The government has released the third of its top-level defence documents for 2026, the Defence Industry Development Strategy (DIDS 2026), which features a series of targeted measures to grow Australia’s sovereign defence industrial base.
Defence Industry Minister Pat Conroy said one measure will require Defence primes to employ a minimum number of apprentices by setting targets based on the nature of their work.
As well, there will be Minimum Viable Contracting, to ensure procurement activities are streamlined and efficient.
How Defence and industry work together on exports will be transformed, building on the landmark sale of Boxer vehicles to Germany and the JORN radar to Canada.
There will be another $80 million grant funding to support eligible businesses, bringing this program up to a quarter-of-a-billion dollars in support.
Faster innovation will be embedded into defence procurement, building on recent experience in acquisition of counter-drone capabilities.
“We saw capability delivered into the hands of the ADF in a matter of months after going to market, which everyone in this room will know is light speed for defence procurement,” he said in a speech to the National Press Club in Canberra.
Minister Conroy said a key plank of DIDS 2026 was overhauling the US $3 billion (approx. A $4.35 billion) Defence Export Facility which was established in 2018 but had not lived up to its full potential.
“It’s only been used three times since then. By streamlining processes and implementing new Ministerial Directions, we want the facility to better support what our defence industry needs,” he stated.
DIDS 2026 forms the third component of the triumvirate of defence strategies and follows the release of National Defence Strategy (NDS) 2026 and the 2026 Integrated Investment Program (IIP), both launched in April.
This is a big week for defence industry and defence acquisition, with the beginning of the rollout of the new Defence Delivery Group on Wednesday with the merger of the Capability Acquisition and Sustainment Group (CASG), the Guided Weapons and Explosive Ordnance Group (GWEO) and the Naval Shipbuilding and Sustainment Group (NSSG).
On 1 July, 2027, that will become the Defence Delivery Agency (DDA) headed by the National Armaments Director.
Minister Conroy said these were the biggest reforms to the defence department for 50 years.
He said the reform taskforce recently examined a range of projects, finding the average total cost increased by 38 per cent from project conception to government decision – before any contracts were signed.
He cited the case of the Hunter-class frigate program as an example where hundreds of millions of dollars’ worth of changes were ticked off without considering the impact of cost, schedule or the design.
“A project with the right intent and capability at the time but let down by a system that prioritised gold plated requirements without considering cost and schedule impacts,” he said.
In his speech Minister Conroy cited the concept of “progressive patriotism,” as confidence in, and celebration of, what our national project has built.
“It is confidence in how it is evolving, and confidence in the future. Strong defence of our country—including the need to invest in our defence industry, people and systems—is a critical part of understanding what Australian progressive patriotism looks like today,” he said.
“Failing to invest in defence leaves Australia vulnerable to aggression and coercion. Leaving Australia vulnerable to aggression will undermine our sovereignty.
“A strong sovereign defence industrial base mitigates risk, decreases dependencies, and means we can make things here.”
DIDS 2026 is the two-yearly update of DIDS 2024 which set out strategic rationale for a sovereign defence industrial base.
“Since then, conflicts in Ukraine and in the Middle East have only served to reinforce that national security is underpinned by domestic industrial capability and capacity,” says the latest version.
“While Australia’s security environment is different to that of Eastern Europe and the Middle East, there are clear lessons that can be learned from contemporary conflicts while still accounting for Australia’s distinct strategic geography.
“Supply chain vulnerability, the evolution of new and innovative technologies, and the expanding use of grey-zone tactics continue to challenge traditional warfighting principles. Therefore, as the 2026 National Defence Strategy highlights, Australia must increase our self-reliance through growing sovereign defence industrial capability and capacity in the areas most critical for National Defence.”
DIDS 2026 says that in order to deliver capability within necessary timeframes, Defence aims to consistently and continuously guide and grow the sovereign defence industrial base to align to Australia’s national security needs.
It cites the seven Sovereign Defence Industrial Priorities from the 2024 Defence Industry Development Strategy which have now been further refined.