Shifting sands: National Defence Strategy, Integrated Investment Program to reprioritise funding towards quick capability

Defence Connect can reveal the findings of the 2024 National Defence Strategy, one of the principle outcomes of the Albanese government’s 2023 Defence Strategic Review.

The government states that the 2024 National Defence Strategy (NDS), alongside a new look and “rebuilt” Integrated Investment Program (IIP), outlines the government’s strategic framework to guide the significant and urgent changes required to address Australia’s challenging strategic circumstances and deliver an ambitious transformation of the Australian Defence Force (ADF) to an integrated, focused force capable of safeguarding Australia’s security for decades to come.

Deputy Prime Minister and Defence Minister Marles said, “The inaugural National Defence Strategy sets out a clear and priority-driven approach to protecting against threats to Australia and our interests. The National Defence Strategy outlines how we are transforming the ADF and equipping it to survive in a much less-certain world.

The central doctrine of the National Defence Strategy is founded on the concept of “National Defence”, a shift in the nation’s approach to defence, in a doctrine that “harnesses all arms of Australia’s national power to achieve an integrated approach to our security”.

At the cornerstone of Australia’s future defence planning is a “Strategy of Denial” across all domains, land, maritime, air, space and cyber.

The adoption of National Defence also means the ADF will shift to an integrated, focused force designed to address Australia’s most significant strategic risks. This will ensure the ADF has the capacity to:

• Defend Australia and our immediate region.
• Deter through denial any potential adversary’s attempt to project power against Australia through our northern approaches.
• Protect Australia’s economic connection to the region and the world.
• Contribute with our partners to the collective security of the Indo-Pacific.
• Contribute with our partners to the maintenance of the global rules-based order.

In order to deliver these capabilities, the government announced an expansion of the nation’s Defence spending, with the Albanese government investing an additional $5.7 billion over the next four years and $50.3 billion over the next decade in Defence funding, above the previous trajectory over that period.

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This increase in annual funding will see the Defence budget grow to more than $100 billion by 2033–34 – an historic investment, critical to giving effect to the National Defence Strategy.

The Deputy Prime Minister said, “These transformational reforms are designed to ensure that peace, security, and prosperity are maintained in our region. The Albanese government is making an historic investment in Defence and has taken tough decisions to reshape the ADF to meet our strategic circumstances and to keep Australians safe.”

As part of this funding, the 2024 National Defence Strategy is supported by a new Integrated Investment Program, forecasting the nation’s defence spending and capability acquisition objectives over the next decade in order to deliver the “Focused Force”.

The Albanese government has allocated $330 billion for the Integrated Investment Program over the decade to 2033–34. This is a significant lift compared to the $270 billion allocated for the 10-year period to 2029–30 as part of the 2020 Defence Strategic Update and 2020 Force Structure Plan.

As a result of this funding increase, the Australian Defence Force will undergo a fundamental restructuring, with each of the respective branches set to receive increased funding to deliver the planned capabilities.

This will see the decade-long funding program expending $76 billion for undersea warfare, including nuclear submarines and underwater drones, supported by up to $69 billion for new surface ships.

In addition to this, Australia’s guided weapons and explosive ordnance enterprise will see $21 billion worth of investment for guided weapons, alongside an investment of $18 billion for integrated air and missile defence.

Finally, the plan includes up to $44 billion to transform the Army into an amphibious force modelled on the United States Marine Corps, with the Royal Australian Air Force set to receive $33 billion over the next decade.

These investments include an additional $11.1 billion over the next decade to deliver the government’s response to the independent analysis of Navy’s surface combatant fleet and an additional $1 billion over the next four years to support targeting, long-range fires, theatre logistics, fuel resilience, and robotic and autonomous systems.

As a result of this increased commitment, Defence funding, as a proportion of gross domestic product, is projected to rise to around 2.4 per cent by 2033–34 – up to 0.3 per cent higher than the spending trajectory set by the former government.

The Deputy Prime Minister added, “To deliver impactful projection, we are making an historic investment in Defence funding – including $330 billion for the Integrated Investment Program over the decade, a significant lift from previous planning."

Defence Industry Minister Pat Conroy added, “This is a record investment in defence capability and an investment in a future made in Australia, which will not only make the country safer, but also deliver dividends for industry and jobs for hard-working Australians.

“This fully funded plan ensures a continuous pipeline of investment that underscores the Albanese government’s unwavering commitment to developing Australia’s sovereign defence industry,” Minister Conroy added.

The Integrated Investment Program will be revised biennially, in line with the National Defence Strategy cycle, to ensure the government’s investment plans remain aligned with the nation’s strategic settings.

More to come – a detailed breakdown and analysis will be coming in our Insights bulletin shortly.