The Government has hinted it wants to increase military spending, as geopolitical escalations taking place off the coast prompt concern.

Three Chinese Navy ships have been conducting live fire rounds in the Tasman Sea in recent days - and details are coming to light of its new deal with the Cook Islands.

Former Defence Minister Andrew Little says China's economy has grown - along with the size of its military. 

"We need to make sure that our equipment is modern, up to spec, and works with our defence partners - whether it's Australia, the UK or the US or whoever."

LISTEN ABOVE