Report: Buying Australian could boost GDP, jobs

New economic modelling has found that awarding a greater share of Australian Defence procurement, covering both services and materiel, to Australian-owned and operated prime contractors would inject billions annually into the nation’s GDP and create tens of thousands of jobs, whilst also strengthening Australia’s sovereign capability at a time of increasing strategic uncertainty. The Defence Dividend: Gains to Australia’s Economy Through Sovereign Defence Procurement report, developed by independent economics, policy, strategy and corporate advisory firm DeltaPearl Partners, models for the first time the ‘economic dividend’ of a small proportion of additional procurement, of both services and materiel, being shifted to sovereign Australian primes.  The dividend calculates the GDP uplift, job creation and national resilience benefits generated when government and defence contracts are prioritised towards Australian primes over foreign-owned subsidiaries. The modelling was done on budget-neutral scenarios, that is, based on existing Defence spending levels. The report was commissioned by the Sovereign Australian Prime Alliance (SAPA), The analysis shows coupling a 5% reallocation of Defence spending away from imports and a 10 per cent shift of domestic Defence spending from foreign-owned subsidiaries to Australian primes would increase Australian GDP by between $5.0 billion and $8.2 billion annually and generate between 25,569-43,205 full-time equivalent (FTE) jobs within Australia annually. “In undertaking the analysis, we modelled only modest changes, sought to identify any adverse implications, and held everything else equal. The results show that on a budget-neutral basis, but with an improved set of procurement criteria, the Australian Government’s Defence procurement program, which makes up 56% of the value of total federal government procurement, can achieve expanded economic and sovereign outcomes – a Defence Dividend. This confirms what Australian industry has been saying for years, that who we award Defence contracts to matters enormously for Australia’s long-term resilience,” said Craig Wilson, lead researcher and Managing Director, DeltaPearl Partners. “The economic behaviour of fully Australian primes versus foreign subsidiaries differs. Australian primes reinvest here, hire here, and build capability here. Decisions about intellectual property, taxation, dividends and management between foreign and domestic primes vary greatly. When we strengthen sovereign industry, we strengthen the economy and national security.” The analysis follows recent reforms by the Albanese Government to the Commonwealth Procurement Rules (CPRs) and reflects arguments raised recently by Defence leaders and the Australian National Audit Office (ANAO) that current practices do not maximise Australian industry participation or sovereign capability. Additionally, the report highlighted a persistent disconnect between strategic intent and on-the-ground procurement decisions, with foreign-owned multinationals still winning the overwhelming majority of major Defence contracts by value. The report lists five recommendations for the Australian Government: Redefine ‘value for money’ to include sovereign capability, economic multipliers, supply chain resilience, innovation, and long-term national benefit. Adopt a quantitative Sovereign Dividend Scorecard to give procurement officials a practical, measurable framework for assessing broader national benefits. Strengthen the definition of an ‘Australian business’ to prioritise organisations with majority Australian ownership, Australian-based boards, domestic supply chain commitments, and Australian control of critical IP. Empower procurement officers with clearer guidelines, practical decision-support tools, and unambiguous authority to prioritise sovereign outcomes. Adopt a whole-of-government approach that treats Defence procurement as a central instrument of national strategy. “Our research shows even modest shifts in procurement settings will deliver billions in GDP uplift, thousands of skilled jobs, and a stronger sovereign base,” said Wilson. “This evidence provides a clear, defensible basis for refining procurement rules to deliver maximum national benefit without additional cost to the taxpayer.” For Editorial Inquiries Contact: Editor Kym Bergmann at [email protected] For Advertising Inquiries Contact: Group Sales Director Simon Hadfield at [email protected]