Last week Strategic Analysis Australia published an analysis of the dollars in the Government’s new public version of the Defence Integrated Investment Program (IIP) that it released along with its National Defence Strategy. This week we’ll look at the capabilities those dollars are intended to acquire, in particular the big muscle movements in this edition of the shopping list—what’s in and, importantly, what’s out.

11 Key Points

• The 2024 IIP, like the preceding two versions of Defence’s investment plan, is presented at a high level with little detail. This makes detailed comparisons between editions difficult. The Government has not released a detailed list of changes to the program.
• This also means the IIP doesn’t meet its stated purpose of providing transparency to the public and information to industry to support planning.
• The IIP’s funding over the decade (i.e., 2024-25 to 2033-34) represents $330 billion out of total defence funding of $765.4 billion.
• A key cost driver is the nuclear-powered submarine (SSN) program that will likely be spending 10% of the entire Defence portfolio budget by the end of the decade—when we will best case only have one SSN in service.
• The two biggest ‘capability priorities’ are Undersea Warfare and Maritime Capabilities for Sea Denial and Localised Sea Control Operations—consistent with the Maritime domain now comprising 38% of the investment program.
• A previously planned major investment in geospatial surveillance satellites appears to be gone, with the Space program continuing the slow, incremental approach of previous plans largely based on relying on US capabilities.
• The Amphibious Capable Combined‑arms Land System reflects recommendations out of the Defence Strategic Review that focus the Army on amphibious operations, but overall this program is broadly similar to previous investment plans.
• Air capabilities are the big loser in this IIP. Investment is proportionally low by historical standards. The Air Force is not getting any new aircraft this decade beyond what is already on order. It’s another fact that doesn’t align with the NDS’ aim of developing a force focused on a strategy of denial.
• There are signs that Defence has turned the corner on autonomous systems, with significant funding programmed in the Air and Maritime domains. The key will be ensuring it supports a broad range of uncrewed systems.
• As with the previous plan, there is a lot of investment in missiles but still little detail around how domestic production will be stood up.
• There’s significant planned investment in Defence’s ‘backbone’—logistics, facilities, northern bases and command and control. That is necessary and welcome, but it’s not possible from the information provided to understand or compare the details with previous plans.

What the IIP provides

The first point to make is that this is necessarily a high-level analysis; there isn’t a lot of detail in the IIP. Defence gave up providing individual project names and numbers, scope statements, schedules and budgets after the last edition of the Defence Capability Plan in 2012. I noted after the release of the last edition of the capability plan, the Force Structure Plan (FSP) that accompanies the 2020 Defence Strategic Update, that it was a lot like Monet’s water lilies—it looked nice from a distance, but the closer you get the fuzzier the details are. Things haven’t improved with the 2024 IIP; we might not quite be in Jackson Pollock territory yet, but it’s still very thin on detail.

The second point is that this is the public IIP. Internally Defence has another version with a lot more detail, including exact project provisions, rather than the bands in the public version. The public IIP’s stated purpose is as follows:

‘The public Integrated Investment Program has been developed in order to:

• provide the Australian public with transparency of the Government’s plans to develop defence capabilities over the coming decade, in line with the National Defence Strategy; and
• provide defence industry with information on Defence’s capability goals and requirements to support industry planning.’

Whether it meets those purposes is debatable. I know Defence industry people who are struggling to work out whether the project they had been aiming to compete for is still in the program, so it’s very difficult to conclude that its transparent or helping industry planning.

The IIP is organised by 11 ‘capability priorities’ and three enabling areas. These are not the same thing as domains. The IIP provides a pie chart providing funding breakdown by domain (page 11) and capability priority (page 10). We reproduced the former in our last piece and noted that the Maritime domain had surged far ahead of all other domains; at 38% Maritime was larger than Land (16%), Air (14%) and Cyber (7%) combined. Below we have reproduced the pie chart for capability priorities. While they are not identical to domains, the breakdown is similar. For example, ‘undersea warfare’ (17%) and ‘maritime capabilities for sea denial and localised sea control operations’ (16%) together make up 33% of the total.

Figure 1: IIP funding by capability priority

Source: Defence Integrated Investment Program, online.

To recap the top-level dollars, the IIP’s funding over the decade (i.e., 2024-25 to 2033-34) represents $330 billion out of total defence funding of $765.4 billion. That includes the Department of Defence, the Australian Signals Directorate and the Australian Submarine Agency.

Each chapter gives a high-level word picture of the capability priority and a funding table broken down by ‘capability element’. The table gives approved planned investment for the decade (i.e., what the Government so far agreed Defence can actually spend), unapproved planned investment for the decade (i.e., what the Government has said Defence can plan on getting, but it still needs to come back to the Government for approval to actually spend it), and the combined total of the two. The figures are rounded to hundreds of millions or even billions of dollars. The figures do not include expenditure to date. It’s important to remember that the figures are not the total cost, just the planned spend over the decade. That’s why the total for nuclear-powered submarines (SSNs) is $53-63 billion, not the $268-368 billion previously stated by the Government (which, incidentally is not the total cost either, but that’s a story for another day).

