'Paradigm shift': Defence Minister Richard Marles moves to align Defence and Finance over big projects, AUKUS spend

In an interview with The Canberra Times in the wake of the federal budget and the landmark Defence Strategic Review, the Deputy Prime Minister said oversight of massive defence spends, including the $368 billion nuclear-power submarine deal under the trilateral AUKUS pact, occupies a "huge" amount of his attention and thought.

In a strategic environment he described as the most threatening and complex since World War II, he also denied Australia was losing the war on defence recruitment.

But Mr Marles said getting Defence to deliver massive defence projects on time and within budgets is "about as important a task as I have".

"Defence is a massive enterprise. It's a very big animal. And part of getting value for money is getting kind of speed for money," the minister said.

"There's got to be a much greater nimbleness and ability to translate decisions into operation faster. And time is money in that sense. That's part of the dimension.

"We are definitely not at war at the moment, but there is contest. So that's a much harder kind of question, in terms of where you pitch Defence spending."

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The budget papers show a total of $19 billion in Defence spending will be reprioritised over the next four years. But while the overall Defence spend will rise over the mid-term, it has led to accusations by the shadow defence minister Andrew Hastie that Labor is "cannibalising" Defence, particularly the army with the order for Land 400 combat vehicles being slashed in half.

Mr Marles rejects seeing areas like the army as "less important" while Australia enters the "missile age." He said the money is moving to "where we really need it and need it right now."

The Prime Minister recently revealed cabinet processes are involved, with the National Security Committee meeting several times with the budget razor gang, the Expenditure Review Committee, in a bid to keep track of big Defence projects.

Describing it as a "different paradigm" for Defence, Mr Marles said it needs to justify its expenditure.

"We need whatever else to have an excellent conversation between national security and finance in Canberra," the minister said. "And I mean that at every level."

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"At a political level, I mean amongst ministers. But at a bureaucratic level, I think the conversation between national security and finance has to be excellent. It cannot be siloed. Everyone needs to know what's going on.

"Because both have a stake. You can't do what we need to do in Defence without the finances to do it and Finance needs to understand what the strategic threat is that would warrant it."

Mr Marles said there was a "controlled urgency" as Defence changes its posture and Australia is put on a different path. He also declared Australia will support war-torn Ukraine for "the long haul."

"There is obviously an active dialogue between ourselves and Ukraine about what they need, what we could help with and what we're in a position to, and there will be more in this space," he said.

Defence funding is expected to reach 2.3 per cent of gross domestic product at the end of this 10-year period, an increase of about 0.2 per cent of GDP in defence spending. The reprioritisation within Defence will be ongoing.

"There will need to be an increase in the funding envelope beyond the trajectory of growth that we inherited from the former government," Mr Marles said.

He said Australia has learnt from Russia's invasion of Ukraine, particularly over supply chain shortages, that Australia needs to build its industrial base if it wants guided weapons and heavy munitions.

Like building the AUKUS submarines locally in Adelaide, the mantra emerging from Mr Marles is if you want war stocks, you're "going to have to substantially make it here."

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While Mr Hastie told The Canberra Times that Australia was "losing the war" on defence recruitment, the Minister denies it, describing Australia as engaged in a contest for Defence people and he said there's a lot more work to do to win it.

The budget shows that staffing levels are expected to be lifted by more than 2500 across the portfolio over the next four years, with the military gaining an additional 1200 places.

"We're kind of a victim of our own success. A lot of those skills are very marketable in a civil economy, we are definitely losing people to the civil economy," Mr Marles said.

"I think there's a lot more that we will need to do over the journey, but getting the answer to the human dimension right is really central. It's an ongoing struggle and it's a big priority."