Fortress Australia: Government drops $425bn defence shield to counter ‘dangerous’ new world

The numbers are staggering. The government is committing a massive $425 billion over the next decade to overhaul the Australian Defence Force.

To get there, they are injecting an extra $14 billion over the next four years and $53 billion over the decade. This funding surge will see Australia’s Defence spending climb to 3 per cent of gross domestic product by 2033, putting us right up there with the NATO heavyweights.

The Minister said: “The central thesis of the 2023 Defence Strategic Review, the 2024 National Defence Strategy and now the 2026 National Defence Strategy – NDS 26 – is to establish a defence force which is completely focused on the challenges of the Indo-Pacific. And the Albanese government remains utterly committed to this.”

Australia’s plan, outlined in the 2026 National Defence Strategy and Integrated Investment Program, is focused on delivering a strategy of denial, making it clear to any potential adversary that the cost of conflict in our region is far too high to pay.

The 2026 plan leans heavily into five key pillars:

• True self-reliance: cutting the apron strings and ensuring Australia can stand on its own two feet.
• Lessons from the front line: using real-world data from Ukraine and the Middle East to pick the best gear for modern war.
• Sovereign muscle: beefing up our own local factories and industry so we aren’t reliant on global shipping for critical parts.
• Civil preparedness: making sure the whole nation, not just the military, is ready to weather global disruptions.
• Regional teamwork: doubling down on our mates in the Pacific and beyond to keep the “global rules” intact.

Detailing this further, Minister Marles added: “The Integrated Investment Program – the IIP – which sits alongside NDS 26, contains an increase in Defence spending of $14 billion over the forward estimates and $53 billion over the next decade. This will be contained in next month’s federal budget.

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“And in turn, this means that since coming to office, the Albanese government has increased Defence spending by a total of $30 billion over the next forward estimates and $117 billion over the next decade,” he added.

All of this is, however, measured against the backdrop of the rapidly evolving and deteriorating nature of the contemporary geopolitical environment, something the Deputy Prime Minister was at great pains to stress, saying, “NDS 26 builds on the foundations laid in NDS 24. It is not a departure in direction, but a strengthening of resolve with an increased focus on self-reliance.” NDS 24 made clear that Australia’s strategic environment was deteriorating and that the assumptions which had underpinned Australia’s security for decades – geographic distance, warning time for conflict and Australia’s regional military superiority – were no longer valid.

Minister Marles added: “That judgement was informed by increasingly adverse trends: intensifying major‑power competition, rapid military modernisation in our region occurring without transparency or strategic reassurance, a weakening prohibition on territorial conquest, and the growing capacity of states to project military power at longer range. NDS 26 makes clear that over the past two years, these trends have both intensified and broadened.”

In turn, these factors have resulted in an evolution from the 2024 National Defence Strategy and Integrated Investment Program, resulting in significant investments as part of the $425 billion package announced by the government, with the Integrated Investment Program emerging as a high-tech shopping list designed to turn the ADF into an “integrated, focused force”.

This is to be delivered across all five of the warfighting domains, including the following:

• A sovereign fleet of conventionally armed, nuclear-powered submarines to dominate the undersea domain.
• Accelerating the delivery of more powerful, “lethal” surface ships.
• Expanding long-range strike capabilities so the ADF can hit targets from much further away.
• Fast-tracking integrated air and missile defence systems.
• A massive rollout of autonomous and uncrewed systems across land, air and sea, plus new tech to knock enemy drones out of the sky.
• A secure, multi-orbit satellite communication system to keep our troops connected, no matter what happens on the ground.

Minister Marles detailed this, saying, “Two years ago, NDS 24 adopted a fundamentally new approach to the defence of Australia and our interests, transforming the Australian Defence Force into an integrated, focused and more lethal force oriented toward denying any adversary the ability to coerce Australia through force. This is Australia’s most consequential risk.

"Accordingly, we have been creating an ADF that is able to operate at greater range, that can engage in impactful projection: a more amphibious army; more capable northern bases that can project our air force further; longer range missiles; a much more capable surface fleet; and the acquisition of long range nuclear-powered submarines.”

We have overseen a swift uplift in long‑range strike capability and we are rapidly expanding our stockpiles. We have commenced making missiles in this country for the first time since the early 1970s at Lockheed Martin’s factory in Port Wakefield, South Australia. The government has undertaken the most ambitious modernisation of Australia’s maritime capability since the Second World War with the selection of Japan’s upgraded Mogami Class frigate as our next general purpose frigate, the building of our new Hunter Class frigates, and the acquisition of the Navy’s fleet of autonomous underwater vessels – the Ghost Sharks.

Minister Marles added: “Contracts have been signed for the Landing Craft Medium and Heavy, which will greatly increase Army’s amphibious capability. The Air Force has moved from prototype to production of the Australian-made Ghost Bat: the leading collaborative combat aircraft in the world.”

The government is clear, this is not just about hardware; it’s about the economy. This record-breaking spend is expected to support tens of thousands of highly skilled, well-paid Aussie jobs. From the shipyards of South Australia to the tech hubs in Queensland, the government is betting big on the “sovereign defence industrial base” to keep the nation’s engine room humming.

At the end of the day, a submarine is just a hunk of steel without a crew. The government highlighted that people remain our “most important capability”. The 2026 strategy puts a massive focus on recruitment, training, and, crucially, retention, making sure the men and women in uniform are supported as they take on the nation’s most consequential task.

The Minister added: “The current strategic environment is challenging old assumptions. Both the cost and requirement of defence will grow, and as a nation, we will need to invest greater resources in our defence than we historically have. Middle powers that don’t take on more responsibility for their own security will be more exposed to coercion and face greater limits on their sovereignty.

“A greater focus on Australian self‑reliance should not be confused with military self‑sufficiency. This is not about jettisoning alliance relationships. To the contrary, alliances, especially with the United States, will always be fundamental to Australia’s defence. Australia is officially gearing up. The message to the world is clear: we are secure, sovereign and ready...

“Self‑reliance means balancing critical tasks we must undertake ourselves, with those that can be assured through trusted partnerships. And we will do this with our allies, not in the absence of them. Central to self‑reliance is a renewed emphasis on strengthening Australia’s defence industrial base. Last financial year, almost 80 per cent of the Defence budget was spent in Australia.

"Since our coming to office, direct employment in the defence sector has grown by 14.5 per cent. This includes accelerated development and acquisition of uncrewed undersea and surface vessels and uncrewed aircraft, and the acquisition of cutting-edge drone and counter drone technologies. Self-reliance also recognises that defence preparedness cannot be separated from national resilience.

"The lessons of the war in Ukraine and conflicts in the Middle East are stark. Preparedness is not just about platforms and weapons systems,” Minister Marles added.

More to come.

Stephen Kuper

Steve has an extensive career across government, defence industry and advocacy, having previously worked for cabinet ministers at both Federal and State levels.