Australia must lift defence spending to 3 per cent of its GDP and reprioritise buying drones and missiles over larger acquisitions to deter regional conflicts in the next decade, a former senior home affairs official has argued.
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The Australian Strategic Policy Institute published a report on Thursday, echoing wider concerns that spending on expensive weapons such as nuclear submarines and frigates has left the military exposed in the short term.
The national security think tank receives funding from the Commonwealth and is led by former senior Liberal Party advisor Justin Bassi.
The March budget confirmed under Labor that Australia's defence spending will reach 2.3 per cent of the GDP by 2033-34, around the same time Australia is due to receive its first Virginia-class submarine from the US.
Former home affairs deputy secretary Marc Ablong, who authored the ASPI report, said funding should be allocated sooner to smaller capabilities to help fill urgent capability gaps in the army, navy and airforce.
"The budget doesn't match the seriousness of the strategic threat that Australia faces. We are focusing too much on these big, exquisite platforms," Mr Ablong told The Canberra Times.
"I'm not suggesting we don't need submarines or frigates, but what we're seeing in war today, particularly coming out of the events in Ukraine, is that our adversaries are more likely to use things like drones and missile capabilities.
"But we aren't focusing on how we are looking to deter that and invest in cheaper, mass-produced capabilities."
The circulation of a Chinese navy flotilla around Australia's shores earlier this year sparked discussions about the nation's military capabilities, with defence spending emerging as a key issue during the election.
Defence Industry Minister Pat Conroy is expected to finalise a series of major defence acquisition projects this parliamentary term, including choosing between a German or Japanese supplier for Australia's $11 billion general-purpose warship fleet.
A decision is expected by the end of December.
The federal government is also expected to hand over a second down payment to the Trump administration under the $368 billion AUKUS deal.
Defence Minister Richard Marles told a defence summit in Adelaide in March that the Albanese government was prepared for "ongoing conversation" about defence spending with the US, after the government pledged to lift spending by $50 billion over a decade.
The Trump administration has pushed Australia to increase spending on defence to 3 per cent of gross domestic product after declaring Western allies were too reliant on the US.
Defence spending is currently sitting above 2 per cent GDP, which amounts to roughly $56 million annually.
Eleanor Campbell
Eleanor Campbell covers federal politics and the public service. Reach her securely on Signal @eleanorcampbell.25.
