Australian Dynamism

This post has benefited from generous contributions from Austin Vernon, Malcolm Davis, Sam D’Amico, and others who do not necessarily endorse the conclusions of this piece. I will follow Australian spelling conventions in this piece. [Edit: This piece was quoted by Eric Crampton in The Post on April 27, 2026.] I’ve written a few pieces over the years about Australian energy and economic policy , and now I’m dipping my toes into defence. The usual disclaimers apply; this post represents my opinions only. I’m a dual US/Australia citizen, resident in Los Angeles, where I founded and run Terraform Industries , a solar synthetic fuel tech startup. I write this as someone who is familiar with the 2023 Defence Strategic Review , the 2024 and 2026 National Defence Strategies, and the 2024 and 2026 Integrated Investment Programs (IIP). While each successive document diagnoses the strategic environment with increasing accuracy it allocates capital against a threat model that no longer exists. Australia spends nearly AUD $60B/year (US $40B/year) on defence, about 2% of GDP. The 2026 National Defence Strategy commits to raising this to 3% by 2033 and allocates $425B over the coming decade, but increased expenditure won’t buy increased security if it’s spent on weapons that are no longer determinative. To avoid burying the lead, it is my contention that Australia should be able to achieve far more bang for its buck running competitive, lean, mean domestic weapons development programs focused on the newly demonstrated and increasingly determinative drones-of-various-kinds platforms. This is in stark contrast to the existing practice of spending >90% of acquisitions funding on foreign weapons platforms and much of the remainder on outrageously expensive failed development programs, such as the Hunter class anti-submarine frigate. This ship, which will spend eight years under construction until first launch in 2032, was based on a British design and will end up costing over $7b, per hull! Let’s contrast this to the US, hardly a paragon of lean defense spending. $7b would buy you a Nimitz-class nuclear aircraft carrier – including the planes. It would buy you the complete ground up development costs of nuclear attack submarines, with enough left over to pilot ballistic missile submarines and develop the original trident missile. It would buy you the complete ground up development of Falcon 9 and Starlink. That’s just for a single Hunter-class hull – Australia is currently planning to build six! Why maintain a defence force at all? The primary purpose is to maintain Australia’s capacity for peaceful self determination indefinitely into the future. That is, absolute national sovereignty requires Australia to maintain the ability to secure its territory, deter hostile aggression, and control its destiny. Without putting too fine a point on it, the purpose of the Australian Defence Force is to ensure that the calamity that befell Ukraine can never occur to Australia. While focused on Australia, this analysis could also be translated with minimal changes to other middle powers. Australia is rich (US$69,360 GDP per capita ), populous (28m + 1m diaspora), educated, peaceful, democratic, liberal, and financially stable. It has enormous territory and unmatched natural resources. It has much that foreign powers covet through either open or covert warfare. Australia’s current GDP exceeds that of every WW2 belligerent in 1940, even the US. It exceeds the combined economic power of all the Axis powers. And yet somehow, in 1940, in a world before computers, reliable diesel engines, modern healthcare, all the WW2 powers were able to churn out planes, tanks, ships, submarines, and munitions. The US produced nearly 300,000 planes. Even countries with terrible climates that are still poverty stricken in 2026, like Russia, were able to produce 160,000 aircraft back in the early 1940s. In contrast, wealthy, modern Australia was able to assemble 73 F-18 fighters from mostly imported components between 1984 and 1990, and nothing for the last 36 years. This is a festering problem that is now inviting catastrophe. What the strategy documents say The Albanese government’s position on Australian defence rests on three documents released in three consecutive biennial cycles. The 2023 Defence Strategic Review (Smith / Houston) concluded that the ADF is “not fully fit for purpose” and that the historical ten-year warning window before major conflict no longer applies. It accepted 105 of 108 classified recommendations and identified six priorities: AUKUS nuclear-powered submarines , long-range strike and domestic munitions manufacture, northern base hardening, workforce retention, rapid translation of disruptive technology into ADF capability, and deepening Indo-Pacific partnerships. The 2024 National Defence Strategy introduced two doctrinal inventions