A multi-billion-dollar project to build high-tech army vehicles will be slashed by more than two-thirds as part of a dramatic realignment of Australia's military that will fast-track the purchase of land-based missiles to deter rising regional threats.
The federal government has confirmed its long-awaited response to the Defence Strategic Review (DSR) will include reducing the number of infantry fighting vehicles (IFVs) from 450 to 129 and cancelling a planned second regiment of self-propelled Howitzers.
Under a $1 billion project first announced during the 2019 election, the construction of 30 self-propelled Howitzers and 15 ammunition resupply vehicles has begun in Geelong, but plans for a second and larger order of the South Korean artillery systems are now being scrapped.
Confirmation that Labor will reduce the IFV project to just one battalion is expected to force South Korean defence company Hanwha and rival German manufacturer Rheinmetall to resubmit their competing bids for a contract previously estimated to be worth between $18-24 billion.
Full details of the DSR, including adjustments to naval, aviation, cyber and space projects are expected to be released just before Anzac Day, and will include a faster and larger procurement of army landing craft to help bring personnel and equipment on shore.
The army will also increase spending on the American-made High Mobility Artillery Rocket (HiMARS) system and fast-track its acquisition of the deadly weapons that have been deployed with great effect by Ukraine against Russia's invading forces.
Independent review
For months, Defence Minister Richard Marles has spoken of the need for "impactful projection" and next week’s DSR will also recommend speeding up and expanding the acquisition of land-based anti-ship missiles for the army.
The independently led review will reveal that new military capability purchases announced since the Morrison government's 2020 Defence Strategic Update are underfunded by 24 per cent over the next four years, and by $42 billion over the next decade.
According to the report completed by former Labor defence minister Stephen Smith and former defence chief Angus Houston, some ADF projects should be immediately delayed, reduced or cancelled to help fund higher-priority capabilities.
Prime Minister Anthony Albanese formally received the completed DSR in February after commissioning the landmark document in August last year.
