Australia - Country Commercial Guide

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-08-16


Australia is a major defense market for the United States and is pursuing a multi-streamed defense acquisition policy including substantially increased total expenditure (target was 2% of GDP per annum but this connection has been downplayed as the investment in defense acquisitions has grown); acquisition of world’s best non-nuclear systems, incorporating interoperability with the U.S. military; skills transfer and in-country R&D, assembly and manufacture as part of a development plan to grow the Australian defense industry; re-establishing a naval shipbuilding industry; and pursuit of international sales from Australian-produced defense systems.

Annual total defense expenditure is of the order of US$25–30 billion and defense acquisition and sustainment is a large part of this figure. Australia’s already substantial defense purchases were strengthened in March 2016 by the release of the Defense White Paper which detailed a US$145 billion defense acquisition plan for the decade to FY 2025-26. More recently, Australia’s defense acquisition planning has been further strengthened by the 2020 Defence Strategic Update ( which details a ten-year US$190 billion defense acquisition plan ending FY 2029-30.

New investments will include 12 regionally-superior conventional submarines (to be built by French company DCNS in Australia); 9 anti-submarine warfare frigates (to be built by UK company BAE Systems); 12 patrol vessels (Germany); 7 P-8 Poseidon aircraft (U.S.); 72 F-35A Joint Strike Fighters (U.S.); 12 E/A-18G Growler airborne electronic warfare aircraft (U.S.); helicopters of various types (United States has multiple options); missile defense systems (probably U.S.); a long-range rocket system (probably U.S.); a new generation of armored vehicles (Germany); and upgrading the main battle tank fleet (U.S.). In addition, there will be a host of investments including upgrades to airports, training areas, army bases, naval facilities, cyber and communications systems. U.S. industry is well-placed to win some of this business as well in collaboration with Australian industry. Note also that there is a strong U.S. industry presence in Australia by way of local subsidiaries and that this is also reflected in a particularly strong American Chamber of Commerce in Australia (AmCham) with offices across the country.

U.S. companies also have the in-country support of U.S. export promotion agencies – specifically the U.S. Commercial Service with an aerospace and defense/marine/safety and security specialist based in the U.S. Embassy in Canberra, along with a uniformed team at the Office of Defense Cooperation, also located in the U.S. Embassy, tasked with facilitating U.S. solutions for a range of Australian defense projects. Both offices actively engage with U.S. companies and the Advocacy Center in Washington DC to advocate on behalf of U.S. bids for defense projects in Australia.  Advocacy cases currently active offer the prospect of more than US$10 billion in U.S. sales to Australia, and active Foreign Military Sales (FMS) cases are valued at in excess of US$20 billion.

U.S. industry is a likely key beneficiary of decisions concerning weapons systems, although the scale and diversity of the total program of acquisitions means there will need to be a number of collaborative bids for projects involving third countries and incorporating Australian industrial capabilities.

Australian defense expenditure is closely aligned with its territorial claims to, and associated defense of, the largest jurisdiction of any nation – 10 million square miles or 27.2 million square kilometers – split almost evenly between land and ocean, and stretching from the South Pole to just short of the Equator. This places a heavy burden on the nation’s military and its border security services. The Australian Defense Force is widely regarded as the most potent military force in the Southern Hemisphere, comprising some 60,000 full-time personnel and over 20,000 active reserves, operating a technologically-advanced portfolio of weapons platforms. It has, for example, recently acquired two Landing Helicopter Docks [LHDs] amphibious assault ships, each of 27,000+ tons to strengthen its force projection capabilities, and is a major customer for the F-35 Joint Strike Fighter program. It has also embarked on a large conventional submarine construction program with frigates to follow. By 2020, Australia was able to boast the world’s first fifth-generation air force, flying almost exclusively U.S.-made product.

Australia has various defense agreements with the United States including a Defense Trade Cooperation Treaty. It prioritizes interoperability with the United States and has been a firm U.S. ally for a century since  the Battle of Hamel in 1918, when the two armies first went into combat together. Australia’s defense acquisitions are premised on a desire to operate the most advanced conventional defense systems in the world; a commitment to defend its territorial jurisdiction and a readiness to deploy worldwide in support of key policy objectives. Australia fully funds its defense acquisitions and undertakes periodic reviews of its national defense strategy and associated equipment needs.

