Releasing the 2013 Defence White Paper, Australian Prime Minister Julia Gillard said, "The white paper underlines the enormous stake Australia has in managing strategic change in the Indo-Pacific region and managing it peacefully, in particular in a US-China relationship in which competition is minimised and co-operation maximised."
"And in a region in which flashpoints, such as North Korea and territorial disputes, are managed peacefully and in a way that avoids the risk of dangerous miscalculations," she said, quoted by AAP news agency.
"China's defence capabilities are growing and its military is modernising as a natural and legitimate outcome of its economic growth," said the roadmap backtracking on the 2009 document, which questioned China's long term strategic ambitions.
Gillard said the government was committed to manufacture 12 advanced new submarines in South Australia.
More From This Section
However, due to the need for detailed design analysis, any further work on buying an existing or modified overseas model was off the table because it was unlikely to meet Australian requirements.
"I want to be clear that we see this as a longer term objective as and when fiscal circumstances allow," she said.
"In this year's budget we will once again allocate more than USD 100 billion to defence over the forward estimates," she said adding defence spending would "rise in a modest way, relative to last year's budget estimates" and would be "appropriate and sustainable."
In response to the white paper, Defence minister Stephen Smith said it set out a framework to "protect and defend the national security interests of the Commonwealth and continue to have an effective and capable Australian Defence Force".
Smith said there were no proposals to reduce military numbers.
"The white paper refers to our part of the world not as the Asia Pacific or Indian Ocean rim, but the Indo Pacific," he said.