The IIP covers acquisition costs and unapproved sustainment, i.e., any additional operating cost of future capabilities above the operating cost of current capability.

Tracking what’s in and out

The last public capability plan was released nearly four years ago. A lot had changed since then, even before the Defence Strategic Review was released by the current Government over a year ago, which required Defence to rebuild the IIP. As Strategic Analysis Australia has noted, the IIP was an exploding suitcase, with too much capability programmed in it for the available funding. The Government has stated that this IIP has begun to reduce the level of overprogramming from 40 per cent and aims to get it to 20 per cent sometime in the future.

In our last piece we argued that the new funding in the forward estimates ($5.7 billion) and decade ($50.3 billion) will be entirely consumed by the SSN program, the new general purpose frigates, and compensation for the falling Australian dollar. That means there’s no money for anything else, so addressing the exploding suitcase requires taking things out, particularly since the DSR added new things to it.

There are three main ways Defence deals with funding pressures on its investment program. Its favourite tool is simply to delay the replacement of things. Since the new IIP only covers one decade in contrast to the previous plan’s two, some capabilities that seem to have disappeared may just have been pushed outside the first decade rather then been cancelled outright. Of course, repeated delays produce a huge ‘bow wave’ of deferred investment and undercapitalised capability, like Vietnam War-era armoured vehicles or the retirement of frigates well before their replacements arrive. And pushing projects out into the next decade creates the obvious risk that they become obsolete ideas before they have begun or they never happen.

The second approach is salami slicing, i.e., reducing the scope of the project. That can produce savings, but they are generally not commensurate with the number of systems given up because the overheads in things like design costs, setting up production lines, etc, are the same regardless of the number of systems acquired. You end up paying a whole lot more per unit for the smaller number of things you buy.

The final resort is to cancel projects. This is only done rarely, and when it is done, it tends to be capabilities that Defence doesn’t have in service already or acquisitions that aren’t in contract.  That can mean novel new capabilities suffer because they are not replacing something the services already know and love and so have few internal champions.

The new IIP doesn’t include a list of things that have been taken out. Because of the high-level nature of the presentation of this and the previous IIP, it’s difficult to determine exactly what’s in and out simply by comparing them. Anecdotally, Defence insiders have commented that there have been 300 project changes as part of development of the latest version of the IIP in the wake of the DSR, but there’s no comprehensive public list of them. That really undercuts the IIP’s two purposes of transparency in planning and useful information for industry. A couple of sources of information help:

• Deputy Prime Minster Richard Marles NDS/IIP launch speech.
• A list of project changes provided to the media after the release of the public DSR. Most of the project changes on it were small, such as adjustments to smaller facilities projects, but it included the significant reduction to the scope of the Infantry Fighting Vehicle project and cancellation of a second tranche of self-propelled howitzers.
• Another list of project changes provided to the media at the launch of the NDS and IIP. This includes some very large changes that total ‘up to’ $40.5 billion in reallocations.

I don’t know why the Government releases these unclassified lists to small group of media (while noting it is not for attribution) but doesn’t publish these lists on its website with the IIP. Who knows. But it’s not good for transparency. I’ll include their key content in the discussion below, without attributing it to any Defence official or the portfolio’s ministers.

Undersea Warfare: $63-76 billion / 17%

Nuclear-powered submarines (SSNs)

Obviously, SSNs are an addition since the 2020 Force Structure Plan as they were only announced in September 2021 with the ‘optimal pathway’ following in March 2023. No one will be surprised that the SSN program makes up the vast bulk of this capability priority at $53-63bn over the decade. This is likely to be over $30 billion more than the funds programmed for the cancelled Attack-class program over the same period and is the key driver for the additional $50.3 billion announced by the Government in the NDS/IIP.

Since Defence is only spending around $10 billion over the forward estimates on SSNs, to achieve $53-63 billion spend over the decade it will likely need to spend close to $10 billion per annum for the last  years of the end of the decade. That’s a big ask, but it might be achievable if we are signing very big cheques for Virginia-class submarines. Since the planned total Defence budget for 2033-34 is $100.4 billion, we will likely be spending 10% of the Defence budget on SSNs when we are only operating one and have barely started construction of SSN AUKUS. And one Virginia submarine is not a reliable capability – in the land of nuclear submarines you need three or four to have one available at any given time because of their maintenance requirements.

Collins-class submarines

$4.0-5.0 billion is programmed for the Collins class. The IIP states that this is for the life-of-type-extension, sonar upgrades and on-going sustainment. That number is hard to understand.  Average annual sustainment for Collins has been $633 million over the past decade, which would suggest sustainment alone will be over $6 billion. The IIP figure may only cover any additional sustainment costs above and beyond the current annual expenditure. But even if that’s the case, the funding seems tight. In the 2020 plan just the Life of Type Extension (LOTE) needed to keep the Collins relevant was $3.5-6.0 billion.

