Australia’s updated defence capability spending plan has put strong emphasis on uncrewed air and underwater systems, strike weapons, and defence against advanced air and missile attack.
The government released its spending plan, known as the Integrated Investment Program (IIP), to accompany the release of the 2026 National Defence Strategy (NDS) on 16 April, which notes that we are in increasingly perilous times. ‘Australia will face elevated levels of geopolitical risk over the coming decade and our exposure to force projection and military coercion will reach levels not seen since the Second World War,’ the strategy document says.
A core objective of both documents is achieving defence self-reliance through building capacity and reducing vulnerability to coercion. That will demand that Australia do more, and spend more, to acquire greater military capability for burden sharing with the United States and other allies and for improving its own self-reliance. The 2026 IIP takes important steps to achieving this.
First, consider funding. Without it, any acquisition plan is just wishful thinking.
The NDS and IIP say the government will add A$53 billion to defence spending in the 10 financial years beginning 1 July 2026, including A$14 billion in the first four of those financial years (called the forward estimates). Building on the 2024 IIP, this takes defence funding for the 10 years to A$117 billion, including A$30 billion in the first four.
The key issue facing the IIP is whether that money will be enough to deliver capability improvements to fulfil the Australian Defence Force strategy of deterrence by denial, to adequately burden share with allies and partners, and to enhance defence self-reliance. And it must do so quickly, given the rapid deterioration of Australia’s strategic circumstances, as clearly acknowledged in the NDS.
So, where’s the money going? In a very good move, greater priority is being given to uncrewed systems, with spending increasing from A$10 billion over the coming 10 years to between A$12 billion and A$15 billion, including A$3.1 billion on acquiring smaller drones of the category demonstrated in Ukraine. It is important to note that investment in lower cost uncrewed systems was also mentioned in the 2024 IIP.
The emphasis remains, however, on higher-end uncrewed systems. For the Royal Australian Air Force these include the Boeing Defence Australia MQ-28A Ghost Bat collaborative combat aircraft and the Northrop Grumman MQ-4C Triton remotely piloted maritime surveillance and intelligence aircraft. For the Royal Australian Navy, the government will spend more on the Anduril Australia Ghost Shark uncrewed submarine (classified as an extra-large autonomous underwater vehicle) and the C2 Robotics Speartooth (a large uncrewed underwater vehicle – L-UUV). The IIP allocates between A$4.5 billion and A$5.8 billion to such uncrewed underwater vehicles.
To this will be added uncrewed surface vessels – Ocius Bluebottles – for persistent surface and underwater surveillance. Expansion of the planned Bluebottle fleet from 15 to 55 boats was announced on 11 March. The issues are how quickly these boats can be introduced into operational service in significant numbers and then how quickly the navy can adapt to fully exploit them. Learning the ropes of command and control of uncrewed systems, particularly in a complex undersea warfare domain, will be challenging.
Investment in air force uncrewed systems centres on the Ghost Bat. The decision to support its full-scale development is sensible, particularly amid a trend towards crewed and uncrewed aircraft operating in teams, which really is the future for air power. The RAAF is leading realising that future. So, it is good to see that funding in the 2026 IIP for the RAAF’s uncrewed systems has increased from between A$4.3 billion and A$5.3 billion in the 2024 IIP to between A$6.1 billion and A$8.1 billion.
The 2026 IIP money should allow the Ghost Bat program to move from a group of developmental aircraft to a much larger, operational fleet that can enhance the lethality and survivability of crewed aircraft. They’ll also be used to ‘explore opportunities to integrate future uncrewed air systems into the ADF’ to ensure that ‘Australia remains at the forefront of autonomous air power,’ according to the IIP. This issue will rise in importance as we get closer to the expected retirement year for the RAAF’s F/A-18F Super Hornets and EA-18G Growlers, no later than 2040.
Long-range strike is another area of important capability investment. It will get between A$28 billion and A$35 billion over the coming decade.
Key announcements in the IIP include that the government is working towards Australian development of advanced hypersonic cruise missiles in collaboration with the US and towards further development of versions of the Lockheed Martin PRSM strike missile that can reach beyond 1,000 km. The Guided Weapons and Explosive Ordnance enterprise must be ready to expand stockpiles of these weapons.
The 2026 IIP finally adds spending on integrated air and missile defence (IAMD), a welcome addition to Australia’s defence-capability acquisition program. With the 2023 Defence Strategic Review identifying IAMD as an urgent capability requirement, it is a relief to see the 2026 IIP move closer towards deploying effective IAMD capabilities. The government will spend between A$7.2 billion and A$10 billion over the coming decade to develop and acquire active missile defence capabilities across the air, land and sea domains. This will include counter drone (called ‘C-UAS’) capabilities for deployed forces, continued introduction of Nasams surface-to-air batteries for local defence, and most importantly, acquisition of a medium-range ground-based air defence system, designed to defeat advanced aircraft and missiles.
The medium-range system will fill an urgent capability gap, so the IIP recommends that the acquisition process begin this year, towards developing a resilient and networked capability to ‘form a core component of the National Integrated Air and Missile Defence System.’ There are challenges, though, in achieving this goal quickly, particularly because wars have drained the West’s stock of interceptors. Australia could find itself on the end of a long queue. In running the competition for IAMD capability, we should prefer suppliers that will support full local manufacturing, so we can rely less on securing output from foreign factories.
In short, the 2026 IIP indicates that some very good decisions have been made. But given the rapid deterioration of Australia’s strategic outlook and the growing risk of war, time is not our friend. Capability development proposed in this year’s IIP must occur quickly – well before the decade is out. And more money than planned may be needed soon to ensure that the capability is delivered in time.