Admiral David Johnston, the chief of the Australian Defence Force, this week issued a thinly-veiled demand for not just higher military spending but the faster development of a war economy.

“Defence is fully expending its budget at the moment,” Johnston said, asserting there was not a dollar to spare. He was replying to a question about US Defense Secretary Pete Hegseth openly pressing the government to swiftly raise military spending levels to 3.5 percent of gross domestic product (GDP).

The Australian Broadcasting Corporation (ABC) national political lead David Speers noted: “The defence chief may not have openly called for a spending increase, but it didn’t take a code breaker to decipher this message.”

More than that, Johnston declared that Australians had to “reconsider” the country as a “homeland” from which to conduct combat operations for the first time since World War II. During that global conflict, the continent served as a critical base for the US war against Japan across the Indo-Pacific region.

Essentially, Australia’s military chief publicly warned of the potential for warfare on, as well as from, Australian soil.

On behalf of the Trump administration in Washington, Hegseth laid down the law to governments throughout the region at last weekend’s Shangri-la Dialogue. They had to dramatically escalate their military build-up and put themselves on a war footing for “imminent” conflict with China, just as the US was demanding of its NATO partners in the Ukraine war against Russia.

In line with that ultimatum, Hegseth announced that he had “conveyed” to the Australian Labor government that it should increase its military spending from around 2 percent to 3.5 percent of GDP “as soon as possible.”

Admiral Johnston’s remarks were doubly pointed because he chose to speak at a conference hosted by the Australian Strategic Policy Institute (ASPI), a government-subsidised US-linked think tank. ASPI had recently accused the Labor government of leaving Australians “less secure” through its “failure” to boost defence spending.

Just days earlier, Prime Minister Anthony Albanese had criticised ASPI, boasting that his government had already raised military spending by a record amount—$10 billion extra over the next four years.

So far, Albanese has not committed his government to meeting Hegseth’s demand, yet he has emphasised Labor’s readiness to further raise the military budget. In Perth on Tuesday, he did not categorically rule out lifting defence spending. Instead, he said: “We’ll continue to invest in our capability and in our ­relationships.”

Albanese and his ministers are thoroughly committed to the US military alliance, on which both Labor and Liberal-National governments have depended since World War II. But they are clearly nervous about the widespread anti-war and anti-Trump sentiment among workers and youth.

That sentiment enabled the Labor government to win the May 3 election on the back of a collapse of support for the Liberal Party, which was identified with the fascistic “Make America Great Again” Trump agenda.

In effect, speaking on behalf of the military-intelligence apparatus, Johnston told the Labor government that it had to implement the deep cuts to social spending needed to boost the war preparations. He told the ASPI conference that, in preparing the government’s 2026 National Defence Strategy: “It’s my job and that of the department to give government that frank advice and a view of what we need to be doing.”

He insisted: “The Australian community wants education, a health system to look after the elderly, so [we are] making sure we do the best we can to present the issues of national security issues in our country, and we do that unambiguously and without avoiding some of those key areas of risk.”

Johnston went beyond the Labor government’s 2024 National Defence Strategy, which declared that Australia faced the “most challenging strategic environment” since World War II and the end of a 10-year strategic warning time for conflict.

That document publicly named China as the central target, parroting Washington’s propaganda that Beijing had “employed coercive tactics” throughout the region. It called for a “whole-of-government and whole-of-nation approach,” foreshadowing the subordination of all aspects of society, including universities and industry, to war preparations.

The 2024 document was based on Labor’s 2023 Defence Strategic Review, which set out the development of a military “impactful projection” across the region, to participate in US war plans against China under the Biden administration, as Washington also escalated the NATO war against Russia.

At the ASPI event, Johnston went further. He outlined a total reorganisation of the continent. “[W]e’re having to reconsider Australia as a homeland from which we will conduct combat operations,” he said.

“And that, again, is a very different way almost since the Second World War about how we think of national resilience and preparedness of what we may need to operate and conduct combat operations from this country. And that’s everything, from our northern infrastructure, our supply chains, how we integrate with industry, states and territories is quite a different answer to that notion of operating from the homeland.”

Johnston listed many challenges facing the “northern infrastructure”. These included limited fuel storage, long supply lines, a lack of adequate medical facilities to “deal with trauma” for personnel involved in combat, and an absence of industry capable of rapidly repairing equipment damaged in battle.

It was a call for larger spending, beyond the defence portfolio, to prepare for war. All federal, state and territory government health, infrastructure and industry programs had to be focused on this. The ABC’s Speers commented: “It all sounded rather similar to the ‘war-fighting readiness’ Sir Keir Starmer spoke of in the UK.”

Not just in the UK but throughout Europe and internationally, governments are rapidly remilitarising and insisting on the need for whole-of-society war readiness as the US ramps up its trade war and military aggression to seek to regain the global hegemony it asserted after World War II.

At the Shangri-La Dialogue, Hegseth also pushed for “an integrated defense industrial base” to support a US-led war against China, and to shore up supply chains, including for critical war-related minerals.

Labor’s 2024 National Defence Strategy committed the Albanese government to continuing to militarise the north of the Australian continent, making it a launching pad for offensive operations throughout the Indo-Pacific.

This includes greater access to ports and air and army bases, the $368 billion acquisition of AUKUS nuclear-powered submarines, more frequent visits by US nuclear submarines, fuel storage capabilities for long-range US bombers, the rotational presence of 2,500 US marines near Darwin and expansions to the Pine Gap satellite surveillance station in central Australia.

Whatever the Labor government’s political calculations in the wake of Hegseth’s ultimatum, the prime minister has previously spoken about developing a war economy, including through “secure supply chains,” expanded domestic weapons production and selected manufacturing.

Johnston’s ASPI appearance is part of a wider campaign, particularly in the Murdoch media, to drum up the war agenda and insist that the Labor government must make a sharper and faster turn regardless of public opposition.

In recent days, repeated editorials in the Australian have declared: “The PM must level with the public about the hard choices to be made.” Today, the newspaper’s foreign editor Greg Sheridan, who is well-connected in Washington, accused the government of “a dismal lack of urgency.”

As Johnston’s remarks indicate, massive military spending increases can be implemented only at the cost of essential social services, such as health, education, aged care and welfare. Even meeting the Trump administration’s 3.5 percent demand “as soon as possible” would, by one estimate, increase this year’s defence budget of $58 billion to almost $150 billion by the early 2030s, taking inflation into account.

Increasingly, the world’s population is being confronted by the danger of World War III. The Trump administration is determined to prevent China from overtaking the US economically, even if it risks engulfing the Indo-Pacific and the world in a nuclear conflagration. In preparation for war, Washington is also demanding the decimation of social spending and basic working-class conditions, and the Albanese government is moving to comply.