that now anchor Australian defence planning: National Defence (a whole-of-nation concept spanning maritime, land, air, space, cyber) and the Strategy of Denial (the cornerstone of Defence planning, intended to deter adversaries from projecting power through Australia’s northern approaches). Deterrence was elevated to Australia’s primary strategic defence objective, above the previously co-equal “shape” and “respond.” The accompanying IIP committed $330B through 2033/34. The 2026 National Defence Strategy , released last week on 16 April 2026, builds on rather than departs from the 2024 framework. It raises the fiscal envelope to $425B over the decade, adds $14B over the forward estimates, and benchmarks defence spending at 3% of GDP by 2033. It lists seven IIP priorities: enhanced undersea warfare via nuclear-powered submarines, accelerated lethal maritime capabilities, expanded long-range strike, integrated air and missile defence (IAMD), expanded autonomous and uncrewed systems, counter-UAS for critical infrastructure, and resilient multi-orbit satellite communications. It claims lessons from Ukraine and the Middle East have been absorbed, and it emphasizes self-reliance, industrial resilience, and civil preparedness. This is, on the face of it, a reasonable set of documents. The strategic diagnosis is correct. The Strategy of Denial is the right doctrine for a middle power: deterrence-by-punishment and deterrence-by-retaliation are beyond Australia’s resources, as Retired Major General Mick Ryan has noted . The rhetorical emphasis on sovereign industrial base, Ukraine lessons, and autonomous systems reads well. The problem is the capability acquisition list that actually gets funded. Why the strategy will fail in execution The unifying defect of the current program is a mismatch between the rhetorical doctrine (denial, mass, self-reliance, Ukraine lessons) and the capital allocation (foreign-sourced exquisite platforms, long lead times, workforce-intensive crewed systems, single-digit hull counts). Four critiques from inside the Australian strategic-policy establishment make this point from different angles, and I quote them here to establish that this diagnosis is not idiosyncratic: The Lowy Institute (2026) describes NDS 26 as “modest spending, welcome reforms” — a continuation of NDS 24 rather than a departure. It notes that Australian defence policy is developed within a narrow Canberra circle largely insulated from external scrutiny, and that Minister Marles’s dismissal of think-tank and retired-officer input at the National Press Club reflects a structural problem, not a tactical misstep. Meanwhile, the same author (retired Major General, CSIS fellow Mick Ryan) remarks on his Substack that AUKUS Pillar 1 plus conventional ADF modernization cannot both be funded at current spending — one will squeeze the other. He also documents that military star-rank officers grew 33% over the past decade while enlisted ranks shrank 1%, which is difficult to reconcile with the claim of a more effective, faster-moving force. Sam Roggeveen argues that increased spending may be necessary but buys us little if it only increases co-dependency on US operational capability, undermining the premise of improving self reliance! Asia Pacific Defence Reporter summarized the ADF press release, but comments immediately identified the weaknesses with respect to environmental shifts since 2024 that the new document does not absorb: weakening US alliance commitments, reduced US Asia deployments, two theaters of successful low-cost mass drone warfare, and chronically underfunded British defence investment. Despite all of this, AUKUS Pillar 1 remains the centerpiece of Australian acquisition. The argument I make below starts from these observations and pushes further. The electric stack has inverted the offense/defence cost curve The core technical fact that Australian defence planning has not absorbed is what Packy McCormick and Sam D’Amico call the Electric Slide : the five foundational technologies of the electric stack — motors, batteries, power electronics, sensors, and edge compute — have each decosted by roughly 100× over the past 30 years. The guidance electronics that in 1990 required a government munitions program now ship as the cheapest component in a disposable toy. The practical result, demonstrated across Ukraine , Nagorno-Karabakh , the Red Sea , the cartel conflicts in northern Mexico, and now the Persian Gulf , is a cost-exchange regime in which a $500–$5,000 drone can plausibly destroy a $1M–$100M asset. Ukraine produced more than 2 million drones in 2024, and doubled that in 2025. Russia’s Black Sea Fleet, which in 2021 was significantly larger than the Royal Australian Navy, has been reduced by approximately 45% by an adversary with no navy at all. The dominant ships were destroyed by autonomous surface vessels and anti-ship missiles at