The Liberal Party pledges to lift defence spending to 2.5% of GDP by 2030, funding AUKUS submarines and a guided-weapons enterprise without raising taxes.
Current spending trajectory
Australia's defence spending has grown steadily in recent years, driven by regional security challenges and major capability acquisitions including the AUKUS submarine program. However, the Liberal Party argues current spending levels remain insufficient for Australia's strategic needs.
The current trajectory sees defence spending rising from 1.96% of GDP in 2024-25 to approximately 2.1% by 2028, primarily driven by AUKUS commitments and guided weapons investments. The Liberal target of 2.5% represents a significant acceleration beyond current plans.
Defence spending drivers
- 1.96% GDP in 2024-25 Budget: Current baseline reflecting existing commitments and programs
- AUKUS subs, missiles push to 2.1% by 2028: Major capability programs drive near-term growth
- Liberal target accelerates to 2.5% by 2030: Additional $16 billion annually by decade's end
- Regional threat assessment: China's military modernization drives capability requirements
The Liberal Party argues that Australia faces the most challenging strategic environment since World War II, requiring defence spending levels comparable to the 1950s and 1960s when Australia maintained defence expenditure above 2.5% of GDP.
Liberal Defence Investment Strategy
Defence spend % GDP 2024-2030
Year-by-year GDP share path to 2.5%
How to reach 2.5% by 2030
Achieving the 2.5% GDP target requires an additional $16 billion in annual defence spending by 2030, funded through a combination of redirected government revenue, efficiency savings, and economic growth. The Liberal Party pledges no new taxes to fund the increase.
The funding strategy relies on leveraging existing government assets and improving public sector efficiency rather than increasing the tax burden on households and businesses. This approach aims to maintain fiscal responsibility while addressing defence capability gaps.
Revenue sources and offsets
- Index defence to nominal GDP +1.2%: Automatic escalation ensures defence spending grows faster than the economy
- Redirect $6bn from NBN equity returns: Government dividend income from NBN Co reinvested in defence capabilities
- Trim public-service headcount by 1%/yr: Gradual reduction in non-essential government administration roles
- Asset optimization: Strategic disposal of non-core government property and investments
The efficiency dividend approach targets administrative savings while protecting front-line service delivery, with the Defence Department exempt from headcount reductions to support capability expansion.
Focus areas: AUKUS & missiles
The Liberal defence strategy prioritizes two key capability areas: the AUKUS submarine program and guided weapons enterprise. These investments aim to provide Australia with long-range strike capability and undersea dominance in the Indo-Pacific.
Priority capability investments
The Liberal defence strategy concentrates additional spending on critical capability areas that address Australia's most pressing strategic vulnerabilities. These investments aim to provide deterrent effect and operational advantage in the Indo-Pacific region.
- $9bn near-term spend on sub base upgrade: Infrastructure investment in submarine maintenance and construction facilities to support AUKUS program
- Accelerated guided weapons enterprise (GWEO): Sovereign manufacturing capability for long-range missiles and advanced munitions systems
- Quad interoperability fund $2bn: Investment in joint capabilities and systems interoperability with US, Japan and India
- Advanced manufacturing base: Industrial capacity development for defence technology production and maintenance
Strategic capability priorities
The enhanced defence spending targets specific capability gaps identified in strategic reviews:
- Undersea warfare: Nuclear submarine acquisition and advanced torpedo systems
- Long-range strike: Hypersonic weapons and extended-range conventional missiles
- Air and missile defence: Integrated defence systems protecting key infrastructure
- Cyber and space: Offensive and defensive capabilities in digital domains
Breakdown of additional $16bn spend 2025-30
Subs, missiles, personnel, cyber
Key Investment Areas
Frequently Asked Questions
The Liberal Party's defence spending target represents a significant commitment to military capability development, driven by assessments of regional strategic threats and capability gaps. Success depends on maintaining political support for sustained spending increases and effective project management of major acquisitions.
For more information on Liberal defence policy, explore the Liberal Party profile or learn about AUKUS program details.