Key Takeaways
- The Albanese government has announced a major overhaul of the defence department to tackle budget and timeline blowouts
- The changes include merging three agencies and establishing a new independent delivery agency to manage complex defence and military projects
- The new agency, known as the Defence Delivery Agency, will be operational from July 2026 and will be led by a new national armaments director
- The government has also confirmed that Australia is tracking a Chinese navy flotilla in the Philippine Sea, amid concerns it may be heading towards Australian waters
- The changes are aimed at streamlining defence procurement and reducing project budget and timeline blowouts
Introduction to Defence Department Overhaul
The Albanese government has announced a significant overhaul of the defence department, aimed at addressing the long-standing issues of budget and timeline blowouts. The changes, which are the biggest to the defence bureaucracy in Australia since the mid-1970s, include merging three agencies and establishing a new independent delivery agency to manage billions of dollars of complex defence and military projects. The new agency, known as the Defence Delivery Agency, will be operational from July 2026 and will be led by a new national armaments director. This move is expected to greatly improve the quality of the defence spend and ensure that programs are delivered on time and on budget.
Merging of Agencies and Establishment of New Delivery Agency
The three agencies that will be merged are the capability acquisition and sustainment group, the guided weapons and explosive ordinance group, and the naval shipbuilding and sustainment group. The new agency will be responsible for overseeing nearly 40% of the department’s current functions and will have control as project managers after a decision is made. The national security committee of cabinet will sign off on proposed defence acquisitions, based on advice from defence and the new agency. This change is expected to streamline defence procurement and reduce project budget and timeline blowouts. The government believes that defence needs more skills to run major projects, with about 30 currently under way and running a combined 97 years behind schedule.
Tracking of Chinese Navy Flotilla
In a rare move, the defence minister, Richard Marles, also confirmed that Australia is tracking a Chinese People’s Liberation Army (PLA) navy flotilla in the Philippine Sea, amid concerns it may be heading towards Australian waters. The navy group has the capability to reach Australia before the end of the year, but its destination is currently unknown. Marles said that Australia maintains constant maritime domain awareness in its geographic areas of interest and will routinely monitor the movements of PLA vessels when there are movements such as this. This is not the first time that a Chinese naval task group has been tracked by Australia, with a similar incident occurring earlier this year when a Chinese naval task group unexpectedly circumnavigated Australia’s coastline and raised concerns at the highest levels in Canberra.
Reaction to the Changes
The changes have been welcomed by some, but others have expressed concerns that the new structure will not address the underlying issues at defence. The Greens defence spokesperson, David Shoebridge, said that the new structure will not change the underlying issues at defence and that the same group of people who have overseen defence’s procurement mess will be the same people who will head this new agency. However, the government believes that the changes will greatly improve the quality of the defence spend and ensure that programs are delivered on time and on budget. The changes are also expected to have a significant impact on the defence industry, with the government flagging the sale of Brisbane’s Victoria Barracks and Spectacle Island on Sydney Harbour, part of planned reductions in the $34bn defence property portfolio.
Aukus Group and Defence Budget
Separately, a new Aukus group has been created within the Department of Prime Minister and Cabinet and will oversee the trilateral project. The group is led by deputy secretary Kendra Morony. Officials from the Trump administration have used a number of public events to pressure Australia to spend more on defence, increasing budget commitments from the current 2% to as much as 3.5%. The government has also flagged the sale of defence properties, with the proceeds to be reinvested within the department. This move is expected to generate significant revenue for the department and will help to reduce the budget blowouts that have plagued the defence department in recent years.
Conclusion
In conclusion, the Albanese government has announced a major overhaul of the defence department, aimed at tackling budget and timeline blowouts. The changes include merging three agencies and establishing a new independent delivery agency to manage complex defence and military projects. The government has also confirmed that Australia is tracking a Chinese navy flotilla in the Philippine Sea, amid concerns it may be heading towards Australian waters. While some have welcomed the changes, others have expressed concerns that the new structure will not address the underlying issues at defence. However, the government believes that the changes will greatly improve the quality of the defence spend and ensure that programs are delivered on time and on budget.
