Australia should join the defence bank that named it as a priority partner

Australia should open talks on joining the Defence, Security and Resilience Bank (DSRB) now, before the institution’s lending rules are written without an Indo-Pacific member at the table.

The DSRB is a proposed multilateral lender designed to strengthen allied defence industrial capacity. Member governments are to provide capital with which the bank can reduce risk for commercial lenders and mobilise private finance for defence manufacturers and their suppliers. Canada was chosen to host the institution after governments concluded negotiations on the DSRB’s charter in Montreal earlier this year, though it has yet to be formally ratified.

The DSRB has publicly identified Australia, alongside Japan and South Korea, as a priority Indo-Pacific partner. Canberra has said nothing about whether it intends to join. Perhaps it has looked at the proposed initiative and decided against it. If so, nobody has said so. The silence is a mistake, and it gets more expensive the longer it lasts.

Take interoperability first. The bank’s designers want to lend only for equipment that allies can operate, sustain and rearm together. Australia’s AUKUS plans run on exactly that kind of joined-up production. But a rule written by a Canadian and European membership might favour NATO-standard European equipment over the US kit that Australia has committed to. If interoperability standards are defined primarily around European defence priorities, Australian programs centred on US-origin equipment may not align as neatly with future lending criteria. It is also the reason to be in the room, because a rule this consequential should not be drafted by governments with no stake in the Pacific. And it is still only a proposal. Whether it survives, and in what shape, gets decided by the governments at the table. Australia is not one of them.

Then there is finance. Many Australian small and medium defence enterprises can win work but struggle to raise the capital needed to grow. Current support is modest. Western Australia’s AUKUS Readiness Fund, for example, provides A$2 million over four years in matched grants. It is a useful initiative, but small against Australia’s A$887 billion in total planned defence funding to 2035–36 under the 2026 National Defence Strategy. As ASPI’s 2026 Cost of Defence report says, the defence industry also faces workforce and production capacity constraints. The DSRB would not solve all those problems. But it is designed to improve access to affordable finance.

Third, size is still on Australia’s side: the founding group is small enough that a newcomer could help shape it. In April, 19 governments backed Canada as host. By the time of the NATO summit in Ankara in July, only nine had signed the founding declaration: Canada, Albania, Belgium, Greece, Latvia, Luxembourg, Romania, Turkey and Ukraine. Britain and Germany, Europe’s two biggest defence spenders, had yet to join. France has not committed. A group this small is either room to shape the rules or a sign the bank never reaches critical mass. Either way, Australia cannot find out by staying outside.

A bank funded by a handful of smaller NATO states choosing whom to lend to by consensus could end up being as slow and cautious as the problem it was built to fix. But a group this thin also has room in it. A serious Indo-Pacific partner could still help set whom the bank lends to, on what terms and how far its reach goes, before any of that sets hard. Canada’s chief negotiator says talks with South Korea are live. Seoul sees the logic.

Some will say this is a European affair, and that Australia’s defence industry lives in AUKUS and the Indo-Pacific. That reads the map right but mistakes how the bank works. Money doesn’t care about theatres. A guarantee that cuts the cost of financing a submarine supply chain or a guided-weapons plant does the same job whether the bank sits in Montreal or Melbourne.

None of this asks Canberra to sign before it has read the charter. It asks only that Australia stop treating a bank that has openly courted it as someone else’s business. The rules are being written now. Joining or not won’t insulate Australia. The DSRB’s rules will still shape the equipment standards and supply chains its programs rely on. The only question is whether it will help write them.