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May 29, 2026
STEPHEN CENATIEMPO: The ASPI Defence Budget brief, the Australian Strategic Policy Institute's assessment warns while the 2026 National Defence Strategy represents one of the largest peacetime investments in Australian history, the ADF remains severely underprepared for immediate conflict. To talk to us about this, we're joined by the Shadow Minister for Defence, Senator James Paterson. James, good morning.
SENATOR JAMES PATERSON: Good to be with you, Stephen.
CENATIEMPO: Look, there's nothing really new in this ASPI report, nothing we didn't already know, but it does sort of highlight what the problems are here. But the divide between what the government is telling us about our defence spending and what seems to be actually happening on the ground seems to be massive.
PATERSON: It's almost like they're deliberately gaslighting the Australian people about how much they're spending on defence and how seriously they're taking the strategic environment we find ourselves in. When Richard Marles stood up at the National Press Club a month ago and said, they're making a record investment in defence, they've never spent more on defence, they'll spend $14 billion over the next four years and $53 billion over the next decade. Now, it turns out in the Budget, on budget night, we worked out the fact that it's only $6.8 billion of new government funding over the next four years and only $35 billion over the decade. And, in fact, defence spending is going to fall between this year and next year. There's an $800 million cut in defence spending over the next financial year. So Richard Marles can spin all he likes, but the numbers don't lie, and the numbers are printed in the Budget papers.
CENATIEMPO: How significant is the shift to the NATO protocols when it comes to determining defence spending by including superannuation and those kinds of things in it? I mean, how much does that add up to?
PATERSON: This is part of the problem. So Richard Marles announced a brand new way of Australia measuring our defence spending at the press club. He said, all of a sudden, we're spending 2.8% of GDP, and it will rise to 3% of the GDP in the early 2030s. Now, if that was due to new funding from the budget for defence capability, sustainment and other important priorities, that'd be wonderful. But it turns out it's just due to a change in accounting, a change in how we measure defence spending. So as you say, things like military pensions and other associated costs of the ADF that we never used to count towards defence spending, all of a sudden, we're now counting. Now, it doesn't make any men or women in uniform safer to play accounting games like this, to have accounting tricks, to dress up the numbers, to be something they're not.
CENATIEMPO: The biggest concern that I reckon most Australians would have, James, is that a lot of this is back-loaded. We talk about big numbers, but none of it actually comes to fruition till a long way down the track and potentially beyond when any conflict might happen.
PATERSON: Well, that's exactly right. To the extent that there is a defence spending increase under this government, it's backloaded to the early 2030s. And there are two problems with that. One is, as you say, the risk of conflict is much earlier than the early 2030s. And the second thing is, defence acquisitions have long lead times. They can take five, ten years sometimes to acquire defence capability. So if we're not starting to spend money until the early 2030s, then the capability that buys won't be arriving until the late 2030s or even the early 2040s - long past the maximum danger that we face.
CENATIEMPO: I want to ask about AUKUS because I speak to a lot of experts overseas about this, who say that we've got two problems. Firstly, the US can't keep up with its own production and is shifting its focus to the new Columbia-class nuclear ballistic subs rather than the Virginia-class, which we're supposed to be getting. And England's capacity to develop the AUKUS-class submarine is almost non-existent. Is AUKUS dead? Do we need to start focusing on drone and counter drone technology? I know there are some great local companies working on that now, but do we need to shift focus away from these major capital purchases?
PATERSON: Look, I don't think AUKUS is dead. I think AUKUS is very much alive and we can deliver AUKUS, but it's going to require much more intent, particularly from this government, and much more spending. Otherwise, we risk atrophying the rest of the Australian Defence Force while we're trying to acquire AUKUS. That's why there's been so much cancellation of other projects under the ADF while we are pursuing AUKUS - because the government is cutting those programs to pay for AUKUS without overall increasing the defence budget. But you're right. Warfare is changing. We're in a modern era of warfare. We've learnt that from Ukraine. We've learnt it again in Iran. Drones and missiles are playing a much greater role. And while the government is shifting emphasis a little bit towards those capabilities, it's nowhere near fast enough, and they're not spending enough. And there are Australian companies producing amazingly innovative capabilities that we should be putting in the hands of our war fighters that would help deter an adversary from threatening our interests.
CENATIEMPO: So correct me if I'm wrong, estimates next week will focus on defence and treasury as well, which is going to be absolutely fascinating. What are the big questions that you're going to be looking for to be answered by the government?
PATERSON: Well, I want to try and get to the bottom of this defence spending, find out why they've been making these claims about defence spending that no independent expert will verify. But I'm also going to ask some questions about a shocking Auditor-General report that was released on Friday about the Collins-class submarines, which are supposed to be going through what's called a Life-Of-Type-Extension to make them more capable and keep them in the sea longer until those Virginia-class submarines arrive. And the Auditor-General was absolutely scathing about the indecision, about the delays, about the drift that's happened over the last four years under this government for the Collins-class, that has resulted in a much riskier Life-Of-Type-Extension that's going to be much less extensive and potentially keep the boats out of the water much longer. And we could find ourselves throughout the late 2020s and 2030s with only a handful of Collins-class submarines available to us. Now, for a maritime nation, that's completely unacceptable.
CENATIEMPO: Is it time to get rid of question time and just extend estimates, because we seem to get better answers out of estimates, whereas question time has become a bit farcical, James?
PATERSON: I think that's a very fair point. I think question time has become entirely performative. It is not a useful accountability mechanism. I don't want to get rid of it because I think government should have the fear that they'll be asked a question and it puts some discipline on them. But you're right, estimates can be at its best a genuine forum for uncovering answers, although there is a trend, an increasing trend in Senate Estimates for public servants to take almost all questions on notice and only provide answers in writing afterwards. There are several problems with that. I mean, it's very hard to ask a follow-up question when the answer comes in writing. And, of course, those answers in writing are cleared by the Minister's office and often edited by the Minister's office. So it really limits the transparency of estimates. So what we need is more Senate Estimates and officials who actually answer questions when they know the answer.
CENATIEMPO: Well, we learn a lot from estimates. I learnt this week that a man can't become pregnant, but he can be potentially pregnant and that some MPs live in vacant blocks. It's been an extraordinary week. I can only imagine next week will be even more extraordinary. James, good to talk to you this morning.
PATERSON: Thanks, Stephen.
ENDS