Defence

Outlook

Defence investment in the Territory is expected to increase over the outlook period due to increased geopolitical uncertainty and the Territory’s important strategic location in the Indo‑Pacific region.

In 2022-23 defence expenditure in the Territory was the highest on record, reaching $2.9 billion, up 4.5% from the previous year. Given the Territory’s relatively low population and output, defence investment has a significant impact on the Territory economy. Large defence projects provide significant investment opportunities for the public and private sector, and impact Territory population.

Australia’s strategic outlook is changing due to the shift in global economic and political power to the Indo‑Pacific region. In response to this changing dynamic, the Commonwealth is strengthening ties with allies and partners, increasing defence capabilities and reprioritising its force posture.

The National Defence Strategy, released on 17 April 2024, outlines the strategic framework for addressing the nation’s security challenges. Since the 2023 Defence Strategic Review, the Commonwealth has committed an additional $5.7 billion over the next four years and $50.3 billion over the next decade in national defence funding. Defence investment in the Territory is expected to be supported by growing interest in the Indo-Pacific region, which remains a strong focus for national security.

Expenditure and employment

National defence expenditure in the Territory represented 9% of GSP. The Territory share of both national defence expenditure and employment was 5%, with both decreasing by 0.1 percentage point from the previous year.

Chart 10: Defence expenditure in the Territory

Source: ABS unpublished data; Department of Treasury and Finance

The number of defence personnel stationed in the Territory decreased by 0.7% (37) in 2022-23 to a total of 5,358. The number of permanent forces decreased by 2.2% to 4,181 while the reserve forces grew by 4.4% to 958. The number of Department of Defence public servants increased by 7.4% (15) to 219.

Chart 11: Defence employment in the Territory

RHS: right-hand side
Source: Defence Annual Report 2022-23

In the permanent forces, the army numbers decreased by 2.8% to 2,576 while the number of navy personnel fell by 3.4% to 659. This was partially offset by a 0.5% increase in air force personnel to 946. The Territory accounted for 7.3% of national permanent defence forces.

The number of Defence Housing Australia properties in the Territory decreased by 0.6% to 1,699 in 2022‑23, continuing a downward trend that has averaged a decrease of 2.4% over the past five years.

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).

To strengthen its defence alliances and enhance the skills of its military personnel, Australia routinely participates in military exercises. Given its location in the Indo-Pacific region, the Territory collaborates with various international partners to host annual exercises including:

• Exercise Koolendong, a combined exercise alongside the US Marine Corps
• Exercise Diamond Storm, operating from RAAF bases Darwin and Tindal
• Exercise Talisman Sabre, led by the Australian forces and US military.

The Territory is home to two large biennial defence exercises: an international air combat exercise, Exercise Pitch Black, and an international maritime engagement exercise, Exercise Kakadu. These exercises bring together numerous nations and strengthen international alliances, while establishing the Territory as an important location for defence in the Indo-Pacific region.

In 2024, the ADF participated in Exercise Milan 24, a six-day naval exercise hosted by India. Exercise Milan is a biennial training activity for the Indo-Pacific region that brings together about 50 nations and 20 international vessels. Australia’s participation is important for strengthening engagement and partnerships with regional security forces.

The defence outlook in the Territory remains positive as global focus on the Indo-Pacific region increases. Engagement with international partners continues to strengthen alliances and investment in the defence sector.

Projects

Defence tenders offer the incentive for large international firms to invest in the Territory. International firms bring with them expertise and experience that support the growing local defence industry. Defence, by fostering links between international and local firms, provides the opportunity for local businesses to integrate into the global supply chain. For example, Territory companies, such as Fuel Calibration Services, Territory Instruments, RAM Services and RGM Maintenance, are subcontracted by Lockheed Martin to provide ground support equipment capability.

The defence projects being delivered in the Territory are significant and extend across the air force, navy, and army. These projects include upgrades to training facilities, enhanced defence logistical capability, housing expansion and new strategic infrastructure to support the ADF’s operation in the north. Projects under development in the Territory (Map 3) include:

• $1.6 billion for RAAF Base Tindal redevelopment stage 6 and USFPI airfield and infrastructure works
• $760 million for the P-923 , 941 and 949 aircraft facilities at RAAF Base Darwin
• $747 million to upgrade major defence training ranges and infrastructure to support the USFPI
• $601 million for the Larrakeyah defence precinct redevelopment program
• $518 million for the MQ-4C Triton forward operating base for RAAF Base Tindal
• $389 million to upgrade USFPI Robertson Barracks base support infrastructure
• $382 million for multipurpose hangar and taxiway construction at RAAF Base Tindal
• $380 million to develop the Berrimah Defence Establishment
• $351 million to maintain and upgrade the national airfield capital works at RAAF Base Darwin
• $214 million for the P-8A Poseidon operating base maintenance and development
• $203 million to develop and maintenance of facilities for RAAF Base Darwin
• $140 million for the Arafura class offshore patrol vessel Sea1180 facilities
• $120 million to upgrade bulk fuel facility at RAAF Base Tindal
• $76 million to maintain the US Air Force support facility and squadron operations at RAAF Base Tindal
• $58 million to upgrade the secure multi-user compound at RAAF Base Darwin
• $37 million for the new Larrakeyah Health Centre and refurbishments to Robertson Health Centre
• $18 million to support the Air555 Airborne Intelligence Surveillance Reconnaissance Electronic Warfare facilities
• $8 million for facilities to support the Sea2273 fleet information environment modernisation project
• $500,000 for the Land 121 facilities project.

On 21 February 2023, the Commonwealth announced a $64 million investment into the Defence Renewable Energy and Energy Security Program to deliver solar energy and battery storage systems to selected defence sites across Australia.

In the Territory, $13 million in upgrades have been proposed to the following sites:

• Robertson Barracks
• Larrakeyah Barracks
• Harts Range
• RAAF bases Darwin and Tindal.

On 30 January 2024, the Commonwealth announced an investment of $24 million for key infrastructure upgrades to Robertson Barracks and Howard Springs South in Darwin.

Defence investment is expected to grow in the Territory as outlined in the National Defence Strategy 2024. Recommendations in the strategy include a focus on improving the ADF’s ability to operate from Australia’s northern bases, and establishing networks in the Indo-Pacific region, representing further upside to the defence outlook in the Territory.

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

Map 3: Major defence sites in the Territory¹

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