Higher taxes needed as Coalition eyes extra $100 billion defence spend
The Age.
April 24, 2025

A Coalition plan to drive defence spending to 3 per cent of GDP would create a $100 billion hole in the budget through the first half of the 2030s and make it the second-biggest expenditure for federal taxpayers, eclipsing the age pension and NDIS.   

Peter Dutton would not be drawn on how he would pay for the huge ramp-up in expenditure, except to repeal Labor’s small tax cuts that are due to be in place in full from mid-2027.   


The Coalition is promising to increase spending on defence to 2.5 per cent of GDP by 2030 in what it says will cost the budget $21 billion.

But beyond that point, the Coalition aims to take defence expenditure to 3 per cent by the middle of the 2030s.

Spending on defence under the government’s current trajectory reaches $108.7 billion in 2035-36. Under the Coalition’s proposals, it would jump to almost $142 billion in that year alone.

Between 2030-31 and 2035-36, the cumulative jump in defence spending envisaged by the Coalition is at least $100 billion. That does not take into account any substantial change to inflation or to the size of the economy.


Pressed on Wednesday how he would pay for the additional expenditure, Dutton – who last week said he aspired to ending income tax bracket creep – argued that by not going forward with Labor’s reduction in the bottom tax rate, the Coalition would save $7 billion a year.

That would be enough to cover the increase in defence spending to the end of this decade, but he would not elaborate on extra expenditure to meet the 3 per cent of GDP proposal.



“A great Coalition government will always be better on national security and economic management,” he said while campaigning in Western Australia.




At 3 per cent of GDP, defence spending would account for almost 12 per cent of total federal government expenditure. Only the GST, which goes to the states and territories, would make a greater call on the budget than defence.

Defence would surpass both the NDIS (forecast to be 9.1 per cent of total budget spending) and the age pension (9 per cent), which are currently the second- and third-largest government expenditures.

The Coalition’s policy would take defence spending as a share of GDP to its highest level since Australian forces were in Vietnam in the early 1970s.

Since then, expenditure in areas such as the aged pension (9 per cent of the budget) and the Pharmaceutical Benefits Scheme (3 per cent) have grown sharply, while governments have introduced completely new spending such as the NDIS (9 per cent) and the private health insurance rebate (1 per cent).

Dutton would not be drawn on how the Coalition would spend the extra resources directed into defence, but said it opened up the options available to the government.

“Drone capability and guided weapons, our munitions and our capability across most platforms, including frigates. That all becomes a reality again. Our cyber defences where Labor has pulled money out,” he said.

On Thursday evening, Dutton attended a sunset ANZAC ceremony at the Sydney Opera House where his friend, mining magnate Gina Rinehart called for a gargantuan rise in defence spending to 5 per cent of GDP.

Rinehart said she supported “boosting our defence manufacturing here as well as our budget to 5 per cent of GDP”.   

There are only a handful of countries that have defence spending above 5 per cent of their nation’s GDP, and many of those are involved in current conflicts - including Ukraine, Russia and Israel.

Defence Minister Richard Marles is also at the event. Earlier in the day he rejected criticisms that Labor’s target was behind the Coalition’s 3 per cent target.

“Plucking a number out of thin air, putting it into a press release and calling that a defence policy is a joke. It is not as though Peter Dutton can waive a press release in the face of our adversaries and they’ll suddenly run from the battlefield.

You actually need to be thinking about what capabilities you are seeking to build, what you are seeking to acquire, and have deep thought about how you’re going to make that happen.”


Independent economist Chris Richardson said the problem with such large announcements as the Coalition’s defence plan was that it was uncosted with no detail about its long-term impact to the budget.

He said both sides of politics had not been upfront about the pressures on the budget, the need for more spending in key areas and ways to lift the speed limit of the entire economy.

whiteknight wrote on Apr 25^th, 2025 at 12:23pm:



hospitals, schools, ndis, higher taxes for low income earners, dv funding, foreign aid, social services, multicultural services etc etc

whiteknight wrote on Apr 25^th, 2025 at 12:23pm:



The RBA will print money to pay for it which will cause inflation.

We're a diplomatic nation under Labor and really don't need to spend anything on defence.

Under liberal it's a different astory as they can't seem to let the diplomats do their thing behind the scenes, but we shouldn't be surprised as there is never any separation of power with liberals

Can you imagine us in a war with China? Be wiped off the map in about 7minutes

All good then - we'll just coast along until the invader is knocking on the door......

Armchair_Politician wrote on Apr 25^th, 2025 at 3:31pm:


American ships tend to be too large for the RAN to man.  In the case of the Adelaide Class LHD, we opted for the Navanta Class from Spain. Shipbuilders from the United States were not included, as American amphibious warfare ships were too large for Australian requirements, and were either too personnel-intensive or could not operate the number of helicopters required.  Unless we opt to increase the size of the RAN - always a difficult proposition - or we opt for a smaller ship.  The Navanta Class ships can operate more helicopters simultaneously than the American class and it is not defenceless, it mounts six 30mm cannon and is meant to be part of a task force, rather than operate alone.

The same problem goes for the Arleigh Burke destroyers.  We simply need a bigger RAN it we are going to have bigger ships.  A difficult proposition when wives are unwilling to allow their men to be sailors and prefer them to work shorter hours at a mining site.  The Arleigh Burke was looked at the time of the adoption of the Italian ships and Arleigh Burkes were found to be too small for Australian purposes.  Even the US Navy found the first versions to be too small and the Flight III versions are larger than their predecessors.

We presently operate two squadrons of F/A-18F or G models.  They are more capable than the F-111 ever was.  It is designed to operate from medium altitude, rather than low-level.  The F-111 was of it's period, just as the F/A-18 is.  Indonesia is our ally, not our enemy, so why do we need to attack it or defend against it?

Patriot SAMs would be hideously expensive to operate.  We have a superior system in NASAM, which has replaced the Rapier system, it is designed for medium range defence, rather than long range defence.

All this really belongs in in the Defence Forum rather than here.  Why are you afraid to post there?  Tsk, tsk, tsk...

Bobby. wrote on Apr 25^th, 2025 at 8:43pm:


If they behave, they can post, Bobby.  You are banned because you refuse to be disciplined.

Quote:


All unwilling to behave and do what the rules state.  Tsk, tsk, tsk...

Bobby. wrote on Apr 25^th, 2025 at 9:20pm:


I banned you because you refused to stop Trolling the forum with your bullshit line that the PRC was about to invade Australia.  The point is, you were given plenty of warning but you refused to listen, so you were banned.  Tsk, tsk, tsk...