a cost-exchange ratio on the order of 1:1000. Houthi operations have forced US carrier strike groups into standoff. Cartel drones routinely contest Mexican state control in Michoacán and Sinaloa. This is not a speculative threat. It is the observed empirical base rate of every live conflict since 2020. The chart below shows just how cheaply an adversary can now asymmetrically convert exquisite war fighting systems into scrap metal. Australia’s existing force, and the force envisioned by IIP 26, is built to engage a different set of adversaries under a different set of cost-exchange assumptions. If a legacy system is operated as part of an integrated force with robust Integrated Air and Missile Defence, directed-energy weapons, resilient Command and Control, counter-UAS coverage, and updated tactics, it may retain some utility, albeit at enormous expense. The question is whether Australia has any of those enablers at scale, and whether NDS 26 funds them at the rate the threat demands. The honest answer to both is no. Domain-by-domain (With apologies for acronym soup, I have done by best to link/summarize/rationalize!) LAND System IOC Units Unit cost (A$) Vulnerability assessment M1A1 Abrams MBT (tank) 2007 59 (most transferred to Ukraine and subsequently destroyed) ~$15M HIGH. Cold War tank optimized for maneuver warfare. Top-attack loitering munitions (Lancet-class), FPV drones with shaped charges, ATGM -armed UAS all lethal. Trophy APS not yet fitted. Weight precludes most regional deployment. AS21 Redback IFV (tank) 2025–27 129 planned ~$27M MOD-HIGH. New Hanwha platform. Better protected than M113AS4 but at 42t still vulnerable to top-attack precision munitions. Active protection to be fitted. Boxer CRV 8×8 (tank) 2025–26 211 ~$12M MOD-HIGH. Lance turret 30mm provides some counter-UAS capability. No integrated APS. M113AS4 APC (tank) 2007 (upgrade) ~340 ~$3M upgrade HIGH. 1960s aluminium hull. No counter-UAS capability. Replacement overdue. Bushmaster PMV (armored truck) 2005 ~1,100 ~$1.5M MOD. Low unit cost makes individual losses tolerable. Hawkei PMV-L (armored truck) 2018 ~1,100 ~$2M MOD. Similar profile to Bushmaster. AS9 Huntsman SPH (K9) (howitzer) 2026 30 ~$25M HIGH. SPHs are the priority target for counter-battery UAS . Only 30 units — loss of a handful is operationally significant. M777A2 155mm Towed (howitzer) 2010 54 ~$5M HIGH. Static when firing, slow to displace. Ukraine has proven this type extremely vulnerable. M142 HIMARS (rocket launcher) 2025 42 (+48 ordered) ~$8M MOD. Dispersible, shoot-and-scoot. GMLRS / ATACMS / PrSM is the real capability. First domestic GMLRS test-fired at Woomera (April 2026). NASAMS (LAND 19 Ph 7B) (surface to air missile) 2025–27 TBD TBD LOW (defensive). But: NASAMS is a short-range system based on AMRAAM . Does not close the IAMD gap. NDS 26 revived the MRGBAD program to layer above NASAMS — an implicit admission that the 20+ year Ground Based Air Defense (GBAD) gap has not been closed. MRGBAD (medium-range GBAD) TBD TBD TBD New in NDS 26. Represents the first funded commitment to medium-range air and missile defence in two decades. Essential but late. ARH Tiger Attack Helo 2004 22 ~$55M HIGH. Being replaced by Apache. Sustainment availability has been <40%. AH-64E Apache (helicopter) 2025–26 29 ~$80M MOD-HIGH. Class faces existential questions post-Ukraine. Standoff missile capability helps. CH-47F Chinook 2015 14 ~$60M HIGH in contested airspace. Essential for logistics, no self-defence vs precision munitions. UH-60M Black Hawk 2025–27 40 ordered ~$40M MOD-HIGH. Replacing Taipan. Same class vulnerability as all utility helicopters. AIR System IOC Units Unit cost (A$) Vulnerability assessment F-35A Lightning II 2018 72 ~$110M LOW-MOD. 5th-gen. Primary vulnerability is basing — small number of northern airfields are targetable and have no IAMD . ALIS / ODIN creates US dependency. AIM-260 JATM (air to air missile) acquisition now confirmed per IIP 26. LRASM (anti ship missile) to be integrated. F/A-18F Super Hornet 2010 24 ~$90M MOD. 4.5-gen, not survivable vs modern IADS . Useful for standoff strike with JASSM-ER and LRASM (now operational). HACM (Hypersonic Attack Cruise Missile) development under US partnership. Block III upgrade in progress. EA-18G Growler 2017 12 ~$100M LOW-MOD. Only non-US Growler operator. Extremely high value. E-7A Wedgetail (radar plane) 2009 6 ~$350M MOD. Vulnerable to long-range AAMs ( PL-15 class). Only 6 airframes. The future of this platform lies in MUM/T battle management for autonomous systems, not as a standalone AEW . P-8A Poseidon (sub hunter) 2017 14 ~$250M MOD. Not survivable in contested airspace. ASW capability essential. C-17A Globemaster III 2006 8 ~$330M HIGH if forward-deployed. Irreplaceable — 8 airframes, no planned replacement. C-130J Hercules 2006 12 (+ 8 on order per IIP 26) ~$130M HIGH if forward-deployed. IIP 26 expands fleet to 20. C-27J