What it means for the defence industry in Australia 6 min read
On 17 April 2024, Deputy Prime Minister, the Hon Richard Marles MP announced the Australian Government's 2024 National Defence Strategy (NDS) and 2024 Integrated Investment Program (IIP).
In this Insight, we cover the key takeaways from the NDS and the IIP, and what it means for the defence industry in Australia.
Key takeaways
- Australia's defence spending will increase by another $50 billion over the next decade—expected to reach $330 billion through to 2033-34 and rise to 2.4% of Australia's gross domestic product by 2033-34.
- The Australian Defence Force (ADF) will move to an integrated, focused force across the five domains of maritime, land, air, space and cyber to give effect to the NDS and IIP.
- A 'strategy of denial' working with the US, UK and other key partners to focus on deterrence is set to be Australia's primary strategic defence objective in the coming years.
- Australian and international industry will have significant opportunities to participate in Australia's defence strategy, including through private capital.
Australia's Defence Strategy
Challenging strategic environment
Following recent government announcements in respect of Australia's SSN-AUKUS submarines and Australia's surface combatant fleet, the newly released NDS and IIP sets out Australia's overall approach to the defence of Australia and its interests.
The NDS and IIP are a response to the 2023 Defence Strategic Review undertaken by the Government, which acknowledged that Australia faces its most challenging strategic environment since the Second World War. The NDS identifies that strategic competition in the region remains a primary feature of Australia's security environment. In addition, the NDS foreshadows that a significant conventional and non-conventional military build-up in the Indo-Pacific, together with other recent conflicts in other regions, threatens to affect security, stability and prosperity.
National Defence
As a consequence of the challenging strategic environment, the NDS proposes a new approach to Australia's defence based on 'National Defence'. National Defence is a coordinated, whole-of-government and whole-of-nation approach that seeks to harness all aspects of Australia's national power to advance its national interests. It is proposed that this approach complements other initiatives aimed at:
- achieving integrated statecraft;
- achieving national, industry and supply-chain resilience;
- developing innovation, science, technology, workforce and skills base; and
- bolstering the National Intelligence Community.
Together, the NDS and the IIP are designed to ensure the ADF has capacity to:
- defend Australia and the immediate region;
- deter through denial any potential adversary’s attempt to project power against Australia through Australia's northern approaches;
- protect Australia’s economic connection to the region and the world;
- contribute—with Australia's partners—to the collective security of the Indo-Pacific; and
- contribute—with Australia's partners—to the maintenance of the global rules-based order.
An integrated, focused force
The NDS proposes to transform the ADF from a balanced force to an integrated, focused entity encapsulating all domains—maritime, land, air, space and cyber. It is designed to counter Australia’s most significant strategic risks. The aim, as outlined by Defence, is to deliver:
- a larger and more effective Navy with more surface ships and conventionally armed, nuclear-powered submarines;
- an Army optimised for littoral operations in Australia's northern land and maritime spaces with landing craft, long-range strike capabilities and a credible, combined‑arms land system;
- an Air Force that can provide air support for integrated operations by conducting surveillance, air defence, strike and air transport;
- strengthened cyber capabilities to protect networks and systems, and provide enhanced cyber and electronic warfare effects; and
- enhanced space capabilities to provide space-based situational awareness and communication capabilities.
Strategy of Denial
At the core of this strategy lies the 'Strategy of Denial', which aims to deter any conflict before it begins, prevent any potential adversary from succeeding in coercing Australia through force, support regional security and prosperity, and uphold a favourable regional strategic balance.
This strategy necessarily involves strengthening the individual and collective capabilities for the AUKUS trilateral partners and other key partners to ensure no other country attempts to achieve its regional objectives through military action. It seeks to deter attempts to coerce Australia through force by signalling a credible ability to hold potential adversary forces at risk.
Previously, Australia adopted equally weighted prevailing strategic defence objectives that covered shaping Australia's strategic environment, deterring actions against Australia's interests and responding with credible military force, when required. Now, deterrence will be the primary focus.
Immediate priorities
The NDS and IIP purport to reset Australia's defence capability to deliver this fundamental change in approach. Six immediate priorities are emphasised by the NDS and the IIP:
- Advancing conventionally armed, nuclear-powered submarine capability.
- Enhancing long-range strike capabilities and our Guided Weapons and Explosive Ordnance enterprise.
- Strengthening northern bases.
- Improving the growth and retention of a highly skilled workforce.
- Boosting innovation, including through the Advanced Strategic Capabilities Accelerator.
- Prioritising partnerships in the Indo-Pacific.
These priorities seek to accelerate new, immediate and longer-term priority projects and capabilities as supported by ongoing funding commitments.
Funding
Government commitments
The Government has committed substantial funding to these initiatives. An additional $50.3 billion has been allocated over the decade until 2033-34 to execute this strategy, totalling $330 billion through to 2033-34 on capability investment. The funding includes:
This is intended to cover:
- conventionally armed, nuclear‑powered submarines
- subsea warfare and uncrewed maritime systems
- Ghost Shark autonomous vehicles
- underwater range systems.
This is intended to cover:
- Hunter class frigates
- general purpose frigates
- Hobart class air warfare destroyers
- large optionally crewed surface vessels.
This is intended to cover:
- sea-based strike
- land-based strike
- air-launched strike
- hypersonic weapons
- targeting enterprise.
This is intended to cover:
- enhanced cyber capabilities
- satellite communications
- space sensors
- space control
- electronic warfare.
This is intended to cover:
- landing craft
- infantry fighting vehicles
- combat reconnaissance vehicles
- Apache helicopters
- Black Hawk helicopters
- M1A2 Abrams main battle tank.
This is intended to cover:
- C-130J Hercules
- F-35A Joint Strike Fighter
- EA-18G Growler
- uncrewed air systems
- air intelligence, surveillance and reconnaissance
- air-to-air weapons systems.
This is intended to cover:
- airborne early warning and control replacement aircraft
- joint air battle management system
- active missile defence
- Jindalee Operational Radar Network
- E7-A Wedgetail.
This is intended to cover:
- theatre logistics upgrade
- improved fuel resilience
- deployable logistics
- improved health capabilities.
This is intended to cover:
- land command systems
- maritime command systems
- air command systems
- air traffic management and control capability
- warfighting networks and strategic communications
- decision advantage and intelligence systems.
This is intended to cover:
- development of a sovereign ability to produce, maintain, repair and overhaul selected weapons
- domestic manufacturing of Guided Multiple Launch Rocket System munitions from 2025.
This is intended to cover:
- northern base infrastructure
- northern logistics network
- northern training area enhancements.
Private sector financing
The funding task is significant. Accordingly, the Government is also exploring models to introduce innovative financing and investment as key enablers to support the global supply chains required to deliver the broader AUKUS program (including Australia's nuclear-powered submarines and Australia's advanced capability development). A key part of this will be exploring how, and to what extent, the private sector can contribute capital and financing to defence industries across Australia, the UK and the US, including through enabling supply chains, technology and workforce capability.
Conclusion
Australia's 2024 NDS and IIP represent a plan for ensuring national security while preparing for future challenges through substantial investment in defence capabilities. They seek to outline an integrated approach to address Australia's most significant strategic risks. By focusing on integration across various domains and fostering partnerships within the Indo-Pacific region and with AUKUS and other partners, these strategic initiatives aim to maintain peace while bolstering Australia's readiness against potential threats. Its successful implementation will require careful investment and robust partnerships between industry and government participants.