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The world spends $2 trillion on defence: How does Australia compare?

·Personal Finance Editor
·2-min read
Chinese, US and Australian solidiers.
The world spends over $2 trillion every year in military spending, but how does Australia's defense budget compare? (Source: Getty)

In light of the new deal made between Australia, the United Kingdom and the United States you might wonder where the money for brand new nuclear-powered submarines comes from.

And, of course it comes from Australia’s defence budget which is 2.1 per cent of our GDP coming in at $44.6 billion.

And while that seems like a large number, Australia doesn’t make the list of top 10 countries that spend the most on defence.

Here is a look at some of the world's biggest defence budgets and how we compare.

The world’s largest defence budgets

In 2020, military expenditure in the world's top 10 countries was $2.01 trillion (US$1.48 trillion) and accounted for 75 per cent of the entire world's military spending, according to the Stockholm International Peace Research Institute (SIPRI).

Here are the top 10 in Australian dollars:

  1. United States - $1.06 trillion

  2. China - $343 billion

  3. India - $99 billion

  4. Russia - $84 billion

  5. United Kingdom - $80.6 billion

  6. Saudi Arabia - $78 billion

  7. Germany - $72 billion

  8. France - $71.5 billion

  9. Japan - $66.8 billion

  10. South Korea - $62 billion

Infographic showing the worlds military spending
The US and China have the largest military budgets by far (Source: SIPRI)

So, how does Australia compare? Well we’re only just off the list sitting in 11th position.

As a whole, the United States accounts for 39 per cent of the entire world’s military spending, whereas Australia only accounts for around 1.4 per cent.

Infographic showing the worlds military spending
Australia's military spending only accounts for 1.4 per cent of the world total (Source: SIPRI)

However, when you look at spending per capita Australia does make the list.

Here are the top 10 countries with the highest military spending by population:

  1. Israel - $3,415 per person

  2. United Arab Emirates - $3,363 per person

  3. United States - $3,202 per person

  4. Singapore - $2,526 per person

  5. Saudi Arabia - $2,250 per person

  6. Kuwait - $2,213 per person

  7. Oman - $1,794 per person

  8. Norway - $1,787 per person

  9. Australia - $1,469 per person

  10. Qatar - $1,377 per person

And, it seems Australia has been increasing its military arsenal. In the SIPRI 2021 Yearbook report, Australia was named as one of the largest arms importers.

“The five largest arms importers were Saudi Arabia, India, Egypt, Australia and China, which together accounted for 36 per cent of total arms imports,” it said.

So while our military spending is relatively small, it seems to be ramping up.

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