Over nearly a decade, no country has moved further or faster toward the American view of security in the Indo-Pacific than Australia. Increasingly, Australian politicians on both sides of the aisle sound like American politicians on both sides of the aisle: ambivalent about the rise of Chinese power; leaning into the deepening of strategic competition; securitizing their investment, technology, and supply chain policies; hotly debating weapons capabilities; and, in recent months, crossing the Rubicon into a public debate about whether and how to join U.S. combat operations with forces based in mainland Australia.
Admiral David Johnston, Australia’s chief of the defence force, has put the last point especially bluntly: “Perhaps finally,” he said at a conference in Canberra on June 3, “we are having to reconsider Australia as a homeland from which we will conduct combat operations. That is a very different way—almost since the Second World War of how we think of national resilience and preparedness.”
Yet this growing strategic convergence belies important differences that, in turn, risk fueling expectation gaps between Washington and Canberra. Already, these gaps have raised tensions. And because they crosscut combustible domestic politics in Australia, they will fuel heated debates about what kind of defense relationship best serves each side’s strategic interest. If left unaddressed, this could ultimately yield a crisis in the alliance, something neither side wants but that cannot simply be wished away.
One piece of this debate within the alliance is the intensifying rancor over Australia’s defense budget. On June 1, U.S. Defense Secretary Pete Hegseth publicly demanded that Australia increase its spending to 3.5 percent of gross domestic product “as soon as possible,” something Canberra has flatly refused to do. Indeed, so combustible is this issue on the left of Australia’s governing Labor Party that Prime Minister Anthony Albanese felt the need to go in front of the cameras to reject Hegseth’s demand in an equally public fashion.
And yet, Donald Trump’s administration will not simply let this issue go. That is almost certainly why, on June 11, Pentagon officials leaked a story to the Financial Times that they are not only reviewing the submarine and technology partnership between Australia, the United Kingdom, and the United States (AUKUS) but teased a linkage between the outcome of this review and Canberra’s next set of choices on defense spending.
Such linkage by the United States would be most unwelcome in Canberra: For one thing, it gives the opposition Liberals fodder to attack the government. For another, it exacerbates splits within Labor over defense policies. And it exposes the Albanese government, triumphantly reelected in May with an increased majority, to the charge that it is “mismanaging the alliance” with the United States—the bedrock of Australia’s strategic policy since Liberal prime minister Robert Menzies signed the ANZUS treaty in 1951, or even 1941 when Labor prime minister John Curtin declared in response to the Japanese threat that Australia “looks to America.”
There is little question that Australia will need to find some way to boost its defense spend. This is not just a question of mollifying Trump and the Pentagon. The fact is, Australia under its current budget cannot afford both the full scope of investments envisioned under AUKUS and the other needed investments in conventional capabilities. Albanese and Treasurer Jim Chalmers have moved toward a record AU$55.7 billion (U.S. $36.8 billion) defense budget for the next fiscal year, a 6.3 percent increase but one that equates to 2.02 percent of GDP and falls short of their publicly stated goal of 2.3 percent by 2033–2034.
But the good news is that the alliance is wholly bipartisan, with Labor evoking Curtin and the Liberals reaching back to Menzies in support of strategic ties to the United States. So, for all the rancor in Australian politics, it should be possible for Labor and the Liberals to reach across the aisle to one another, and even to some in the crossbench, to forge a new consensus on defense spending. And rather than implicitly bashing Albanese, Washington should be encouraging both sides of the aisle in Australia to do so.
Trump is not popular among Australians, and only 36 percent of them now express any level of trust in the United States, according to the latest Lowy Institute survey—the lowest result in Lowy’s twenty-year polling history. This sentiment helped drive Labor’s successful reelection campaign, so Washington risks undercutting its own objectives by openly picking this fight with the Australian government: Albanese loses nothing politically by pushing back publicly against the Trump administration’s demands for spending hikes.
The deeper problem for the United States, however, is that these Australian debates about defense budgets obscure less visible but crucial strategic gaps between the two allies. Bluntly put, American policymakers over the last three administrations have misunderstood much about Australian strategic policy.
Because Washington has largely reduced its Indo-Pacific policy to security competition with China and little else, too many Americans presume that Australia’s recognition of a strategic threat from China somehow makes defense coordination with Canberra easy. But this is not the case. Instead, it is sharpening contradictions that could yield a crisis in the alliance if high-intensity conflict ever breaks out in the Indo-Pacific.
Here are four less visible debates that need to be aired out between American and Australian policymakers—and with the Australian public too:
Precommitment and Sovereignty
The first is an intensifying American desire for Australia’s precommitment to the use of Australian assets and even joint warfighting. Planners in Hawaii and Washington are focused on one strenuous scenario in particular—the outbreak of war with China in the Taiwan Strait. And it seems increasingly clear that U.S. war plans turn, in part, on what allies can and will do, which means that they will look to integrate Australian assets, bases, and even forces, as well as U.S. forces rotating through Australia, into their plans.
