Australia seals $1.3BN U.S. missile deal, rejects higher defence target

Australia has confirmed a $1.3 billion missile deal with the U.S., highlighting its defence priorities, while stopping short of committing to Washington’s 3.5% GDP spending target.

The missiles will equip Australia’s F/A-18 and F-35 jets, and a new army unit targeting aerial threats up to 500 km away. Despite this significant investment, Prime Minister Anthony Albanese has resisted U.S. pressure to raise defence spending to 3.5% of GDP, sticking to a projected 2.3% by 2033.

Foreign Minister Penny Wong emphasized Australia’s 'capability approach' and noted the current boost as the country's largest peacetime military funding increase.

"I know there will be more capability required, I think we all understand that, and we will fund the capability Australia needs," she said.

A planned meeting between Albanese and President Donald Trump at the G7 was cancelled due to Trump’s early departure amid escalating Israel-Iran tensions, though a rescheduling is underway.

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