A review of a small sample of Defence projects under the biggest reform of the department in decades has revealed blowouts costing taxpayers $29 billion.
The federal government has vowed to overhaul Defence to reduce significant project delays and waste of public funds, as record amounts are committed to military spending.
A delivery group, which consolidates three areas of Defence including the guided weapons and explosive ordnance group, begins operating on Wednesday.
Under the group, about a dozen projects were reviewed which found costs had increased by 38 per cent before any contracts were signed, amounting to $29 billion.
The Defence Investment Committee, set up as an oversight body, has been found no longer fit for purpose.
The committee met 13 times in 2025 for about 60 hours, with 14 extra out-of-session meetings.
Those meetings involved 26 senior executives and senior defence force officers, resulting in time being wasted on preparing briefs, rather than delivering projects.
In a speech to the National Press Club in Canberra on Thursday, Defence Industry Minister Pat Conroy will make a series of announcements, including that the key committee will be scrapped.
"That represents an opportunity cost … funding that could have been invested better, if costings had been done better in the first place," he will say.
"The task force found that Defence’s costing capability has atrophied over time – it’s become fragmented, under-resourced, and over-reliant on contractors and consultants.
"We are talking about multibillion-dollar capability projects, integral to the defence of our nation and to peace and stability in our region."
Mr Conroy will also announce a shake up of the $4.36 billion Defence Export Facility, which has only been used three times since established in 2018.
Positioning Labor as the party of defence, he will argue the reforms are essential and that his government can be trusted with national security.
Mr Conroy on Thursday will release the Defence Industry Development Strategy, the blueprint to developing the nation's industrial base.
"We are getting back to making our own stuff where it makes sense and leveraging our allies and trusted partners where we cannot," he will say.
"A strong sovereign defence industrial base mitigates risk… decreases dependencies… and means we can make things here."
From July 2027, the Defence Delivery Agency will become operational with a mandate for project delivery.
Recruitment is under way for the agency's national armaments director, who will advise government.
A candidate with private sector experience is being sought following years of bungled procurement.