One might wonder whether this suggests Defence is reconsidering its previous plan of putting all six Collins boats through the LOTE and operating them through the 2030s and into the 2040s. It’s going to be really hard to introduce the Virginia-class SSNs, build the SSN AUKUS fleet and continue to operate Collins for another 20+ years; something has to give, and the most likely candidate is Collins. That’s another conversation for another time.

Subsea warfare and uncrewed maritime systems

This area is getting $5.2-7.2 billion. It’s not clear how this is split between things such as undersea surveillance like the SURTASS-E passive towed sonar system announced already and uncrewed and autonomous underwater vehicles.

There’s likely to be considerable overlap between this line and one in the 2020 plan described as ‘an integrated undersea surveillance system (including exploration of optionally crewed and/or un-crewed surface systems and un-crewed undersea systems), an undersea signature management range, and expanded undersea warfare facilities and infrastructure’ that was programmed at $5-7.4 billion. In short, the dollars in the two plans are similar, but the detail around what they are being spent on is not there.

Since there was no explicit funding for uncrewed and autonomous systems in the 2020 plan, the new plan’s reference to ‘the development and acquisition of highly capable large and extra‑large uncrewed and autonomous underwater vehicles to undertake stealthy missions in high‑risk environments, alongside continued acquisition of Bluebottle uncrewed surface vessels to undertake persistent maritime surveillance’ is welcome news to advocates of maritime autonomous systems (disclaimer—that includes me as a long-time advocate of such systems and recent employee of C2 Robotics, a company that produces UUVs). Hopefully the funding covers a diverse range of systems across air, surface and undersea domains, including the small, the smart and the many as well as larger and more complex uncrewed systems.

The undersea range that was part of the broader Integrated Undersea Surveillance System in 2020 looks like it has been broken out into its own line in the 2024 plan.

Maritime Capabilities for Sea Denial and Localised Sea Control Operations: $51-69 billion / 16%

When you use clunky terms like this, it suggests a degree of conceptual confusion. And since sea denial and sea control are quite different things, it does seem that the confusion in the recently released surface fleet review has permeated the investment program. Sea control that is too localised can look a lot like uncontrolled seas to an adversary.

The main addition in this area is of course the 11 general purpose frigates proposed in the surface fleet review. At the time the Government said it would provide $11 billion in new funding over the decade to fund the recommendations in the review. In the IIP, $7.0-10.0 billion of that is for the GPF. We should also note that this is only the planned spending in the decade; as far as we are aware, nowhere has the Government or Defence provided a total acquisition cost for the GPFs. The schedule for the spend this decade is also highly speculative, with delays to the target in service date of the first vessel in 2029 highly likely given what is looking like an undefined procurement path for this project without clear ground rules or requirements.

Despite their youth, the 2020 plan included an upgrade to the three Hobart-class destroyers at $2.9-4.4 billion. That has ballooned out to $6.5-8.5 billion. The 2024 plan only gives the scope as Aegis Baseline 9 with enhanced strike and air-defence capabilities. Since Aegis Baseline 9 was already part of the 2020 plan, it’s not clear what is driving the doubling of what was already a very substantial budget to upgrade a class of only three ships. Their acquisition cost was around $8.5 billion—the same as the upper limit of the upgrade band. It’s strange we are spending as much to upgrade a class of ships that are less than a decade old as it cost to build them.

The Hunter-class frigates are programmed to spend $22-32 billion over the decade. That will only get us to the planned in- service date of the first frigate. That also doesn’t include the $4.3 billion that has been spent to date. The surface fleet review cut the planned build program from nine to six vessels; that will have no impact on the spend this decade. As we noted in our previous piece on the NDS/IIP, between the SSNs and the Hunter, 25% of Defence’s planned acquisition spending will provide virtually no in service capability this decade.

The planned cost of the future frigate program (which the Hunter was selected for) has grown from $30 to $35 to $45.6 billion (in the 2020 FSP). Since the new IIP only gives spending for the decade and not total cost, we don’t have an update cost estimate for the six-ship program. As we noted, salami slicing doesn’t generate savings commensurate with the reduction in platform numbers, so the new estimate is likely to be a lot more than two-thirds of the previous $45.6 billion.

Despite the surface fleet review reducing the Arafura-class offshore patrol vessels from 12 to 6 vessels, Defence is still planning on spending a further $3.2-3.7 billion on them this decade in addition to the $2.7 billion spent to date. Unfortunately, this is for ships that no longer seem to have a clear purpose in a force focused on deterrence of a major power adversary. Presumably that includes sustainment costs once they start to enter service. Considering that the OPVs were meant to replace Defence’s patrol boat capability, the fact that Defence has had to buy 10 Cape-class patrol boats anyway to bridge the gap from the retiring Armidale-class patrol boats suggests that the transition in the Navy’s maritime patrol capability has not gone according to plan in any way. As we have noted many times, capability transitions are difficult and even ones that seem relatively straightforward can go awry.

