Prime Minister Anthony Albanese has insisted that Australia would maintain its sovereignty if nuclear submarines were deployed in a regional conflict under the trilateral AUKUS security agreement with the United States and the United Kingdom.
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Mr Albanese also said the nation needed to be "clear-eyed" about Australia's defence and intelligence recruitment challenges.
He was answering questions on national security at the National Press Club on Wednesday, as well as parliamentary debate over the National Reconstruction Fund and the proposed revamp of the safeguard mechanism.
Although the submarine design is not yet finalised, AUKUS will lead to an unprecedented level of highly classified information sharing and cooperation among the nations as well as the industry partners.
Asked which nation would have operational oversight of the AUKUS asset in the event of a regional conflict, Mr Albanese was clear.
"Australia will maintain our sovereignty," he said.
"That's a decision for Australia as a sovereign nation, just as the United States will maintain its sovereignty and the United Kingdom will in maintain its sovereignty."
Ahead of the release of the landmark Defence Strategic Review, the Prime Minister outlined his government's embrace of the AUKUS technology sharing agreement, as the "biggest single leap" in defence capability ever taken by Australia.
"We recognise that pursuing and defending our sovereign interests and contributing to regional stability requires us to build our sovereign defence capability, including advanced manufacturing," Mr Albanese said.
"These investments include announcing, through AUKUS, the optimal pathway by which Australia will operate our nuclear-powered submarines."
He said an unclassified version of the Defence Strategic Review would be released before the May budget, and while he stated that the government would ensure Defence has the resources it needs, the nation needed to be "clear-eyed" about defence recruitment challenges.
Top defence department officials last year warned there was a dire need to beef-up staff numbers amid struggles to attract and retain skilled personnel.
The AUKUS partnership was at-risk of being understaffed or outsourced to labour hire contractors unless salaries and employment benefits were more attractive.
ASIO director-general Mike Burgess also warned on Tuesday that the agency had never been so busy and that tackling espionage and foreign interference is "soaking up more and more of our resources."
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"We can't be overwhelmed by what's before us. We need to be clear-eyed about the challenges that are ahead ... we have been clear-eyed about agencies being able to recruit to meet their needs," Mr Albanese said.
"The defence force is the same. These are good, secure jobs. These provide an opportunity to be engaged in really interesting work and to have the sense of self-satisfaction that comes with making a contribution beyond yourself to the nation."
Mr Albanese did flag, however, that there would be "significant fiscal pressure" in the budget, in part due to pressures including from defence, in which expenditure will increase in coming years.
