"The case for a strong Australian sovereign defence industrial base has never been clearer," Australian Minister for Defence Industry Pat Conroy said as Canberra released a new, wide-ranging plan to reshape how Canberra funds, sells and manages defence capability.
Defence Industry Development Strategy: purpose and place in a broader planning cycle
The Defence Industry Development Strategy (DIDS) was released today in Melbourne as the third top-level defence document published by Australia this year, following the National Defence Strategy (NDS) and the Integrated Investment Plan (IIP) issued in April. The DIDS positions industry growth and sovereign capability as central to national security and aims to deepen the government's partnership with Australian industry so Australia can "manufacture, sustain and scale the capabilities the Australian Defence Force needs, when and where they are required," Conroy said.
Targeted funding: the Defence Industry Development Grants Program expanded by $80 million AUD
The DIDS includes a targeted investment package built around the Defence Industry Development Grants Program. The government announced an additional $80 million Australian dollars ($55.4 million USD) to be committed to Australian small- and medium-sized businesses developing defence-related capabilities through 2030. That top-up raises total program investment to $250 million Australian dollars ($173.5 million USD). Defence authorities framed the funding as intended to help "enable Australian businesses to innovate, expand production, and create jobs" and to allow industry to better "scale its capabilities and respond more effectively to Defence requirements."
Reforms to a $3 billion fund and export priorities: relaunch, flexibility, and the Anduril Ghost Shark
The strategy also reforms and relaunches a $3 billion Australian-dollar fund ($2.06 billion USD) first established in 2018. Defence officials described the fund as having been "underutilised" and said the relaunch will seek to provide "more flexible and timely support" for industry to secure overseas contracts.
On exports, the DIDS explicitly adds a named platform to Australia’s priority export list: the Australian-built Anduril Ghost Shark, described in the document as an extra-large autonomous underwater vehicle. The Ghost Shark will be a "priority export capability for the Australian Defence Strategic Sales Office," signalling a government push to turn domestically built systems into overseas sales opportunities.
Workforce and procurement reform: apprenticeships, mandate for primes, and a new delivery organisation
The strategy mandates that defence prime contractors commit to growing their defence industry workforce within Australia, with a particular focus on apprenticeships. Those workforce requirements are a central plank of the DIDS’s effort to translate industrial policy into on-the-ground labour capacity.
To address long-running acquisition problems, the government announced the establishment of Australia’s Defence Delivery Group. The new body will "provide independent, evidence‑based advice to Government" on the delivery of defence projects. The DIDS sets out a timetable under which, in one year, the group will transition into the Defence Delivery Agency. That agency will consolidate three existing organisations: the Capability Acquisition and Sustainment Group; the Guided Weapons and Explosive Ordnance Group; and the Naval Shipbuilding and Sustainment Group. The consolidation is explicitly aimed at reforming a system the government characterises as suffering from "longstanding systemic challenges that have resulted in major Defence projects being delivered late, over budget, and below expectations."
What this means for Australian small- and medium-sized businesses, defence primes, and the Australian Defence Force
- Australian small- and medium-sized businesses: They will receive expanded grant support through 2030 under the Defence Industry Development Grants Program — an $80 million AUD addition that brings program funding to $250 million AUD — with the stated intent to help firms innovate, expand production, and create jobs.
- Defence prime contractors: The DIDS requires primes to commit to growing the domestic defence workforce, with a policy emphasis on apprenticeships. Primes will also be operating under a refreshed acquisition environment as the Defence Delivery Group transitions into a consolidated Defence Delivery Agency.
- The Australian Defence Force: The strategy is framed around ensuring the ADF can "manufacture, sustain and scale" capabilities when needed, and intends acquisition reform to reduce the delivery shortfalls the government has identified.
Defence Minister Richard Marles described the package as 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." He added that the reforms are intended to rebuild "a defence capability system that is disciplined, accountable and focused on outcomes."
The DIDS ties financial incentives — grant funding and a retooled $3 billion AUD fund — to structural changes in procurement and workforce policy, and it names at least one concrete export target in the Anduril Ghost Shark. The next fixed milestone in the plan is organisational: the Defence Delivery Group is slated to become the Defence Delivery Agency in one year, consolidating three acquisition and sustainment organisations as Canberra pursues faster, more disciplined project delivery.
