Australia will raise defence spending to 3.0% of GDP by 2033 as armed conflicts flare worldwide, Defence Minister Richard Marles said Thursday.
The new commitment follows pressure from US President Donald Trump's administration for Canberra to boost military expenditure as a share of total annual economic output.
"International norms that once constrained the use of force and military coercion continue to erode," Marles said in a speech in Canberra, outlining a boost to spending on missile defence, drones and guided weapon stockpiles.
"More countries are engaged in conflict today than at any time since the end of World War II, and this is occurring across every region of the world."
Australia's defence spending had previously been forecast to rise to 2.3% of GDP by 2033.
But the country will spend an additional AU$53bn ($38bn) over the next decade when compared to its 2024 defence strategy, Marles said.
In the shorter term, spending would climb by an extra AU$14bn over four years.
To reach the 3.0% figure, Australia changed how it calculates the defence budget to match a Nato definition that includes factors such as military pensions and defence intelligence.
Marles said Thursday this allowed better comparisons with other countries and put Australia ahead of comparable European and Asian nations with a defence spend this year of 2.8%.
But the new spending still falls short of the 3.5% of GDP that US Defence Secretary Pete Hegseth demanded Australia shell out last year.
Wary of China's navy build-up, US ally Australia has reshaped its defence force in recent years to focus on its missile strike capability and deterring an adversary from its northern approaches.
It has also embarked on its largest-ever military spending project to build nuclear-powered submarines next decade under the AUKUS agreement with the US and the UK.
Marles emphasised Australia would focus in 2026 on building greater military self-reliance but was not jettisoning its US security alliance, which he said remained "fundamental".
"There is no effective balance of power in the Indo-Pacific absent the continued presence of the US," he said.
Spending to build a missile defence system will accelerate — up to AU$30bn over the next decade.
Another AU$36bn will be spent to build guided missiles locally.
Australia's vast coastline and small population have also spurred a focus on developing large autonomous submarines and fighter jets, dubbed the Ghost Shark and Ghost Bat.
This week, Canberra said it would boost spending on drones by up to AU$5bn in response to shifts in warfare tactics in the Middle East and Ukraine.
Under the AUKUS agreement, the US will sell Australia two nuclear-powered submarines from 2032.
Australia and Britain will then build a new class of submarine in the 2040s.
Critics have alleged the deal does not guarantee that Australia will ever receive the submarines.