Key Takeaways
- The Australian federal government has announced a major overhaul of the Department of Defence to address cost blowouts and project delays.
- A new independent agency, the Defence Delivery Agency (DDA), will be established to prioritize delivering projects on time and within budget.
- The DDA will combine three existing groups within Defence, responsible for nearly 40% of defence spending, into one entity.
- The reforms aim to improve the quality of defence spending and ensure that projects are delivered efficiently, with a focus on "more bang for buck".
- The government has emphasized that the reforms are not about job cuts, but rather about improving accountability and leadership within the Defence department.
Introduction to Defence Overhaul
The Australian federal government has unveiled a comprehensive overhaul of the Department of Defence, aimed at addressing the long-standing issues of cost blowouts and major project delays. The reforms, announced by Defence Minister Richard Marles, are the most significant changes to the Australian Defence Force organisation in 50 years. The government has recognized the need for a more efficient and effective approach to defence spending, particularly as the budget is set to increase from $60 billion to $100 billion annually by 2034.
Establishment of the Defence Delivery Agency
At the heart of the reforms is the establishment of a dedicated independent agency, the Defence Delivery Agency (DDA). The DDA will be responsible for prioritizing the delivery of projects on time and within budget, with a focus on improving the quality of defence spending. The agency will combine three existing groups within Defence – the Capability Acquisition and Sustainment Group, the Naval Shipbuilding and Sustainment Group, and the Guided Weapons and Explosive Ordnance Group – into one entity. These groups are currently responsible for nearly 40% of defence spending, making the DDA a critical component of the government’s efforts to improve defence efficiency.
Reform Rationale and Timeline
The need for reform has been clear for some time, with Defence Minister Richard Marles criticizing the department’s performance in June and declaring that "everything was on the table" when it came to reform. The government has repeatedly emphasized the importance of improving accountability and leadership within the Defence department, particularly in relation to the delivery of sophisticated military capabilities and platforms. The DDA is set to begin as the Defence Delivery Group on July 1, 2026, before transitioning to the independent Defence Delivery Agency on the same date a year later. The agency will report to the Minister for Defence and the Minister for Defence Industry, and will be headed by a new position – the National Armaments Director.
Implications and Future Directions
The reforms are not expected to result in job cuts, with the same number of people (around 6,500) being moved to the DDA. However, the government has made it clear that it expects more accountability from top Defence officials when it comes to delivering projects efficiently. The establishment of the DDA is a significant step towards addressing the long-standing issues within the Defence department, and is expected to have a major impact on the government’s ability to deliver defence projects on time and within budget. As the Australian government continues to ramp up defence spending in response to growing regional tensions, the success of the DDA will be critical to ensuring that the defence establishment is fit for purpose.
Context and Challenges
The reforms come at a time of significant change and challenge for the Australian Defence Force. The rise of China and the increasing importance of the AUKUS alliance have highlighted the need for Australia to invest in its defence capabilities. However, this investment must be accompanied by a more efficient and effective approach to defence spending. The government has recognized that the current system is not working, with 28 different projects running a combined 97 years over time when Labor first came to office. The establishment of the DDA is a major step towards addressing these challenges, and towards ensuring that the Australian Defence Force is equipped to meet the demands of a rapidly changing regional security environment.
