Defence

Outlook

Defence investment in the Territory is expected to increase over the outlook period as a result of increased geopolitical uncertainty and the Top End’s important strategic location in the Indo‑Pacific region.

The 2016 Defence White Paper and associated Integrated Investment Plan reinforced the growing strategic importance of the Territory to Australia’s defence and regional stability. As the country’s northernmost jurisdiction, the Territory will always be integral to the operational capability of the Australian Defence Force (ADF), Australia’s military allies and partners, and regional neighbours.

Responding to geopolitical tensions in the Indo‑Pacific, the Commonwealth released the 2020 Defence Strategic Update. This presents further opportunities for the Territory to play an even bigger role in supporting Australia’s future defence capabilities that are critical to respond to evolving regional and global challenges. Alongside this are the associated investments in infrastructure, operational support, maintenance and technologies for equipment, and forces based in and deployed from the Territory.

The reinvigoration of the Quadrilateral Security Dialogue and the establishment of the Australia, United Kingdom (UK) and US agreement has seen a significant increase in the attention and resources of Australia and its allies into the Indo-Pacific. This is likely to generate a level of involvement by the Territory.

As a sparsely populated yet geographically large jurisdiction, defence personnel and operational decisions have a direct impact on the Territory’s economy. Associated supply and maintenance activity supports local businesses and industry development, and relocating families contribute to population growth and increased demand for goods and services.

Defence training exercises with international partners, and deploying allied personnel and equipment to the Territory also brings additional revenue that extends beyond defence‑related industries to reach a wide range of local industries including the hospitality, retail and tourism sectors.

The capability of the local defence service and supply industry, including the industrial infrastructure essential to this capability, continues to strengthen, expand and modernise the ongoing and future defence and national security requirements of Australia and the region.

Employment

The Territory’s proportion of national defence expenditure was 4.6% in 2020-21, or $2.2 billion, a 0.9% decrease from the previous year. Defence expenditure in the Territory is above the 10-year average of $2.1 billion per annum (Chart 8). The share of the national defence expenditure was unchanged from the previous year and is down by 1.8 percentage points from the height of 6.4% in 2014.

Chart 8: Defence expenditure in the Territory

Defence expenditure in the Territory

Source: ABS unpublished data; Department of Treasury and Finance

The number of defence personnel stationed in the Territory increased by 0.2% (11) in 2020-21 to a total of 5,444. The growth was in the reserve forces (up by 2.6% to 858), with the number of permanent forces decreasing by 0.3% to 4,382. The number of Department of Defence public servants was unchanged at 204.

Chart 9: Defence employment in the Territory

Defence employment in the Territory

RHS: right‑hand side
Source: Defence Annual Report 2021

In the permanent forces, the army decreased numbers by 2.6% to 3,371, though this was partially offset by a 1.5% increase in air force personnel to 1,048 and an 11.5% increase of the navy personnel to 821 (chart 9). The Territory’s share of total defence personnel decreased by 0.1 percentage points to 5.1%.

On 10 March 2022, the Commonwealth announced a national expansion of defence personnel of 18,500 by 2040. An additional 988 defence personnel will be stationed in the Territory. As a further 6,000 postings will be determined in the future, there is potential for a greater number to be stationed in the Territory.

Personnel numbers are not the only contributors to the Territory’s population as numerous defence personnel relocate with their families. The total defence-related population is estimated to be about 9,000 or 3.6% of the Territory’s population.

The number of Defence Housing Australia properties in the Territory decreased by 1.5% to 1,746 in 2020-21, continuing the downward trend from a peak of 2,638 in 2013-14. The Territory’s proportion of total defence housing stock decreased by 0.6 percentage points to 9.2%. Defence Housing Australia is in the process of developing 131 hectares at Lee Point to produce 778 development lots in a mixed residential and retail community, with titling expected by June 2022. Between 20% and 50% of residential properties will be allocated to defence personnel.

International cooperation

Australia maintains international cooperation with a range of defence partners. Together with its main defence partner, the US, Australia participates in the United States Force Posture Initiatives (USFPI). The 10th anniversary of USFPI was held in 2021 and included the Marine Rotational Force – Darwin (MRF-D) of up to 2,500 US personnel, training throughout the Territory. In addition to the MRF-D, the Enhanced Air Cooperation element of the USFPI strives to strengthen the air cooperation between the 2 allies with air assets and personnel rotated through the Territory.

The US also sees strategic value in the Territory due to its location in the Indo‑Pacific region. Therefore, it has partnered with Australia to improve infrastructure in the Territory to better secure its interest. As part of the Enhanced Air Cooperation, the US is upgrading infrastructure to support increased rotations of air and sea assets. One of these projects is the $270 million bulk fuel storage facility to provide storage of 300 million litres of aviation-grade JP-5 turbine fuel and commercial grade Jet A-1 fuel in Darwin.

