of reassessing the strategy and capabilities we need to keep Australians safe.

NDS 26 builds on the foundations laid in NDS 24. It is not a departure in direction, but a strengthening of resolve with an increased focus on self-reliance.

NDS 24 made clear that Australia’s strategic environment was deteriorating and that the assumptions which had underpinned Australia’s security for decades — geographic distance, warning time for conflict, and Australia’s regional military superiority — were no longer valid.

That judgement was informed by increasingly adverse trends: intensifying major power competition, rapid military modernisation in our region occurring without transparency or strategic reassurance, a weakening prohibition on territorial conquest, and the growing capacity of states to project military power at longer range.

NDS 26 makes clear that over the past two years these trends have both intensified and broadened.

These trends have occurred in the context of immense global economic interdependence, meaning the effects of conflict travel — through markets, supply chains, energy networks, right into household budgets. Even when Australia is not an active participant in war we feel its consequences.

That same interdependence offers new tools for coercive and grey zone statecraft while lowering the threshold for its use: from the pervasive penetration of digital communication systems, to the targeting of critical undersea architecture and the leveraging of economic chokepoints. 
This is occurring alongside a rapid transformation in the character of warfare itself, as conflicts in Ukraine and the Middle East demonstrate. While attrition and high intensity conventional warfare remain enduring features of war, the ability to generate asymmetric advantage is quickly disrupting established tactics and doctrine. The Ukrainian example — matching rapidly evolving, cheaper military equipment against larger, more expensive platforms — is driving new investment in emerging and disruptive technologies – including AI.

These technologies offer revolutionary promise, but also new threats. Unlike previous innovation cycles, where the cost of entry was high and uptake depended on a sovereign industrial base, this new cycle will be faster and it will spread more quickly. And this will challenge our collective ability to manage risk.

New technologies are not the only concern. The Cold War era of nuclear arms control — put in place to limit the risk of catastrophic nuclear confrontation — ended this year with the expiry of the last remaining agreement limiting the number of strategic nuclear warheads deployed by Russia and the United States – the countries with the two largest stockpiles.

All nuclear weapon states are growing their arsenals once more, with the biggest growth occurring in China. Absent new arms control efforts, we may be at the foothills of a new nuclear arms race.

All these trends are made more worrying because of intensifying strategic competition among major powers, most notably between the United States and China.

China continues to engage in the world’s largest conventional military build-up since World War II without the transparency and strategic reassurance other states expect.

It is pursuing greater strategic depth by enforcing contested territorial and maritime claims in the South and East China Seas and has not accepted the binding legal decision of the relevant international tribunal. China has now resumed large-scale land reclamation for new military facilities at Antelope Reef.

China is also deploying the PLA Navy at greater distance in the Pacific, maritime Southeast Asia, and the Indian Ocean. PLA deployments close to Australia have grown in frequency and capability over the last two years, a trend that will continue.

And China has deepened its strategic partnership with Russia.

The features characterising the current international system profoundly complicate Australia’s strategic environment. The global rules-based order is under extreme pressure. We have now entered a period that will be defined more by disorder and characterised by a sharper struggle among states as they vie to assert a new equilibrium that favours them.

This struggle is not abstract. It will drive elevated risks to Australia’s security and prosperity over the coming decade, increasing our exposure to conflict and coercion, requiring a relentless focus by this Government on Australia’s defence strategy and capability.

And we are acting.

Two years ago NDS 24 adopted a fundamentally new approach to the defence of Australia and our interests, transforming the Australian Defence Force into an integrated, focused and more lethal force oriented toward denying any adversary the ability to coerce Australia through force. This is Australia’s most consequential risk.

Accordingly, we have been creating an ADF that is able to operate at greater range, that can engage in impactful projection: a more amphibious army; more capable northern bases that can project our air force further; longer range missiles; a much more capable surface fleet; and the acquisition of long range nuclear powered submarines.

We are building an ADF that is integrated across all five domains – including space and cyber – that works in concert with other arms of national power and with our partners.

Over the last two years since NDS 24 – indeed since coming to office – the Albanese Government has acted with urgency and determination to deliver this strategy.

There has been major progress toward the acquisition of our future submarines under AUKUS.

HMAS Stirling will be ready to host Submarine Rotational Force – West – a rotational presence of US and UK nuclear powered submarines – by the end of next year.

