Defence and the government are preparing new versions of the National Defence Strategy (NDS) and Integrated Investment Program (IIP), drawing on lessons from conflicts in Ukraine and the Middle East.
NDS 2026 and IIP 2026 will update NDS and IIP 2024, under the new biennial refresh program, with the expectation that key prescriptions – rising global tensions, reduced warning times – won’t change.
One immediate takeout is that the numbers in IIP 2024 were rubbery, which won’t be repeated in IIP 2026.
“It was clear within months of publishing the IIP in 2024 that some of our cost estimates and budget phasings were flawed. This created significant disruption and eroded enormous confidence in our ability to deliver the integrated investment program,” Vice Chief of the Defence Force Air Marshal Robert Chipman told the recent Defence and Industry Conference in Canberra.
“We stand much greater change of justifying defence expenditure when our estimates are accurate and our delivery reliable.
Defence is now adopting more dynamic and sophisticated treatment of over programming.
Chris Deeble, Deputy Secretary of the Defence Capability Acquisition and Sustainment Group (CASG) said the new NDS and IIP would be critical in guiding us into the future.
“Time is now of the essence and our ability to be able to respond to that challenge and deliver on time and on budget with the capabilities needed set at that minimum viable capability will be critical,” he told the conference.
“If we not seen to be spending that money wisely, delivering not on our outcomes in a timely fashion, then we will lose credibility, and the likelihood of that funding is going to be reduced.”
AIRMSHL Chipman said events of the last 15 months underlined the merits of reviewing the NDS and IIP every two years. That includes fighting between India and Pakistan, the Middle East and Ukraine.
“This has been a year of tectonic shifts in our geostrategic environment. Defence continually reviews our judgments, investments and responses to make sure that are contemporary and optimised,” he said.
“The biennial cycle provides a structured basis for this assessment.
“We will be looking the lessons from recent conflicts and - to a large extent - they will reinforce the judgments that we made for NDS 2024. We will prioritise long range strike and force projection capabilities we need to deliver a strategy of denial.”
AIRMSHL Chipman said one development from Ukraine the ADF was assessing very carefully was the proliferation of drone and counter-drone technology.
“When we talk about learning the lessons of Ukraine, it shouldn’t be about having a warehouse full of small drones. It should be how do we create those conditions to enable that genuine strategic drone capability,” he said.
That is, fostering industry capabilities to produce small drones, with capabilities to speedily innovate. Australian industry is already doing some of that through supply of drones for Ukraine.
Another emerging perception is that the war we may have to fight might not necessarily be brief. The latest round of the Russo-Ukraine war is approaching its fourth year. Israel’s war in Gaza is well into its second year.
AIRMSHL Chipman said Defence’s perception was that a future war would be triggered by a crisis, would involve high end combat systems and be over in weeks.
But the lesson from Ukraine and elsewhere was that modern combat was no less protracted than it had been throughout history.
“Therefore, you go from those exquisite capabilities that we can acquire through our international partners to things we can deliver reliably from our own sovereign industrial base,” he said.
“That places a completely different focus on the industry capability that we need to develop as part of NDS 2026. It’s not just the ability to manufacture capabilities but to be able to sustain them, adapt them and to evolve them to make sure they’re in the right place at the right time with all the right logistics”
Along with reduced warning time, the concept of minimum viable capability was a central feature of NDS 2024.
Contrary to popular perceptions, defence acquisition projects generally don’t run over budget and deliver all or most of the contracted capability. But they could - and did - run years late – highly undesirable in the current strategic circumstances.
AIRMSHL Chipman said in the past Defence had routinely accepted project cost increases and changes to scope.
“But we haven’t really held our feet to the fire on schedule. We see adjustments to schedule occurring continuously,” he said.
“NDS 24 drove an emphasis on minimum viable capability, to deliver capabilities as soon as it offers and advantage - good enough on time, with improvement delivered through iterative upgrades.”
He said this was a significant shift, elevating cost and schedule alongside capability.
Time to delivery has become an essential factor in our value for money calculus, he said.
Addressing the industry representatives at the conference, he said Defence needed to incentivise companies to deliver capabilities on time and on budget rather than delivering the exceptional and unique.
With nations across Europe increasing their defence spending, there are growing opportunities for Australian companies.
Deputy Secretary of CASG Chris Deeble said he had spent a fair bit time in Europe talking to NATO and the European Union, assessing changes in their policies and how they are posturing European industry to respond to threat of an aggressive Russia.
From those discussions, it was clear there were real opportunities for Australian industry which could benefit from the 800 billion Euros assigned to uplift European industry.
“They have changed a lot of rules around how they want to engage across the European industry base and open opportunities for other nations,” he said.
“Currently about 30 per cent of the work that will be undertaken in the European context is open to other nations.
“There is a far greater appreciation in Europe that they can’t do it all themselves. They need like-minded nations to participate.”