Australia promises Trump a defence revamp, dangles $1b AUKUS carrot before PM’s trip

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Australia is countering US pressure to immediately step up military spending by promising Trump officials a defence revamp next year, as the government flags a $1 billion AUKUS payment to the Trump administration that could line up with Prime Minister Anthony Albanese’s trip to Washington.

The US has been pressuring European allies and others such as Australia to share the burden of defending Western interests, spurring Australia to make a stream of defence funding announcements on submarine bases, guided weapons and autonomous vessels in the weeks before the Trump meeting.

Albanese heads to the White House next week to meet Trump in a chance to bed down the US-Australia alliance. Upholding the under-review AUKUS pact, and leveraging Australia’s role in supplying the West with critical minerals will be on the agenda.

Australia has a scheduled update of its defence spending, called the National Defence Strategy, due in April next year. Defence Minister Richard Marles said US officials had “absolutely” been made aware that the NDS would be Australia’s next chance to make big new defence investments, potentially easing US anger about Australia’s defence spending.

“The next moment where we are, in a structured way, assessing the needs of our defence force is absolutely NDS,” Marles said in an interview with this masthead. “All of that feeds into next year’s budget.”

The AUKUS submarine deal has been under review in the Pentagon since June. Australian officials believe any major departmental recommendations will not shift White House policy driven by pro-AUKUS figures such as US Vice President JD Vance and Secretary of State Marco Rubio.

Under the deal, Australia has been paying instalments to the US to support its domestic submarine capacity, amid fears it is not producing enough submarines to give any to Australia. The US will continue to receive these funds until 2030, when the president of the day must decide if the US can hand over boats.

Defence Industry Minister Pat Conroy, in Washington already to discuss AUKUS, hinted that Labor was on the brink of paying another big sum, which could be presented as a win for Trump when he meets Albanese.

“We’ve made a billion dollars. The plan is to provide another billion dollars shortly,” Conroy said.

Former US ambassador and Liberal senator Arthur Sinodinos said Trump’s advisers would be seeking a commitment for more than just a top-up AUKUS payment.

“I suppose they could do a novelty cheque [for the $1 billion payment], but really it’s a bit beyond those sorts of stunts,” he said.

“They’ll be looking for more, I think, and Australia will be going into the meeting talking about what more we can do on defence and how it will complement what the US is doing in the Indo-Pacific.”

The US is releasing its own defence update this year, and several analysts have expressed doubts that it will match up to its own rhetoric about defence spending.

This masthead reported on Thursday that Marles, during his visit to Washington in August, felt that Vance, Rubio and Secretary of War Pete Hegseth were not just highly supportive of AUKUS but significantly focused on Australia because of its role in the tussle for influence with China.

Conroy said on Thursday that he had been telling US officials that Australia’s military spending as a proportion of GDP, a key focus for Trump, was actually much higher if the NATO methodology was used. This accounting includes things like infrastructure and veterans’ pensions. Australia is on track to reach defence spending levels of 2.33 per cent of GDP by 2034, up from the current level of 2 per cent, but the Trump administration is demanding 3 per cent.

“Using the NATO methodology … [Australia’s spending] is bigger than anyone in Europe, other than Poland … it’s bigger than the United Kingdom, and it’s larger than any of the other Indo-Pacific partners,” Conroy said on ABC radio.

Michael Shoebridge, who runs think tank Strategic Analysis Australia and formerly worked in the Australian Signals Directorate, said Labor had recently made a series of unfunded defence spending announcements that did not materially raise the defence budget.

Marles’ argument that the US would wait for the National Defence Strategy next year, Shoebridge said, was a cynical political move to “play for time” and avoid creating the appearance that Albanese was acquiescing to Trump, who is unpopular in Australia.

“Marles has had no success in convincing the PM or treasurer to increase the defence budget for the whole time he’s been the defence minister, so why should we think he’s going to have outrageous success now?” Shoebridge said.

“What the Americans want is a very substantial real increase in the order of $25 billion per annum.

“Be ready for a document [the 2026 NDS] full of window dressing and ‘announceables’.”

But Marles claimed that Australia’s defence ties with the US were more substantive, saying the AUKUS agreement meant the nation was on the pathway to being treated as a domestic US supplier of defence products.

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