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Defence Minister Richard Marles announced a $12 billion investment in Western Australia's Henderson Defence Precinct while firmly rejecting calls to meet international defence spending benchmarks, describing the focus on GDP percentages as misguided during a Sky News interview Wednesday.
The massive funding boost will enable continuous naval shipbuilding and nuclear submarine sustainment capabilities, marking what Marles called "the biggest peacetime increase in Australia's defence spending in our history."
"$12 billion is a significant amount of money," Marles said. "If there's anybody out there trying to claim that $12 billion is not a significant amount of money, that is obviously disingenuous."
The Henderson facility will build Mogami-class general purpose frigates when production shifts to Australia and provide sustainment for the nation's future submarine fleet, including nuclear-powered vessels under the AUKUS partnership with the United States and United Kingdom.
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GDP Percentage Debate Intensifies
Marles repeatedly deflected questions about Australia's defence spending as a percentage of GDP, despite apparent pressure from the United States to reach 3 to 3.5 percent of national economic output.
"We're not focused on that number," Marles told Sky News presenter Pete Stefanovic. "We are focused on what money we are spending for the defence capabilities that we need."
The minister argued that GDP-based calculations vary depending on methodology and economic fluctuations unrelated to defence priorities.
"The point of not going down the road of a percentage is it depends on, obviously, what is included, how you calculate it," Marles said. "There are various different measures around the world."
Current estimates place Australia's defence spending at just over 2 percent of GDP, with plans to reach 2.3 percent, well below the targets reportedly sought by Washington.
Historic Spending Increase
The new investment brings total additional defence spending since the Labor government took office to $70 billion over the decade, according to Marles.
"What this represents now, since we've come to government, is an additional $70 billion over the decade, which is the biggest peacetime increase in Australia's defence spending," he said.
The minister emphasized that capability development, not arbitrary spending targets, should drive defence investment decisions.
"A number doesn't give you the ability to contest in a conflict," Marles said. "Capabilities do."
AUKUS Strategic Importance
The Henderson Defence Precinct investment directly supports Australia's AUKUS commitments, enabling United States nuclear-powered submarines to operate from HMAS Sterling as part of the submarine rotational force west.
"That's a really important contribution to our country, it is a really important step forward in terms of the AUKUS arrangement," Marles said.
The facility will provide sustainment and maintenance capabilities for nuclear submarines, a critical component of the trilateral security partnership aimed at countering China's growing influence in the Indo-Pacific region.
Political Strategy Criticism
Marles criticized the opposition Liberal Party's approach to defence spending targets during the last election campaign, arguing that announcing percentage goals without specific capability plans was counterproductive.
"They go out and they think that what you do in terms of fighting a conflict is to announce a number," he said. "And they did that in the election campaign, and then they get the very first question, well, what would you actually spend that money on? And they did not have an answer."
The minister described this approach as "the single silliest defence announcement that we've seen."
International Relations Context
Marles indicated that Australia's defence spending approach resonates well with international partners, despite the focus on dollar amounts rather than GDP percentages.
"When we talk with our international partners they absolutely get that," he said. "So this fixation on a GDP number is actually not what's out there in the conversations that we're having."
The minister confirmed ongoing high-level diplomatic engagement, noting recent phone calls between Prime Minister Anthony Albanese and President Donald Trump, though he declined to speculate about potential face-to-face meetings.
"The relationship between ourselves and the United States is going well," Marles said. "The Prime Minister is building a relationship with the President."
Operational Integration
The defence relationship extends beyond political leadership, with Australian personnel embedded throughout the American defence system, according to Marles.
"Our systems literally talk on a daily basis in the sense that we've got embedded Australians throughout the American system," he said. "The alliance is going well. Our defence relationship is going well. AUKUS is going well."
Broader Political Landscape
When questioned about favorable polling numbers for the Labor government, Marles maintained focus on governance rather than electoral prospects.
"Every three years there's an election and the Australian people can make their decision and we don't take anything for granted," he said. "What we need to do is to be working for the Australian people and to continue to earn their confidence and trust."
China Relations Complexity
Addressing Victorian Premier Jacinta Allen's upcoming trade mission to China, Marles acknowledged the complexity of the bilateral relationship while supporting engagement.
"The China relationship is complex," he said. "We want the most productive relationship that we can have with China, and we will work with China where we can. They clearly are a source of security anxiety."
The minister emphasized the need for nuanced management of China relations, noting federal government efforts to stabilize the relationship through ministerial visits and prime ministerial engagement.
Strategic Assessment Approach
Marles outlined the government's methodical approach to defence planning, starting with strategic assessment rather than spending targets.
"Any country, when it goes about thinking how it's going to resource its defence force, does so on the basis of what is the strategic need, what defence force do you need to meet that, and how do you resource it," he said.
The Henderson Defence Precinct investment represents the latest phase of this capability-driven strategy, positioning Australia for enhanced naval shipbuilding and submarine operations as regional security challenges intensify.
The announcement comes as Australia navigates increasing pressure from allies to boost defence spending while managing complex relationships with both strategic partners and potential adversaries in the rapidly evolving Indo-Pacific security environment.
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