Speaking at a conference, the minister said the $195 billion investment in defence over the next decade, part of the 2016 defence white paper plan, is a carefully considered investment that must put sustainment as a crucial priority.
"This investment [the 2016 defence white paper] is a considered and carefully calculated allocation of funds designed to provide the maximum return to the nation," Minister Pyne said.
"In the past we would buy defence equipment from overseas and take delivery a few years later. Maybe some training and sustainment work would be done here, but the high quality and high value work would always be done somewhere else.
"This can no longer be the approach we take."
Minister Pyne said by becoming a middle power in the political world order, Australia will be able to do more for defence industry across the globe.
"Australia needs to be able to better express itself as a middle power in the world," he said.
"We do this through regionally superior capability, and by being able to deploy that capability where needed.
"However, we can and should be able to do more. We should have the ability to stand on our own two feet. That means developing the ability to design, build, maintain and repair our own equipment. We need to grow our own defence industrial capability."
Making these changes, and becoming a moderate and internationally recognised power, will – in part – come down to a cultural change that Australia must undertake in how it thinks about defence, something Minister Pyne said the government is committed to undertaking.
"When we are successful we will be better allies, even more serious adversaries than we are now and have a better ability to project our power in the region," he said.
"This will require a cultural change in the way Australia thinks about defence and particularly defence procurement.
"The Turnbull government is driving that cultural change, from the National Security Committee, on which I sit, to the media that reports the decisions and the effect they have."