SINGAPORE — Australia’s government today released its budget for fiscal 2026-2027, putting aside a total of $62.6 billion Australian dollars ($45.2 billion USD) for defense.
This represents an increase of 6 percent from last year’s defense budget, and comprises 2.02 percent of its Gross Domestic Product. The Aussie government plans to increase its defense spending to 3 percent of its total GDP by 2033.
Included in the defense budget is a boost to staffing and funding to go toward the Australian Submarine Agency (ASA), which is in charge of Australia’s effort to develop and acquire a nuclear submarine capability under the AUKUS pact. The agency will have a budget of 512.5 million AUD over the coming year, a 33 percent increase from its current budget, according to the Portfolio Budget Statement.
Further, ASA is expected to increase its staffing levels for FY27 to an expected 1,209 from its current 833.
The plan to introduce nuclear powered submarines will be the costliest defense program in Australian history, with the recently released Defence Integrated Investment Plan (IIP) forecasting that the country will spend between $71 billion AUD and $96 billion AUD on the program and supporting infrastructure between now and 2036, although it does not break down the spending by year.
Australia has already budgeted and spent $5.3 billion AUD on the AUKUS submarine program over the previous fiscal year — $2 billion AUD over initial projections through additional payments to the US and UK to uplift their respective submarine industrial base.
AUKUS Pillar 1 will deliver eight locally built AUKUS-class submarines starting from the 2040s. The program has not been smooth sailing, however, despite surviving a review from the Trump Administration unscathed and more recently, a UK parliamentary report that said the program was suffering from “shortcomings and failings.”
Another significant area of investment flagged in Australia’s IIP is long range strike, with Australia planning to spend $28 billion AUD to $35 billion AUD over the next decade on associated programs across the air, land and sea domains. including up to $1 billion AUD for air-launched hypersonic weapons.
These figures do not include Australia’s plans to improve the resilience of its guided weapons supply chain by developing local manufacturing capability for precision munitions under its Guided Weapons and Explosive Ordnance Enterprise, which is expected to cost between $26 billion AUD and $36 billion AUD over the next decade.
The budget documents released today also confirmed that Australia will complete delivery of several aircraft types in 2026, with a separate portfolio statement stating the its 14th and final Boeing P-8A Poseidon multi-mission anti-submarine aircraft and three L3Harris MC-55A Peregrine surveillance aircraft will arrive in Australia in the remaining months of this year.