Japan's defeat of Russia in the 1904–05 war, concern about Japanese naval power led to calls for an Australian fleet. Deakin proposed the purchase of destroyers in 1906 and his government's Surplus Revenue Act of 1908 provided £250,000 for naval expenditure. The Fisher Labor government increased the naval budget and in 1911 established the Royal Australian Navy. In October 1913, the navy's first battle cruiser, Australia, arrived in Sydney harbour, accompanied by the new light cruisers Sydney and Melbourne. In 1907, Deakin proposed compulsory military training for home defence, a measure that was supported by Watson and Hughes of the Labor party. The Labor party adopted the measure at its 1908 annual conference and in 1911 the Fisher government expanded the system of compulsory military training which had been introduced by the Deakin government the previous year. Defence expenditure increased from £1 million in 1908–09 to £4.3 million in 1913–14, when it accounted for a third of the Commonwealth budget. Economy and population The breaking of the Federation Drought in 1903 heralded a period of strong economic growth. The economy grew by 75 per cent in the fourteen years to the outbreak of the First World War, with pastoralism, construction, manufacturing and government services leading the way. Rural industries were still the major employer (accounting for a quarter of all jobs) but manufacturing was fast catching up. While employment grew by 30 per cent during the period, employment in manufacturing increased by almost 70 per cent. The Australian population also grew strongly, driven by a fall in infant mortality, increasing adult life expectancy, and a revival in state-subsidised immigration. The population increased from four million in 1901 to five million in 1914. From 1910 to 1914 just under 300,000 migrants arrived, all white, and almost all from Britain. First World War Australia at war 191418 When the United Kingdom declared war on Germany on 4 August 1914, the declaration automatically involved all of Britain's colonies and dominions. The outbreak of war came in the middle of the 1914 federal election campaign during which Labor leader Andrew Fisher promised to defend Britain "to the last man and the last shilling." Both major parties offered Britain 20,000 Australian troops. As the Defence Act 1903 precluded sending conscripts overseas, a new volunteer force, the Australian Imperial Force (AIF), was raised to meet this commitment.Public enthusiasm for the war was high, and the initial