Australia seeks to rein in defence spending blowouts, delays

SYDNEY - Australia announced changes on Thursday to the way it manages the delivery of defence projects, aiming to curb billions of dollars in cost overruns and lengthy delays.

• The government said it would establish a special agency to oversee defence project delivery, overhaul the way project costs are assessed, and streamline decision-making by cutting bureaucracy.

• The decision comes as the country undertakes a major build up of its military capacity, with projects including the AUKUS nuclear submarine pact, a continuous naval shipbuilding programme and investments to develop domestic missile and drone industries.

• "For too long, Defence has struggled to deliver major capability projects on time and on budget," Pat Conroy, minister for defence industry, said in a statement.

• In a speech in Canberra unveiling the reforms, Conroy described the department's systems as "broken".

• "The fact is these systems were designed for a very different world," he said. "Through these reforms, we're making sure that when Defence is developing capability projects that we're setting them up for success."

• He said an internal review found the average cost of defence projects increased by 38%, or A$29 billion ($19.97 billion), from project conception to government decision.

• "The way Defence was operating had become outdated and compromised for at least the last decade," Conroy said.

• The government in April announced it would raise defence spending to 3% of gross domestic product by 2033 from about 2%.($1 = 1.4520 Australian dollars)

(Reporting by Christine Chen in Sydney; Editing by Raju Gopalakrishnan)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published July 1, 2026 at 11:27 PM.