Australia upgrading bases, expands war games with US

Australia's Prime Minister Scott Morrison has denied a major investment in military bases in northern Australia is aimed at sending a message to China.

At the same time, he has also defended comments made by Australia's new Defence Minister Peter Dutton that the possibility of conflict with China over Taiwan should not be "discounted".

Morrison was in Darwin to confirm a $747 million upgrade to defence facilities in the Northern Territory, part of $8 billion set to be spent on military infrastructure in northern Australia over the next decade.

The bases are often used for joint Australian-US military training exercises, including an annual rotation of thousands of US Marines.

Morrison said the goal of properly resourcing the Australian military was aimed at keeping peace in an "uncertain" region rather than preparing for conflict.

"All of our objectives through the activities of our Defence Forces is designed to pursue peace," he said.

"In a region as uncertain as this you need to ensure that you have the Defence capability that enables you to protect and defend Australia's interests in that region.

"And this enables us to ensure there's an appropriate balance - particularly in partnership with our United States allies to ensure we can promote an environment where peace will be the outcome."

During an interview last weekend, Dutton observed conflict over Taiwan was a possibility, and that reunification was a "long-held objective" of China.

That prompted a strong response from China, suggesting any progression in China-Australia relations required adherence to its 'One China' policy.

The prime minister said he did not consider Dutton's comments to be inflammatory.

"I have set out what the government's purposes are here, and I know that's strongly supported by the defence minister, who has made the point about ensuring we have appropriate capability," Morrison said.

"That's the defence minister's job, to ensure that we have that capability to deal with any matter of scenarios, and that's indeed what these training environments provide for.

"That's why you invest $747 million to ensure that your Defence Forces have the best training environments possible to build their capabilities to keep Australians safe."