Acting Prime Minister and Defence Minister Richard Marles has announced a sweeping restructure of his department, creating a new mega-agency to manage major military projects, but has not ruled out future job losses as a result.
A New Agency to Tackle Delays and Blowouts
The new Defence Delivery Agency, announced on Monday, will be tasked with overseeing all major defence acquisitions, aiming to minimise the chronic cost overruns and delays that have plagued past projects. This comes as Australia commits an extra $70 billion in military spending over the next decade, including funds for the pivotal AUKUS submarine program.
Mr Marles insisted the initial phase of the plan would not involve job cuts. However, he declined to guarantee there would be no redundancies once the new agency becomes fully operational and independent from July 2027. The agency will be led by a national armaments director.
"We are about ensuring that we have the best capability that we can and putting a focus on that," Mr Marles told reporters in Canberra. "That's what this is about. It is about ensuring that we have a project delivery capability in Canberra. We are not seeing job cuts here."
Phased Implementation and Direct Ministerial Oversight
The overhaul will be implemented in stages. From July 2026, a new defence delivery group will be established within the existing department, staffed by personnel from three existing groups that will be scrapped and absorbed:
- The Capability Acquisition and Sustainment Group
- The Guided Weapons and Explosive Ordnance Enterprise
- The Naval Shipbuilding and Sustainment Group
Once fully established, the independent Defence Delivery Agency will report directly to the defence and defence industry ministers and will control the budget for all major defence acquisitions. Defence Industry Minister Pat Conroy said the agency would combine strong public sector expertise with top talent recruited from the private sector.
"We've added 500 highly-skilled public servants in these three groups, and got rid of a serious number of contractors and consultants," Mr Conroy said, highlighting efforts to rebuild internal capability.
Mixed Reactions and AUKUS Coordination
The announcement received a mixed response. The Coalition's defence spokesperson, Angus Taylor, dismissed it as "nothing... other than moving bureaucrats around." Greens defence spokesperson David Shoebridge was similarly sceptical, arguing that simply creating a new agency does not guarantee accountability for "multiple billion-dollar failures."
However, defence analyst Jennifer Parker from the Australian National University called it a "significant and... good decision," noting it was based on review recommendations. She cautioned it was "not a silver bullet" to prevent cost blowouts but would help drive necessary structural change by operating more like a commercial entity.
In a related move, the Department of Prime Minister and Cabinet confirmed it had established a dedicated AUKUS Group to lead policy on the trilateral security pact, headed by Deputy Secretary Kendra Morony.
Mr Marles framed the overhaul as essential for modernising the Australian Defence Force. "It will drive stronger contestability, more accurate cost estimation and clearer accountability for the delivery of major projects," he said. The government will begin designing the new agency and consulting stakeholders immediately.