Spartan 2015 10 ~$60M MOD-HIGH. Useful for dispersed archipelagic ops. KC-30A MRTT (tanker plane) 2011 7 ~$300M MOD. Essential force multiplier. Only 7. MQ-4C Triton 2024–25 4 (+3 planned) ~$200M HIGH. Large, slow, non-maneuvering. Not survivable in contested airspace. MQ-28A Ghost Bat 2024 ( IOT&E ) ~6 test articles ~$30–40M MOD. Points in the right direction, but at current unit cost not attritable by drone-war standards . Unit cost must fall 10–30× and production rate rise by orders of magnitude before Ghost Bat matters at the force level. As a learning lab and a template for evolved CCAs , more valuable. SEA System IOC Units Unit cost (A$) Vulnerability assessment Hobart-class DDG (guided missile destroyer) 2017 3 ~$3B MOD. Aegis + SM-2 / SM-6 / ESSM . Tomahawk recently added. Only 3 hulls. Vulnerable to saturation AShBM / AShCM and USVs . Anzac-class FFH (helicopter frigate) 1996 7 ~$800M (original) HIGH. 1990s design. Being replaced by SEA 3000 Advanced Mogami-class frigates (11 planned, 10,000 nm range, 32-cell VLS ). Hunter-class FFG ~2031 (est.) 6 planned (down from 9) ~$7–8B per hull (not an aircraft carrier!!) Cost blowouts and delays, 32 VLS cells per hull. Entire program yields 192 VLS cells — one US Arleigh Burke Flight III carries 96. ASW -focused. A $45B+ program delivering two destroyers’ worth of missile cells. SEA 3000 Mogami-class 2029–30 11 planned ~$1.5B New in IIP 26. 32-cell VLS, 10,000 nm range. Japanese design, first 3 Japanese built. Doubles surface combatant fleet over the decade at $52–65B. Arafura-class OPV (offshore patrol) 2024 6 (of 12) ~$500M HIGH. OPV , lightly armed — some hulls entering service without main armament fitted . Constabulary only. Canberra-class LHD (baby carrier) 2014 2 ~$1.5B HIGH. 27,000t amphib, minimal self-defence. Must be heavily escorted. HMAS Choules (LSD) 2011 1 ~$150M acquired HIGH. Landing ship, dock . Old, slow, poorly armed. Collins-class SSK (attack submarine) 1996 6 ~$1.2B original LOW-MOD. Quiet on battery. Historically poor availability. The most survivable major ADF platform if maintained and crewed. SSN-AUKUS (future) ~2040s 8 planned ~$30–40B per (!) Not operational for 15+ years. Program cost consumes a huge share of envelope. Virginia-class SSN (interim) (nuclear attack sub) ~2033 3 planned ~$5–6B purchase If delivered on schedule, the most capable platform in ADF inventory. Crewing and basing challenges. Ghost Shark XL-AUV (robot submarine) 2024 (prototype) TBD ~$40–100M LOW. Anduril autonomous. Potentially game-changing. Scale is the question. SPACE / CYBER System IOC Units Cost (A$) Vulnerability assessment JP 9102 (MILSATCOM) ~2027 Multi-orbit ~$3–4B Redefined in NDS 26 as multi-orbit for resilience. Number of satellites and timeline unspecified. DEF 799 (Space Surveillance) — — — Effectively disappeared from public reporting over the last two years. Likely quietly cancelled or downscaled. No sovereign space-based ISR . DARC (Deep Space Advanced Radar Capability) Partial — Joint AU/US/UK program Trilateral SSA capability out to GEO . Australia is a partner, not sole operator — co-dependent rather than fully sovereign. Jindalee OTH Radar (JORN) 2003 3 sites ~$2.5B total HIGH. Ground-based, fixed, targetable — but geographically remote. Irreplaceable sovereign capability. REDSPICE (ASD Cyber) 2022 — ~$10B / 10yr Offensive and defensive cyber. Doubles ASD capability. Arguably the best value-for-money investment in the ADF: asymmetric, scalable, sovereign. In short, almost none of Australia’s current or near future weapon systems are useful against any adversary capable of obtaining the specific kinds of missile or drone warfare systems that are routinely fielded by such poorly funded outfits as second tier Mexican cartels, investigative journalists, Hamas, and Houthi rebels, as we have seen time and time again in Ukraine, Iran, and other places. This may seem unbelievable. So unbelievable that, for example, you can measure Russia’s state of denial in their loss of more than 2600 tanks to drone attacks in the last four years. Australia doesn’t have 2600 spare tanks to learn this lesson. We live in the future, and highly capable attack drones are significantly less difficult to build than, say, a motorcycle. The structural problem, restated Australia’s capability posture is built around high-unit-cost, low-count, foreign-sourced exquisite platforms — a force structure appropriate to a world where precision strike was a US/USSR duopoly and tactical mass was a minor consideration. That world is gone. In the world NDS 26 claims to operate in — the post-Ukraine, post-Red Sea, post-Nagorno-Karabakh world — tactical mass is everything, and the cost-exchange regime rewards the side that can produce cheap guided munitions in volume. Australia produces essentially none of these domestically. Approximately 90% of Australian defence acquisition spending flows