The Australian government said its 2026 National Defence Strategy and Integrated Investment Program outlines an additional $14 billion over the next four years and $53 billion over the decade in recognition of Australia’s strategic environment. Together with the additional investments in 2024, the government is investing an additional $30 billion over the forward estimates and $117 billion over the decade.
This brings total funding in the portfolio to $887 billion to 2035-36 including for the Australian Signals Directorate, the Australian Submarine Agency and the Australian Naval Nuclear Power Regulator. Of this, the government is investing $425 billion over the decade to deliver accelerated capability for the integrated, focused force – to increase the ADF’s self-reliance and contribute to regional deterrence.
This additional investment from the government through the 2024 NDS and the 2026 NDS is the largest peacetime increase in defence spending in Australia’s history the government said, and delivers critical defence projects that underpin Australia’s maritime capability and defence industrial strategy, including the Henderson Defence Precinct, the Nuclear-Powered Submarine Program and General Purpose Frigates.
The government has identified around $5 billion over the forward estimates and $15 billion over the decade in projects for which defence will prioritise developing alternative financing options as part of the additional investment in the 2026 National Defence Strategy. This includes projects in the defence estate, the Henderson Defence Precinct and the Guided Weapons and Explosive Ordnance enterprise.
“Appropriately funding Defence to keep Australians safe is also creating tens of thousands of well-paid local jobs right across Australia and across the supply chain. It also means a growing ADF with recruitment surging to the highest in more than a decade,” the government said. “We’re continuing to deliver on the Albanese Government’s response to the Royal Commission into Defence and Veteran Suicide with an allocation of more than $770 million in additional funding to deliver on Royal Commission recommendations. This funding includes $169.7 million funding over five years to increase fees for allied health providers from 1 July 2027, the largest investment in allied health fees for veterans in over 20 years.”
The budget will provide $29.8 million to support the establishment of a National Veterans’ Data Asset, and $16.6 million for the Defence and Veterans’ Service Commission to conduct an independent Inquiry into Military Sexual Violence in the Australian Defence Force from the middle of 2026. “The record investment in defence is also matched by historic reforms to ensure there is a renewed focus on value for money and greater speed to capability, including through the establishment of the Defence Delivery Agency on 1 July 2027.”
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How much of this is actually going to the Defence Force? The Government now claims it is spending 2.8% of GDP on defence, that’s an extra 40% of funding that was previously not included in defence GDP accounting. Is 40% of announced increases going to these other inclusions? It is no longer possible to determine what the actual defence spend actually is. The defence budget since 2023 no longer has provisions for inflation and foreign exchange rate protection, which according to ASPI estimates cost the budget in that year alone around $1.5B. So as I have said it is almost impossible to compare with the previous governments defence spending or promised increases to 3.0%.
The 2.4% is an accounting trick – and they can’t even get the maths right. The argument is that NATO members count military pensions as part of their Defence budgets – and if we do the same we get to 2.4%. Translated to Australia, our military pensions are worth 0.12% of GDP, which if you added that to our current 2.08% for Defence it would lift it to 2.2%. What some idiot has done is take the entire Veterans Affairs spend and add it to Defence to get to 2.4%. That’s not how NATO does it.