Australia Defence & Security Report

Providing expert analysis, independent forecasts and competitive intelligence on the defence & security industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Security Risk Reward Index, Company Profiles and Global, Regional and Country Industry Overviews.

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Australia Defence & Security Report
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BMI View: The Australian government plans large increases in defence spending over the next decade, in order to modernise the ADF - in particular the navy - amid rising threats linked to East and South China Seas territorial disputes, regional military build-ups, terrorism and cybercrime. Large-scale procurement programmes will be carried out over our forecast period to 2025 - most of which will be covered by foreign defence companies , due to Australia's still-limited military industrial base . That said, we see significant potential for expansion of the domestic defence sector in the longer term , as local companies - for which government support is strengthening - benefit from technology transfer agreements tied to military import contracts.

Headline Defence Expenditure Forecasts (Australia 2016-2020)
2016f 2017f 2018f 2019f 2020f
f = BMI forecast. Source: ADB, BMI
Defence expenditure, USDmn 20,175.9 21,561.3 24,031.0 25,638.3 27,245.6
Defence expenditure, USD, % y-o-y -13.5 6.9 11.5 6.7 6.3
Defence expenditure, % of GDP 1.8 1.9 1.9 2.0 2.0

Latest Updates :

  • The government has reiterated its commitment to raising defence spending to 2% of GDP, amid growing threats from terrorism, regional military build-ups, tensions surrounding the East and South China Seas territorial disputes and cybercrime. According to its current budget model and our GDP projections, this will occur by 2019. The government has decided to 'de-couple' its defence spending from GDP growth, which means that even if economic expansion slows, the military budget will still increase according to 2016 Defence White Paper plans.

  • The recently published Defence White Paper envisions major capability investments into six 'streams' in the next 10 years. These streams are: ISR, space, EW and cyber (to receive 9% of overall investment); maritime and anti-submarine warfare (25%); strike and combat air (17%); land combat and amphibious warfare (18%); key enablers (to support operation and sustainment of defence) (25%); and air and sea lift (6%).

  • According to the white paper, the size of the ADF will increase by around 2,500 to 62,400 staff over the next decade, in order to support new capabilities.

  • In April 2016, Australia selected France's DCNS as its preferred international partner for a USD39bn programme to replace the Collins-class submarines currently in service with the navy, in one of the largest-ever defence deals globally.

  • According to the defence department, Australian defence exports reached AUD1.8bn (USD1.3bn) in 2015 from AUD1.2bn in the previous year. This figure is likely to be slightly higher, as estimates are based on license approvals, and defence companies are not required to declare value of goods on applications.

  • Australian police has carried out a number of counterterrorism raids over the past few months. In November 2015, it revealed that 12 people assumed to be capable of carrying out terrorist attacks in Australia were being kept under close surveillance.

Defence Industry Risk/Reward Index :

Demand for defence products in Australia is significant, as the MoD works to modernise the ADF's equipment amid growing threats from terrorism and regional tensions over maritime disputes. This trend strengthens Australia's score in the Industry Risks segment of our Index. The country's domestic defence sector is limited, however, reducing Industry Rewards. Australia's strongest performance across our RRI is in the Country Risks segment, due to low levels of corruption, a secure operating environment, and a highly skilled workforce. Overall, Australia scores 53 out of 100 in our RRI, ranking second out of 14 Asia-Pacific states.

BMI Industry View
Table: Headline Defence Expenditure Forecasts (Australia 2016-2020)
Defence Industry SWOT
Industry Forecast
Defence Expenditure
Table: Defence Expenditure (Australia 2016-2020)
Table: Defence Expenditure (Australia 2021-2025)
Defence Trade
Table: Australia - Defence Agreements
Industry Risk Reward Index
Defence Industry Risk Reward Index
Table: Asia Pacific - Defence Industry Risk Reward Index
Market Overview
Defence Market Overview
Domestic Defence Sector
Domestic Defence Market
Armed Forces Overview
Armed Forces
Table: Armed Forces Personnel (Australia 2008-2013)
Table: Australian Defence Force - International Deployments
Security Overview
Domestic Threats
International Threats
Company Profile
Boeing Australia
BAE Systems Australia
Raytheon Australia
Thales Australia
Risk/Reward Index Methodology
Sector-Specific Methodology
Table: Defence Risk/Reward Index Indicators
Table: Weighting of Defence Risk Reward Index

The Australia Defence & Security Report features BMI Research's independent forecasts for national and international security, the defence industry, military expenditure, employment in arms production, and arms imports and exports, as well as examining industry trends and prospects, national and multinational arms producers and the regulatory environment.

BMI's Australia Defence & Security Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Australian defence and security industry.

Key Benefits

  • Benchmark BMI's independent defence and security industry forecasts on Australia to test other views - a key input for successful budgetary and strategic business planning in the Australian defence and security market.
  • Target business opportunities and risks in the Asia defence and security sector through reviews of latest industry trends, regulatory changes and major deals, projects and investments in Asia.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity).


Global and Regional Political Outlooks

A strategic overview of the world’s major political risks, identifying countries facing leadership successions and nations at risk of upheaval, inter-state conflict, or separatism and insurgencies, plus a summary of the world’s ‘wild card’ low-probability high-impact risks.

SWOT Analysis

Snapshot evaluation of the major issues affecting the defence and security sectors, economy and politics, with issues subdivided into strengths, weaknesses, opportunities and threats.

BMI Industry Forecast Scenario

Historic data series and forecasts to end-2019 for key industry indicators supported by explicit assumptions, plus analysis of key downside risks to the main forecast.

  • Defence Expenditure: Defence expenditure (local currency and USDbn); defence expenditure (% of total budget); defence expenditure per capita (USD); defence budget (local currency and USDbn).
  • Armed Forces (to 2012): Manpower available for military service, manpower fit for militaryservice, army personnel, navy personnel,air force personnel, total armed forces, (‘000) (% population).
  • Arms Trade: Arms and ammunition exports and imports (USDmn); bombs, grenades and missiles exports and imports (USDmn); revolver and pistol exports and imports (USDmn); weapons excluding guns and swords exports and imports (USDmn).

Political Risk Assessment

Drawing on BMI’s heritage of more than 25 years of Country Risk analysis, this comprehensively evaluates the key risks to domestic politics and foreign relations, focusing on issues most likely to affect either domestic security or the defence sector.

Security Risk Analysis

BMI’s proprietary Security Risk Indices provide investors with a reliable and country-comparable guide to conflict, terrorism and criminal risk, backed up by our analyst’s latest assessment of each component. Furthermore, drawing on our Country Risk expertise, we assess the state’s vulnerability to a serious, or prolonged, terrorist campaign.

Armed Forces Spending/ Expenditure

The reports contain a detailed breakdown of areas of expenditure by the armed forces, these include spending on international deployments, WMDs and missile defence systems as well as individual breakdowns of the cost-per-soldier.

Competitive Landscape

The domestic security overview lists the various potential internal security threats facing a country, ranging from internal security issues such as terrorism, cyber terrorism, crime and drugs, to external security issues including general defence procedures and potential threats from specific countries. The reports also provide a regional overview which details specific issues and flashpoints affecting the Americas, along with potential risks in the coming year.

Company Profiles*

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.


The Defence & Security Market reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.