Russell Buzby

The 2026 National Defence Strategy describes Australia’s strategic environment as the most dangerous since the Second World War. The concept of deterioration, which anchored the 2024 edition, is declared no longer adequate. The rules-based order is “in transition,” the end state “difficult to predict,” and exposure to military coercion will reach levels not seen in eighty years. The Integrated Investment Program backs this assessment with $425 billion in capability investment over the decade, drawn from a total defence portfolio of $887 billion through 2035-36. On paper, the scale of the response matches the scale of the threat assessment.

The gap between the two documents tells a different story. ASPI’s day-one analysis, drawn from nine separate analysts, identified a recurring pattern: the NDS sharpens the strategic language while the IIP distributes money in ways that do not always follow the strategy’s own priorities (ASPI, 2026). The most concrete example is northern bases. The strategy elevates them as “infrastructure of deterrence,” describing them as essential to force projection and the Strategy of Denial. The IIP allocates 3 per cent of total investment to enhanced northern bases, down from 4 per cent in the previous iteration. Raelene Lockhorst, ASPI’s Deputy Director for National Security, captured the disconnect precisely: “The strategy has sharpened, but the investment signal has not kept pace” (ASPI, 2026). When a strategy names something as critical but reduces its funding share, the investment is the truer statement of intent.

The largest tension runs through the strategy’s central organising concept: self-reliance. The NDS formally elevates self-reliance as a core strategic objective, distinguishing it carefully from self-sufficiency. Self-reliance, the strategy argues, means reducing critical dependencies while maintaining access to the technological and industrial strengths of allies. The distinction is analytically sound and the definition is honest about what Australia can and cannot do alone. But the single largest investment in the IIP, the AUKUS nuclear-powered submarine pathway at $71-96 billion over the decade, deepens the very alliance dependency the strategy identifies as a risk. The submarine rotational force at HMAS Stirling from 2027, the purchase of three to five Virginia class boats from the United States, and the trilateral SSN-AUKUS design process all depend on sustained cooperation with Washington and London across multiple administrations and decades. Hughes and Bassi, writing separately for ASPI, acknowledged what the strategy does not quite say aloud: “the US is no longer the benign hegemon to which we’ve been accustomed” (Hughes & Bassi, 2026). Their recommendation is to follow Poland’s model, preserving the security partnership while publicly disagreeing on specific policies. Whether that model survives the particular pressures of AUKUS, with its unprecedented nuclear technology sharing and multi-decade commitment horizons, remains genuinely uncertain.

The 3 per cent of GDP headline has drawn the sharpest political fire, and with good reason. The target adopts NATO’s methodology for measuring defence expenditure, which counts military pensions, housing, and healthcare for personnel alongside direct capability spending. Under this metric, Australia is already at approximately 2.8 per cent of GDP. Under the traditional Australian measurement, the figure would sit closer to 2.3-2.4 per cent by 2034 (Grattan, 2026). The methodology change is defensible on its own terms. NATO’s metric is the international standard and allows comparison with alliance partners who measure the same way. But presenting a metric switch as a spending increase invites the criticism it has received. The Coalition called it “creative accounting.” Former ASPI executive director Michael Shoebridge called the methodology “shameless.” Whether the underlying accounting is sound matters less if public confidence in the fiscal credibility of the strategy erodes.

The strategy’s engagement with lessons from Ukraine and the Middle East is more developed than critics have allowed, but also more limited than the strategic environment demands. The NDS includes a dedicated inset box identifying key findings: the asymmetric advantage of cheaper systems against expensive platforms, the disproportionate impact of Ukraine’s Unmanned Systems Forces, and the necessity of scalable domestic industrial capability that can be surged at the onset of conflict. The IIP follows through with investment in Ghost Shark autonomous underwater vehicles, 55 Bluebottle uncrewed surface vessels, counter-drone systems through the ASCA missions, and sovereign hypersonic development. These are real commitments. But they are scattered across smaller line items while the maritime domain, at 41 per cent of the IIP, remains anchored by crewed warships and submarines. Ryan, writing at the Lowy Institute, assessed the strategy’s treatment of AI and cognitive warfare as “superficial” and observed “nothing that would get the ADF close to” the capabilities demonstrated by the United States, Ukraine, and Israel in recent operations (Ryan, 2026). Layton at Griffith University went further, arguing the strategy “feels written for a bygone era” and that autonomous systems receive minimal funding relative to traditional crewed platforms despite everything the past four years of conflict have demonstrated (Layton, 2026).

The most consequential element of the strategy may receive the least public attention. The Defence Delivery Agency, standing up in July 2027 under a National Armaments Director reporting directly to Ministers, will integrate three existing capability delivery groups and consolidate accountability for acquisition and sustainment. This is the institutional mechanism through which the strategy’s ambitions will either be delivered or diluted. I have written separately about the concentration of acquisition authority in Defence and the patterns of oversight retreat that accompany structural reform. The DDA’s success will depend less on its organisational design than on whether it inherits the accountability frameworks that make institutional authority productive rather than merely concentrated. Defence’s track record on major project delivery, extensively documented by the ANAO and the Joint Committee of Public Accounts and Audit, gives reason for caution on that front.

The think tank consensus is that the 2026 NDS represents evolution, not revolution. Ryan called it “more of the same.” ASPI’s Mike Hughes described it as “evolution, not revolution.” The strategic framework is unchanged: National Defence, Strategy of Denial, deter-shape-respond. The capability priorities are refined, not reimagined. The new money, while significant in absolute terms, is incremental rather than transformative. The question the strategy does not quite answer is whether incremental improvement is adequate to the environment it describes with such urgency. A strategy that assesses the threat as unprecedented but funds the response as a progression is making an implicit bet that the timeline for action remains forgiving. The next biennial review, due in 2028, will test whether that bet was well placed.

References

Australian Government (2026). National Defence Strategy 2026. Department of Defence.

Australian Government (2026). 2026 Integrated Investment Program. Department of Defence.

ASPI (2026). “2026 National Defence Strategy: views from ASPI analysts.” The Strategist, 16 April 2026.

Grattan, M. (2026). “Albanese government will commit to boosting defence spending to 3% of GDP, but under a revised definition.” The Conversation.

Hughes, M. & Bassi, R. (2026). “NDS 2026 – The Australia-US Alliance: the art of dealing with a great power.” The Strategist, 16 April 2026.

Layton, P. (2026). “The new National Defence Strategy feels written for a bygone era – and ignores the elephant in the room.” The Conversation, 16 April 2026.

Ryan, M. (2026). “The 2026 National Defence Strategy delivers more of the same.” The Interpreter, Lowy Institute, 16 April 2026.