AUSTRALIA has declared it will not be a regional “strategic bludger” as it offers Donald Trump Aussie factories to build his ships, planes and armoured vehicles for the US President-elect’s planned “gigantic” expansion of military might.

And Defence Industry Minister Christopher Pyne has also foreshadowed Australia would in coming years lift its own defence spending, to above the current 2 per cent of GDP.

Australia’s defence industry has been buzzing in recent days following the election of Trump who during his campaign pledged a $500 billion splurge to expand the Army by 50,000 troops, 10,000 new Marines, 75 new warships and 100 new fighter jets.

The industry had already been lobbying the Americans with offers to use its ship building facilities predominantly in South Australia and WA, high-end technology plants in NSW and the ACT as well as pitching its next generation Hawkei armoured vehicle largely produced and maintained in Victoria and Queensland.

Mr Pyne told an industry summit in Canberra attended by both US and French military chiefs, that as a close ally of the US and with President Trump’s election, Australian defence industry had never been better placed to build America’s fighting force of the future and that potentially meant an economic bonanza for all states in Australia.

He confirmed the government was in close contact with Mr Trump’s transition team and said Australia had made it clear it had the capabilities to realise his military pledge.

“President-elect Trump has called countries around the world who are US allies and are not at 2 per cent [of spending] strategic bludgers,” Mr Pyne said.

“Fortunately we are not strategic bludgers because we are at 2 per cent of gross domestic product, and given the spend of the Turnbull Government over the next 10 years, I imagine that will be surpassed at some stage in the future.”

Mr Pyne also said the US knew only too well Australia was pulling its weight not only in spending but in the Middle East with ADF’s commitment to the region second only to the US.

The minister also referenced former New York mayor and leading contender for the position of secretary of state, Rudy Giuliani’s flagging expansion of American forces this week and boast that China would be no match for a future US military.

Mr Pyne said Australia was also significantly lifting its defence capability, putting defence at the heart of the National Policy Agenda.

“Our mission is simple: we are determined to use the Defence dollar to drive a high technology, advanced manufacturing future,” he said.

He added: “We not only want to guarantee our national security and ensure that Australia can play its part in protecting peace in our own region, in Asia, in the Pacific and the Indian Ocean; we want to use Defence to underpin our economic prosperity and to put the skills and innovation that characterise our defence industries at work, to form the basis of the smart, hi-tech manufacturing of the 21st century.”