Defence has taken a major step forward in bolstering Australia’s sovereign defence capability with the release of the 2026 Defence Industry Development Strategy (DIDS26). 

DIDS26 forms a key component of the Government’s broader biennial review of Defence’s strategic policy settings and aligns closely with the 2026 National Defence Strategy and the Integrated Investment Program.

Significantly, it signals a shift in emphasis from policy direction to practical delivery, aimed at accelerating capability outcomes in response to a more contested and dynamic strategic environment.

DIDS26 builds upon and refines the foundations laid by the 2024 strategy, placing a strong emphasis on targeted investment and industry collaboration. 

First Assistant Secretary Industry Engagement Division with CASG, Michael Howell, said the updated strategy would see lessons learned since 2024 and consistent feedback from industry taken on board. 

“DIDS26 is about ensuring Australia is integrated, resilient and ready – and that defence industry is at the centre of this national mission,” Mr Howell said.

“DIDS26 is a more structured and disciplined approach to prioritisation, including updated Sovereign Defence Industrial Priorities (SDIPs) with increased granularity and specificity.

“These priorities are supported by a new ‘Grow, Guide, Monitor and No Action’ framework, which provides a clearer articulation of where Defence will actively shape markets, where it will partner closely with industry and where it will adopt a lighter-touch approach.”

'The intent is simple: deliver capability faster and improve it continuously.'

For industry, this is intended to translate into more predictable engagement and more informed decision-making, particularly in determining where to invest, build capability and pursue partnerships.

“This strategy sharpens our focus and will allow us to give even clearer signals about where Defence will invest, partner and act,” Mr Howell said.

“Very importantly, DIDS26 is designed to give our industry partners something they consistently ask for: clarity.

“The strategy outlines how Defence will transform engagement with industry, such as with the introduction of a new Defence Industry Hub that represents a more coordinated and accessible approach to collaboration designed to help small-to-medium enterprises enter and thrive within defence supply chains.

“The Defence Industry Hub will provide a more coordinated and accessible entry point into Defence. Particularly, for small-to-medium enterprises, while enhanced engagement frameworks and regular forums, including classified briefings, will improve transparency around capability needs and future opportunities.”

Mr Howell added that these measures are designed to strengthen two-way understanding to give industry better visibility of Defence requirements, while helping Defence become more informed and effective.

“The intent is simple: deliver capability faster and improve it continuously,” Mr Howell said.

“This includes an additional $80 million for the Defence Industry Development Grants Program through to 2030 that aim to support Australian businesses in driving innovation, increasing production capacity and generating new employment opportunities across the country.

“DIDS26 comes at a time when supply chains are under immense pressure and industry can play a greater role in helping boost Australia’s sovereign defence industrial strength.

“The scale of the opportunity before us is substantial.”

Read more about the strategy here.

View the ministerial media release here.