offshore, primarily to the US. The 2024 NDS identified this as a problem and committed to sovereign industrial resilience; the 2026 NDS reiterates the commitment and adds some additional funding. Neither document commits to domestic manufacturing at the scale or tempo the threat model requires. Despite spending $60b/year, foreseeable advances in drone weapons have rendered not only Australia’s legacy defence systems but almost all of its current generation of acquisitions obsolete. On land we have vehicles, tanks, artillery, attack helicopters, all of which are extremely expensive cannon fodder for drones or guided rockets. As we have seen in Ukraine, when a $1000 drone can take out a $1m tank or $100m aircraft, the asset light combatant has a sharp advantage. On sea, we are planning to spend AUD$70b (1.5x the entire Manhattan Project!) on six Hunter Class Frigates that are far too few to defend our maritime borders and just as vulnerable to explosive jet skis as Russia’s black sea fleet, halved in four years by a conventionally far weaker adversary who doesn’t even have a navy, and who extracted casualties with a 1:1000 cost exchange ratio. Australia is rich but not that rich. The only systems which are not floating boxes of explosives and sailors visible from space are the submarines, consisting of the rapidly aging Collins fleet and the AUKUS submarines that are as expensive and foreign as they are far off. In air, Australia has about 100 foreign-built fighters. Which airforce are they built to engage? Australia doesn’t have a regional peer adversary who is going to slug it out fighter to fighter. 100 F-18s and F-35s could hardly stand up to Chinese air power and represent high value targets (particularly when on the ground) to irregular insurgent/proxy/asymmetrical combatants, against which they have struggled to engage in similar conflicts elsewhere. Israel has plenty of jets but they were not particularly useful in stopping rocket attacks from Gaza. In all cases, this is hardware built for fighting yesterday’s wars. The electric stack has de-costed by a factor of 100-1000, putting sharply asymmetrical threats directly into the fight. In WW2, the Allies were ultimately able to achieve crushing air superiority and then destruction of enemy energy and transport infrastructure via the saturation Combined Bombing Offensive . Eighty years later, wars are once again decided by materiel production capacity, only adversaries can easily field 100 times as many aircraft and operate them with software rather than trained pilots. Despite spending nearly AUD$60b/year, Australia is functionally undefended and undefendable. The unstated premise of this conversation is whether Australia’s military is powerful enough to deter, that is, to compel the resolution of disputes through diplomatic channels, with strong military powers like China. But this isn’t how most wars are fought anymore. Instead, adversarial powers prefer to act with a winking deniability between networks of proxies, committing a litany of sub-threshold hybrid outrages that are calibrated to fall short of an open declaration of war while doing everything possible to degrade their opponents. Grey-zone threats the strategy underweights The documents acknowledge “hybrid threats” but the IIP does not allocate against them at scale. The actual vectors being used against Australia and similar middle powers today include: Submarine cable cuts and seabed infrastructure sabotage, as seen in the Baltic and around Taiwan. Industrial espionage and IP theft, documented extensively across Australian universities and critical-tech companies. Cyber operations against critical infrastructure (Optus, Medibank, DP World) with state attribution in several cases. Covert police operations and diaspora surveillance , documented against the Chinese overseas security apparatus. Deliberate information operations across social platforms, especially during elections and referendums. Deliberate introduction of biological disease vectors and operation of domestic clandestine laboratories with foreign links and funding. Predatory dumping of both legitimate and contraband products to degrade domestic industry and social cohesion. Mysterious degradation of critical infrastructure . A further strategic problem: any adversary can use Australia’s much smaller, closer neighbours, or enormous swaths of uninhabited sovereign territory, or even existing infrastructure, as covert staging grounds. In a world where adversaries now routinely preposition containers of offensive drones within a mile of their target, how are Papua New Guinea, the Solomons, parts of Indonesia, and the broader Pacific arc, let alone the 99% of Australia with no significant human presence, meant to counter this threat? A few shipping containers of Shaheds or lightly modified commercial drones, released by a non-state proxy, would be sufficient to