The Australian government has released its Rebuilding Defence Capability report that sets out structured and practical reforms which will ensure that every dollar of investment is focused on value for money and greater speed to capability. The government said it is delivering on its commitment to fundamentally reset the development, acquisition and sustainment of Defence capability projects to ensure the Australian Defence Force (ADF) is equipped to keep our nation safe.
Since 2022, the Albanese Government has undertaken the biggest peacetime increase in Defence spending in Australia’s history, bringing the total additional investment from the 2024 National Defence Strategy and 2026 National Defence Strategy to $117 billion over the decade to 2035-36.
With this investment comes a clear responsibility to ensure Defence has the structures, focus and resources to deliver the right capability projects on time, within scope, and on budget. Defence personnel are central to implementing the 2026 National Defence Strategy and securing our nation, and these reforms seek to enable them working to deliver capability for the ADF.
These reforms have three central components:
- The establishment of the Defence Delivery Agency, a dedicated delivery organisation, headed by a new National Armaments Director, consolidating Capability Acquisition and Sustainment Group, Guided Weapons and Explosive Ordnance Group, and Naval Shipbuilding and Sustainment Group.
- The consolidation of capability development functions across all domains – land, air, maritime, space and cyber – under the Vice Chief of the Defence Force, to ensure we continue to deliver an integrated, focused force.
- A re-designed capability system which clarifies accountabilities and re-establishes decision discipline. This system will be underpinned by stronger contestability and improved cost estimation and assurance across the Defence Delivery Agency, Department of Defence and the Department of Finance.
On 1 July 2026, the Defence Delivery Group was established. It will provide independent, evidence‑based advice to Government on delivery, strengthening Government’s ability to make informed decisions and achieve best value for money and speed to capability. This has been missing in the past.
The report sets out a clear implementation pathway for the next 12 months to transition the Defence Delivery Group to the Defence Delivery Agency, which will be established on 1 July 2027, to ensure it has the resources, accountabilities and autonomy needed to operate as an independent agency.
To support this transition, the Albanese Government has appointed Ms Nadine Williams as the interim National Armaments Director.
These reforms are being undertaken in a deliberate, staged and structured approach to ensure that there is continuity in project delivery, and the uplift in the capability system can be realised quickly. This will reset the relationship between Defence and industry. Led by the National Armaments Director, engagement with industry will be more collaborative, transparent, and performance-based, providing clearer demand signals and stronger commercial discipline. For industry, this means clearer visibility of Defence’s likely demand, priorities and direction of travel.
The Albanese Government said it recognises the longstanding systemic challenges that have resulted in major Defence projects being delivered late, over budget, and below expectations. This created a widening gap between strategic need and realised capability.
Alongside the 2026 Defence Industry Development Strategy, these reforms will help deliver a more integrated and resilient Defence enterprise that enables Australia to accelerate capability delivery and respond more effectively to emerging threats in support of Australia’s national interest.
Deputy Prime Minister Richard Marles said: “These reforms are about building a more agile, disciplined and strategically focused Defence organisation, one that is capable of responding to the strategic challenges we face and safeguarding Australia’s security into the future. We are rebuilding a defence capability system that is disciplined, accountable and focused on outcomes. This is what Australia’s security environment demands, and what the Australian people expect. These reforms will deliver what the Australian Defence Force needs faster—and make sure every dollar we invest delivers real capability, and keeps Australians safe. There is no more important job for our Government than this.”
Minister for Defence Industry Pat Conroy said: “The Rebuilding Defence Capability report and the 2026 Defence Industry Development Strategy will deepen and strengthen our partnership with Australian industry. Together these two documents lay out a new era for Defence – a sharper and more integrated enterprise, with defence industry as close partners in the mission to protect Australians and our way of life. For too long, Defence has struggled to deliver major capability projects on time and on budget. These reforms are about fixing that. They’re the biggest in fifty years. We are putting in place clear accountabilities and improving leadership performance so Australians can have confidence that Defence will deliver what the National Defence Strategy demands.”
Government releases Defence Industry Development Strategy
The Albanese Government has released the 2026 Defence Industry Development Strategy, outlining how the country will strengthen Australia’s sovereign defence industrial base and boost self-reliance. Building on the record defence spending outlined in the 2026 National Defence Strategy and Integrated investment Program, the Defence Industry Development Strategy outlines the Government’s plan to build the industrial base needed to keep Australia safe.
The Strategy places industry at the centre of national defence and economic security, driving a new era of partnership with government. The 2026 Defence Industry Development Strategy builds on the Government’s plan to support a defence future made in Australia by:
- Setting targets for large defence primes to grow the defence industrial workforce, with a focus on apprentices.
- Enhancing broader workforce initiatives to grow the required skills, encourage the uptake of STEM learning, and strengthen partnerships between Defence, industry and the education sector. This includes:
- Extending the Defence Industry Internship Program (DIIP) with more than $17 million in funding, ensuring more university students gain practical experience in Australia’s growing defence industry.
- Investing nearly $30 million to expand the Schools Pathway Program, encouraging school students to pursue science, technology, engineering and mathematics studies and explore careers in defence industry.
- Adding the Ghost Shark extra large autonomous underwater vehicle as a priority export capability for the Australian Defence Strategic Sales Office.
- Reforming and relaunching the USD $3 billion Defence Export Facility, which has been underutilised since its establishment in 2018, making it easier for Defence industry to access this pool of funds.
- Investing an additional $80 million in Defence Industry Development Grants to build self-reliance and support Australian defence businesses.
- Streamlining procurement to enable faster, more agile delivery of capability to Defence, including by implementing a ‘Continuous Capability Development and Delivery’ and ‘Minimum Viable Contracting’ approach.
Minister for Defence Industry Pat Conroy said: “Industry policy is security policy, and the 2026 Defence Industry Development Strategy recognises the critical role defence industry plays in our national security. The case for a strong Australian sovereign defence industrial base has never been clearer. We must ensure Australia can manufacture, sustain and scale the capabilities the Australian Defence Force needs, when and where they are required. We are powering defence industry, powering our economy and creating secure jobs. Our hardware, our capabilities, made in Australia, by Australians.”
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All seems to be a good strategy,as long as it’s not all P*ss & Wind like many of their other endeavours, concerned that absorbing the departments responsible for the things that the New Defence Delivery Group is being created to address, will only move the existing problems to a new department . Would love to hear your thoughts Mr Bergmann .
Any attempt to reform defence procurement is welcome, but if it’s just the same people with different titles, it’s unlikely to make much difference. Hopefully, some new people will come into the picture, and the services will take more of a back seat and let the acquisition experts get on with it. I find it extraordinary that the Defence internal review – which we knew nothing about until Pat Conroy mentioned it a couple of days ago – calculated that a minimum of $29 billion had been wasted. Has anyone ever been held to account for such enormous wastage and gross incompetence? Of course not.