Work is underway in building the new Submarine Construction Yard at the Osborne Naval Shipyard and we are on track to cutting steel there on the first Australian-built nuclear powered submarine by the end of the decade.

We are also investing $12 billion as a down payment for the redevelopment of the Henderson Defence Precinct, which will support the maintenance, and sustainment of our future submarines.

We have overseen a swift uplift in long range strike capability and we are rapidly expanding our stockpiles. We have commenced making missiles in this country for the first time since the early 1970s at Lockheed Martin’s factory in Port Wakefield, South Australia.

The Government has undertaken the most ambitious modernisation of Australia’s maritime capability since the Second World War with the selection of Japan’s upgraded Mogami class frigate as our next general purpose frigate, the building of our new Hunter class frigates, and the acquisition of the Navy’s fleet of autonomous underwater vessels – the Ghost Sharks.

Contracts have been signed for the Landing Craft Medium and Heavy, which will greatly increase Army’s amphibious capability.

The Air Force has moved from prototype to production of the Australian-made Ghost Bat: the leading collaborative combat aircraft in the world.

Over the last two years the ADF has started growing again with a permanent force that is at its highest levels in 20 years, and force separation rates falling substantially below the ten-year average.

And in the specific area of Defence’s fuel supply, we have strengthened Defence’s fuel resilience, expanding storage and distribution capacity and establishing a strategic defence fuel reserve: doubling defence’s fuel holdings since our Government came to office.

As a result of NDS 26 and the updated IIP investments in all of these capabilities will continue. But we will also do more.

Over the next two years and beyond we will be making significant new upgrades in communications, command and control systems.

We will be investing in subsea warfare capabilities that protect critical undersea infrastructure.

In delivering a more lethal surface combatant fleet, we will be expanding opportunities for continuous naval shipbuilding and sustainment.

NDS 26 will increase development of a sovereign hypersonic strike capability through AUKUS Pillar II.

We will accelerate the introduction of air and missile defence capabilities, including new investment in a medium range, ground based air defence system, recognising the increasingly contested air and missile environment. This program will commence as a priority from 2026 to enhance protection against advanced aircraft as well as cruise and ballistic missiles.

We will also expand the fleet of autonomous and uncrewed systems across all domains with a strong emphasis on sovereign industry and Australian innovation.

Ghost Bat and Ghost Shark are world leading Australian developed autonomous capabilities. They are tailored to meet our circumstances.

The development and procurement of these capabilities and many others represents a $12-15 billion commitment over the decade. And this will enable the necessary proliferation of autonomous systems to support force projection.

NDS 26 places a focus on delivering a secure, resilient, multi orbit satellite communications system, recognising that assured access to space enabled communications is now foundational to military effectiveness.

NDS 26 places an emphasis on increased self-reliance. This is not a new concept in Australian defence thinking, but it has been an elusive one.

We are the world’s largest island nation with the third largest maritime domain. Yet our population is 56th in size and our industrial base is relatively small at 5.7 per cent of GDP. This has given Australia a unique defence challenge which we have historically addressed through partnership with a major power.

But the current strategic environment is challenging old assumptions. Both the cost and requirement of defence will grow, and as a nation we will need to invest greater resources in our defence than we historically have. Middle powers that don’t take on more responsibility for their own security will be more exposed to coercion and face greater limits on their sovereignty.

A greater focus on Australian self-reliance should not be confused with military self-sufficiency. This is not about jettisoning alliance relationships. To the contrary, alliances, especially with the United States, will always be fundamental to Australia’s defence.

However, in this tougher era, the benefit of alliances will stem as much from shared access to critical capability that better enables Australia to defend itself, as it does from security commitments.

Self reliance means balancing critical tasks we must undertake ourselves, with those that can be assured through trusted partnerships. And we will do this with our allies, not in the absence of them.

Central to self reliance is a renewed emphasis on strengthening Australia’s defence industrial base.

Last financial year, almost 80 per cent of the defence budget was spent in Australia.

Since our coming to office direct employment in the defence sector has grown by 14.5 per cent. This includes accelerated development and acquisition of uncrewed undersea and surface vessels and uncrewed aircraft, and the acquisition of cutting-edge drone and counter drone technologies.