regionally neutralize Australian military power, with no warning, no formal declaration of war. This is not speculative. Hezbollah has conducted Shahed operations against Israel from Iraq and Yemen. Houthi operations have targeted commercial shipping and US naval assets at 1000+ km standoff. Wagner / Africa Corps conducts similar operations across the Sahel. The base rate of proxy-staged drone warfare is not hypothetical, rather, it is the modal form of contemporary conflict. In 1943, Australian commandos were able to infiltrate Japan-occupied Singapore in a disguised fishing boat, sinking or damaging six ships. This sort of raid could only be done once, at enormous risk and limited impact. Today, a similar raid could be executed by a competent high school robotics team with autonomous boats, or deployed at literally 1000x the scale and 1000x less cost by a well-resourced military. What the 2026 IIP does not buy, and must In the following, I advocate strongly for domestic production capacity. This does not mean autarky. It means possessing enough of the stack that either the remaining supply chains are highly fungible, or Australia has enough aggregate industrial power to earn a seat at the table when supply is constrained. (I drafted this post before the latest conflict in Iran. Then, I worried that Australia lacking bargaining power in a resource constrained environment would be hard to motivate. Now, with Australian agriculture on the verge of diesel starvation, it is only too obvious.) None of what follows is technically difficult relative to Australian economic and technological capacity. The Soviet Union delivered most of it in the 1950s, at a fraction of Australia’s current real GDP per capita. Each program below could be operated for under AUD $1B/year — well within the existing defence envelope. Indeed, programs fail more often from over funding causing indigestion than underfunding. Committing to tight budgets and schedules is the key to success. Must-have domestic capability Orbital launch capability. SpaceX developed Falcon 1 in five years for under $100M. Rocket Lab repeated the feat with Electron a decade later. Gilmour Space Technology in Queensland is developing the Eris vehicle — the first Australian-developed orbital-class rocket — and represents the nascent beginning of sovereign launch. It is privately funded, chronically under-supported by the government, and has not yet reached orbit. Compare Rocket Lab’s trajectory, which benefited from early NZ government partnership and US customer access. Without sovereign launch, Australia lives under a sky controlled by others. Domestic comsat, spysat, radar sat, and GNSS capability. SpaceX ships some of the most advanced satellites ever built, for less than $1M per unit . The US, China, India, Russia, Europe, and Japan each operate sovereign GNSS constellations. Planet Labs , a private company, operates hundreds of imaging satellites and offers sub-metre resolution. Umbra operates a SAR constellation resolving better than 1 m in any weather. The ADF buys or requests access to intelligence that any civilian with a credit card can purchase — and has no sovereign path to independent ISR because DEF 799 has effectively disappeared from the public IIP over the last two years. JP 9102 has been redefined to multi-orbit per NDS 26, but the number of satellites and timeline remain unspecified. Through DARC , Australia is a partner in deep-space SSA — genuinely useful, but co-dependent with the US and UK, not sovereign. One million drones per month manufacturing capacity, with local supply chains and/or stockpiles sufficient for more than a year of sustained conflict. Ukraine produced over 2 million drones in 2024 and 4 million in 2025 — a wartime economy, certainly, but Ukraine’s pre-war GDP was a quarter of Australia’s. Australia has a strong drone innovation community (the current world drone speed record is held by an Australian hobbyist) but no production base worth the name. Drones require motors, structures, batteries, power electronics, and controllers. Most of these parts can be mass-produced with startup capital in the ~$1B range per category. Standing up semiconductor fab capacity for controllers, MEMS sensors, and CMOS cameras at drone-adequate nodes would cost approximately $5B. The first step is supplier relationships and stockpiling; the second is a land-and-expand domestic fab strategy with enough strategic ambiguity about actual capacity that defence saturation or blockade are unacceptably risky for an adversary. Either Australia has the ability to produce its own industrial controllers, or it ends up — as Russia has — cannibalising white goods for guided-munition chips . Fabricating 1980s-era 8086-class processors is not technically difficult; those nodes are adequate for the vast majority of drone applications. But… Australia bulldozed its only functional fab in 