Defence Minister Richard Marles has announced sweeping changes to the Defence Department and military spending. Photo: Michelle Kroll.
The Department of Defence is set to undergo a massive shake-up under sweeping changes just announced by the Federal Government.
It will see the biggest reform to the Australian Defence Force in half a century, and will see a renewed focus on military spending.
A new independent agency will be established to prioritise the delivery of Defence projects on time and on budget.
To be known as the Defence Delivery Agency (DDA), it will roll the Capability Acquisition and Sustainment Group, the Naval Shipbuilding and Sustainment Group and the Guided Weapons and Explosive Ordnance Group — all currently within the department – into one entity.
The DDA will report directly to Defence portfolio ministers and control its own budget, enabling coordinated and holistic delivery of Defence capability and the growth of the sovereign defence industrial base.
Deputy Prime Minister and Defence Minister Richard Marles said the government was taking the “next significant step” towards ensuring Defence delivers the capabilities, skills and workforce it needs to meet Australia’s strategic circumstances.
“This is one of the biggest changes to Defence that we have seen. It will greatly change how Defence operates,” he said.
“It will greatly improve the quality of the Defence spend, and it will make sure that as we spend more money in the Defence budget, we are doing so in a way which sees programs delivered on time and on budget.
“As the Albanese Government makes the biggest ever peacetime investment in Defence, it is important that we put in place the structures and systems to ensure Australia’s Defence Force can deliver the capabilities we need at speed and within budget.”
Mr Marles said the establishment of the DDA will elevate the professionalism and strategic focus of Defence capability acquisition and sustainment.
It will drive stronger contestability, more accurate cost estimation, and clearer accountability for the delivery of major projects.
The government will also appoint a National Armaments Director to lead the new agency. That person will be responsible for providing advice to the Federal Government on acquisition strategies and the delivery of acquisition and sustainment projects following government approval.
At the same time, Defence will also centralise capability development functions to support clearer prioritisation, streamlined decision-making, and accountability for new capability proposals, ensuring capabilities support an integrated, focused ADF.
Work to implement the reforms, including the design and development of the DDA, will begin immediately and will include consultation with relevant stakeholders, including industry.
Mr Marles said the reforms build on a series of targeted improvements already delivered, to ensure the ADF has the capabilities it needs to safeguard Australia and its interests.
Since May 2022, the Federal Government has provided the largest increase in Defence spending in Australia’s peacetime history, with an additional $70 billion over the next decade.
This includes record spending on acquisition and sustainment, but Mr Marles said that with such high-level funding comes the need to ensure that Defence continues to demonstrate value for money.
Defence Industry Minister Pat Conroy said the planned reforms will support greater project and budget management, cost estimation and assurance right across the life of a project.
“The increasing complexity of Defence capabilities, systems and platforms requires a systematic rethink of the capability development and delivery system,” Mr Conroy said.
“This is about setting Defence up for success so we can modernise the ADF in line with the National Defence Strategy, while ensuring we spend taxpayers’ money wisely.
“The new agency will help ensure our industrial base is resilient, innovative and aligned with our strategic priorities.
“It will create more opportunities for Australian businesses and workers to contribute to Australia’s national security.”
When announcing the new agency, the government also confirmed Australia is tracking a Chinese navy flotilla in the Philippine Sea, amid concerns the ships could be heading towards Australian waters.
The flotilla has the capability to reach Australia before the end of the year, but Mr Marles said it was too early to tell whether it is actually headed this way.
He said officials will continue to track the progress of the Chinese vessels.
