Anticipation is growing of further cuts to expensive defence projects as the Albanese government confirms a senior mining figure will soon oversee Australia’s military acquisitions and overhaul troubled procurement processes.
Defence officials and industry representatives have told The Nightly that a new “budget review” has recently begun inside the department with Secretary Meghan Quinn continuing to examine options to reduce spending on “over-programming”.
“Everything appears to be on the table — Hunter-class frigates, infantry fighting vehicles, or even the early retirement of Navy’s Landing Helicopter Docks,” one Defence insider claims.
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“There is a real funding crunch inside Defence as AUKUS consumes much of the spending, so urgent efforts are being made to find savings elsewhere – all while the government pushes to land a budget surplus in 2027,” the figure adds.
One Defence official, speaking on the condition of anonymity, claims there are now regular “robust conversations” between the department secretary and Chief of Defence Vice Admiral Mark Hammond about project budgets.
A spokesperson for Defence Minister Richard Marles declined to say which projects were being examined, but said the government would “continue to make budget decisions in a prudent and methodical way that supports our Defence Force and supports delivery.”
“We inherited a Defence budget that was at historically high levels of over-programming, including $42 billion in additional Defence spending without any additional allocation in the budget,” the spokesperson told The Nightly.
“Since coming to government we have successfully reduced over-programming to more sustainable levels so Defence has a real plan for the capabilities it needs, and the money to deliver it.”
This week defence also quietly confirmed that the annual cost of salaries for star-ranked officers in the ADF had reached $140 million but insists the number of top brass is now “on a downward trajectory”.
“The ADF is rebalancing senior officer numbers through the implementation of the Biennial Review of Star Ranks, stabilising headcount and enhancing workforce sustainability,” the department said in a statement submitted to Parliament.
“The Biennial Review of Star Ranks has reversed growth in star rank numbers and placed them on a downward trajectory. As at June 2026, the number of star rank positions reduced from a peak of 242 in March 2025 at the review’s commencement, to 226 positions (a reduction of 16 positions).”
Kellie Parker has been appointed National Armaments Director. Credit: Matt Jelonek/Getty
Speculation about impending cuts to large military programs has emerged as Rio Tinto executive Kellie Parker has been unveiled as Australia’s inaugural National Armaments Director to head up the new Defence Delivery Agency.
Confirming her appointment, Defence Industry Minister Pat Conroy compared Ms Parker to former BHP leader Essington Lewis. who served as Director-General of Australia’s Departments of Munitions and Aircraft Production during World War II.
Minister Conroy says Ms Parker, who was appointed Rio Tinto’s Australian Chief Executive in 2021 after 20 years at the company, was the obvious choice for the new role overseeing hundreds of billions of dollars’ worth of defence projects.
“We chose someone with deep commercial expertise, strong project management background, but also equally importantly, the first and that has to build the culture of a new organisation, so she’s done that twice within Rio Tinto,” Mr Conroy told The Nightly.
Pat Conroy. Credit: Gaye Gerard/NewsWire
Mr Conroy also rejected suggestions that the confirmation of Ms Parker’s appointment had been delayed given her name was being spoken about inside his department for months.
“I don’t think it took that long,” he said.
“We wanted to find the best person and go through a really exhaustive process, and then obviously people have to go through hurdles within government to be selected.
“I think we had to get the right person. We wanted them on board before the DDA started.
“We’ve done that, and in fact, they’re on board before critical decisions are being made.”
Ms Parker will begin her appointment as National Armaments Director Designate at the Defence Delivery Group from 9 November this year, until the new Defence Delivery Agency begins operations from 1 July 2027.
Earlier this year, the Defence Department’s Capability and Sustainment Group (CASG), Guided Weapons and Explosive Ordnance Group (GWEO) and Naval Shipbuilding and Sustainment Group (NSSG) were integrated into a new independent Defence Delivery Group.
