Australia faces difficult decisions as it boosts defence capability -review

A review of Australia's defence force warns A$42 billion in overspending on defence projects by the previous government means "difficult decisions and tradeoffs" must be made for new capabilities, according to excerpts shared with the media.

Anthony Albanese's Labor government will on Monday release its response to the Defence Strategic Review, led by former defence minister Stephen Smith and former defence chief Angus Houston, as well as a redacted, public version of its findings.

The review is expected to outline how Australia should shift to a more assertive defence posture, increasing deterrence with long-range strike capability amid a worsening geopolitical environment, and the cost of preparing for a conflict that could erupt without warning.

Excerpts of the review show key defence projects of the previous government were unfunded, including a proposed guided-weapons production programme, and an expansion of cyber capabilities.

Between 2020, when diplomatic ties worsened with China, and 2022, the Liberal government announced defence acquisitions that cost A$42 billion more than defence spending planned for the decade, the review found.

The authors said they could not fully quantify the cost of the review recommendations as a result.

"New capability requirements coupled with sustainment demand for existing capabilities and the need to address severe workforce pressures will require difficult decisions and tradeoffs to manage the Defence Budget over the immediate period," the review said.

It recommended some projects should be delayed, reduced or cancelled to shift resources to higher priorities.

That includes reducing the scope of what had become the Army's most expensive project, replacing ageing armoured personnel carriers with 300 infantry fighting vehicles. The project should be reduced to 129 vehicles, or one battalion's worth, it said.

The acquisition of modern amphibious landing vehicles and High Mobility Artillery Rocket Systems, or HIMARS, should be accelerated and expanded, it said.

It also recommended a land-based anti-ship missile project should be sped up and expanded.

Australia said last month it would spend up to A$368 billion over three decades to acquire and build a fleet of nuclear-powered submarines with the AUKUS partnership of Britain and the United States.