Lessons from the U.S. “Big Beautiful Bill” – A Warning for Australia’s Future Budgeting

Executive Summary

The United States’ war-based economy—fueled by defense industry lobbying and geopolitical paranoia—offers a stark warning to Australia. The AUKUS submarine deal risks entrenching us in foreign military strategy, serving U.S. interests rather than our own. This report evaluates the disproportionate economic benefits of U.S. defense legislation, the myth of Chinese aggression, and the risk of Australia adopting a debt-heavy, arms-reliant economic model that does not serve its citizens.

Key Issues

1. U.S. Paranoia and Geopolitical Pressure

The U.S. consistently promotes a narrative of existential threat—currently focused on China—to justify expansive defense budgets and international arms sales. U.S. Navy and military advisors openly describe the strategic placement of AUKUS submarines in the South China Sea as a form of deterrence, bordering on provocation. This narrative sustains the U.S. arms industry and influences allies to contribute financially and militarily, even when not in their strategic interest.

2. AUKUS: Strategic Dependency and Foreign Control

Australia’s commitment to U.S.-designed submarines locks us into decades of financial and strategic dependence. These submarines are not built to defend Australia’s shores—they’re positioned to operate in foreign theatres such as the South China Sea. The deal will result in billions spent in the U.S., while Australia's local shipbuilding capability remains underdeveloped. This prioritises U.S. economic and military goals over Australian self-sufficiency.

3. The War-Based Economy Model

The U.S. defense industry profits from instability, with arms sales used as both diplomatic leverage and economic engine. ‘One Big Beautiful Bill’ exemplifies this, providing vast benefits to defense contractors while doing little for average Americans. The legislation disproportionately allocates wealth upward, adds to national debt, and leaves infrastructure and social services underfunded.

4. Disproportionate Benefits and Burden

Under the U.S. model, defense spending delivers minimal benefit to the average family. Taxpayer funds support arms manufacturers, while basic healthcare, education, and infrastructure are neglected. Australia risks replicating this imbalance. Massive defense commitments may divert essential funding from schools, hospitals, renewable energy, and housing—areas with real public benefit.

5. The Peaceful Rise of China

Contrary to U.S. messaging, China has not attacked another country in modern history. Its approach to international relations has increasingly focused on trade, development, and diplomacy. Labeling China as a threat without evidence fosters unnecessary tension and drives military escalation. Australia must evaluate threats based on fact, not foreign narrative.

Recommendations for the Australian Government

- Reassess the full cost and strategic intent of AUKUS.
- Prioritise independent defense planning and sovereign capability.
- Evaluate defense spending in light of social infrastructure needs.
- Require transparency on long-term debt and opportunity costs.
- Promote peace and diplomacy in Asia-Pacific relations.
- Avoid adopting a U.S.-style war-based economic model.