Defence spending will increase over and above Morrison government levels as Australia’s defence forces are remade to prepare for deployment in possible conflicts outside our borders, but also patrols and exercises with America aimed at “deterrence”.

The defence strategic review, an unclassified version of which was released publicly on Monday, is the culmination of a gradual move to shift the focus of national defence beyond Australia’s borders and forward into the region around us.

China is named as the principal threat to the global order, and the area from the South China Sea to the Pacific island chain the zone of greatest potential impact upon Australia’s interests.

“China’s military build-up is now the largest and most ambitious of any country since the end of the Second World War,” the review finds.

“The defence of Australia lies in the collective security of the Indo-Pacific,” the document states.

‘Urgent call to action’

“The defence of Australia’s national interests lies in the protection of our economic connection with the world and the maintenance of the global rules-based order.

“In the present strategic circumstances, this can only be achieved by Australia working with the United States and other key partners in the maintenance of a favourable regional environment,” the review finds.

“Australia also needs to develop the capability to unilaterally deter any state from offensive military action against Australian forces or territory.”

Two decades since George W Bush called Australia the region’s “sheriff” the review is an “urgent call to action” for the nation to take on a new “engagement with the United States on deterrence, including through joint exercises and patrols”.

Although an invasion of the Australian continent is “a remote possibility”, the review calls for a return to fundamentals to re-order Australia’s military and spend money on long-range strike capabilities in response to “higher threat levels”, not only in the immediate region.

Focus on missiles

A new focus on missile technology is expected to increase Australia’s strike range to several hundreds of kilometres.

To enable this, spending on armoured vehicles will decrease – which will be part of a $19 billion rejig in military programs.

The Opposition’s defence spokesman, Andrew Hastie, said the review had only identified areas for reprioritised funding, not new spending.

Defence spending currently accounts for about $48 billion of the federal budget, but the review does not put a price tag on the cost of its recommendations.

“Beyond that, however, defence spending will need to grow,” Deputy Prime Minister Richard Marles said.

“It is absolutely our expectation that defence spending over the medium term over the decade will grow above the existing trajectory of growth that we inherited.”

Despite coming at a $1 million price tag – paid to authors Sir Angus Houston, former defence minister Stephen Smith and academic Peter Dean who does not have a byline – the review declines to examine one major branch of current defence arrangements.

The ABC reported retired US Navy vice-admiral William H. Hilarides will lead a “short, sharp” review of the Royal Australia Navy’s combat surface fleet.

The review was completed in six months and with input from 150 experts from stakeholders including BAE Systems, Lockheed Martin, Department of Defence, Raytheon Technologies and Thales Group.

“Our view is that this is not ‘just another defence review’ that will shuffle available resources, or tweak the balance of the ADF,” the authors wrote.

“This review, in conjunction with the acquisition of conventionally armed, nuclear-powered submarines, will reshape the force structure, posture and capability of defence for coming decades.”

Australia recently committed to the acquisition of nuclear-powered submarines via the AUKUS agreement at a long-run cost of $368 billion.

“We’ve been living in the post-Cold War years,” said ANU security expert Professor John Blaxland.

“We really have had a boutique defence force that was meant to make niche contributions towards faraway wars, not existential challenges to Australia and its interests closer to home.”