New economic modelling suggests Australia could add billions of dollars to annual GDP and create tens of thousands of jobs by allocating a greater share of Defence procurement to Australian-owned prime contractors, rather than foreign-owned subsidiaries. The findings come from a new report, The Defence Dividend: Gains to Australia’s Economy Through Sovereign Defence Procurement, prepared by economics and policy firm DeltaPearl Partners for the Sovereign Australian Prime Alliance.
The analysis modelled a modest shift in procurement allocations: a 5 per cent reallocation of Defence spending away from imports, and a 10 per cent shift of domestic spending from foreign-owned subsidiaries to Australian primes. Under those scenarios — and without increasing the Defence budget — the report estimates an annual GDP uplift of between $5.0 billion and $8.2 billion, along with 25,569 to 43,205 additional full-time equivalent jobs.
Lead researcher and DeltaPearl Partners managing director Craig Wilson said the modelling shows the significant economic and strategic gains that come from awarding contracts to companies with Australian ownership, local reinvestment and domestic control of intellectual property. He said Australian primes generate greater long-term benefits because their decisions on tax, management, capability development and supply-chain investment remain within the national economy.
The report comes amid ongoing debate about the balance between sovereign capability and international competition in Defence procurement. Recent changes to the Commonwealth Procurement Rules, combined with comments from senior Defence officials and the Australian National Audit Office, have highlighted a gap between strategic goals and operational procurement decisions, with foreign multinationals still winning the majority of major contracts by value.
DeltaPearl’s report proposes five recommendations for the Australian Government, including redefining “value for money” to include sovereign capability considerations, introducing a quantitative sovereign-dividend scorecard, setting clearer definitions for what constitutes an Australian business, and equipping procurement officers with stronger decision-support tools. It also calls for a whole-of-government approach that treats Defence procurement explicitly as an instrument of national strategy.
Wilson said the evidence reinforces long-standing arguments from Australian industry. “Even modest shifts in procurement settings will deliver billions in GDP uplift, thousands of skilled jobs, and a stronger sovereign base,” he said. “This provides a clear basis for refining procurement rules to deliver maximum national benefit without additional cost to the taxpayer.”
You can read the full report here.
