Australia needs a defence levy to survive an uncertain future
We must invest wisely in missiles, cyber power and European jets to secure real independence
The world is shifting beneath our feet, and Australia is not ready. The global security environment is deteriorating at a pace not seen since the 1930s. But in these uncertain times one thing is certain: wholly relying on the United States for our defence is no longer a viable strategy.
Australia must face reality. We need to invest in our own security, and that means a defence levy. If we want to preserve our way of life, we must be willing to pay for it.
The world is more dangerous and the U.S. is less reliable
War rages in Ukraine, risks of regional collapse in the Middle East are growing, tensions are flaring once again between nuclear armed India and Pakistan, and China has made its intentions of taking Taiwan by 2027 clear (and built the world’s largest navy to do just that).
For seventy years, Australia has depended on the United States. ANZUS has been the backbone of our defence thinking, from Vietnam to Afghanistan. But America today is distracted, polarised, and dangerously unpredictable. Donald Trump’s re-election and “America First” doctrine has significantly undermined the global economy and shattered the confidence of NATO members. His chaotic approach to alliances, trade, and international diplomacy has made it clear the U.S. cannot be trusted to come to Australia’s rescue in a crisis.
Why our current arsenal is not fit for purpose
Australia’s military remains woefully underprepared. The Royal Australian Navy is relying on ageing Anzac-class frigates that are outgunned and outranged. The new Hunter-class frigates are years behind schedule and billions over budget. Only one of our six Collins-class submarines is operational, the first nuclear-powered subs under AUKUS won’t be built until the 2040s, and the U.S. has already established by law it has no intention of giving us the subs we’re committed to paying hundreds of billions of dollars for. Madness.
The Royal Australian Air Force operates a modern fleet that includes most of its planned 72 F-35A stealth fighters, alongside 24 F/A-18F Super Hornets and 12 EA-18G Growlers. These aircraft offer advanced capability, but it comes at the cost of strategic and operational autonomy as all are heavily dependent on U.S. supply chains, software, and sustainment systems. If those links are disrupted, Australia’s air combat power could be significantly diminished. Diversifying to include European fighter platforms would enhance resilience and reduce strategic risk.
Meanwhile, the Army is retooling for a littoral (coastal) fight but remains short on capabilities essential for modern, asymmetrical warfare.
How we should invest the levy proceeds
A levy is only worth it if it’s spent wisely. We need a fast-track procurement and construction timeline that prioritises off-the-shelf options wherever possible to maximise Australia’s ability to deter or survive a naval/missile-centric assault from a hostile regional power.
Here’s how we should invest to build true self-reliance:
- Missile defence systems. Australia must buy and deploy IRIS-T SLM or Aster-30 missile defence systems now to ensure we can defend major cities, military sites, and critical infrastructure.
- Asymmetrical naval power. Instead of sinking billions primarily into slow, vulnerable surface ships, we must invest in fleets of unmanned surface and underwater vehicles, missile-armed corvettes, and smart mines.
- Cybersecurity and information warfare. Cyberattacks are already a daily reality. Increased investment in the Australian Signals Directorate and Cyber Security Centre would pay massive dividends. We must defend our networks before a hostile power shuts down our infrastructure.
- European fighter jets. To reduce our dependence on the U.S., Australia should acquire European fighter jets like the Saab Gripen E or the Dassault Rafale as soon as possible. The Gripen has low running costs and can operate from road bases and austere airstrips — ideal for Australia’s vast geography and redundancy under attack. And the Rafale offers long range maritime patrol and strike capability.
- Long-range strike capability. We need land, air, and ship-based missiles capable of hitting targets thousands of kilometres away for effective deterrence and defence. JASSM-ER and LRASM are needed now to fill our current air-launched, long-range, precision strike and anti-access / area denial capability gap. But we should diversify as soon as possible by investing in sovereign cruise missile development and seeking to partner with with Europe (e.g., MBDA SCALP or SPEAR 3).
What it will cost and how we should raise it
Australia currently spends about 2.1% of GDP on defence. To be truly self-reliant in the current environment, we must lift that to at least 3.5% — an increase of around $35 billion annually.
To fund it fairly, we should introduce a defence levy on individuals and large businesses. That could look something like this:
- Individuals with a taxable income bracket of $0 — $45,000, $45,001 — $135,000, $135,001 — $190,000 and $190,001+ would pay 0% ($0), 0.5% ($225 — $675), 1% ($1,350–1,900) and 1.5% ($2,850+), respectively.
- Corporations with an annual turnover of less than $10 million, $10–100 million, and over $100 million could pay a 0%, 1% and 2% defence levy, respectively.
Why high earners and big business should pay more
Security and stability are the foundations of Australia’s economic success. The people and businesses who benefit most from our strong economy have both the greatest stake in its defence and the greatest capacity to contribute.
High-income earners enjoy the prosperity, property rights, and investment opportunities that only a stable, secure Australia can provide. And corporations, particularly large ones, have profited enormously from a rules-based international order that supported the free flow of trade through our vulnerable sea lanes. But that order is crumbling before our eyes, and we are all going to have to get used to paying more to protect our interests as a result.
By asking a little more from those who have gained the most, we spread the burden fairly, and we ensure that Australia can stand on its own feet in an increasingly dangerous world.
For someone earning $80,000, the levy would cost around $7.70 a week — less than the price of two coffees.
For a major corporation turning over $1 billion, the cost would be around $20 million annually — a small price for the stability that makes large profits possible.
Together this would generate a combined $35–40 billion annually, enough to fund the uplift to 3.5% of GDP.
No security without sacrifice
If we do nothing, we risk everything. A weaker Australia will not be spared by distance, nor saved by luck. If we fail to build the capabilities we need, we may find our future dictated by others, and no amount of regret or last-minute scramble will be enough to change that.
That last minute is fast approaching. The best time to act was decades ago. The next best time is now. We can only hope we are not already too late.
Jonathan Meddings is an author and advocate from Melbourne, Australia.