Australia regularly engages in military exercises with its defence allies to foster closer relations and upskill defence personnel. Due to its location in the Indo-Pacific, the Territory frequently hosts exercises with different international partners.

In 2021, these exercises included:

  • the annual Exercise Crocodile Response with the US and Indonesia in May
  • exercise Jackaroo with Japanese troops and US Marines in June
  • the annual Exercise Wirra Jaya with Indonesia, where host duties switch between the 2 nations
  • a 2,200‑strong US Marine Corps contingent trained with the ADF in Exercise Koolendong 2021 – a high-end, live-fire warfighting exercise at the vast and remote Bradshaw Field training area
  • in November 2021, Exercise Paradise, a regular naval exercise with Papua New Guinea, was hosted in waters off Darwin
  • the Territory hosted for the first time AUSINDEX21, a naval exercise between Australia and India in September 2021.

The Territory is home to 2 large biennial defence exercises: an international maritime engagement exercise, Exercise Kakadu, and an international air combat exercise, Exercise Pitch Black. These exercises bring together numerous defence partners ranging from the US and UK to Malaysia and Singapore. Both exercises will be held in 2022, with Exercise Pitch Black to take place from 19 August to 8 September 2022 and Exercise Kakadu to follow on throughout September.

Besides military exercises, Australia’s defence partners are welcomed in Darwin and regional port facilities to enable resupply, as was the case when Japanese vessels JS Kaga and JS Murasame docked in Darwin after exercises with India and the US in September 2021.

The engagement with international partners reaches a wide range of local industries including the hospitality, retail and tourism sectors.

Projects

Since 2016, the Territory economy has benefited greatly from an increase in Defence investment. The Commonwealth is in the midst of an $8 billion major infrastructure investment commitment through to 2025, and a further $12 billion is earmarked for 2026 to 2035, pending parliamentary approvals. Local industry capability plans and Indigenous procurement targets set by the Department of Defence have seen an uptake in Territory businesses, including Indigenous Business Enterprises, winning work across defence programs and projects since 2016. Nationwide, local industry participation in defence infrastructure projects is sitting at 75%. In the Territory, it is achieving 82% participation (as at late 2021).

Defence tenders offer the incentive for large international firms to invest in the Territory. These international firms bring with them expertise that can be skill shared across the Territory. Defence, by fostering links between international and local firms, allows for networking in the future or provides the opportunity to integrate into the global supply chain. For example, Territory companies (Fuel Calibration Services, Territory Instruments, RAM Services and RGM Maintenance) are subcontracted by Lockheed Martin to provide ground support equipment capability.

Projects under development across various facilities in the Territory include (Map 3):

  • $520 million on redeveloping Larrakeyah Barracks and HMAS Coonawarra to support naval operations in the north
  • $1.1 billion for the RAAF Base Tindal stage 6 redevelopment and USFPI airfield works to support the KC-30A platform
  • $711 million investment to upgrade Robertson Barracks’ close training area, and Kangaroo Flats, Mount Bundey and Bradshaw Field training areas
  • $149 million to upgrade hangers and other facilities at RAAF Base Darwin to support the P-8A Poseidon aircraft
  • $245 million for infrastructure to support Arafura‑class offshore patrol vessels
  • $49 million for upgrades to Larrakeyah Barracks Health Centre and RAAF Base Darwin health centres
  • $92 million for USFPI fuel storage at RAAF Base Darwin
  • $270 million bulk fuel storage facility at East Arm to provide storage of 300 million litres of aviation‑grade JP-5 turbine fuel and commercial grade Jet A-1 fuel.

Projects proposed and subject to approval:

  • USFPI Robertson Barracks infrastructure upgrades
  • RAAF Base Darwin mid-term refresh
  • MQ4C triton forward operating base at RAAF Base Tindal
  • National airfields capital works at RAAF Base Darwin, Robertson Barracks and Mount Bundey.

In December 2021, RAAF Base Tindal accepted the first delivery of 4 F-35s that will operate from the base. The delivery of the F-35s followed the construction of new facilities at RAAF Base Tindal needed to store and operate the jets. The posting of the F-35 is integral to the ADF's plans for northern Australia and brings Lockheed Martin to the Territory to support aircraft maintenance at the base.

The Darwin ship lift project provides sovereign infrastructure which will enable the Regional Maintenance Centre North to conduct maintenance and sustainment to support the Royal Australian Navy’s fleet of vessels.

For the latest data on the Territory’s defence sector, refer to the Territory Economy website.

Map 3: Major defence sites in the Territory1

Major defence sites in the Territory

Click on map to enlarge.

1  This map is produced from various sources. Department of Treasury and Finance cannot guarantee the accuracy, currency, or completeness of the information. To be used as a guide only.
2  The Jindalee Operational Radar Network has 2 operating facilities within the Alice Springs region, at Harts Range and Mount Everard.
Source: Department of Treasury and Finance; Department of Industry, Tourism and Trade; Department of Defence