Which leads us to the faltering frigate transition that the new GPF project is meant to remediate. The 2024 plan confirms that two Anzac class frigates will be decommissioned at their planned service lives in 2024 and 2026 rather being extended. While the surface fleet review may eventually result in a significantly large surface fleet, in the shorter-to-medium term, it is going to decline even further to a mere nine vessels (three Hobart-class destroyers and six Anzac-class frigates). It won’t grow past 11 until the early 2030s. Moreover the remainder of the Anzac fleet now won’t receive a previously planned upgrade and life extension so they might end up going before they are replaced as well.

Acquisition of an additional 12 Seahawk Romeo maritime combat helicopters was announced in the final days of the previous government to meet the 2020 plan’s requirement for a maritime logistics helicopter. That will bring the Navy’s fleet to 36. The additional 12 are still in the 2024 plan with funding of $2.4-2.7 billion, suggesting the Navy will be well supplied with crewed helicopters.

The same cannot be said for uncrewed aircraft. There was a line for maritime uncrewed aerial systems for $0.9-1.3 billion in the 2020 plan. However the Government cancelled the Navy’s uncrewed rotary-wing capability last year and there doesn’t appear to be anything covering UAVs launched from ships in the new plan.

Also gone are the two additional maritime support ships that were in the previous plan at $4.0-6.0 billion. This is not stated anywhere in the new IIP, but the Deputy Prime Minister stated in his launch speech that ‘Defence had planned to acquire two large support vessels to increase the capacity of our Navy’s sea lift and refuelling support. The focus on improving our maritime lethality means these support vessels are no longer a priority. This action will generate savings of $120 million over the next four years and $4.1 billion over the decade.’ The cancellation is also in the more recent list of project changes.

This is one of the more curious decisions in the new plan. The Navy only has two replenishment ships. It’s hard to see how it will support the larger surface fleet now planned with only two oilers, particularly for missions that require endurance such as protecting sea lanes of communication. And the smaller general purpose frigates may need more replenishment to operate at a distance than larger ships like AWDs.  Moreover, with the Army now having a more amphibious focus, it will need large support vessels in additional to landing craft.

Another unexplained change is mine warfare and hydrography. Without retracing the tortured history of these capabilities over the past decade, the 2020 plan had a line for ‘Future Mine Warfare and Hydrographic Vessels ($3.3 – $5b)’ that was intended to acquire vessels to conduct mine clearance and military hydrographic tasks. In 2021 the previous government announced it was heading towards acquiring variants of the OPV to host the mine clearance and hydrographic systems. Somewhere along the way, the ships disappeared from the acquisition plan while the mine clearance systems they were to carry are still progressing.

The way forward presented in the 2024 plan is decidedly murky. There’s no clear statement on what mine clearance capability the ADF will have, which is a problem—every analysis of mine warfare begins by noting that since World War 2, the US Navy has more ships damaged by mines than any other threat. The simple mine threat from Saddam Hussein’s forces prevented the international coalition launching an amphibious assault to deliberate Kuwait in 1991 and since then, mines have only got more lethal and smarter.

The list of changes provide to the media says of the SEA 1905 Ph 1 – Maritime Mine Countermeasures and Military Survey Capability project: ‘Project closed and replaced by robotics and autonomous systems’. There is no discussion of this in the IIP itself. There is $640-670 million for maritime mining but the explanatory text only refers to sea mines, and that amount of money won’t buy any ships to do mine countermeasures.

In sum, the ships that were meant to carry the autonomous mine clearance systems to replace the Navy’s four in-service minehunters are gone. The new plan appears to be that the Navy will use vessels of opportunity to carry robotic mine countermeasures, but since the Navy is historically short of ships at the moment, it’s not clear how that will work. Maybe the six OPVs that are being delivered will be put into service in that role.

And the only reference to hydrography refers to HydroScheme, which uses commercial providers to meet Defence’s obligations as Australia’s national hydrographic authority. There is no mention of any military-specific hydrographic capability. Considering the importance of hydrography to undersea warfare, this appears to be a major loss (unless this function is now somehow covered by the undersea warfare program discussed above).

Naval Shipbuilding and Sustainment Enterprise

The naval shipbuilding and sustainment enterprise is not a capability priority per se (although it is one of the seven Sovereign Defence Industrial Priorities in the Government’s recent Defence Industry Development Strategy), nevertheless there is a chapter on it in the IIP. It provides the broad outlines of the Government’s shipbuilding strategy and confirms that a more detailed plan and ‘Shipbuilding Forecast’ will be published this year and updated on the biennial NDS cycle.