2021 to extend the Sydney Metro. Austin Vernon has described the necessary fleet architecture in his drone airforce essay. The point is that the key components are the same across drone types, which means that a single industrial base serves the entire mission set. Missile defence. Israel, the US, and other allies have operationalised layered missile defence systems. What were infeasible science projects in the 1960s and unreliable demonstrators in the 1990s are now mature enough to shift deterrence calculus — not to guarantee leak-proof defence, which is physically difficult against a capable adversary, but to raise the cost of strike sufficiently to change the adversary’s planning. A system that intercepts more than 50–70% of incoming threats is a strategic asset; it does not need to be perfect to deter. Australia’s NDS 26 MRGBAD acquisition is the first real step in two decades, but it is a purchased point-defence capability, not a sovereign system. Building a domestic layered IAMD would cost a fraction of AUKUS and deliver deterrent value on a much shorter timescale. There are multiple rocket hobbyists on YouTube currently building rockets that, with some extra-legal tweaks , would be capable of missile defence. AI coding agents are more than capable of writing the entire software stack in an afternoon. Australia does not need to spend billions of dollars and wait decades to purchase this capability from foreign nations. Energy independence. Australia has oil and tight shale but has allowed domestic refining capacity to collapse. Two refineries are not enough. This is re-discovered every few years, including the current gulf crisis. Australia invented the modern solar module and then actively exported the technology to China. It is now time to play an active role in the production of the materials and technology that power the electric stack. Building GW-scale solar and inviting the world to smelt their aluminium and other metals in Australia is a path to both wealth and strategic weight. Submarines. Surface naval assets are increasingly vulnerable against any adversary. Conventional wisdom maintains that surface ships can still function inside an integrated force given sufficient organic integrated air/missile defence (IAMD), electronic warfare (EW), counter unmanned aerial system (C-UAS), and coalition coverage but it is not the empirical pattern of recent conflicts. The Black Sea Fleet, operating inside its own anti-access/area denial (A2/AD) bubble with the full range of Russian EW and air cover, was reduced 45% by an adversary without a navy. The Moskva and Sevastopol strikes were the headline cases; the attritional campaign against patrol craft, intelligence ships, and the Kerch Bridge was continuous. Surface ships can be made more survivable. They cannot currently be made cheap enough for an attrition regime. Submarines retain genuine utility. They are used for anti-shipping, anti-submarine, special-forces insertion, strategic chokepoint interdiction, electronic intelligence, and missile launch. Crewed submarines perform all these missions, but autonomous submarines can perform many of them, and the technology is trending there — Australia’s Ghost Shark program is a leading example. Submarines require air-independent propulsion. The Collins class has demonstrated that Australia can operate large long-range diesel-electric submarines for decades, though transit speed and time on station are so limited that coverage of Australia’s top four strategic chokepoints would require a fleet of over one hundred submarines of this type. The US Navy developed the first nuclear submarine powerplant in 1173 days for approximately $2.5B in current dollars, including two hulls and the adjacent unsuccessful sodium-cooled reactor work, as well as all the start-up costs associated with building the first ever nuclear power reactors, such as developing a supply chain for hafnium and vanadium from scratch. Seven decades of design heritage and modern computational tools later, Australia is being told that buying foreign-designed and mostly foreign-built nuclear submarine powerplants will cost $30–40B over 15+ years. Why do the error bars on this purchase exceed by a large factor the real world cost and time for long dead pioneers to do it for the first time ever? Brazil is developing sovereign nuclear submarine technology. A domestic Australian submarine powerplant effort, capped at $1B and four years, is technically feasible. Whether it is politically feasible is a separate question. Must-have domestic participation AI sovereignty. The near future will run on CCP AI or US AI. Choose wisely. Australia must retain the ability to make material contributions to US frontier AI, and therefore to derive special benefits from it. Australia does not need to run a nationalized frontier model or replicate TSMC . It does need to contribute enough of the