In a recent exchange, Prime Minister Anthony Albanese responded critically to the Australian Strategic Policy Institute (ASPI), which has issued a report asserting that the Australian government is underfunding defense sectors, leaving the Australian Defence Force (ADF) inadequately prepared for imminent conflict scenarios.

This report, released on Thursday, highlights a concerning lack of short-term funding, describing the current state of the ADF as a 'paper ADF' lacking the necessary readiness in light of escalating tensions in the Indo-Pacific region.

The ASPI report indicates that without urgent and well-coordinated investment in defense capabilities, Australia risks developing a weakened defense force, compromised national sovereignty, and diminished security amid volatile regional dynamics.

Former Home Affairs deputy secretary Marc Ablong, who authored the report, characterized the March budget as an 'opportunity lost' for boosting the ADF's capabilities ahead of major projects, such as the AUKUS deal to acquire nuclear-powered submarines scheduled for delivery over the next decade.

Pressed for his views on the ASPI findings, Albanese asserted that the think tank should reflect on its approach.

He noted the government's efforts to enhance military funding, citing a $10 billion investment in defense initiatives over the next ten years as part of a strategic review commissioned by the government itself.

Albanese criticized ASPI for consistently producing similar reports and mentioned its leadership's past roles in previous administrations as a basis for skepticism regarding their current evaluations.

He emphasized the government's commitment to upgrading defense assets and making necessary investments.

The relationship between the Albanese government and ASPI has been contentious, particularly given ASPI's leadership by former Coalition advisor Justin Bassi, who has adopted a critical stance towards China.

A governmental review of think tank funding conducted last year recommended that ASPI lose its funding for its Washington-based operations and compete for financial support alongside other organizations.

The government accepted these recommendations, despite ASPI currently receiving approximately $8 million annually from the government, which includes a direct grant from the Department of Defence, alongside additional funding from foreign entities and defense contractors.

In response to Albanese's comments, Bassi defended the institution's role, stating that ASPI was established to provide the government with unvarnished assessments of defense needs, irrespective of the ruling party.

Bassi emphasized that the organization aims to foster public understanding and discourse regarding national security issues, claiming that the latest report is grounded in the government’s own statistics.

ASPI's report urges the government to raise defense spending to 3% of the country’s gross domestic product, echoing assertions made by the Trump administration and various defense experts.

Bassi articulated that the government itself recognizes the growing dangers faced by Australia, thereby necessitating increased defense investment—not as a precursor to warfare, but as a deterrent against potential conflicts.

He highlighted lessons from other global scenarios, including Europe, where extended periods of underinvestment in defense have recently compelled nations to drastically increase their military spending.