The Australian Defence Force (ADF) and its strategic outlook are in crisis and urgent action is needed. The key recommendation of this report is that, following the next election, the government must take urgent steps to boost Australian production of weapons, munitions and other defence technology.

The approach should be informed by a thorough analysis of technology and other developments in wars in Ukraine and the Middle East. We need a new approach to rapid Defence acquisition.

The Prime Minister must also lead a national discussion about how to overcome a recruiting and retention crisis in the ADF.

The size, structure, and equipment of the Australian Defence Force has remained static for decades because it has been designed for small scale wars of choice. Last year the Defence Strategic Review concluded that the ADF was not fit for purpose in an age of great power competition. This conclusion has been reinforced by lessons from contemporary armed conflict such as the war in Ukraine. Nevertheless, we have not yet seen convincing evidence that the ADF is rapidly recreating itself to meet the potential demands of wars of necessity involving major powers.

That we have yet to re-open our Embassy in Kyiv in the years since the initial evacuation during the Russian invasion, indicates a lack of interest at the highest levels in learning the lessons of that conflict.

In this paper we outline the key challenges that the Department of Defence will need to address to become more relevant to our current circumstances.

These include addressing the ADF’s people problem—its inability to recruit and retain the people it needs; weaning itself off its addiction to ever more complex systems that cost too much and take too long to design and deliver; learning how to deliver new equipment in relevant timeframes; and generating the mass needed to compete in modern warfare.

We propose several high-level recommendations on defence capability to address those challenges.

The first is to acknowledge the risks and limitations with nuclear-powered submarines and to seek complementary capabilities to hedge against those risks. Second, Defence needs to complement its pursuit of exquisite, expensive systems with ones it can produce domestically, rapidly and at scale, to generate mass. Related to this it needs to adopt autonomous systems much more rapidly, even if they are not perfect.

Next, the ADF needs greater strike power—we recommend the B-21 bomber as an effective way to deliver affordable, mass-produced munitions.

Finally, the ADF needs to significantly enhance its ability to defend itself and Australia against an adversary’s strike capability through investment in air and missile defence.

All these measures require filling major capability gaps created by decades of insufficient funding.

In its 2024 National Defence Strategy the government said the ADF is facing a workforce crisis; it must be treated as one, and one that requires new solutions. Addressing the ADF’s people problem requires different models from its traditional one of a very small, professional workforce. This must be part of a larger conversation that the Prime Minister needs to lead about service to the nation and community.

Australia cannot function without the contributions of paid and unpaid volunteers; those contributions must be encouraged, enabled, and acknowledged. This applies also to the ADF. This means expanding the role of the Reserves as well as actively designing the ADF for wartime expansion.

Finally, we argue that logistics capacity is crucial to success in conflict. For the ADF to succeed it needs to draw on the 98 per cent of Australia’s GDP that is not part of the Defence budget. That means more integrated thinking around defence infrastructure and industry and national resilience—issues we examine in more detail in future papers in this series.

The recommendations in this paper are numbered continuously from Paper 1: The Defence of Australia: A blueprint for the next government: National Security and Australia’s Northern Defence.

RECOMMENDATION 7

The Commonwealth government must urgently reopen Australia’s embassy in Kyiv and seek Ukraine’s permission to locate a Defence and defence industry team at the embassy to build our understanding of the war.

RECOMMENDATION 8

The next government should direct Parliament’s Joint Foreign Affairs, Defence and Trade Committee to convene a major inquiry into the lessons from recent conflicts, in particular the wars in Ukraine and the Middle East, and how these lessons should be applied to Australia’s circumstances.

RECOMMENDATION 9

Government should establish an initial $1 billion annual Rapid Acquisition Fund in the Defence budget getting Australian small and medium-sized enterprises to produce key ‘consumables’ of war, including munitions, autonomous systems, and counter-drone systems. The Fund must bypass Defence’s glacial acquisition processes. Government should direct Defence to have programs underway with industry no later than six months from the election.

RECOMMENDATION 10

The Government must restore air and missile defence procurement plans that were cut in the April 2024 National Defence Strategy. Protecting Australia from missile and air attack cannot be regarded as a low priority that can be traded off in Defence’s capability planning.

RECOMMENDATION 11

The Government must direct Defence to publicly report, no later than 100 days after the election, on the capability impact of deferrals, removals and reductions in the April 2024 National Defence Strategy. The government should then decide which equipment projects must be returned to actively funded programs in order to restore a capable ADF in the 2020s.

RECOMMENDATION 12

The Prime Minister needs to take charge of fixing the ADF workforce crisis by convening a high-level group of eminent Australians that will develop new ways to grow and sustain the ADF, enlisting the support of the broader Australian community.

Read the full report at this link.