Australian Strategic Policy Institute head Justin Bassi responds to Anthony Albanese’s dismissal of report

The head of a leading security think tank has hit back after Prime Minister Anthony Albanese dismissed an alarming report warning Australia’s conflict-readiness would be at risk without a hike in defence spending.

“ASPI was set up to deliver the hard truths to the government of the day, regardless of who’s in power,” said Justin Bassi, head of the Australian Strategic Policy Institute, after the body’s annual Cost of Defence analysis concluded the 2025-26 Defence Budget failed to match the seriousness of the strategic threats Australia faces.

The report raised the alarm about a “major disconnect” between the urgency of threats including a major rearmament in the Indo-Pacific, critical infrastructure vulnerabilities and cybersecurity threats, and the level of defence funding set out by the Government.

“Without urgent, coordinated and well‐resourced responses to those challenges, Australia risks a brittle and hollowed defence force, diminished industrial sovereignty, and compromised national security in a volatile Indo‐Pacific region,” the report states.

The analysis, led by former Home Affairs deputy secretary Marc Ablong found that despite the Government’s claims it made a “generational investment” in defence during the March budget, “that investment has been put off for another generation”.

However, Prime Minister Albanese derided the report’s startling conclusions when pressed by ABC Brisbane on Thursday.

“Well, that’s what they do, isn’t it? ASPI. I mean seriously, they need to, I think, have a look at themselves as well and the way that they conduct themselves in debates,” he said.

“ASPI regularly produce these sorts of reports, run by people who’ve been in a position to make a difference in the past as part of former governments … I think it’s predictable, frankly,” he added.

Mr Albanese pointed to an additional $10 billion investment going into defence.

“We’re lifting up our defence expenditure up to 2.4 per cent of GDP. We’re investing in assets and our capability. We’re also investing in our relationships in the region that’s very important as well,” he said.

“What we’re doing is getting on with the defence assets and providing the investment for those assets to be upgraded.”

The Government has repeatedly warned Australia faces its most dangerous strategic environment since World War 2, and defence experts have consistently called for a higher, and more targeted, investment to boost deterrence capabilities.

Under the Government’s projections, defence spending is expected to reach 2.33 per cent of GDP by 2033-34, up from its current level of 2.02 per cent, despite mounting pressure from the Trump administration to raise military investment to 3 per cent of national output.

Mr Bassi, a former Liberal staffer, strongly defended the think tank’s findings after the Prime Minister’s outburst, stressing the report was based on the Government’s own numbers.

“Our charter requires us to provide alternative advice to government and increase public understanding and discussion. That’s what we’ve been doing for 24 years,” he said.

“We are not saying there is no defence spending; there’s already a lot. But the government’s own assessment is that we are now living in increasingly dangerous times. That requires increased defence spending - not to bring on war but to deter it.”

Mr Bassi pointed to the lessons from other regions, including Europe which is now on the doorstep of Russia’s war with Ukraine.

“They underinvested in defence for years, lost deterrence and are now spending far more than they were supposedly saving,” he said.

The report’s conclusions make for chilling reading as fears grow of a potential conflict in the near future between the US and China over regional flashpoints including the South China Sea and Taiwan.

National security was thrust to the forefront of the public’s mindset earlier his year when a Chinese flotilla this year sailed close to Australia and conducted live-fire drills in the Tasman Sea.

Among concerns raised by ASPI is the protracted acquisition timeline for critical capabilities such as integrated air and missile defence (IAMD) and long‑range strike systems.

The slow pace of building up critical military assets left the Australian Defence Force in a “‘no‑man’s‑land’ of preparedness,” it said.