Protecting Australian shores and deterring China demands greater military spending across land, sea and air, a think tank has warned.

Lowy Institute executive director Michael Fullilove has identified higher spending, further integration and greater reach and firepower as needed for the nation's defence force.

"Our leaders keep telling us that our strategic circumstances are worse than anything in their lifetime," he said in an address on Wednesday.

"If that's true we should be doing more to protect our own sovereignty."

Mr Fullilove recognised defence expenditure had increased to about 2.05 per cent of GDP, totalling some $56 billion, but said a more robust military force was needed to deal with regional threats.

The island continent required an integrated air and missile defence sys

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