Defence Minister Richard Marles talks defence spending with US counterpart Pete Hegseth

Defence Minister Richard Marles has told his United States counterpart Australia is open to having conversations about increasing its defence spending if required to meet the “strategic moment”.

Mr Marles and Pete Hegseth met on Friday ahead of the Shangri-La Dialogues in Singapore, where the pair reaffirmed their commitment to AUKUS, and the role the program plays in meeting the challenges of the Indo-Pacific.

Mr Marles said the pair had spoken about the importance of the two powers continuing to work together to provide security and stability in the Indo-Pacific in a way underpinned by democracy and the rule of law.

“We talked about obviously, the Alliance and the role that we can jointly play together to provide for a stable and secure Indo-Pacific, and to provide balance in the context of the Indo-Pacific, and obviously what we are doing together in terms of the development of AUKUS was a critical component of that,” Mr Marles told ABC News after the meeting.

“And we spoke about that and how that is progressing and what that does in terms of improving our joint capability to provide for the collective security of the Indo-Pacific.”

He said AUKUS was moving forward, and all three countries involved are “meeting the timelines that we need to” and wanted to make sure momentum was maintained.

“Fundamentally we feel confidence about how we can manage AUKUS specifically but also how we can work really closely together more broadly to be providing for security and stability in this region and make our contribution to the security of the world,” he said.

On defence spending, Mr Marles confirmed Mr Hegseth had raised Australia’s level of expenditure with him, but the minister would not say whether or not his counterpart had raised a specific number.

The Trump Administration has previously called for Australia to raise its defence expenditure to at least three per cent of GDP. Australia is on track to reach 2.33 per cent of GDP by 2033-34, up from its current level of 2.02 per cent.

“The need to increase defence spending is something that he definitely raised, and you have seen the Americans in the way in which they have engaged with all of their friends and allies asking them to do more and we can completely understand why America would do that,” Mr Marles said.

“What I made clear is that this is a conversation that we are very willing to have, and it is one that we are having, having already made very significant steps in the past.

“But we want to make sure that we are contributing to the strategic moment that we face, that we all face, and what Pete Hegseth said is entirely consistent with in the way that the Americans have been speaking to all their friends, and I would say this was done in a very respectful and dignified way and we understand it and we are very much up for that conversation.

“We have done a lot already. But we are absolutely up for having this conversation and we want to calibrate our defence spending to meet the strategic moment that we all face.”

As the US Government continues to push for Australia to spend more, a post-budget report by the Australian Strategic Policy Institute this week warned Australia could be left with a “brittle and hallowed defence force” if military funding was not increased.

The report found that despite Labor’s claims it had made a “generational” investment in defence during the March budget, “that investment has been put off for another generation”.

“The failure of this year’s budget to meet that responsibility will make all Australians less secure,” ASPI report author and former home affairs deputy secretary Mark Ablong said..

Mr Marles on Friday joined Prime Minister Anthony Albanese in deriding the report as one “not particularly intellectually satisfying or ultimately deep in analysis”.

“To simply go out there and say more needs to be spent, is the easiest thing in the world to say, in actual fact, we have spent more, to be clear, and the most significant peacetime increase in Australia’s defence ending ever, but it’s also what you spend it on, and it is having strategic clarity about the direction of your Defence Force, giving shape and sharpness to the way in which we do our defence spending and none of that was reflect that in the report,” Mr Marles countered.

Mr Marles and Mr Hegseth will meet again on Saturday with their Japanese and Filipino counterparts, while Mr Marles will also deliver a speech to the Dialogues.