Targeting and long-range strike: $28-35 billion / 8%

As with the 2020 plan, there is a lot of money and words dedicated to guided weapons but while the previous plan contained tens of billions of dollars for strike weapons and platforms to launch them, it didn’t refer to the targeting system that would effectively employ them at all. The new plan still contains tens of billions for missiles, but now has a $5.6-7.6 billion line for the ‘Defence targeting enterprise’. That enterprise is only described at a very high level in one paragraph as having the ability to ‘provide Defence with the timely ability to detect, identify and track targets more precisely and at longer ranges in highly contested operating environments.’ There’s no discussion of what’s in that enterprise or what’s new. The 2020 plan did refer to ‘joint intelligence, surveillance and reconnaissance’ which has now gone, so there may be some overlap between this and the new targeting enterprise.

The missiles mentioned by name in this chapter have all been announced previously, with some being announced multiple times by both the current and previous governments. Unsurprisingly there is no discussion of quantities in either plan, although the United States Defence Security Cooperation Agency’s notifications to Congress are useful in this regard, showing numbers can be provided to the public without breaching national security….

The future acquisition of hypersonic weapons appears to have firmed up since the 2020 FSP. That plan referred to research in hypersonic weapons while this one states that ‘the development of hypersonic air‑launched weapons for employment from the F/A‑18F Super Hornet will provide the ability to engage targets at longer ranges with high‑speed weapons.’ That is supported by a $2.5-3.0 billion funding line. There’s still that disturbing word ‘development’ that raises doubts about any actual purchase of operational missiles any time soon, but there seems to be progress.

Space and Cyber: $27-36 billion / 8%

In the domain pie chart, Space (3%) and Cyber (7%) make up 10% of the total. However, in the capability priority pie chart they only make up 8% combined….

Cyber

The IIP states that the Government will spend $15-20 billion on ‘enhanced cyber domain capabilities. That’s split between a line of $6.4-8.4 billion with the generic name of ‘cyber capabilities’ and a $8.9-12 billion line for ‘cyber terrain’ which appears to cover ‘capabilities to enhance Defence’s ability to understand, operate in and secure the cyber terrain in which cyber activities occur.’

Readers will recall that in the 2022-23 budget the previous government announced the REDSPICE cyber program that would effectively double ASD’s funding and workforce. That’s already grown ASD’s funding from around $1 billion per year to nearly $2.5 billion. Even if it only stays at that level over the coming decade, that would be much more the $15-20 billion for cyber stated in the IIP. It’s unlikely the Government is cutting ASD’s funding, so it’s another one of those confusing elements of the IIP.  A clear break down of ASD’s cyber investment plan and the ADF and broader Defence’s planned investments is possible for Defence to provide and would be useful.

Space

Australia has relied on other countries’ space assets, particularly America’s. The evolution of Space 2.0, i.e., smaller, more affordable, largely commercially driven programs, has held out the promise of Australia developing greater sovereign capability, but it’s largely been a one-step-forward two-steps-back process in the defence realm.

The 2024 plan’s $9-12 billion may look like a substantial increase on the 2020 plan’s $7 billion but that plan also had significant funding for geospatial imagery satellites that for some reason didn’t fall under the space domain. The 2020 plan foreshadowed ‘acquisition of a sovereign space-based imagery capability to enhance coverage of the Indo-Pacific region.’ It programmed $3.2-4.8 billion for that as well as $1.2-1.8 billion further in the future for additional imagery satellites.

However, sovereign geospatial imagery satellites now appear to be gone from the current plan. There is a funding line of $3.3-4.3 billion for ‘space sensors’, but nowhere is there any mention that these sensors are geospatial imagery satellites. The only space sensors that are discussed are a ‘Deep‑space Advanced Radar Capability, integrated with sites in the United Kingdom and United States, to provide continuous detection, tracking and identification of objects in deep space.’ That does appear to be a step up in Defence’s space surveillance capability—but that’s a capability that looks up at space, not down from it.

There’s no explanation in the IIP, Marles’ speech or the cancellation list for what happened to a sovereign geospatial satellite capability. It’s not clear whether it’s related to the Minister for Industry and Science Ed Husic cancelling the National Space Mission for Earth Observation in June last year for ‘budget repair’, although that was not primarily a Defence-funded program.

Cancelling this capability was not recommended out in the DSR, which remarkably didn’t mention satellites or geospatial capabilities once. However, the DSR did emphasise the need for smaller, rapid acquisition projects’ and an acquisition ‘approach that emphasises speed of capability acquisition including off-the-shelf (commercial and military) capabilities. It’s possible that a traditional Space 1.0 approach of geospatial satellites didn’t fit the bill. Or it was a simply convenient way to do a further $5 billion in budget repair, or it’s somehow still happening but in ways that aren’t discoverable from any information out of Defence or the government. Either way, the way forward on sovereign, space-based geospatial capabilities is not set out and there’s no explicit funding line for it.

In contrast, a very large sovereign satellite communications program is continuing. In April 2023 Defence announced it had selected Lockheed Martin as the preferred provider of its communications satellite network under project JP9102 Phase 1. The new IIP programs $5.2-7.2 billion for satellite communications.