Australia’s defense equipment investment program includes a heavy focus on various fixed wing, helicopter and UAV aircraft. Australia is a major importer of defense systems and a leading customer of the United States – 3rd in 2015 and 2016, 2nd in 2017, 5th in 2018, and 6th in 2019. This does not include collaborative development activities which are of a similar scale in value to direct export sales.

Australia released its Naval Shipbuilding Plan in May 2017, outlining the country’s largest ever program of naval shipbuilding and sustainment, including AU$1.3 billion (US$1 billion) investment to develop infrastructure in shipyards.

Australia has committed to investing around AU$90 billion (US$70 billion) in the rolling acquisition of new submarines, and the continuous construction of major ships such as future frigates, as well as minor naval vessels.  

U.S. companies looking to showcase their capabilities to Australia and its Asia Pacific neighbors should consider exhibiting in the U.S. Pavilion at the next Australian International Airshow (also known as the Avalon Airshow), held at Avalon Airport south of Melbourne every second year.  

Many U.S. defense companies have large presences in Australia, including Boeing, Lockheed Martin, Collins Aerospace, Northrop Grumman, Honeywell, General Dynamics and Raytheon. These companies and many smaller U.S. companies have won substantial defense contracts in Australia, culminating in Australia’s rise in 2017 to the U.S.’ 2nd largest defense market worldwide.  Australia’s defense industry is also a major investor in the United States, with Australian defense companies now present in over thirty U.S. states. The Australian Defense Sales Catalog is available online at and will be of interest for U.S. companies who are looking for potential Australian partners and/or distributors as well as those who trade in military equipment, including of U.S. origin.

Total U.S. defense sales to Australia are hard to quantify due to their nature and to differing definitions of what constitutes a ‘defense’ sale, but Australian government sources confirm annual defense purchases from the U.S. have exceeded US$3 billion per annum for the past three years. While equipment of diverse kinds dominates Australian defense purchasing it also invests heavily in services including cyber/electronic warfare, training and facilities construction.  In April 2018, the Australian government announced that U.S. companies KBR and Huntington Ingalls Industries (HII) would jointly deliver a Naval Shipbuilding College in Adelaide to train the skilled workforce necessary to deliver Australia’s ambitious naval capability plan.

Equipment supply includes leading edge technologies such as the MQ-4C Triton remotely-piloted aircraft from Northrop Grumman announced in June 2018 to be supplied via a cooperative program with the U.S. Navy. Six or possibly seven MQ-4C RPAS are planned to be acquired under the AIR 7000 project, with a total potential value of approximately AU$7 billion (US$5.5 billion). And while various companies have or will win the prime contractor roles to deliver these large projects, that still leaves extensive specific supply opportunities for U.S. companies within their scope.  For example, while UK company BAE Systems will build the AU$35 billion (US$27 billion) SEA 5000 fleet of anti-submarine warfare frigates, the United States will supply its Aegis combat management system as a critical component and Australian industry content is expected to reach 65-70%, further opening up opportunities for U.S. companies and their subsidiaries to work with local Australian companies.

Boeing, which has its largest presence outside the U.S. in Australia, has also utilized its Australian workforce to develop the Loyal Wingman pilotless combat vehicle (UCAV) which is the first aircraft that Boeing has designed and will build outside the U.S. and which opens up export opportunities from Australia.  Boeing was also announced in January 2021 as Australia’s preferred supplier of armed reconnaissance helicopters in a defense project valued at over US$3 billion.

The key source document for future defense purchases is the 2020 Defense Strategic Update, which was released in July 2020.  It is accessible online and updates the 2016 Defense White Paper explaining Australia’s defense strategy and planned acquisitions.  

The following table summarizing defense trade with the U.S. broadly extrapolates 2018 and 2019 numbers forward – despite widespread international economic disruption in 2020 – on the basis that the Australian government’s capacity to keep buying defense equipment is still in place.  There was some concern that the defense budget might suffer in 2020/21 as Australia committed an enormous amount to social and economic initiatives to underpin the Australian economy.   The Australian government remains committed to growing its ongoing defense spending to broadly two percent of annual GDP; further increased defense acquisitions in its 2020 Strategic Update; and is helping support a local defense export industry that will put Australia among the world’s top ten defense exporters in the near future.

Defense Trade Data: 2018-2021 est.





