The White Paper shows a return to a more robust acknowledgement of China's military rise, in the wake of its recent aggression in the South China Sea, leaving no doubt about the disruption to the region that the growing world power poses. The paper repeatedly refers to Australia's reliance on a "stable, rules-based global order which supports the peaceful resolution of disputes, facilitates free and open trade and enables unfettered access to the global commons". ​

But the announcement sparked a hostile reaction from Beijing with government-linked commentators in China warning Australia's military build-up will threaten its economic relationship with China and is part of a "dangerous regional trend".

The White Paper gives a heavy emphasis to maritime activities at the centre of a "more active defence presence" in the region, including an amphibious presence for the army, and in relative terms downplays the significance of a role in Middle East conflicts, noting the extra complexity of Russia's involvement in the Syrian conflict and emphasising the need for a political solution.

The Indo-Pacific region's tremendous growth "affects long-standing strategic balances", Mr Turnbull said."Investment in military, technological and strategic capability is increasing. In the next two decades, half of the world's submarines and at least half of the world's advanced combat aircraft will be operating in the Indo-Pacific region, in our region.

Australia Financial Review Interactive Interactive by Les Hewitt DATA JOURNALIST: EDMUND TADROS Modernising Defence information management, operational communications, and command and control systems A continuous naval shipbuilding program starting with nine frigates and 12 offshore patrol vessels The Permanent ADF workforce will grow to around 62,400 over the next decade, a return to its largest size since 1993 The government will also spend $1.6b over ten years on defence innovation, including: A Centre for Defence Industry Capability, funded at $230 million over ten years, to connect defence with industry A new virtual Defence Innovation Hub, with funding of $640 million over ten years to help deliver new technology to defence Buying 12 new “regionally superior” submarines Defence will invest $730 million over ten years to develop “the next generation of game-changing capabilities” in collaboration with academia, publicly funded research agencies, industry and international counterparts Enhancing intelligence, surveillance and reconnaissance, space, electronic warfare and cyber capabilities Implementing advanced training and modernising equipment, health care and logistics systems for Defence Upgrading defence infrastructure across Australia at key bases, training and testing ranges, and fuel and explosive ordnance facilities The government will spend an extra $29.9b over ten years on:

"And this complicates the outlook for our security and strategic planning. Now, we would be concerned if the competition for influence and the growth in military capability were to lead to instability and threaten Australia's interests, whether in the South China Sea, the Korean Peninsula or further afield.

"We have a strong, vital, vested interest in the maintenance of peace and stability and respect for the rule of law."

Strategic experts said the prime minister had kept open the option of challenging China over their artificial islands in the area Chinese militarisation in the South China Sea.


The White Paper commits an additional $30 billion over a decade to defence, forecasting the government will achieve its election commitment to lift defence spending to 2 per cent of GDP in ten years in just seven.

However, the escalation of spending doesn't begin in earnest until 2020 - beyond the official forward projects of the budget- as spending on major projects naval and air projects come on stream .

While honouring former Prime Minister Tony Abbott's commitment to spending, the white paper reflects the change of leadership with a heavy emphasis on using the might of the defence dollar to drive innovation in Australian industry.

The US-China relationship is identified as the most strategically important factor confronting Australia, followed by the rules-based global order

Australia's significant contribution to operations in the Middle East and Afghanistan received relatively little attention in the renewed focus on the region, and are grouped under the heading of terrorism, which is the third of six strategic priorities in the White Paper. Other priorities include dealing with state 'fragility' in the region - particularly island states, an increase in the number of missiles entering the region and the growing cyber threats from both state based and non-state based sources.

The alliance with the United States is still given a high priority and while there is considerable discussion about cooperative defence arrangements, and a "more active international role" individual partnerships – notably that with Japan – get only a small amount of detailed mention.

The massive hardware build will include the commitment outlined last year to a 'continuous build strategy' for naval surface vessels – first 12 offshore patrol boats, then nine frigates which has been welcomed by industry as a long-overdue salve to the uncertainty of past stop-start industry – in addition to the eventual decision about where 12 new "regionally superior" submarines will be built.

For the first time, the new white paper outlines a year by year spend, which reveals the annual spend will start to grow by $3.2 billion a year in 2012-22 and jump by a staggering $7.2 billion in 2025-26 alone, representing an overall increase of $29.9 billion.


Significantly, the White Paper seeks to break the link between defence spending and GDP followed by both sides of politics, saying that while the new spending plans have been estimated on the 2 per cent base, the actual spending figures will now be a firm commitment, no matter what happens to economic growth.

It contains a $1.6 billion commitment to investment in innovation and industry skills, and to new private sector involvement in directing that investment.

"These investments in Australian industry and technologies will generate benefits beyond the Australian defence industrial base which flow into the rest of the economy, delivering jobs and encouraging innovation for regional businesses and communities across Australia," Mr Turnbull said.

There is also to a huge upgrading of military bases across Australia – from Sydney's Garden Island to Exmouth - to support new vessels and hardware.

There will be significant new spend on enhanced intelligence, surveillance and reconnaissance, space, electronic warfare and cyber capabilities which will see a rebalancing of the intelligence community after a period in which heavy investments have been made in ASIO and terror-related intelligence.

A rebalancing of public service defence staff will see numbers fall from 22,300 in 2012 to 18,200 but 1200 new positions created in defence intelligence.

The White paper forecasts an increase in the permanent ADF workforce to 62,4000 over a decade to bring it to its largest level since 1993 and restructuring to allow an easier movement between permanent and reserve forces.

A new Centre for Defence Industry Capability – co-chaired by a private sector businessmen will receive $230 million in funding across the decade to "connect Defence needs with the innovation and expertise of Australian defence industry as well as help grow a competitive, sustainable Australian defence industry base".


Part of the purpose of the centre will be to support small to medium enterprises. Defence industry experts said the aim of the centre would be to reconstruct the way Defence works with local industry, pushing out technological questions that Defence must solve to the private sector to help solve at the beginning of a build, rather than waiting until later to set out specifications for a particular form of technology.

A new virtual Defence Innovation Hub will have funding of $640 million over the decade, replacing existing separate programs to help deliver a capability edge, working with CSIRO academia and industry partners to accelerate technology transfer into defence.

In addition, there will be a $730 million investment to "develop next generation game-change capabilities".

-with Angus Grigg and Primrose Riordan