Australia has to up its defense spending, increase its capacity to produce its own munitions and put itself in a position to strike targets at a greater distance if it is to cope adequately with regional security challenges, according a government-commissioned review released on Monday.

The public version of the classified report recommends the defense reforms as a response to China's military buildup, with the power competition in the Indo-Pacific region between the US and China creating a "potential for conflict" that could gravely impact Australian interests.

What did the review say?

The Defensive Strategic Review points to a growing security threat posed by China in particular, saying that Beijing was carrying out its biggest military buildup since World War II while engaging in strategic competition close to Australia. These developments meant that the US, Australia's most important defense treaty partner, is no longer the "unipolar leader of the Indo-Pacific," it says.

China's military expansion "is occurring without transparency or reassurance to the Indo-Pacific region of China's strategic intent."  

Australia must "avoid the highest level of strategic risk we now face as a nation: the prospect of major conflict in the region," according to the review.

In the face of the current security threat, the report recommends establishing domestic production and accelerated acquisition of long-range strike and guided weapons.

It also says there will be closer military cooperation between Canberra and Washington and that Australia should step up its defense partnership with Japan, India, Pacific and Southeast Asian nations.

As a priority for Australia's deterrence capability, the review supports the so-called AUKUS partnership between Australia, the US and the UK, under which Australia will establish a fleet of eight submarines powered by US nuclear technology.

It says Australia will upgrade its northern bases and ports immediately as a way of deterring adversaries and protecting trade routes and communications.

It also calls for the development of cyber and space defense capabilities.

The government should spend more on defense than the current expenditure of 2% of gross domestic product, it says.

What have Australian officials said?

Prime Minister Anthony Albanese called the review "the most significant work that's been done since World War II."

"It demonstrates a world where challenges to our national security are always evolving. We cannot fall back on old assumptions. We must build the strength in our security by seeking to shape the future rather than waiting for the future to shape us," he told reporters.

Defense Minister Richard Marles said the review had found that Australia's defense force was "not fit for purpose" and that the country must be able to adequately defend its territories, the immediate region, trade routes and communications. 

"We aim to change the calculus so no potential aggressor can ever conclude that the benefits of conflict outweigh the risks," he said.

He said the reforms would maintain "peace, security and prosperity" in the region.

Defense Industry Minister Pat Conroy said the army's maximum range of weapons would be extended from 40 kilometers (25 miles) to over 300 km and, with the acquisition of precision strike missiles, over 500 km.

"This is about giving the Australian army the fire power and mobility it needs into the future to face whatever it needs to face," Conroy said.

tj/msh (AFP, Reuters, AP)