2021 (Estimated)

Total Local Production





Total Exports





Total Imports





Imports from the U.S.*





Total Market Size





Exchange Rates





(total market size = (total local production + imports) - exports)

Unit: US$ Thousands

Data Sources: Global Trade Atlas; IBISWorld Australia; tariff and trade data from the US Department of Commerce and the U.S. International Trade Administration; White Paper on Defense, Australian Department of Defense; Australian defense sector estimates and analysis. Data retrieved as at 9 July 2021.

NB Imports from the U.S. * are measured differently by U.S. and Australian Government sources. While the above figures for U.S. imports reflect defense export statistics compiled by the U.S. Department of Commerce, Australian Government numbers are consistently higher – i.e. US$3 billion per annum – and reflect likely definitional issues and arbitrary inclusions/exclusions.  The Australian data for example includes Cooperative, FMS and Commercial Sales. For FY 2018 their figures were US$ 1.3 billion, US$ 1.2 billion and US$ 0.57 billion respectively for a total of US$ 3.07 billion defense purchases from the U.S..

Leading Sub-Sectors

The scale of the defense acquisition is so great that U.S. companies would be well advised to review the 2020 Defense Strategic Update and the preceeding 2016 Defence White Paper; identify potential opportunities from the information provided; and subsequently reach out to the U.S. Commercial Service in Canberra and/or the Office of Defense Cooperation, also in Canberra, for more detailed advice.


Strong promotion is essential. Three major defense trade shows held in Australia on a rolling two-year cycle, each featuring a U.S. Pavilion are the Australian International Airshow at Avalon, which alternates with the Singapore Air Show; the Indo-Pacific International Maritime Exposition; and Land Forces. Land Forces 2021 was held in Brisbane June 1-3, 2021 and represented the return of large trade shows to the Australian calendar. However ongoing international travel restrictions effectively limited it to a domestic Australian audience and exhibitor cohort.

MilCIS is the annual Military Communication and Information Systems conference held in Canberra in November and usually features a strong U.S. exhibitor presence. In 2020, MilCIS was held as a virtual event. Almost half of the exhibitors at the 2019 event were U.S.-based or Australian subsidiaries of U.S. companies and indeed all the Chief Information Officers (CIOs) of the five FiveEyes nations (U.S., UK, Canada, New Zealand, and Australia) attended and delivered keynote presentations.

It is worth noting that Avalon, Indo-Pacific and Land Forces (and the helicopter industry trade show RotorTech) are all organized by one company - AMDSFA - and Kallman Worldwide of NJ promotes and manages U.S. Pavilions at Avalon, Land Forces and Pacific.  A U.S. Pavilion at MilCIS is not required since at least 30% of exhibitors are U.S. or U.S. subsidiaries.

The Australian Government also organizes the annual U.S. Australia Dialogue on Defense Industries to bring together industry representatives and senior government officials to discuss opportunities to optimize defense industry collaboration.  The most recent Dialogue took place in Washington DC on May 9, 2019. No event was held in 2020 or 2021 due to international travel restrictions.

Key defense acquisition and sustainment projects are profiled on the Australian Department of Defense website. Project opportunities are advertised via tender and can be found on the AusTender website at  U.S. companies should pay particular attention to the Australian Government’s Industry Capability Plan requirements and objectives.  Australia is determined to reverse a decline in its defense industry capabilities, starting with the rejuvenation of its naval shipbuilding, and has a strategy to turn Australia into a leading defense exporter in the mid-term.  While not mandating specific Australian content requirements or offsets, Australia is determined to see that everything that can be done in Australia should be done in Australia and has been quite clear that those companies that bid on that basis will be looked upon more favorably than those that do not.

Note that this framework still leaves enormous opportunities for U.S. companies to sell directly; in collaboration with an Australian distributor / partner; and / or via an Australian subsidiary or contracted partner delivered some work in-country.  It is about ‘clever supply’ that delivers enhanced capabilities in Australia while also achieving export success to U.S. exporters and manufacturers. U.S. industry is a preferred partner, benefits strongly from Australia’s determination to deliver interoperability with the U.S. military, and easily wins the largest share of defense business going to non-Australian suppliers, as well as a large share of Australian industry business via its Australian subsidiaries.


  • MilCIS 2021
  • Land Forces 2021
  • Indo-Pacific International Maritime Exposition 2022
  • Australian Department of Defence
  • Australian Department of Defence – 2020 Defence Strategic Update
  • U.S. Pavilion coordinator at Pacific, Land Forces, RotorTech and Avalon Airshow – Kallman Worldwide –
  • U.S. Department of Commerce – The Advocacy Center