Overall the IIP seems to continue Defence’s standard, conservative approach to space, essentially relying on other countries’ capabilities and small numbers of large, expensive satellites. The contrast with the rapid pace of progress in Australia’s commercial space sector which is developing space launch, space vehicles and microsatellite technologies is stark.

Amphibious capable combined arms land system: $36-44 billion / 11%

Another clunky title that seems primarily to be about messaging the changed role of the Army out of the DSR while offering a compromise that will keep the traditionalists happy; ‘combined arms’ is a phrase of deeply orthodox theology for much of the Army, while the emphasis on amphibious is rather heretical. We’ll call it ACCALS.so they will probably be delighted to see it acknowledged in print, as a heading no less.

The Land domain was listed at $55 billion over the decade in the 2020 plan. Even if we assume that some land capabilities are in other capabilities priorities in the 2024 plan (e.g., the $3.9-4.9 billion for Army’s land-based strike listed in the Long-range Strike capability priority), land capabilities have not done well with ACCALS at only $36-44 billion. And a quarter of that funding ($7.0-10 billion) is actually for ‘littoral manoeuvre vessel’, i.e., landing craft.

Much of the hit came before in the IIP, with the DSR recommending cutting the infantry fighting vehicle program from 450 to 129 vehicles. Its funding line in the 2020 plan was $18.1-27.1 billion; in the 2024 plan only $6.6-6.7 billion of that is needed for the reduced number of vehicles, freeing up $12-20 billion. It doesn’t look like the Army got to keep that.

The DSR also cancelled a second tranche of self-propelled howitzers. But the first tranche is continuing, as are the armoured vehicles including the new M1A2 Abrams tank fleet, Boxer combat reconnaissance vehicles, and combat engineering vehicles.

The DSR said that delivery of LAND 8710, the Army’s medium and heavy landing craft, should be accelerated. The Government has stated that the schedule has been accelerated and two classes of landing craft, one of 500 tonnes and one of 3,000-5,000, will be built by Austal at Henderson in Western Australia. Since neither the 2020 or 2024 plan have schedules, it’s not possible to assess this statement one way or the other.

The 2024 plan’s budget for littoral manoeuvre vessels is $7-10 billion. That compares to $1.4-2.1 billion in the 2020 plan for Army watercraft. It’s not clear what is driving that four or five-fold budget increase, but it could be that vessels in the 3,000-5,000-tonne range are bigger than what was envisaged in the 2020 plan.

The ACCALS’ approach to uncrewed systems doesn’t appear to be particularly ambitious. The old plan had a funding line of $7.4-11.1 billion for future autonomous vehicles, but they were well out in the future with the funding not starting until the 2030s. That program’s line is gone from the 2024 plan; whether it’s been cancelled or is just sitting outside the first decade is not clear.

The new plan flags ‘further investment in low‑cost and expendable small uncrewed aerial systems’. However, the only UAV discussed is the Integrator UAV, which is a $450 million program and not exactly a disposable or attritable system that can be rapidly produced at scale. Since the total funding in the ACCALS for uncrewed tactical systems is $690-890 million, once you factor in Integrator, there’s only a few hundred million over the decade for the small, the smart and the many—less than 1% of the ACCALS total investment budget. It’s not clear what lessons the Army is learning from the war in Ukraine or even the land-based maritime successes of the Houthis.

On a related note, the Apache attack helicopter project is continuing. We’ve written at length about Apache before and don’t need to highlight the $5 billion waste of resources again. Delivery of the new Blackhawk fleet is continuing and hopefully will fill the Army’s glaring battlefield mobility capability gap. Replacement of the Tiger armed reconnaissance helicopter was part of the 2020 plan, but replacement of the MRH-90 Taipan by the Blackhawk represents a significant acceleration on the 2020 plan.

Long-range fires like HIMARS are part of the Targeting and Long-range Strike capability priority, not ACCALS. The DSR recommended increasing the planned number of HIMARS launchers (funded by the cancellation of the second regiment of self-propelled howitzers); this is reflected in the new IIP with a second regiment of HIMARS now added in.

Overall, this capability priority broadly looks a lot like the previous plan but with most of the infantry fighting vehicles removed and more amphibious lift added. There is no clear central new purpose for the Army to cohere around and plan for now that its long-desired heavily armoured future has gone.

Expeditionary air operations: $28-33 billion / 8%

Another odd title, suggesting that Defence doesn’t believe these capabilities will be used to defend Australia itself, even though it is still the first of the ADF’s five tasks according to the NDS. The choice of this name for the capability priority must be intentional, but the precise intent it’s signalling is opaque. If it simply saying that all air operations in the context of Australia’s vast geography are expeditionary, even from established northern bases, then it is a tautology. And if we are really thinking about operating from our own territory – presumably northern Australia – is expeditionary, we are giving up an enormous home ground advantage we should be exploiting mercilessly. If it is saying the Air Force will need to operate beyond Australian bases, there is no discussion of, or explicit funding for, capabilities that can establish and sustain expeditionary air bases beyond the continent in the IIP.

