Australia plans to buy 100 state-of-the-art U.S. jet fighters and double the size of its modest submarine fleet in a bid to keep pace with an Asian military buildup.

Prime Minister Kevin Rudd, announcing the plan on board the HMAS Stuart in Sydney Harbour on Saturday, said Australia's military must be prepared for any situation.

"It's important for our own capability requirements ... for the Australian Defense Force to be prepared to meet a range of contingencies arising from military and naval buildups across our region," Rudd said. "That is prudent, long-term defense planning, and we believe we've got the balance absolutely right."

The major defense update also says that global warming and shortages of fuel, food and water will likely be emerging threats to world peace as countries seek to guarantee supplies of crucial resources.

The plan says world powers will jockey for naval supremacy in the Indian Ocean as it gains importance as a seaway for oil shipped from the Middle East to Asia.

It does not single out any single country as posing a military threat to Australia, which is a close military ally of the United States.

The plan focuses on building Australian naval and air force strength to take any fight over Australia's security far offshore.

To do this, Australia's current fleet of six Collins-class submarines will be replaced by 12 longer-range Australian-manufactured submarines. The government, which bans atomic energy in Australia, has ruled out nuclear propulsion. The navy's 12 frigates will also be replaced by the same number of larger warships.

Australia will remain without an aircraft carrier.

The government plans to buy 100 U.S.-manufactured Lockheed F-35 Lightning Joint Strike Fighters to phase out the current Boeing F/A-18 Super Hornets over the next decade.

But the opposition Liberal party argued that the report doesn't explain how the new equipment will be funded.

"Nobody reading this white paper could have any confidence that the government has the capacity, the commitment, or even knows how it is going to pay for this dramatic expansion in our military hardware," opposition leader Malcolm Turnbull told reporters in Sydney.

Rudd recently warned that Australia needed to reshape its military in response to an "explosion" in defense spending in Asia.

Saturday's plan said the global economic downturn would slow the recent arms buildup in some Asian countries, though China will likely continue its military modernization, it said.

"But the pace, scope and structure of China's military modernization have the potential to give its neighbors cause for concern if not carefully explained," the paper says. "China has begun to do this in recent years, but needs to do more."

The government is committed to increasing defense spending, which is $16 billion in the current fiscal year, by 3 percent each year despite the current recession.

Australia is the largest contributor to the U.S.-led coalition force in Afghanistan outside NATO. Rudd announced this week that the Australian military commitment there would be boosted from 1,100 to 1,550.

Click here to read more from News.com.au.