In a significant move to address long-standing inefficiencies, the Australian government has unveiled the most substantial restructuring of its defence bureaucracy since the 1970s. The announcement comes alongside confirmation that Australian defence forces are actively monitoring a Chinese naval flotilla in the Philippine Sea, raising regional security concerns.
Streamlining Defence Procurement
Defence Minister Richard Marles and Defence Industry Minister Pat Conroy detailed the sweeping changes at Parliament House on Monday. The core of the reform involves merging three key agencies: the Capability Acquisition and Sustainment Group, the Guided Weapons and Explosive Ordinance Group, and the Naval Shipbuilding and Sustainment Group.
This consolidation will lead to the creation of a new, independent body called the Defence Delivery Agency, which will manage billions of dollars in complex defence projects. This new agency will oversee nearly 40% of the defence department's current functions, aiming to tackle persistent issues with projects running over budget and behind schedule.
A New Era for Major Projects
The Defence Delivery Agency is scheduled to become operational from 1 July 2026, under the leadership of a newly created National Armaments Director. By July 2027, it will transition into a fully standalone agency, independent of the main defence department structure.
Minister Marles emphasised the scale of the change, stating it will "greatly improve the quality of the defence spend." He added that the overhaul is designed to ensure that as defence spending increases, programmes are delivered on time and on budget. The government's strategic review found the current procurement systems were not fit for purpose, citing fragmented accountabilities and overly bureaucratic processes.
Under the new model, the National Security Committee of Cabinet will approve proposed acquisitions based on advice from both defence and the new agency. Once a decision is made, the Defence Delivery Agency will take control as project manager.
Regional Tensions and AUKUS Developments
In a related development, Minister Marles confirmed that Australia is tracking a Chinese navy flotilla in the Philippines Sea. While it is too early to determine if the vessels are headed towards Australian waters, officials are monitoring their progress closely.
This situation follows an incident in February, when a Chinese cruiser, frigate, and supply ship conducted unannounced live-fire drills in the Tasman Sea, an event that forced commercial aircraft to alter their routes due to serious safety concerns.
Separately, the government has established a new AUKUS group within the Department of the Prime Minister and Cabinet to oversee the trilateral security pact. This group will be led by Deputy Secretary Kendra Morony.
The government has assured that no major job cuts are expected from the defence restructure. A temporary taskforce will be set up imminently to direct the transition, focusing on injecting more skills into managing the approximately 30 major projects currently running a combined 97 years behind schedule.