stack to stay in the conversation. Australian expats are well-represented at every frontier AI company. A “Federation Fellowship” structured to repatriate senior talent on favourable terms could help, but would need significant follow through. Australia is geographically ideal for large solar-powered AI datacenters , but would need legal reform to bring Australian fair-use and training-data rules into alignment with US practice. Nuclear weapons. This is the most politically fraught recommendation in this document, and I want to state it precisely. The technical argument: producing a nuclear weapon is not especially hard given baseline industrial capacity. The 1964 Nth Country Experiment showed that three physics PhDs with no classified access produced a workable weapon design in 2.5 years. The strategic argument: the 1994 Budapest Memorandum , under which Ukraine relinquished its nuclear arsenal in exchange for security “guarantees”, has become the canonical example of why middle powers without independent deterrents are structurally vulnerable. Having a nuclear deterrent guarantees a baseline of absolute national sovereignty that no alliance commitment can replicate. The political and industrial argument: Australia has a tiny civil nuclear industry, no enrichment or separation capability, no testing infrastructure, and — at present — no political coalition willing to sustain the investment. That said, North Korea is hardly an economic powerhouse and was able to build plutonium weapons despite determined interference by its adversaries. The NPT and various regional agreements would need to be renegotiated, exited, or ignored. The point of listing nuclear weapons here is to identify an asymmetry: the technical and industrial obstacles are self-imposed and reversible on a sub-decade timescale given political will. The political constraint is the binding one. If Australian political will to sustain sovereign security catches up to the realities of the post-unipolar era, the nuclear question will be on the table, and the preparation — civil nuclear industry, enrichment-adjacent capability, professional workforce — should begin now regardless. Having a nuclear deterrent guarantees absolute national sovereignty. After WW1 and WW2, England and France did not hesitate for an instant to ensure they could never again suffer outrages from the industrial might of Germany and later, the Soviets. It is better to have it and not need it than to think “she’ll be right mate” and bequeath eternal slavery and damnation to your descendents. Conclusion None of the capabilities above are hard to build relative to Australian economic and technological capacity. The Soviet Union did them in the 1950s. Each program could be operated for under AUD $1B/year — a rounding error inside the existing defence budget, and less than a tenth of what AUKUS Pillar 1 is projected to consume annually by the late 2030s. Unlike the current acquisition pattern, which sends most capital offshore in exchange for indefinite dependence on foreign industrial complexes for maintenance and support, a domestic weapons-platform development policy accumulates research and production expertise within Australia, where its value appreciates over time, including in the civilian economy. Expat Australians work at every frontier technology company on earth. Australian hobbyists hold world records in the relevant disciplines. The constraint has never been talent, capital, or technology. The 2023 Defence Strategic Review diagnosed the threat environment accurately. The 2024 and 2026 National Defence Strategies identified the right doctrine — National Defence, Strategy of Denial, self-reliance, industrial resilience. The 2026 Integrated Investment Program commits $425B against these priorities and in doing so reaffirms a platform-centric acquisition model that the post-Ukraine evidence base does not support. Australia is not undefendable in principle, but it is undefendable against the threat model the documents themselves describe, using the capabilities the documents themselves fund. The Strategy of Denial is the right strategy. The question is whether the capability program actually delivers denial against a cost-exchange ratio of 1:1000 in favour of the adversary. The answer to that question, visible in the IIP line items, is obviously not. That has to change. Australia’s future national sovereignty could topple at any moment, not through conventional conquest but through the slow attrition of deterrent credibility that invites exactly the kind of sub-threshold coercion the Strategy of Denial is evidently unable to prevent. If Australia fails to aggressively correct course toward domestic defence tech production immediately — not the next biennial National Defence Strategy cycle, right now — the last vestiges of its existence as an independent political entity will soon vanish entirely.