Day two of the triennial policy summit in Adelaide coincided with the federal government announcing $4.6 billion for nuclear submarine construction at Osborne in South Australia.
The construction yard will be used to build the nuclear-powered vessels as part of the $368 billion AUKUS agreement with the US and UK.
The additional funding will bring the spend on the construction yard to $8.5 billion, with the funding going towards building and development activities at the site.
But rank and file members of Labor want Labor to drop AUKUS from its party platform.
Marcus Strom from Labor Against War said the submarine deal needed to be axed to free up funds for reform measures.
"If the Labor Party is serious about defeating the hot-air challenge from One Nation over lack of investment in infrastructure, it should be putting that sort of money into meaningful jobs, not jobs in the war industry," he told AAP on Friday.
"This is a chimera of opportunity for jobs, the much better jobs, longer-term jobs in renewables, advanced manufacturing, and the health industry."
Under the AUKUS pact, Australia will buy used nuclear submarines from the US, before locally built vessels are brought online.
Prime Minister Anthony Albanese discussed AUKUS with newly elected UK counterpart Andy Burnham during a call on Thursday to congratulate him on his appointment and invite him to visit Australia.
AUKUS is expected to be debated on the floor of conference on the final day on Saturday.
While delegates agreed on AUKUS at the party's previous conference in 2023, members are optimistic about a change in stance.
Defence Minister Richard Marles said there was "definitely an opportunity" for AUKUS to be publicly debated at the national conference, but pointed to the positive vote three years ago.
"Seventy-five per cent of the floor supported AUKUS, so this was not close, and that's the position of the party right now," he told ABC Radio.
"I understand that this is a huge public expenditure, and so people are entitled to raise questions and have debates, and I stand ready to do those debates.
"But at the same time, we are putting this in place."
Dozens of anti-AUKUS protesters were out the front of the Adelaide Convention Centre in hazmat suits and blaring sirens, urging Labor to drop support for the pact.
Gambling reform measures will also be brought to the conference floor, with rank and file members urging the government to go further on the issue.
Amendments have called for a national regulator to better protect vulnerable people from gambling harms.
Debate on anti-Semitism will feature later in the day as part of policies on social cohesion.
While votes at the conference will determine a binding stance on the party's position, it will be up to Labor's parliamentary team to decide how and when the measures are implemented.
The conference coincides with rising support in opinion polls for One Nation, with Pauline Hanson's party outperforming Labor on some primary votes.
One Nation were the "new kids on the block" with many of their policies unknown and untested, Health Minister Mark Butler said.
"The anti-Labor forces will always have the same policy prescriptions: anti-worker, anti-wage increases, hostile to Medicare, and determined to divide this country rather than unite it," he told the conference.
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