Rumors are circulating that another Chinese naval task group may be heading towards Australia. Although such a deployment poses no direct threat, as warships are entitled under international law to operate in international waters, it inevitably recalls the Chinese task group that circumnavigated Australia earlier this year. That voyage, while perhaps overblown by some, was a deliberate demonstration of maritime coercion in a shifting strategic environment.
China’s increasing assertiveness in the Indo-Pacific, coupled with Russia’s aggression in Ukraine and ongoing conflicts in the Middle East, underscores a troubling reality: military force has re-emerged as a standard tool of coercion. For Australia, the pressing question is how to mitigate vulnerability to such military coercion, a conversation that begins with defense spending.
Australia’s Defense Spending: A Critical Evaluation
Despite recent incremental funding boosts, Australia still lacks the capabilities necessary to safeguard its national interests in a more contested world. The nation cannot guarantee the security of its ports due to outdated mine-detection systems; its land-based missile-interception capability is largely symbolic; and it possesses almost no sovereign space assets to support defense operations. In a period of mounting global instability, Australia is asking its military aircraft to fly less and its ships to spend less time at sea simply to stay within budget. The unavoidable reality is that current resourcing does not align with strategic needs or the threats highlighted by national leaders.
Discussing the prospect of conflict, or even a major military crisis short of it, is never easy. While Australians honor sacrifice on Remembrance Day and Anzac Day, the visceral prospect of attack has understandably faded from memory. The fear felt in Darwin in February 1942, in Katherine a month later, or in Sydney when midget submarines entered the harbor in May of that same year, are distant memories.
Historical Context and Current Challenges
Australia is not on the brink of attack, but the nation has lived in relative peace since 1945, and those memories have receded. However, these are the circumstances evoked by political leaders when they claim Australia faces “the most challenging strategic circumstances since World War II.” States increasingly use military coercion to solve their problems, and countries unable to resist coercion will struggle to defend their interests and way of life. Australia is already experiencing degrees of military coercion.
The South China Sea, through which two-thirds of Australia’s maritime trade passes, is fundamental to the nation’s security and prosperity. As an island nation utterly dependent on maritime trade, Australia has operated there consistently since the end of World War II. Yet, with China’s growing military power, Australian Defence Force personnel have faced increasingly aggressive harassment in international waters and airspace. The most recent incident in October involved a Chinese fighter aircraft releasing flares close to an Australian patrol aircraft, risking engine disablement and potential loss of life.
“This is military coercion: an attempt to pressure Australia not to operate freely in international airspace.”
The Need for Strategic Alignment
The circumnavigation of Australia by a Chinese naval task group of three ships fits into the same category of military coercion. It was not en route to any destination, offered no scientific value, and China’s maritime trade does not depend on the Southern Ocean. It was a demonstration of capability and a show of force likely to be repeated. While Australia need not be alarmed, it must remain alert and ready to respond to a changing world.
One fundamental point stands out: to withstand military coercion, Australia must possess the military capability to deter it where possible or to respond if prevention fails. The recent Lowy Poll found that 51 percent of Australians support higher defense spending. Although the Albanese government has announced major plans for new submarines, surface ships, and an expanded missile inventory, Australia still lacks several key capabilities essential to reducing the impact of military coercion and, in the worst case, responding to conflict.
“We are trying to meet a rapidly changing strategic environment on a lean budget, spending about 2 percent of GDP on defense. In the Cold War, it was around 2.7 percent; in the 1950s, about 3 percent.”
Future Implications and Strategic Adjustments
In nominal terms, Australia is spending more, but as a share of the economy, it is significantly less. Consequently, the nation cannot afford many critical capabilities needed to protect itself from increasing trends of military coercion and conflict. Australia must recognize how quickly the world is changing and act accordingly. Modest increases in defense spending will not bridge the gap between strategic ambitions and fieldable capabilities.
The government’s plan to reach 2.3 percent of GDP by 2033–34 does not match the pace or scale of the strategic deterioration faced. If Australia is serious about resisting coercion and protecting national interests, defense funding must rise beyond that level, and soon. Delay only heightens vulnerability to military coercion.
