Canberra — 1 December 2025: The Albanese government has announced the most significant shake‑up of Australia’s defence bureaucracy in half a century, creating a powerful new Defence Delivery Agency (DDA) to rein in multibillion‑dollar cost blowouts and years of delays across major military projects. [1]
The new body will merge three of Defence’s most important acquisition and sustainment arms and report directly to ministers, as Canberra prepares to spend an extra A$70 billion on defence over the next decade in an increasingly contested Indo‑Pacific. [2]
What the government has announced
Under the reforms unveiled in Canberra today, the government will: [3]
- Create a Defence Delivery Agency (DDA) dedicated to delivering major capability projects on time and on budget.
- Merge three existing groups — the Capability Acquisition and Sustainment Group (CASG), the Guided Weapons and Explosive Ordnance enterprise (GWEO), and the Naval Shipbuilding and Sustainment Group (NSSG) — into a single delivery organisation.
- Appoint a National Armaments Director to lead the agency, with direct accountability to the Minister for Defence and the Minister for Defence Industry.
- Centralise capability development inside Defence to streamline how new projects are prioritised and approved.
Initially, the merged entity will be known as the Defence Delivery Group inside the Department of Defence from 1 July 2026, before transitioning to a fully independent statutory Defence Delivery Agency on 1 July 2027. [4]
Defence Minister Richard Marles described the move as “one of the most significant reforms to defence that we have seen”, while Defence Industry Minister Pat Conroy labelled it “the biggest reform to the defence organisation in 50 years.” [5]
Why Canberra says Defence needs a shake‑up
The overhaul follows years of criticism that Defence struggles to manage complex, multi‑billion‑dollar procurements — from warships and missiles to cutting‑edge drones and cyber systems.
When Labor came to office, 28 major projects were running a combined 97 years behind schedule, a statistic Marles has repeatedly used to argue that the system was “not fit for purpose”. [6]
At the same time:
- Defence’s annual budget is just under A$60 billion but is forecast to climb to around A$100 billion by 2034, driven by AUKUS nuclear submarines, long‑range strike systems and a modernised surface fleet. [7]
- Since May 2022, the government has authorised the largest peacetime defence spending increase in Australia’s history, adding roughly A$70 billion over ten years to previously planned expenditure. [8]
Conroy argues that over the past decade the complexity of defence projects has more than doubled, while previous reforms dismantled Defence’s dedicated project‑management agency and leaned heavily on contractors — a combination he says was “a recipe for trouble”. [9]
The three groups being merged into the new agency together oversee almost 40 per cent of Defence spending, making their performance pivotal to whether the broader defence strategy can actually be delivered. [10]
How the new Defence Delivery Agency will work
The government’s intent is to create a single, highly professionalised “delivery engine” for Defence: [11]
- Direct reporting to ministers: The DDA will report straight to the Defence and Defence Industry ministers, rather than through multiple layers of the Defence hierarchy.
- Budget control: Once cabinet approves a project, the DDA will control its budget and act as the lead project manager, responsible for keeping it on schedule and within cost.
- National Armaments Director: A new, high‑profile role will front the agency, providing advice on acquisition strategies at key decision points and carrying personal accountability for delivering major projects.
- Stronger commercial skills: The agency is expected to combine existing public‑sector expertise with seasoned project managers and commercial specialists recruited from industry.
- Centralised capability development: Inside Defence, capability planning functions will be pulled together under the Vice Chief of the Defence Force to sharpen priorities before projects are handed to the DDA.
Marles says the purpose is to move project delivery “much closer to government”, with earlier warnings when a ship, missile system or IT program is heading off track. Conroy emphasises “greater discipline and accountability”, warning that unmanaged scope changes are often what “kill” projects. [12]
Importantly, the government stresses the reform is not about job cuts. Around 6,500 public servants and roughly 1,500 ADF personnel currently working across the three groups will transfer into the new structure, with the government claiming it has already added 500 skilled staff while cutting reliance on consultants. [13]
Reform unveiled amid Chinese naval activity and AUKUS pressures
Today’s announcement comes against a backdrop of rising strategic tensions.
Marles confirmed Defence is monitoring a Chinese People’s Liberation Army Navy task group currently operating in the Philippine Sea, which could theoretically approach Australian waters before the end of the year, though its destination is unknown. [14]
Earlier this year, another Chinese fleet conducted live‑fire drills in the Tasman Sea and then circumnavigated Australia, forcing commercial flights to reroute and prompting a formal diplomatic complaint from Canberra. [15]
These moves come as Australia embarks on the AUKUS program for nuclear‑powered submarines and advanced technologies, and faces renewed pressure from the Trump administration in Washington to lift defence spending towards 3–3.5 per cent of GDP, compared with a little over 2 per cent today (or closer to 2.8 per cent if military pensions are counted). [16]
Canberra’s response has been to promise “speed to capability” while insisting that every additional dollar must be justified against other domestic priorities — a tension that makes cost control and delivery performance politically sensitive as well as strategically vital. [17]
Industry cautiously welcomes a “first step towards an Australian Armaments Policy”
Defence industry, long frustrated by opaque processes and shifting requirements, has broadly welcomed the change — with caveats.
The Australian Industry & Defence Network (AIDN), which represents more than 700 small and medium suppliers, said it had “been of the view that Defence industry would be better served by Defence having a greater focus on project delivery” and backed the decision to bring the three major groups under one roof. [18]
AIDN chief executive Mike Johnson argued the reform should: [19]
- Improve oversight of programs and reduce central administrative costs over time.
- Provide clearer guidance and more predictable pipelines for local SMEs.
