A former senior Australian diplomat has called for Australia to maintain a firm and confident approach toward China following Beijing's recent missile test in the Pacific, arguing that the country should prioritise defence capability and strategic investment.

Speaking on 7NEWS' "The Issue" podcast, former Australian High Commissioner to the Solomon Islands Lachlan Strahan said Australia should not be intimidated by China's growing military activities in the Indo-Pacific region. His comments came after Foreign Minister Penny Wong raised Australia's concerns with Chinese Foreign Minister Wang Yi, describing China's recent missile test as "destabilising" for the Pacific region.

The missile launch has renewed debate about Australia's defence strategy and regional security. Defence Minister Richard Marles said Australia requires a defence force capable of projecting power and responding effectively to changing security challenges across the Indo-Pacific.

Strahan, who has more than three decades of diplomatic experience, said Australia should respond calmly to isolated military demonstrations but remain prepared if such activities become more frequent. He argued that Australia should never allow itself to be intimidated and should continue defending its national interests and regional partnerships.

While supporting stronger defence capabilities, Strahan questioned whether current government spending priorities are aligned with Australia's strategic needs. He suggested that policymakers should focus less on the total amount being spent and more on ensuring defence funding is directed toward the most effective military capabilities.

He also described the AUKUS defence partnership as a significant long-term financial commitment, noting that maintaining advanced submarine and defence programs will require substantial ongoing investment.

Strahan criticised the Federal Government's investment in sports diplomacy, particularly funding linked to Papua New Guinea rugby league initiatives. The government has committed $600 million to support a future Papua New Guinea NRL team and $250 million for grassroots youth programs across the Pacific.

According to Strahan, Australia's resources are limited, and government spending should be carefully prioritised to maximise national security outcomes. He argued that funds should focus on strengthening Australia's defence capabilities and broader regional engagement.

The discussion also turned to Australian politics and foreign relations. Strahan warned that Australia's relationships with Asian nations could be affected by political leadership that adopts more confrontational or divisive positions internationally. He expressed concern about how regional partners may perceive Australia's diplomatic approach.

One Nation leader Pauline Hanson rejected Strahan's criticism, saying he did not know her personally or understand her policies. She dismissed the comments, saying she was not concerned by his assessment.

The discussion reflects ongoing national debate about Australia's place in an increasingly competitive Indo-Pacific region. With rising strategic competition between major powers, policymakers continue to balance defence spending, diplomacy and regional partnerships.

The missile test has reinforced concerns among Pacific nations about regional security and military activity. Australian officials continue to emphasise the importance of maintaining a peaceful, stable and prosperous Indo-Pacific while strengthening relationships with neighbouring countries.

As geopolitical tensions evolve, discussions surrounding defence investment, foreign policy and Australia's strategic priorities are expected to remain central issues in national political debate.