The recent story of Australian defense policy is straightforward. Faced with an increasingly adverse strategic outlook, Australia has been bolstering its defenses since the turn of the century. In the past 15 years defense spending has increased by 75% in real terms, defense personnel numbers are up by 18%, and military modernization is underway across the board. At the same me, Australia has demonstrated its alliance credentials through stalwart support of US‐led operations in Afghanistan, Iraq, and Syria. As a result, there is little doubt that the Australian Defense Force (ADF) is now more capable and more inter‐operable with the US, and the Australia‐US alliance is stronger than at any time since at least the Vietnam conflict.
But the strategic environment has continued to deteriorate on multiple fronts. Most alarming has been China’s annexation and militarization of contested territory in the South China Sea. It is hardly surprising then, that Australia unveiled plans last year to further expand and modernize its own defense force. Just about every aspect of the ADF is slated for expansion and/or enhancement over the next two decades, but the centerpiece is a US$50 billion naval construction program. In addition to new classes of anti‐submarine frigates and offshore patrol vessels, 12 new French‐designed submarines — much larger than any extant conventional submarines — will replace the six existing boats. To pay for this large‐scale program, the government has promised to increase defense spending to 2.1% of the GDP by 2020.