"The Indo-Pacific is the epicentre of rising strategic competition".
The Australian government announced on Tuesday that it will allocate A$1.35 billion ($928 million) to strengthen the country's cyber security amid escalating tensions due to suspicion of meddling and espionage by foreign countries.
In recent years, Australia has seen China try make inroads into its backyard in the South Pacific - with offers of aid infrastructure projects besides offering to build undersea internet links for them, according to news reports. "Malicious cyber activity undermines that", Morrison claimed in a assertion.
"We remain prepared to make military contributions outside of our immediate region where it is in our national interest to do so, including in support of USA -led coalitions", Morrison said.
And he also warned the region was seeing "military modernisation" at an unprecedented rate. "The risk of miscalculation - and even conflict - is heightening", he added.
"We need to also prepare for a post-COVID world that is poorer, more unsafe and more disorderly", Mr Morrison said on Wednesday.
Mr Morrison said Australia would vigorously defend its democratic values and those of others in the region and insisted increasing military capabilities would help "to prevent war".
Australia in 2016 promised to spend A$195 billion over the next 10 years.
Prime Minister Scott Morrison will reveal details of the military package on Wednesday
Though China remains Australia's largest trading partner, relations between the two nations have become increasingly fraught since 2018 when Morrison's government banned Huawei Technologies Co. from building its 5G network on national security grounds.
Known as the Cyber Enhanced Situational Awareness and Response (CESAR) package, it will include $470 million to hire an extra 500 cyber security experts in the Australian Signals Directorate (ASD), which intercepts electronic communications from foreign countries.
It also plans to develop and test high-speed, long-range strike weapons, including hypersonic weapons.
Australia's government is committing to spending two per cent of GDP on defence - as US President Donald Trump has angrily demanded of allies - and spending nearly 40 per cent more over the last defence review in 2016.
Mr Morrison said tensions between the U.S. and China had been ramped up in recent years warned relations between the two were "fractious at best".
Australia will spend another $270 billion on defence over the next decade to protect against China's rise and the fallout from the coronavirus.
But it was not only China and the USA that will determine "whether our region stays on path for free and open trade, investment and cooperation that has underpinned stability and prosperity, the people-to-people relationships that bind our region together", Morrison said.
Australia, Morrison said, supported the rule of law, abided by the rules of good neighborliness without seeking to "entangle or intimidate or silence our neighbours".