Australia 'risks being left behind’ without defence reform, Home Affairs Deputy Secretary Marc Ablong says

Australia risks falling behind on current defence spending levels with a major re-armament under way in the Indo-Pacific, a report warns.

The Australian Strategic Policy Institute released its analysis of the 2025/26 defence budget on Thursday, claiming defence funding fails to address the seriousness of threats facing the nation.

The budget misses a “crucial opportunity” to prepare Australia’s military and defence industrial base for future challenges, the report says.

Under the Albanese Government’s spending plans, defence spending is set to rise to about 2.3 per cent of GDP within a decade.

While the Government has committed to bringing forward $1 billion in funding, the report says no “significant uplift” is expected until after 2028/29, despite the current era being described by authorities as the most dangerous since the end of World War II.

The nation’s strategic environment was deteriorating rapidly, the report’s principal author and former Home Affairs Department Deputy Secretary Marc Ablong said.

“Australia faces a real risk of being left behind at the very time when the potential use of the ADF as a military force is rising,” he told AAP.

The Government needs to urgently reform Defence so it can better collaborate with industry, said Mr Ablong, who is a senior fellow of the institute.

He said the nation needed to acquire capability fast, and attempts to “Australianise” everything through modifications took time, introduced risk and added costs.

The report recommends the Government commit to funding national resilience measures across the economy and society to ensure Australia is ready to manage potential national security crises.

It also calls for improved transparency and for Defence to increase its public messaging.

In the information war, Australia needs a defence communications strategy to combat nations with propaganda expertise.

“The bureaucracy is being beaten by loud voices amplified by foreign adversaries,” the report said.

Mr Ablong said Defence culture should be overhauled, with the biggest change being an embrace of risk, while labelling it’s decision making process “too slow”.

He said the military had struggled to integrate women and minorities.

Defence was also failing to get maximum productivity out of its people as they treated the “workforce as a number rather than as human beings”.

On the Chinese navy ships that circumnavigated the country earlier in 2025, Mr Ablong said the nation should have “made it difficult”, whether they left Australia’s exclusive economic zone or not.

“What did we tell China by the fact that we weren’t constantly telling them that we knew where they were and what they were doing? It says you’re free to operate wherever you want to,” he said.