- Mark “the first step towards creating an Australian Armaments Policy” that links industrial planning to long‑term capability needs.
However, AIDN also renewed its call for defence spending to reach at least 3 per cent of GDP, saying that structural reform alone will not meet Australia’s geostrategic challenges without sustained investment. [20]
Industry insiders note that the success of the DDA will hinge heavily on who is chosen as National Armaments Director and whether the new agency genuinely has the authority to say “no” to politically attractive but unaffordable changes. [21]
Political reaction: “moving bureaucrats around” or meaningful change?
Not everyone is convinced the overhaul will fix Defence’s chronic delivery problems.
- The Greens have criticised the DDA’s independence, arguing that a body reporting directly to the Defence Minister can’t be truly arm’s‑length and warning that “the same group of people who have overseen defence’s procurement mess” will simply be re‑badged. [22]
- Greens senator David Shoebridge has suggested the reform risks being little more than a name change unless accompanied by tighter external oversight and greater transparency on major contracts. [23]
On the centre‑right, Shadow Defence Minister Angus Taylor has argued the merger does nothing to address what he calls a “chronically underfunded” ADF, describing it as “moving bureaucrats around” while reserving final judgment until the detail is scrutinised. [24]
The government counters that structural reform and increased spending must go hand in hand — pointing to its A$70 billion uplift and arguing that taxpayers expect stronger accountability as budgets grow. [25]
What it means for projects, jobs and the ADF
If the new model works as intended, several changes should be felt across Defence and industry over the coming years: [26]
- Faster decisions on big purchases
With capability development centralised and a single delivery agency handling projects after cabinet approval, the government hopes to cut down on looping approval processes and late‑stage redesigns that have plagued programs such as warships and armoured vehicles. - Earlier warning on problem projects
The DDA is expected to provide ministers with more candid, earlier advice when costs or schedules are slipping, increasing the chances of course‑corrections before a project becomes a full‑blown “debacle”. - Clearer accountability
A single National Armaments Director — backed by a dedicated agency — creates a focal point for praise or blame when big programs succeed or fail, replacing a diffuse web of shared responsibility across multiple groups. - Continuity for the workforce
On paper, no jobs are being cut; staff will move into the new agency largely unchanged, though there is likely to be re‑shaping of senior roles and more emphasis on commercial and program‑management skills over time. - More predictable pathways for local industry
A single delivery organisation with end‑to‑end visibility across the portfolio could, in theory, give Australian SMEs clearer information about future opportunities — but only if the DDA prioritises transparent engagement.
Critics warn that large bureaucratic mergers can initially slow things down and that Defence’s culture — risk‑averse, highly hierarchical and wary of external scrutiny — may prove harder to reform than org charts. [27]
Timeline: what happens next
While today’s announcement is significant, many of the practical changes lie ahead. Key milestones include: [28]
- From now to mid‑2026
- Detailed design work on the Defence Delivery Agency and associated legislation.
- Consultation with industry, Defence unions and key allies.
- Launch of recruitment process for the National Armaments Director, which Marles says will begin “very shortly”.
- 1 July 2026
- CASG, GWEO and NSSG merge inside Defence to form the Defence Delivery Group.
- Capability development functions centralised under the Vice Chief of the Defence Force.
- 1 July 2027
- The Defence Delivery Group becomes an independent Defence Delivery Agency, with its own budget and direct reporting line to ministers.
Over the same period, the government will continue implementing recommendations from the Defence Strategic Review, the Surface Fleet Review and earlier procurement inquiries — all of which stressed the need for faster, more integrated capability delivery as Australia faces a more dangerous strategic environment. [29]
The big question: will this overhaul finally fix Defence procurement?
For now, the DDA represents a high‑stakes bet that centralising power and responsibility in one agency — led by a politically accountable National Armaments Director — will succeed where layers of committees and reviews have failed.
Supporters see the reform as long overdue, aligning Australia with allies that use similar armaments agencies and signalling to Washington and London that Canberra is serious about turning AUKUS and other commitments into real capability, not just announcements. [30]
Sceptics counter that the same people, within largely the same system, will simply be rearranged behind a new nameplate, and that without deeper changes in transparency, ministerial risk appetite and parliamentary oversight, the DDA could become just another layer in an already complex machine. [31]
What is clear is that, as billions more are poured into submarines, missiles, drones and digital systems over the next decade, the political and public tolerance for failure is shrinking. The Defence Delivery Agency is being created to ensure that the next chapter of Australia’s military build‑up is defined by delivery — not delay. [32]
References
1. www.abc.net.au, 2. www.9news.com.au, 3. www.abc.net.au, 4. www.abc.net.au, 5. www.abc.net.au, 6. www.abc.net.au, 7. www.abc.net.au, 8. www.minister.defence.gov.au, 9. www.minister.defence.gov.au, 10. www.abc.net.au, 11. www.minister.defence.gov.au, 12. www.minister.defence.gov.au, 13. www.abc.net.au, 14. www.theguardian.com, 15. en.wikipedia.org, 16. www.9news.com.au, 17. www.minister.defence.gov.au, 18. aidn.org.au, 19. aidn.org.au, 20. aidn.org.au, 21. aidn.org.au, 22. www.abc.net.au, 23. www.abc.net.au, 24. www.abc.net.au, 25. www.minister.defence.gov.au, 26. www.minister.defence.gov.au, 27. www.crikey.com.au, 28. www.abc.net.au, 29. www.wa.gov.au, 30. www.minister.defence.gov.au, 31. www.abc.net.au, 32. www.minister.defence.gov.au
