Reforming Australian defence: from Cold War relics to an affordable, independent missile and drone deterrent

Australian jet fighters, while advanced, represent high-value targets. A single F-35 costs over $100 million; losing even a handful in the opening hours of conflict would be catastrophic. Surface warships face the same risk from anti-ship missiles. Coastal patrol and mine countermeasures vessels retain value, but blue-water power projection fleets are increasingly redundant for an island nation focused on denial.

AUKUS exemplifies the problems. The projected to cost up to A$368 billion over decades. The program locked Australia into nuclear submarines whose delivery timeline stretches into the 2040s. Delays in US Virginia-class transfers, industrial bottlenecks and opportunity costs have already forced reductions elsewhere: fewer Hunter-class frigates, cancelled MQ-9B drones, scaled-back infantry fighting vehicles.

Critics rightly note the deal assumes China as the primary threat and perpetual US reliability. With the United States facing domestic challenges, stretched global commitments and potential shifts in priorities, reliance on such a massive, single-platform bet undermines sovereignty. Defence spending sat at around A$59 billion (roughly 2% of GDP) in 2025-26 and is projected to rise.

Yet AUKUS and related naval programs consumed a disproportionate share, crowding out potential investment in affordable mass systems. The result was a force optimised for yesterday's wars rather than tomorrow's missile-dominated battlespace.

Lessons from contemporary conflicts

Ukraine's experience is insightful. Low-cost drones and missiles have sunk or damaged dozens of Russian warships, neutralised expensive air defences and inflicted attrition on armoured columns at minimal expense to the defender. Fibre-optic guided FPV drones evade electronic jamming; loitering munitions turn commercial components into precision strike tools.

The Black Sea "drone war" showed that sea control can be contested without a traditional navy. Similar dynamics played out in the 2025 Thai-Cambodian border clashes. Both sides deployed kamikaze drones and FPV systems reminiscent of Ukrainian tactics. Cambodia used Chinese-supplied drones. Thailand responded with domestically developed models, including bomber and multi-copter systems. These low-cost assets disrupted conventional operations, targeted air bases and forced rapid adaptation. Iran's missile and drone barrages against regional targets further illustrate how relatively inexpensive systems can saturate defences and project power across hundreds of kilometres.

The common thread is asymmetry. An attacker need not invade Australia's shores; they can threaten sea lanes, northern bases or offshore assets from afar. Australia's response must mirror this reality: massed, attractable systems that can strike first and sustain operations without bankrupting the nation.

A sovereign missile and drone force

Australia already possesses the industrial foundations for a new model. The Guided Weapons and Explosive Ordnance (GWEO) Enterprise, launched in recent years, partners with Lockheed Martin (GMLRS assembly starting 2025), Raytheon, Kongsberg (Naval Strike Missile and Joint Strike Missile production) and others. Domestic companies such as DefendTex produce low-cost loitering munitions and UAVs like the Drone40 and Drone81, already selected for ADF trials. The Australian developed AI driven autonomous underwater vehicle (XL-AUV) designed for stealthy, long-endurance surveillance, reconnaissance and attack missions by Anduril Industries shows what the nation can produce indigenously.

A restructured policy could prioritise three layers:

Short-range systems (under 100 km): Coastal defence drones, loitering munitions and portable anti-ship/anti-air missiles for northern bases and maritime approaches. These would be cheap, attritable and produced in volume.

Medium-range systems (100-1,000 km): Ground- and sea-launched cruise and ballistic missiles (extensions of existing PrSM and HIMARS capabilities) plus ship-launched Naval Strike Missiles. Mobile launchers dispersed across the north would create a "porcupine" effect.

Long-range systems (1,000+ km): Hypersonic or high-supersonic missiles, potentially air- or ground-launched, capable of reaching adversary staging areas or fleets well before they approach Australian waters. These would form the strategic deterrent.