Spend More on Defence, Introduce National Service to Combat ‘Assertive’ China, Analyst Says

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Sep 21, 2025 - 09:53 Updated: Sep 21, 2025 - 09:50
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Spend More on Defence, Introduce National Service to Combat ‘Assertive’ China, Analyst Says

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For many years, Australian defence analysts have been calling for increased spending. After years of inaction, where touted increases have barely kept up with inflation and the rising cost of increasingly sophisticated weaponry, this year the Albanese government announced a target of spending 2.4 percent of GDP by 2033-34.
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But that’s nowhere near enough for its major ally, the United States. Back in May, Defense Secretary (now Secretary of War) Pete Hegseth said Australia needed to hit 3.5 percent “as soon as possible,” according to a statement from the Pentagon.

Aside from the affordability of such a move, Australia faces another obstacle if it decides to move spending more in line with Hegseth’s target: the Australian Defence Force (ADF) struggles to spend its existing budget.

A breakdown of the 2025 defence budget by Strategic Analysis Australia (pdf) found that “Defence hasn’t been able to hit its acquisition spending targets even before it attempts to deliver the more ambitious plan presented in the NDS (National Defence Strategy) … Defence hasn’t spent the money it had to in order to deliver planned military capabilities. Over the past decade, it’s fallen short by $26 billion.”

So should the country aim for 3.5 percent of GDP and could it effectively spend that money if it did?

Mick Ryan, a retired major general in the Australian Army and now a defence analyst, says the answer to both questions is an emphatic “yes.”

He points out that NATO this year endorsed new spending targets, including 3.5 percent of GDP on core defence capabilities and an additional 1.5 percent on infrastructure, civil defence, the defence industry, and national resilience.

The current defence budget of $59 billion equates to 2.03 percent of GDP, and a rise to 3.5 percent would see it reach a figure of around $145 billion.

“China’s behaviour since 2024, including its massive military exercises around Taiwan, its accelerating capacity growth in the space, air, maritime, land, cyber, and information domains, its expanding Pacific cooperation with Russia, its collaboration with other authoritarians to learn and adapt to the lessons of the war in Ukraine, and its more overt assertiveness towards Australia, demonstrates the need for higher defence spending [in this region],” Ryan says in a report for the Lowy Institute.

How to Spend the Budget

While Hegseth has assured U.S. allies in the Indo-Pacific of continuing support, Ryan warns America is reportedly considering a shift to hemispheric defence in its 2026 National Defence Strategy.

That will mean Australia will need to “do much more for itself, and its neighbours, to deter aggression and fill the gaps of an American military stretched to its limit in Europe, the Middle East and the Pacific,” he says.

So, assuming the government finds another $86 billion for the defence budget? Where should it go?

First, the roadmap set out in the 2024 National Defence Strategy should be followed, Ryan says.

That means submarines, precision, long-range strike capability (including producing munitions in Australia), enhancing northern bases, growth in the number of ADF personnel, new technologies, and engagement in the Indo-Pacific.

Then the additional investment should be in mobilisation, faster workforce expansion, more research and development, and, controversially, a national service scheme.

Mobilisation is the act of assembling and readying troops and supplies for war. Ryan says mobilisation planning must be seen as “part of a national deterrent against Chinese aggression.”

Reintroduce the Draft

Some of the additional funding should be allocated to stockpiling munitions, fuels, medicines, and strategic materials in the event Australia’s sea lanes become part of a future conflict.

Some should also be spent on building more infrastructure for training an enlarged, mobilised ADF, and basing larger numbers of foreign forces in Australia.

“And increasing manpower for reserve units and training institutions would also be timely initiatives,” he adds.

However, Australia shouldn’t rely solely on reservists in the event of conflict in the Indo-Pacific and should, Ryan says, introduce universal national service.

He says it would “inculcate young Australians with a service ethos and an understanding that citizenship is about balancing individual and community imperatives.”

“Small, professional military institutions do not survive long in major conflicts,” he says. “The ability to induct large numbers of additional people into the ADF quickly is therefore an imperative.”

While he admits that spending more on defence would inevitably mean cuts to domestic programs, increased government borrowing, or a combination of both, the risks of the current strategic environment can’t be underestimated.

“Australia’s circumstances may not just be the most challenging since the Second World War, as the 2024 National Defence Strategy judged, but the worst in our history,” he warns.

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