US President Donald Trump has complained that security ally Australia has kept out of the Iran war, which began in late February, although Prime Minister Anthony Albanese's government said it was in talks with Britain, France and the United States about potential contributions to efforts to protect shipping in the Strait of Hormuz after a ceasefire.

Defence spending risks listed in Australian budget documents released on Tuesday included "the cost of major operations of the Australian Defence Force in 2026-27 in the Middle East and European regions".

A defence official told AFP no government decision had been made to send military forces to the Strait of Hormuz, adding that the budget listed existing operations.

Australia has a small maritime security presence to protect international shipping in the Middle East as part of a multi-nation effort in the Red Sea, and trains Ukrainian forces in Britain.

Australia will significantly lift spending on defence cooperation in the Pacific, providing Aus$600 million over four years.

This includes "initiatives under development with partner governments", and spending Aus$114 million to build dual use infrastructure in Papua New Guinea to support integrating the two nations' defence forces, the budget documents showed.

Australia struck a defence treaty with Papua New Guinea last year, while other proposed security treaties with Pacific states Vanuatu and Fiji are not finalised.

The budget documents also included Aus$5.4 million in tax exemptions over four years to allow star footballers recruited from Australia to play in Papua New Guinea's first rugby league team, the PNG Chiefs. This would also require a law change.

Australia has heavily supported its northern neighbour Papua New Guinea in joining Australia's national football league as a form of soft power in its competition for influence in the Pacific with China.