Albanese Labor’s Defence System Test Just Got Harder
Conroy put shape around the machinery. Now Labor has to break the behaviour previous Labor governments had already seen.
NEED TO KNOW
Minister for Defence Industry Pat Conroy has put substance behind his earlier claim that Defence workers were let down by “the system”. His National Press Club address named impossible requirements, committee drag, weak costing, cost underestimation, consultant dependence and blurred accountability before contracts were even signed. That sharper diagnosis now traps Albanese Labor inside a harder test: proving the Defence Delivery Group can break behaviours previous Labor governments had already seen, patched and failed to stop.
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Old Labor reviews mapped the machine; Albanese Labor now has to prove it can break the loop.
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Minister for Defence Industry Pat Conroy has put shape around “the system”, and that makes Albanese Labor’s Defence problem harder because delivery is now central to its claim of progressive patriotism.
Earlier this week I argued that Conroy had taken a useful first step by separating Defence workers from the machinery that frustrates delivery, but that “the system” was useless unless he defined what actually failed: Conroy Must Define The System Defence Says It Will Fix. A few days later, at the National Press Club, he supplied much more of the missing map.
Australians hear “the system” and picture some vast Defence machine behind closed doors. Industry hears requirements that move, approvals that crawl, risk that shifts, committees that absorb ownership, cost optimism dressed as planning, and blame arriving after the damage is already built in.
Conroy’s speech mattered because it moved beyond the phrase and started showing how the machine works.
His Adelaide-class frigate example was brutal in the right way. Defence wrote capability requirements that breached the laws of physics, went to market asking industry to breach those laws, industry contractually agreed, and when the project fell apart each side blamed the other. Anyone who has worked near Defence delivery recognises the pattern.
Capability failure does not begin when a project appears on a public trouble list.
A capability need starts as strategic urgency. Requirements then become ambitious because nobody wants to be accused of buying too little. Early costings are softened because a brutally honest number can kill a project before it reaches government.
Committees then add scrutiny, but also dilute ownership. Contractors and consultants fill skill gaps, but can also become part of the cover system. Industry prices uncertainty because requirements move, decisions crawl and risk keeps being pushed around.
By the time the public sees trouble, everyone can point backwards.
National Press Club detail also exposed committee drag. Conroy said the Investment Committee met 13 times in 2025 for around 60 hours, with another 14 out-of-session meetings, involving 26 senior executives and star-ranked Australian Defence Force (ADF) members, consuming around 1600 collective hours. More than half the recommendations considered required no decision.
A committee built for oversight had become a machine for consuming senior time without enough decision-making.
Albanese Labor has abolished that committee and replaced it with a four-member Capability Investment Board. That is a serious structural answer, and Conroy deserves respect as the minister carrying out one of the hardest delivery briefs in government.
Political stakes are larger than procurement housekeeping.
Conroy’s speech wrapped Defence industry in Albanese Labor’s language of progressive patriotism: jobs, skills, manufacturing, self-reliance, sovereignty, deterrence and national confidence. That makes delivery more than an internal Defence reform. Albanese Labor is saying Defence industry helps prove Labor can protect what it wants to build.
Old reviews make innocence impossible.
Mortimer went to buying discipline during the first Rudd government. Black went to who is accountable. Rizzo showed ships unavailable because Navy sustainment, engineering depth, risk management and accountabilities had failed.
Coles added the Collins sustainment lesson: platforms are not real capability unless they can be crewed, maintained, repaired, supplied and trusted.
Previous Labor governments did not invent every Defence failure, but they were not strangers to the machinery. During the Rudd-Gillard-Rudd years from 2007 to 2013, Labor commissioned reviews, reinforced Two-Pass approvals, formalised Projects of Concern and pushed commercial discipline into the Defence Materiel Organisation (DMO). Those interventions showed the problem was visible.
Projects of Concern made troubled projects public, but visibility after failure is not the same as honesty about how Defence helped manufacture failure before the public label was applied.
During my Boeing years, I saw the industry side of that game. A troubled project could be framed as contractor failure even when Defence requirements, approvals, risk settings and daily project behaviour had helped create the mess. Industry was not always innocent, but the Commonwealth controls much of the maze it later blames others for getting lost in.
Conroy’s cost evidence now makes the old loop harder to ignore. A reform taskforce found average total cost increases of 38 per cent from project conception to government decision, before contracts with industry were signed. In dollar terms, that was a $29 billion increase across the same sample before formal delivery had even begun.
Bad costing before contract is weak discipline becoming public expense.
Consultants are part of the same story. Conroy named atrophied costing capability, fragmentation, under-resourcing and over-reliance on contractors and consultants. Albanese Labor is trying to rebuild Defence’s internal commercial and delivery competence while also asking industry to invest, hire, manufacture and carry national security risk.
Sailors, soldiers and aviators need requirements held steady, costs tested early, sustainment designed in, engineering depth rebuilt, committees made useful rather than endless, and ownership made visible before failure becomes public.
Albanese Labor’s test is no longer whether it can name the system, because Conroy has started doing that; the test is whether it can break the behaviour previous Labor governments had already seen, patched and failed to stop.
What do you think matters most now: better requirements, honest costing, fewer committees, stronger engineering, or clearer ownership when Defence delivery fails?