Anthony Albanese has once again shunned Australia's call for Australia to significantly increase its defense budget, amid Trump administration's warnings about China's plans, and now adds about $40 billion a year.

U.S. Defense Secretary Pete Hegseth met with Australian Defense Secretary Richard Marles in Singapore over the weekend as part of the Shangri-La dialogue.

In readings from the meeting released on Monday morning during the Australian period, Heggs conveyed that Australia's defence spending should increase to 3.5% of its GDP "as soon as possible".

Australia is expected to increase its defense spending from about $53 billion per year (about 2% of GDP) to an estimated $100 billion, or 2.4% of GDP in 2033-34.

By 2033-34, spending will be about US$40 billion per year to reach 3.5% of GDP.

Hegseth on Saturday urged Asian countries to "share the burden" and raise defense spending to 5% of GDP, warning that "Beijing is reliably preparing to use military power to change the balance of power in the Indo-Pacific" Speech at the conference.

Pentagon Deputy Secretary Elbridge Colby told the U.S. Senate hearing that the U.S. hopes Australia reaches a 3% defense spending threshold.

Albanese was asked on Monday to respond to U.S. calls for Australia to invest billions more into its defense budget to achieve higher spending targets. The Prime Minister asked: "Which one?"

"There is a range of (spension goals) in the future. What you should do in terms of defense is to decide what your needs, your capabilities, and then provide it. That's what my government does."

“What we need is to defend our things truly, and that’s what we provide.”

The Prime Minister stood firm on Sunday and answered a similar question about Heggs Saturday: “We will determine our defense policy.”

Mars also said in a speech on Sunday that the problem with defense spending was his “full effort conversation.”

"Americans are very clear to see more from friends and allies around the world. This is the emotion we understand," Mars said at a press conference in Singapore.

“In the past few years, we have been involved in the largest increase in defence spending in Australia’s history.

"Indeed, if we look at Aukus, I mean, Aukus is something that increases in our defensive spending - it should - so we are actually taking a step down this path."

In February, Australia paid US$500 million ($790 million) to the United States, as part of the first part, totaling US$3 billion to support the U.S. shipbuilding industry.

At the time, Mars said that Aukus was a "strong symbol of the joint efforts of our two countries in the Indo-Pacific."

Albanis is expected to meet Trump for the first time since he was re-elected this month at the G7 Leaders' Summit.

The leaders are expected to discuss defense cooperation in the Indo-Pacific region, as well as U.S. tariffs on steel and aluminum imports that began this week, including 50% of steel and aluminum imports.