But there is really no scenario under which Australia’s political leaders will, as Matthew Sussex and former deputy defence secretary Peter Tesch have put it, “outsource sovereign choices over where, how, and when its military assets might be utilized.” This means that Canberra will resist U.S. pressure to precommit, especially to a Taiwan contingency—inevitably fueling debates in the United States about Australian “reliability” and the resilience of the alliance to real-world contingencies.
This is unfortunate because it misunderstands how much Australia’s strategic debate has, in fact, progressed. Rather than burying the debate, it would be better to air out these issues more publicly because the government has no social license from Australia’s body politic to meet Washington where it seems to be moving.
Geography and the Locus of Conflict
Second, the two sides risk a divisive debate about the geography of tactical and operational focus. America’s attention is focused squarely on Taiwan and northeast Asia. But this lies far away from the traditional emphasis of Australian strategic policy, which is much closer to home and the defense of mainland Australia.
Americans will need to be patient as Australia evolves a broader posture toward a more far-flung strategic geography—yet another reason why leaked American mutterings about “reviewing AUKUS” are especially unhelpful. There is growing recognition in Australia that its defense interests lie farther afield than the defense of mainland Australia. And this is an intuitive next step in the multidecade evolution that Michael Pezzullo—like Tesch, a former deputy secretary of defense—has called “the long arc of Australian defense strategy.”
Australia’s potential adversaries have a range advantage that Australia’s current capabilities, quite simply, cannot address. As importantly, Australia has economic interests that now span Asia and are not confined to its near Oceanian geography. Asia writ large already accounted for some 65 percent of Australia’s trade in 2021, so Canberra must evolve its security strategy and posture to reflect and potentially respond to security developments that constrict economic flows.
Force Posture and Politics
Third, since the Labor government of prime minister Julia Gillard in 2011, U.S. forces have rotated through Australia under a series of arrangements, such as Marine Rotational Force-Darwin and now Submarine Rotational Force-West and the rotation of U.S. bombers through Australian airfields. And because the timelines on AUKUS are so long—stretching from the early 2030s into the 2040s—these and other force posture initiatives may have a greater near-term impact on deterrence.
In a hot conflict, Australia will certainly be asked to provide access for forward-deployed U.S. forces. But this will inevitably expose Australia to attacks and strikes—something that has not been discussed sufficiently in the Australian body politic. And Australian forces are increasingly postured to go beyond this: they have a latent capability to directly support and even integrate with U.S. forces in warfighting missions.
Can Washington, however, presume this integration? Australia’s most recent Defence Strategic Review (2023) and National Defence Strategy (2024) are, as Stephen Frühling has argued, equivocal and imprecise: “the (rather vague) concept of deterrence is linked to the (equally vague) concept of denial . . . without making a link between [force posture] cooperation and deterrence or countering coercion.”
Unlike the U.S.-Japan alliance, where roles, missions, and wartime operational control are much more clearly delineated, a real-world crisis will throw much of this decisionmaking between Canberra and Washington into the realm of politics. Americans and Australians have a long history of fighting shoulder to shoulder, beginning with the Battle of Hamel in 1918 when U.S. forces even served under an Australian commander, General Sir John Monash. What they do not have is a deep history of divvying up roles and missions as part of a combined operational concept.
Coalitional Defense
Fourth, Australian decisionmaking will turn heavily on whether, and how, the United States has or hasn’t built a multinational coalition. So, at a time when the Trump administration is tanking U.S. alliances and relationships across Asia, this will eventually impede alliance-based defense choices.
In a May 31 speech at the Shangri-La Dialogue in Singapore, Hegseth implicitly ring-fenced military and security cooperation from the broader context of relations with allies and partners. In other words, he attempted to rally them around shared and perceived threats without addressing the broader context of deteriorating relations.
But this is a fantasy, as the Japanese decision to cancel a key annual meeting with Hegseth and Secretary of State Marco Rubio demonstrates. The cancelation came in the face of U.S. demands for increased Japanese defense spending, a notable parallel to the administration’s pressure on Australia. Yet this is not the only issue: With the United States imposing tariffs and other trade restrictions on allies and partners, including Australia and Japan, divorcing security from the broader context of U.S. foreign and economic policy is impossible.
Intellectual Honesty
The United States and Australia have everything to gain from a vastly enhanced alliance. And they have moved affirmatively over the last fifteen years toward broader and more multilayered partnerships with each other and third parties not just in the military domain but on critical minerals, supply chains, and research and development on emerging and foundational technologies.
But there has been too much “rah-rah” and too little intellectually honest self-reflection. The back and forth between Hegseth and Albanese over the defense budget is a warning of what may come. Beneath the cheering lie contradictions and expectation gaps that the alliance’s strongest advocates need to address forthwith.
Especially for those who have the greatest ambitions for defense cooperation, it is time to recognize that American and Australian defense strategies are closely aligned but not identical—and that many of the key questions now facing the alliance are inherently political.
What is needed is ambition combined with empathy—and social license from the public to meet the hard realities of deterrence and potential warfighting amid a high-intensity conflict in the Indo-Pacific.
