Defence project blowouts blast taxpayers with $29b bill
A review of a small sample of Defense projects, part of the department’s biggest reform in decades, has revealed massive blowouts costing taxpayers $29 billion.
The federal government has promised to overhaul Defense to reduce significant project delays and waste of public funds as record amounts are allocated to military spending.
A delivery group combining three Defense areas, including a guided weapons and explosive ordnance group, becomes operational on Wednesday.
Nearly a dozen projects were reviewed within the group and it was found that costs had increased by 38 percent to $29 billion before any contracts were signed.
The Defense Investment Committee, established as an oversight body, was deemed no longer fit for purpose.
The committee met 13 times in 2025 for approximately 60 hours, with 14 extra out-of-session meetings.
26 senior managers and senior defense force officers attended these meetings, resulting in wasted time in preparing briefings rather than delivering projects.
Defense Industry Minister Pat Conroy will make a series of announcements, including the sacking of a key committee, when he speaks to the National Press Club in Canberra on Thursday.
“This represents an opportunity cost… if the costs had been handled better in the first place, it could have been better invested,” he will say.
“The taskforce found that Defence’s costing capability had atrophied over time, becoming fragmented, under-resourced and over-reliant on contractors and consultants.
“We are talking about multibillion-dollar capability projects that are integral to the defense of our nation and peace and stability in our region.”
Mr. Conroy will also announce the replacement of the $4.36 billion Defense Export Facility, which has been used only three times since its establishment in 2018.
He will position Labor as a defense party, arguing that reforms are necessary and that his government can be trusted with national security.
Mr Conroy will unveil the Defense Industry Development Strategy, a plan to develop the country’s industrial base, on Thursday.
“We’re going back to producing our own products where it makes sense, and leveraging our allies and trusted partners where we can’t,” he will say.
“A strong sovereign defense industrial base reduces risk… reduces dependencies… and means we can get something done here.”
From July 2027, the Defense Delivery Agency will become operational with project delivery authority.
The recruitment of the agency’s national armaments director, who will advise the government, is ongoing.
After years of incompetent tenders, a candidate with private sector experience is sought.
The Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national news channel and has been providing accurate, reliable and fast-paced news content to the media industry, government and corporate sector for 85 years. We inform Australia.
