Australia’s commitment to purchasing nuclear submarines through the AUKUS pact—forecast to cost up to $368 billion (US$239.8 billion) between now and the mid-2050s—risks “cannibalising” necessary military spending, former Chief of the Defence Force Sir Angus Houston has warned.
Speaking to the U.S. Studies Centre (USSC) Sydney, he said the only way to avoid depriving other arms of the military would be for Australia to immediately increase its defence spending to 3 percent or more of GDP.
Houston held the top job from 2005 to 2011 and after retiring, he was chosen to co-lead the recent Defence Strategic Review. Launching that report, Houston said that Australia faced the most dire strategic situation since World War II.
The Review and its Integrated Investment Plan projected a $55.5 billion budget for 2024/25, rising to $67.9 billion in 2027/28, which represents approximately 2.2 percent of GDP.
Australia has committed to an increase in annual defence spending over the next 10 years to $100 billion in 2033/34. That would put the country at 2.4 percent—well below what Houston believes is needed.
“[President-elect Donald Trump] might say ‘increase your GDP defence spend to 3 percent,’ but I don’t think that is a bad thing,” Houston said.
Regardless of what Trump may demand, Australia should proactively increase spending to that level, he said.
If it did not, the cost of buying and building nuclear-powered attack submarines, as agreed under AUKUS, would consume too much of the defence budget and result in “the cannibalisation of other military capability,” he said.
New Threats, Alliances, and Technology
Houston told the USSC that there was an increasingly urgent need to combat new threats, alliances, and technology that had emerged since his retirement.“Things have gotten worse,” he said. “At that time, the only big war running was Ukraine. We see the alignment of four countries in North Korea, China, Russia and Iran. Things are pretty grim.
“We have seen no moderation of China in the Indo-Pacific. There has been no transparency, no assurance [of the motive for Beijing’s military build-up].”
Houston noted the numerous incidents in the South China Sea, often involving aggression by Chinese Coast Guard vessels.
He was also concerned about the Chinese Communist Party’s (CCP) quest for ever-increasing influence in the South Pacific.
“There are offers being made to small island states for policing assistance [from Beijing]. We may wake up to basing rights, which would be a serious challenge for Australia,” he said.
Meanwhile, Houston warned of the current proliferation of missiles.
Support From Other Experts
Houston’s concerns were echoed by a number of other participants at the USSC forum.Chief executive officer of the Centre, Michael Green, said the new U.S. administration is expected to crack down on nations that are seen as not spending enough on defence.
“No allies of the United States will get a pass on two percent [defence spend] of GDP,” he warned. “We expect that even close allies of the U.S. such as Canada and those in Europe will not get a pass.”
Former Australian ambassador to the United States, Arthur Sinodinos, agreed.
“The new U.S. administration will expect allies and partners to spend more on their defence ... and it’s in our best interest to do more,” he said. “We need to make the ’they need us’ pitch from Australia to the USA.”
And former Secretary of the Department of Defence and the Department of Foreign Policy and Trade, Dennis Richardson, said, “Nuclear-powered submarines must be a net addition to the Australian Defence Force capability.”
