"Today's release of the 2026 National Defence Strategy and Integrated Investment Program (IIP) is an important update to Australia's Defence planning and an important step in continuing to build the capability and sovereign industrial base the nation needs," Innes Willox, Chief Executive of the national employer association, Australian Industry Group, said.
"The Federal Government has correctly stated that Australia faces its most challenging strategic environment since the Second World War. The wars in Ukraine and the Middle East have significantly altered strategic circumstances, warning times have shortened and our major ally is requesting partners to do more. A proposed additional $53 billion in defence funding over the next decade — the largest peacetime increase in our nation's history — is welcome in this context.
"We particularly commend the emphasis on preparedness and deterrence in light of the threat environment and the investment plans in a range of new or updated capabilities, including in areas such as autonomous systems and effective satellite communications. Industry supports and welcomes the Government's focus on increased sovereign manufacturing across a range of capabilities.
"Strategic intent, however, must be matched by resourcing. We understand the IIP includes reprioritisation of capabilities alongside the new funding, and industry will need clarity on what has been cut or deferred and what that means for the programs that underpin sovereign capability.
"Industry will also want to understand the composition of the new funding — in particular, how much rests on estate sales and private capital rather than direct budget appropriation, given the different level of certainty each carries. The impact of inflation, as well as increasing AUKUS, estate and support costs must also be considered.
"When the Portfolio Budget Statements are published, industry will be looking closely at the year-on-year comparison. Businesses make long-lead decisions about workforce, facilities and supply chains based on the forward program, and they need to be able to read the numbers clearly and transparently.
"Australian Industry Group and our members stand ready to engage as the detail is worked through.
"Unfortunately, the industry statements contained in the National Defence Strategy are generic and represent a missed opportunity for clear implementation plans to secure supply chains to ready us for future conflict. As we are witnessing right now with the fuel security issues, these initiatives must be developed, implemented and funded now — not as a response to a future crisis.
"In our submission to the 2026 National Defence Strategy, we were clear about what is needed: industrial readiness elevated from aspiration to a funded, measurable requirement; production lines kept warm where appropriate rather than switched off between contracts; industry engaged early in the capability development cycle and a Defence Delivery Agency with genuine commercial authority, judged on speed to capability.
"We look forward to working with Government and Defence to ensure today's announcement translates into the sovereign capability Australia needs," Mr Willox said.
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