Army normally complains it’s the biggest loser in reprioritisation exercises, and in the wake of the DSR that looked like being that case. But the Air domain is probably the biggest loser in this IIP. In the 2016 IIP, planned investment in the Air domain (24%) was comparable to the Maritime domain (28%); now they are not even close. The Air domain now makes up a measly 14% to Maritime’s 38%. At one level this is in part to the Air domain only having recapitalised many of its  capabilities relatively recently (it’s still in the process of recapitalising parts of the fleet) so their replacements sit outside the IIP’s decade, but it is also another indication of the SSN enterprise starting to swallow the rest of the ADF.

Overall, the Air Force will need to make do with the platforms it has for the rest of the decade. It’s an odd approach for a defence force that is meant to rapidly acquiring capabilities that to support a focus on a strategy of denial over large spaces of water and air. Air capabilities, particularly those delivering stand-off strike weapons, are well suited to imposing cost on adversaries. One could even argue they are much more capable of doing it than surface ships which carry only limited quantities of weapons, many of which must be devoted to protecting the ship and its crew. Moreover, aircraft can be acquired and delivered much more rapidly than building ships. If the reason is that Air Force doesn’t have the self-confidence that it can recruit and train the pilots required, perhaps it should learn from Navy’s unashamed chutzpah in claiming it can recruit and train 2,500 to 3,000 nuclear submariners.

Air mobility

The IIP continues the replacement the current fleet of 12 C-130J aircraft with a new fleet of 20 C-130J aircraft at a cost of $8.2-8.5 billion that was one of the few big acquisition decisions announced by the current government.

According to the list of reprioritisations supplied to the media, the project to replace the C-17A has been closed and the requirement to be examined closer to the planned replacement date. The reallocation is listed at $3 billion in the decade. That’s probably a reasonable decision, considering the relatively young age of the RAAF’s C-17A fleet.

The IIP is silent on the future of the C-27J Spartan that has (unsurprisingly) been unable to fulfil its planned role as a battlefield airlifter and has been consigned to regional support operations. If Defence was serious about cost savings it could have retired this fleet, which was costing as much per flying hour as the massive C-17A the last time it appeared in the Portfolio Budget Statements, and replaced it with commercial arrangements.

Air combat

No increases are planned to the air combat fleet beyond what is already ordered.

The previous plan held a line for ‘Additional air combat capability ($4.5-6.7 billion)’. There has been much speculation that this would be used to acquire the fourth combat squadron of F-35As that had always been part of the Air Force’s ambitions to get to around 100 F-35A aircraft. This line has now gone. The media’s reprioritisation sheet states that ‘the requirement for the fourth F-35A squadron [will be] examined closer to planned replacement of the F/A-18F Super Hornet.’ That allowed a reallocation of $3 billion. Since the IIP also states that the life of the Super Hornet will be extended to 2040, it’s highly unlikely that they will be replaced by F-35s—it’s unlikely the production line will still be running.  The new plan does include a $4.3-5.3 billion line for the F-35A, but the explanatory text indicates that this is for ‘incremental improvements’ over the decade. Let’s hope those ‘increments’ are very big ones to justify the billions.

Uncrewed systems

The 2020 plan had a funding line of $7.4-11 billion for ‘teaming air vehicles’, but that extended well into the second decade. The new plan instead has a line for uncrewed air systems at $4.3-5.3 billion. However other than stating that the Government will continue to invest in the MQ-28A Ghost Bat, details are sparse. How much of this funding is for Ghost Bat and how much is for other systems such as expendable/attritable UAVs is not stated. As with autonomous maritime systems, we hope that this investment will cover a broad range of systems

In his launch speech the Deputy Prime Minister stated that ‘We have all seen the prevalence of drones in combat, including in Ukraine and the Red Sea. So we are increasing funding for Australian drone and counter-drone capabilities. To make this happen, we are providing an additional $300 million over the next four years and $1.1 billion over the decade.’ It’s not clear if this $1.1 billion is part of the $4.3-5.3 billion for uncrewed air systems, or a separate line of funding specifically for the small, the smart and the many. Either way, in a defence budget that will spend over $740 billion over the decade, an average of $100 million per year seems rather miserly in light of the impact these new capabilities are having on warfare around the world.

The 2020 plan included $1.6-2.4 billion for an armed medium altitude long endurance remotely piloted aircraft system. The previous government announced that the solution was to be a variant of Reaper called Sky Guardian. However that government then cancelled the program in 2022 to help fund REDSPICE. There is no explicit discussion of anything system to fill this niche in the new plan. It may be that the Government believes that Ghost Bat will fill it, although they are very different kinds of capabilities.

Air intelligence, surveillance and reconnaissance

Air ISR is listed at $3.6-3.9 billion, but that only allows completion existing projects: the MQ-4A Triton uncrewed aircraft (of which we are acquiring four for the eye-watering price of $3,095 million) and the MC-55A Peregrine ISREW aircraft (likewise four for nearly $3 billion). It also includes upgrades to the existing fleet of 14 P-8A maritime patrol aircraft. As with air combat, there are no additional aircraft planned.

