Australia is set to dramatically scale back the number of infantry fighting vehicles it buys for the army as part of a defence overhaul to be announced on Monday.
The army had planned to acquire up to 450 infantry fighting vehicles, at a cost of up to $27bn, to replace Australia’s Vietnam war-era armoured personnel carriers.
But a review, billed by the Albanese government as the most significant update of defence planning in nearly 40 years, will recommend reducing this number to just 129 vehicles, enough for one mechanised battalion.
The government is likely to accelerate and expand numerous other projects, including a land-based anti-ship missile system and new landing craft for the army.
In addition to looking at what developments across the Indo-Pacific region mean for the Australian defence force, the review has identified $42bn in additional defence spending over 10 years that the former Coalition government had announced but not yet funded in the budget.
The review, carried out by the former defence chief Angus Houston and the former Labor defence minister Stephen Smith, was completed in February, but the classified final report has remained under wraps while ministers considered their response.
On Monday the government will release a declassified version of the report, together with a response to the recommendations.
While defence funding is expected to continue to rise overall, the review will recommend that a number of projects be delayed, reduced or cancelled.
This aims to free up funding and workforce for higher priorities within the defence portfolio, in line with what the deputy prime minister, Richard Marles, flagged in an interview with Guardian Australia in January.
Marles said the government did not have “limitless resources” and would weigh up “how best we can use the resources that we have to make sure that we have a defence force which maximises Australia’s capability”.
Recommendations include a scaling back of the infantry fighting vehicle project, known within defence circles as “Land 400 Phase 3”.
The review is also expected to recommend the immediate cancellation of the second phase of the army’s self-propelled howitzer project (Land 8116 Phase 2). This project had been set to begin in the late 2020s.
But other projects that the review argues should be “accelerated and expanded” include one to acquire a land-based maritime strike capability. The project (Land 4100 Phase 2) will enable ground forces to strike ships at sea.
Projects to be fast-tracked and expanded also include the acquisition of army landing crafts and long-range fires (Himars).
The government will announce on Monday whether it has accepted the recommendations, but it is considered likely to follow them.
The report is believed to argue “difficult decisions and trade-offs” are required to manage the defence budget, citing severe workforce pressures, new capability needs, and the cost of sustaining existing capabilities.
It has identified more than $42bn in defence spending over the decade to 2032-33 that was announced between mid-2020 and the establishment of the defence review in August last year “without the provision of any additional allocation in the commonwealth budget”.
This is believed to include $7.9bn in further funding for the Redspice cybersecurity program beyond 2025-26 and $32.2bn to establish a guided weapons and explosive ordnance enterprise in Australia.
The gaps also include $1.9bn for the advanced capabilities under the second pillar of the Aukus security partnership with the US and the UK. This second pillar covers the non-submarine parts of the three countries’ defence cooperation.
Last month the three governments announced a multi-decade staged plan for Australia to acquire nuclear-powered submarines at a forecast cost of $268bn to $368bn between now and the mid 2050s.
The projected cost of the submarine project includes $9bn over the initial four-year budget period, or an increase of $3bn compared with the $6bn that was already earmarked for the abandoned French project over the same period.
Defence has been asked to offset that $3bn, probably through changes to other defence projects.
While the Aukus announcement last month focused on a single capability, the defence strategic review is supposed to look across the board at what posture and structure the ADF should take in light of increasingly challenging strategic circumstances.
Marles has argued that the ADF’s role is much broader than simply defending Australian territory, because “a lot can happen to us before anyone seeks to place a foot on our continent”.
Australia needed to think about “how we hold any potential adversary at risk at greater distance from our shores”, Marles said in January.
The foreign affairs minister, Penny Wong, said in a National Press Club speech this week that all countries in the region had “a responsibility to help maintain the conditions for peace through our diplomacy” but must also “play our part in collective deterrence of aggression”.
Critics such as the former Labor prime minister Paul Keating have argued that Australia is too closely following the US in responding to the rise of China.
