Contending that Australia is unprepared in facing its most challenging security environment since the Second World War, this paper examines the limiting factor between the rhetoric of upgrading our defence capability and current expenditure. A key recommendation is to increase defence expenditure from 2% to 3% of GDP. Other recommendations bolster the case for how a government could dramatically lift defence spending and see quick and positive increases in military capability. 

Recommendations

1. Produce an annual inquiry into Australia’s regional threat environment, recommending necessary policy steps.
2. Lift Australia's performance as a contributor to global security. The Government should engage the incoming US administration to discuss burden sharing on both defence spending and capabilities.
3. Put the Defence budget on a rapid trajectory to reach 3% of GDP in the next term of government.
4. Regularly review and increase the defence budget to compensate for the effects of inflation, particularly on military systems.
5. Establish an advisory board, separate from the Defence Department and reporting to the Prime Minister, along the lines of the US Defence Policy Board, to advise on required military capabilities, assess progress and risks in equipment delivery, identify efficiencies in spending and promote speedy innovation.
6. Radically overhaul Defence to stress openness and accountability in delivering equipment projects. Government must itself commit to greater openness in policy making.