According to the reprioritisation sheet, a less ambitious upgrade of the Wedgetail early warning and control aircraft fleet is now planned, realising ‘up to $1.5 billion’.

Missile Defence: $14-18 billion / 5%

This capability priority appears to be the one where the discrepancies between the DSR, the NDS and the new IIP are greatest. The DSR concluded that (paragraph 8.78), ‘Defence’s medium-range advanced and high-speed missile defence capabilities should be accelerated.’ And the NDS made the telling observation (paragraph1.26) that ‘Geography cannot protect Australia against new long-range missiles.’

So it is more than a little jarring that ballistic missile defence and medium-range ground-based air defence that were in the 2020 plan (with funding of $15.8-23.7 billion and $4.9-7.3 billion respectively) have disappeared from the new plan. The only ground-based capability that that leaves us with is the Army’s new NASAMS system, a capable system used by the Ukrainians to good effect, but there’s not much of it and it’s not designed to defeat long-range ballistic missiles.  It’s one part of what has to be a layered system of different weapons.

As with other omissions, there’s no explanation. The cancellations are not even included in the list of reprioritisations, despite their combined $20-30 billion value (the cynic might wonder whether that was done deliberately so as not to draw attention to it). Of course, arguments could be made against making investment of that scale in missile defence, for example that it still won’t cover all of Australia, that defeating ballistic missiles capable of reaching Australia from China is technically difficult, that investment in passive defences is better value for money, and so on. But the Government hasn’t published any explanation, which can only make the public wonder what, if anything, it is doing to protect them from those missiles that the Government has acknowledged can now reach Australia.

The DSR also assessed that (paragraph 8.79), ‘While we are supportive of Defence’s approach to developing an ADF common IAMD capability, we are not supportive of the relative priority that the program was given. The program is not structured to deliver a minimum viable capability in the shortest period of time but is pursuing a long-term near perfect solution at an unaffordable cost.’ The 2020 plan programmed funding of $1.8-2.8 billion for a joint air battle management system; in the 2024 plan that’s ballooned to $5.7-$7.7 billion. Whether this is more consistent with a minimum viable capability or with a ‘long-term viable solution at an unaffordable cost’ is difficult to say from the outside.

Overall it would be interesting to hear what the authors of the DSR have to say about the tripling in cost of the air battle management system and the cancelling of ballistic missile and air defence missiles that any big control system might fire in the new IIP.

Theatre logistics: $15-21 billion / 5%

Since, according to the old saying, amateurs talk tactics while professional talk logistics, it’s always good to see funding going into logistics. Due to the lack of granularity in the investment plans, it’s hard to compare them, but the $15-21 billion in the new plan seems to be an increase, although many of the analogous elements in the 2020 plan were scattered across domains and chapters such as the ones on the Defence enterprise program and Defence estate.

By far the biggest element is $11-15 billion for ‘additional logistics centres and capacity’, but there is little detail on what this will deliver other that the comment that it will be focused on northern and central Australia.

There’s also $3.7-4.8 billion for fuel holdings, storage and distribution up from $0.9-1.3 billion in the 2020 plan. We should also note that the United States has invested heavily and quickly in fuel storage in the Northern Territory as part of the US Force Posture Initiative, showing what is possible.

Theatre command and control: $11-15 billion / 4%

Overall this capability priority is $11-15 billion of jargonistic verbiage, although in its favour the chapter is thankfully brief. It seems like a remarkable amount of money to ensure commanders can make decisions, particularly when the explanatory text doesn’t explain what it’s delivering other than command and control systems.

It includes $5.2-7.2 billion for land command systems but the text doesn’t say if part of that is delivering a battle management system so that the troops on the ground get something to help them do the actual fighting. Readers might recall that after nearly $2 billion in expenditure, years of fruitless effort, multiple reviews and scathing audits, the Army’s previous attempt to deliver a battle management system (LAND 200) was cancelled without public explanation from Defence, leaving the troops with nothing. Hopefully this $11-15 billion will deliver more tangible benefits, but LAND 200’s sorry history does not inspire confidence.

The rest

Since nobody is paying me to do this and you are probably time poor, we’ll wrap this up since we are getting into the relatively small (but still very large by most people’s standards) capability priorities. They are:

Guided weapons and explosive ordnance: $16-21 billion / 5%

Northern bases: $14-18 billion / 4%

Enterprise infrastructure: $17-22 billion / 5%

Enterprise data and ICT: $8.5-11 billion / 3%

Advanced Strategic Capabilities Accelerator: $3.6-3.8 billion / 1%

There’s certainly a lot more to be said about GWEO, northern bases and infrastructure and Defence’s innovation system that is now led by ASCA, so SAA will be returning to these topics in future posts.

Dr Marcus Hellyer is Head of Research at SAA.