The 2026 Defence Industry Development Strategy (DIDS26) establishes the strategic policy settings for Defence’s engagement with Australia’s defence industry.
These settings reflect the changing strategic circumstances and deliver the initiatives required to develop Australia’s sovereign defence industrial base in support of our national security requirements.
DIDS26 forms part of the Australian Government’s biennial review of Defence’s strategic policy settings and aligns with the 2026 National Defence Strategy and the Integrated Investment Program. Building on the 2024 strategy, DIDS26 sets a clear direction for enhancing Australia’s sovereign defence industrial base and ensuring Defence can deliver capability at the speed and scale required in a changing strategic environment.
DIDS26 places Australian industry at the centre of national defence and economic security, recognising the critical role a capable and responsive industrial base plays in supporting the Australian Defence Force. It outlines a coordinated approach to strengthening sovereign capability, accelerating capability delivery, and increasing industry participation across Defence priorities, while deepening collaboration with trusted international partners.
Workforce development remains a central priority, enhancing workforce initiatives to grow the required skills, encourage the uptake of STEM (science, technology, engineering and mathematics) learning, and strengthen partnerships between Defence, industry and the education sector. DIDS26 also introduces apprenticeship and learning worker targets for Prime contractors to grow the defence industry workforce and strengthen our sovereign defence industrial base.
A key feature of the strategy is targeted investment to support industry growth. An additional $80 million will be provided through the Defence Industry Development Grants Program through to 2030, bringing total investment in the program to around $250 million, enabling Australian businesses to innovate, expand production, and create jobs. This investment is designed to help industry scale its capabilities and respond more effectively to Defence requirements.
The strategy also introduces a new Defence Industry Hub to transform engagement between Defence and industry to strengthen partnerships. The hub provides clearer pathways for small-to-medium enterprises to contact Defence officials, enter defence supply chains, unlock new business opportunities, and support job creation across Australia.
DIDS26 reforms procurement through a continuous development and delivery approach, streamlining processes and supporting more agile and responsive capability delivery. By enabling minimum viable contracting and reducing complexity, Defence will be better positioned to deliver outcomes more quickly while providing industry with greater certainty.
Another key initiative of the strategy is the reforming and relaunching of the USD$3 billion Defence Export Facility, administered by Export Finance Australia; providing more flexible and timely support for Defence industry. This will ensure alignment with the priorities set out in the DIDS26.
Importantly, the strategy also strengthens international partnerships and furthers export opportunities, positioning Australian companies to access global markets, improve competitiveness, and contribute to trusted allies and partners’ supply chains.
Through these combined efforts, DIDS26 will mitigate critical dependencies and risks, enhance resilience, and ensure Australia has a strong, self-reliant defence industrial base capable of meeting future challenges.
Resources
2026 Defence Industry Development Strategy (PDF, 6.43 MB)
2026 Defence Industry Development Strategy factsheet (PDF, 838.16 KB)
DIDS26 Sovereign Defence Industrial Priorities Annex (PDF, 3.15 MB)