The Budget delivers a substantial increase in defence funding, with an additional $6.8 billion over four years (and $35.6 billion over the decade), bringing total portfolio funding to $887 billion to 2035–36.
Defence accounts for approximately 6.2 per cent of total expenses in 2026–27, with expenses projected to grow by 18.8 per cent over the period to 2029–30.
Additional measures provide continued resourcing for the Nuclear-Powered Submarine program ($863.8 million), enhanced defence cooperation in the Indo-Pacific ($600 million), and ongoing implementation of the Royal Commission into Defence and Veteran Suicide response ($311.9 million).
On the Government services side, Services Australia receives $2.2 billion in additional funding, and the Government extends its program of savings on consultants, contractors and non-wage expenses, achieving a further $2.7 billion in savings in 2029–30 and bringing total savings in this area to $14.8 billion since 2022–23.
National defence strategy and investment
2026 National Defence Strategy and Integrated Investment Program
- The Government will provide additional funding of $6.8 billion over four years from 2026–27 (and $35.6 billion over ten years from 2026–27) to support the delivery of the 2026 National Defence Strategy and Integrated Investment Program to enhance Defence capability, preparedness and resilience.
- Together with the additional investments in 2024, the Albanese Government is investing an additional $30 billion over the forward estimates and $117 billion over the decade. This brings total funding in the portfolio to $887 billion to 2035-36.
- Of this, the Government is investing $425 billion over the decade to increase the ADF's self-reliance and contribute to regional deterrence.
- This measure includes part of the $12 billion investment committed by the Government during 2025–26 Mid-Year Economic and Fiscal Outlook to deliver the Henderson Defence Precinct.
- The investment in Defence is matched by establishment of the Defence Delivery Agency on 1 July 2027.
Nuclear‑Powered Submarine Program – Continuation of government resourcing
- The Government will provide $863.8 million over four years from 2026–27 for continued support to the Nuclear‑Powered Submarine program.
- Funding includes:
- $711.9 million over four years from 2026–27 for the ongoing operation of the Australian Submarine Agency, to manage the delivery of Australia's Nuclear‑Powered Submarine program, including the continuation of the Nuclear Graduate program.
- $51.7 million over two years from 2026–27 for the Department of Foreign Affairs and Trade to provide policy and international law advice and diplomatic support for the Nuclear‑Powered Submarine program.
- $35.3 million over two years from 2026–27 for the Australian Safeguards and Non‑Proliferation Office within the Department of Foreign Affairs and Trade to deliver safeguards and nuclear security regulation.
- $23.6 million over two years from 2026–27 for the Australian Radiation Protection and Nuclear Safety Agency to support regulatory approvals, provide scientific advice, and conduct radiological monitoring.
Nuclear‑Powered Submarine Program – further program support
- The Government will provide $218.4 million over eight years from 2026–27 for continued support to the Nuclear‑Powered Submarine program.
- Funding includes:
- $110.0 million over five years from 2026–27 to support housing and related services for personnel deployed to Submarine Rotational Force – West, to be delivered through Defence Housing Australia.
- $87.9 million over eight years from 2026–27 for workforce initiatives to grow, train and retain a sovereign qualified and highly skilled workforce to support the Nuclear‑Powered Submarine program.
Australian Naval Infrastructure Equity Injection
- The Government will provide Australian Naval Infrastructure Pty Ltd with an equity injection over four years from 2026–27 to support construction of the Nuclear‑Powered Submarine Construction Yard in South Australia.
Enhancing Defence Cooperation in the Indo‑Pacific
- The Government will provide $600.0 million over four years from 2026–27 to deliver initiatives to realise the benefits of the Papua New Guinea – Australia Mutual Defence Treaty and expand Defence infrastructure investments in the Pacific and South‑East Asia.
- Funding includes:
- $421.6 million over four years from 2026–27 to be held in the Contingency Reserve to support regional engagement through initiatives under development with partner governments to be considered in a future economic update.
- $113.8 million over four years from 2026–27 to build dual‑use infrastructure in PNG to support integration between the PNG Defence Force and the Australian Defence Force (ADF).
- $64.6 million over two years from 2026–27 to deliver a pilot program to recruit suitable PNG citizens into the ADF.
Veteran support
Royal Commission into Defence and Veteran Suicide
- The Government will provide additional funding of $311.9 million over four years from 2026–27 (and an additional $271.5 million over two years from 2030–31) to implement the Government's response to the Final Report of the Royal Commission into Defence and Veteran Suicide. Funding includes:
- $282.1 million over four years from 2026–27 (and an additional $271.5 million over two years from 2030–31) to progress the implementation of the recommendations.
- $29.8 million over three years from 2026–27 to establish the National Veterans' Data Asset.
Continuing to Support Veterans and their Families
- The Government will provide $173.7 million over five years from 2025–26 (and $58.8 million per year ongoing) to continue supporting veterans and their families.
- The Government will achieve savings of $779.5 million over five years from 2025–26 (and $352.4 million per year ongoing) through better targeting of services for veterans and their families.
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