Self-reliance also recognises that defence preparedness cannot be separated from national resilience.

The lessons of the war in Ukraine and conflicts in the Middle East are stark. Preparedness is not just about platforms and weapons systems.

NDS 26 commits to improving ADF and whole of nation preparedness and resilience, directing targeted investments to uplift sustainment, logistics and health — the indispensable foundations of military effectiveness.

NDS 26 reaffirms the significance of Australia’s defence partnerships, particularly in our region.

Our alliance with Papua New Guinea is our first alliance treaty since 1951. Our historic security treaty and Defence Cooperation Agreement with Indonesia represents a high water mark in this critical bilateral relationship. Our partnership with Japan has been strengthened through the Japan–Australia Framework for Strategic Defence Coordination. The Australia–Singapore Comprehensive Security Partnership 2.0 provides for expanded ADF access in Singapore in support of our regional presence.

In our near region, we will continue to deliver on the Pacific Islands Forum vision for Pacific-led responses to Pacific security challenges. We will also wholeheartedly support a regional order in Southeast Asia which has ASEAN at its centre.

From India to Indonesia, from the US to the UK, all of these partnerships seek to integrate our capabilities and operations to increase the collective weight of our deterrence effort in order to shape a region and a world where stability is upheld not by dominance, but by a shared commitment to rules, sovereignty and mutual respect.

And to that end, NDS 26 underscores Australia’s enduring commitment to rules and norms, and the partnerships necessary to underwrite them.

As the world enters this current period of disorder, some argue that the idea of the global rules-based order — an order where nations can pursue their security and economic interests, consistent with international law and free from coercion — is now extinct.

I disagree.

If you ever have the chance to fly low over the waters to our north that separate us from Indonesia, there are times where you can actually see the maritime boundary between our two countries. It is marked out by the southern-most extent to which Indonesian fishing boats operate. And by knowing how far to go but going no further these fisher people are operating in accordance with understood maritime laws – they are operating in accordance with the global rules based order. Yet none of these people are international lawyers. They come from small fishing villages along Indonesia’s south coast. But their understanding of the international rules is clear, demonstrating that the global rules-based order is not abstract but real. It is deeply understood. And Australians and Indonesians and our two nations live by these rules each and every day.  

The global rules-based order provides a middle power like Australia with agency. A world defined purely by power and might does not. And it is most definitely against Australia’s national interest to rush – as some Australians have – to the conclusion that this order no longer has any role.

For all the failings of the global rules-based order — and there have been many — we have been far better off with it than without it. Our challenge is not to discard the imperfect but rather to make the promise of an ideal better. Because if we let it go the world will deeply regret its disintegration. 
 

The global rules-based order would not have existed without American leadership based on an enlightened conception of its own self-interest.

Now I understand US frustrations that allies might seek to free ride on this US leadership or believe that the order acts as a substitute for hard power. It does not. Any rules-based order can only prevent conflict when it is underpinned by the hard power necessary for collective deterrence.

Australia must contribute to this and we are. And we will work with all our likeminded partners to better shape our region’s strategic trajectory. We will double down on middle power cooperation. But let’s also be clear: there is no effective balance of power in the Indo-Pacific absent the continued presence of the United States.

The Alliance remains critical to Australia’s national security and the Government welcomes the United States’ 2025 National Security Strategy and National Defense Strategy, which set out a critical US commitment to the Indo Pacific.

Finally, the Government is clear that delivering this strategy is not only about investing more — it is about spending better. The Australian people rightly expect that defence investment delivers real capability, at pace, and with transparency.

The Government is committed to ensuring that every dollar invested in defence is well spent. So we are continuing to drive defence innovation and enterprise reform through the establishment of the Defence Delivery Agency, the reform of the Australian Submarine Agency and the implementation of the recommendations of the Defence Estate Audit. And together, all of this represents the biggest reform to the public administration of defence in our country’s history.

NDS 26 reflects a clear-eyed assessment of a more dangerous and uncertain world — and a confident response to it.

It puts Australia on a path to strengthen our defence self-reliance.

It reinforces the industrial and national foundations of defence. And it situates Australia firmly within a network of trusted regional and global partnerships.

Above all, it ensures Australia remains secure, sovereign and ready — not just for today’s challenges, but for the decade ahead.

Thank you.

ENDS