The Albanese Government is delivering on its commitment to fundamentally reset the development, acquisition and sustainment of Defence capability projects to ensure the Australian Defence Force (ADF) is equipped to keep our nation safe.
Since 2022, the Albanese Government has undertaken the biggest peacetime increase in
Defence spending in Australia’s history, bringing the total additional investment from the 2024 National Defence Strategy and 2026 National Defence Strategy to $117 billion over the decade to 2035-36.With this investment comes a clear responsibility to ensure Defence has the structures, focus and resources to deliver the right capability projects on time, within scope, and on budget.
The Rebuilding Defence Capability report sets out structured and practical reforms which will ensure that every dollar of investment is focused on value for money and greater speed to capability.
Defence personnel are central to implementing the 2026 National Defence Strategy and securing our nation, and these reforms seek to enable them working to deliver capability for the ADF.
These reforms have three central components:
- The establishment of the Defence Delivery Agency, a dedicated delivery organisation, headed by a new National Armaments Director, consolidating Capability Acquisition and Sustainment Group, Guided Weapons and Explosive Ordnance Group, and Naval Shipbuilding and Sustainment Group.
- The consolidation of capability development functions across all domains – land, air, maritime, space and cyber – under the Vice Chief of the Defence Force, to ensure we continue to deliver an integrated, focused force.
- A re-designed capability system which clarifies accountabilities and re-establishes decision discipline. This system will be underpinned by stronger contestability and improved cost estimation and assurance across the Defence Delivery Agency, Department of Defence and the Department of Finance.
On 1 July 2026, the Defence Delivery Group was established. It will provide independent, evidence‑based advice to Government on delivery, strengthening Government’s ability to make informed decisions and achieve best value for money and speed to capability. This has been missing in the past.
The report sets out a clear implementation pathway for the next 12 months to transition the Defence Delivery Group to the Defence Delivery Agency, which will be established on 1 July 2027, to ensure it has the resources, accountabilities and autonomy needed to operate as an independent agency.
To support this transition, the Albanese Government has appointed Ms Nadine Williams as the interim National Armaments Director.
These reforms are being undertaken in a deliberate, staged and structured approach to ensure that there is continuity in project delivery, and the uplift in the capability system can be realised quickly.
This will reset the relationship between Defence and industry. Led by the National Armaments Director, engagement with industry will be more collaborative, transparent, and performance-based, providing clearer demand signals and stronger commercial discipline. For industry, this means clearer visibility of Defence’s likely demand, priorities and direction of travel.
The Albanese Government recognises the longstanding systemic challenges that have resulted in major Defence projects being delivered late, over budget, and below expectations. This created a widening gap between strategic need and realised capability.
Alongside the 2026 Defence Industry Development Strategy, these reforms will help deliver a more integrated and resilient Defence enterprise that enables Australia to accelerate capability delivery and respond more effectively to emerging threats in support of Australia’s national interest.
Quotes attributable to Deputy Prime Minister, Richard Marles:
“These reforms are about building a more agile, disciplined and strategically focused Defence organisation, one that is capable of responding to the strategic challenges we face and safeguarding Australia’s security into the future.”
“We are rebuilding a defence capability system that is disciplined, accountable and focused on outcomes. This is what Australia’s security environment demands, and what the Australian people expect.”
“These reforms will deliver what the Australian Defence Force needs faster—and make sure every dollar we invest delivers real capability, and keeps Australians safe. There is no more important job for our Government than this.”
Quotes attributable to Minister for Defence Industry, Pat Conroy:
“The Rebuilding Defence Capability report and the 2026 Defence Industry Development Strategy will deepen and strengthen our partnership with Australian industry.”
“Together these two documents lay out a new era for Defence – a sharper and more integrated enterprise, with defence industry as close partners in the mission to protect Australians and our way of life.”
“For too long, Defence has struggled to deliver major capability projects on time and on budget. These reforms are about fixing that. They’re the biggest in fifty years.”
“We are putting in place clear accountabilities and improving leadership performance so Australians can have confidence that Defence will deliver what the National Defence Strategy demands.”
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