Australia plans to modernize its air force and naval capabilities to safeguard its border, sea lines of communication, protect surrounding regions including Southeast Asia and the South Pacific. In addition, the increased interest and involvement in the stability of the Indo-Pacific has provided another impetus to do so. In line with this, the defense budget of the country is expected to increase at a compound annual growth rate (CAGR) of 5.05% between 2022 and 2026, says GlobalData, a leading data and analytics company.

GlobalData’s report, ‘Australia Defense Market – Attractiveness, Competitive Landscape and Forecasts to 2026’, reveals that the upsurge in defense spending will be driven by increasing acquisition programs. The acquisition budget for 2021 is $11.7bn and is expected to reach $17bn in 2026, growing at a CAGR of 6.43%. Throughout the forecast period, it is expected that military expenditure will remain above 2% GDP share despite the global economic slowdown and pressure of mitigating the impact of Covid-19.

Rouble, Aerospace & Defense Analyst at GlobalData, comments: “The Australian government is investing in programs across maritime domain which includes the acquisition of nuclear-powered submarines, Hunter-class frigates, and Arafura-class offshore patrol vessels. This new fleet will significantly improve the Royal Australian Navy’s (RAN) capabilities to maintain a continuous presence in its territorial waters and would give Australia the muscle to stand up to any potential treat in the immediate region.”

Australia intends to acquire eight nuclear-powered submarines with the help of the US and the UK under the AUKUS trilateral security pact. Unlimited range coupled with high cruise speed in these submarines would give the RAN the ability to patrol the Indo-Pacific for a longer time and spot potential threats from afar. Additionally, the country has been developing its unmanned capabilities to provide a round-the-clock maritime wide-area intelligence, surveillance, and reconnaissance capacity. The country has been acquiring modern capabilities for a more sustained operational and strategic contribution.

Rouble concludes: “Australia will continue to boost procurement programs, as well as fund major RDT&E programs in the forecast period such as the High-Speed Long-Range Strike program which includes hypersonic research. Developing a sovereign high-speed weapons capability will be a step towards building and developing a robust, resilient, and internationally competitive defense industry base. This will create new opportunities for the Australian defense industry and could lead to potential defense exports as well.”