Opposition Leader Sussan Ley says Australia is unprepared for a rapidly deteriorating strategic environment and will use a keynote address at the Menzies Institute in Melbourne to warn the nation lacks the military strength, industrial capacity and energy resilience needed to withstand a major regional conflict.

In a move to boost her national security credentials, Ms Ley will on Thursday argue that the world is being reshaped by "war, technology, trade turmoil, and profound social change" and that Australia must respond with a whole of nation approach to defence preparedness.

"Under Labor, in every field, military, diplomatic, economic, Australia is experiencing a distinct and alarming deficit of power and influence," she will say.

"We cannot shape our region and the wider world in our

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