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Australia Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2021-2026

The defense budget in Australia is valued at $31.1 billion in 2020. The market is expected to grow at a CAGR of over 5% during the forecast period 2022-2026. The 2020 release of the Defense Strategic Update presents a realignment of strategic priorities for Australia Rising. A shift in strategic direction also entails a shift in how it is implemented throughout the services. The possibility of coming into conflict with greater military power in the immediate region drives the need for deterrence capabilities against an asymmetric threat. Therefore, increased future investment in platforms that enable long distance deterrence such as hypersonic research and ballistic missile defense are planned according to the 2020 Force Structure Plan.

Overview of the defense market in Australia

Overview of the defense market in Australia

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Military doctrine, modernization goals, and Australia’s national defense strategy

Australia’s defense strategy is based on three strategic defense interests: protecting national security and sea lines of communication, protecting surrounding regions including Southeast Asia and the South Pacific, and ensuring the stability of the Indo Pacific through a rules-based order. The three strategic defense objectives are outlined in the 2016 White Paper as follows: to deter, deny, and defeat attacks on, or threats to, Australia while protecting its national interest, and northern approaches; to effectively use military forces in support of Southeast Asia maritime security and the governments of Timor Leste, and Papua New Guinea; and to contribute military capabilities to operations in its strategic interest.

The 2020 Defense Strategic Update redefines strategic priorities and provides a new policy framework to address the changing security environment since the release of the 2016 White Paper. Three new strategic objectives are outlined: use military power to influence the security environment; deter threats to national interests; and respond with military force when necessary

Through Plan Galileo, the Australian government will reconceptualize and implement a transformation strategy in maritime sustainment in line with the shipbuilding program Under Galileo, sustainment will be embedded across the whole Capability Life Cycle (CLC).

How has COVID-19 affected Australia’s defense spending?

Australia delayed the federal budget for 2020 until October 6 and by extension the national defense budget, citing the COVID-19 pandemic as the key reason. The government stated that the global outbreak of COVID-19 and its effects on economies, jobs and certain industries such as tourism and airlines impacted the defense industry’s supply chain which increased market uncertainty. Instead, the Morrison government focused on releasing stimulus packages to counter the impact of a pandemic-induced economic recession in 2020. Due to the effective mitigation of the spread of COVID-19 through border closure, isolation policies, and stimulus packages, Australia will be on the road to economic recovery earlier than the rest of the world. However, high unemployment rates and government debt will limit the rate of recovery, along with other factors such as the slowing of international economic growth.

What are the segment classifications in the Australian defense market?

The defense market in Australia is segmented into multi-role aircraft, frigate, HALE, anti-air missiles, and others. Multi-role aircraft is the largest segment of the Australian defense market followed by frigate.

Defense market in Australia, by segment

Defense market in Australia, by segment

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What are the import and export market dynamics in the Australian defense market?

The US is Australia’s most significant defense partner. Imports from the US have consistently increased since 2016. The US constituted the largest share of the total imports during the 2016-20 period, followed by Spain and other countries such as France, Switzerland, Italy, Germany, Canada, the UK, and Austria.

Chile is Australia’s largest export market from 2016 to 2020. Chile is followed by the US, which has consistently imported Australian defense products. Canada, Indonesia, and Oman follow along with other countries, including the Philippines, Tonga, New Zealand, Papua New Guinea, Samoa, Solomon Islands, Tuvalu, Netherlands, Jamaica, Fiji, and Japan. During 2016-20 naval vessels constituted the majority of Australia’s total defense exports, with aircraft following. The remaining exported military goods were armored vehicles.

Who are the major market players in the Australian defense market?

Major companies in the Australian defense market include BAE Systems Plc, Lockheed Martin Corp, and Northrop Grumman Corp.

Defense market in Australia, by key players

Defense market in Australia, by key players

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Market report scope

Market size (Year – 2020)

$31.1 billion
Growth Rate (2022-2026) CAGR of >5%
Base year 2020
Forecast Period 2022-2026
Segmentation Multi-role aircraft, frigate, hale, and others
Key players BAE Systems Plc, Lockheed Martin Corp, and Northrop Grumman Corp


This report provides a comprehensive analysis of the defense market in Australia and contains an in-depth analysis of the following:

  • Australia’s Defense Budget: detailed analysis of Australia’s FY2021 defense budget broken down into market size and market share. This is coupled with an examination of key current and future acquisitions.
  • Regulation: the procurement policy and the process is explained. This is coupled with an analysis of Australia’s military doctrine and strategy to provide a comprehensive overview of Australian military regulation.
  • Security Environment: political alliances and perceived security threats to Australia are examined; there help to explain trends in spending and modernization.
  • Import and Export Dynamics: analysis of prevalent trends in the country’s imports and exports over the last five years
  • Competitive Landscape and Strategic Insights: analysis of the competitive landscape of the Australian defense industry.

Reasons to Buy

  • Determine prospective investment areas based on a detailed trend analysis of the Australian defense market over the next five years
  • Gain in-depth understanding about the underlying factors driving demand for different defense and internal security segments in the Australian market and identify the opportunities offered.
  • Strengthen your understanding of the market in terms of demand drivers, market trends, and the latest technological developments, among others
  • Identify the major threats that are driving the Australian defense market providing a clear picture about future opportunities that can be tapped, resulting in revenue expansion
  • Channel resources by focusing on the ongoing programs that are being undertaken by the Australian government
  • Make correct business decisions based on in-depth analysis of the competitive landscape consisting of detailed profiles of the top defense equipment providers in the country. The company profiles also includes information about the key products, alliances, recent contract awarded, and financial analysis, wherever available

Key Players

BAE Systems Plc

Lockheed Martin Corp

Northrop Grumman Corp

Table of Contents

Table of Contents

Executive Summary

Defense Budget Assessment

Budgeting Process

Defense Market Size Historical And Forecast

Drivers Of Defense Expenditure

Analysis Of Defense Budget Allocation

Military Doctrine And Security Environment

Military Doctrine And Strategy

Primary Threat Perception

Political And Strategic Alliances

Geopolitical Social And Economic Scenario

Market Entry Strategy And Regulations

Procurement Policy And Process

Market Regulations & Market Entry Routes

Key Challenges

Market Attractiveness And Emerging Opportunities

Market Attractiveness, 2020-2025

Top Defense Segments By Value

Import And Export Market Dynamics

Import Market Dynamics

Export Market Dynamics

Defense Platform Acquisitions

Defense Platform Acquisitions By Value

Nuclear powered submarines


MQ-4C Triton

F-35 Joint Strike Fighter



Boxer Combat Reconnaissance Vehicle

National Advanced Surface-to-Air Missile System


Fleet Size

Competitive Landscape

Defense Companies Operating In Australia

Main Defense Companies


About This Report

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Frequently Asked Questions

The defense budget in Australia is valued at $31.1 billion in 2020.

Australia’s defense expenditure is expected to register a CAGR of more than 5% during the forecast period 2022-2026.

In 2020, the Australian defense budget as a percentage of GDP is 2.0%.

Naval vessels & surface combatants is the largest sector within Australia’s defense market.

Leading companies in the Australian defense market include BAE Systems Plc, Lockheed Martin Corp, and Northrop Grumman Corp.


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