TBH urges defence productivity overhaul as spending rises

TBH has called for a formal whole-of-defence-sector productivity system in Australia, setting out the case in a new white paper as Defence spending moves towards AUD $100 billion a year.

The paper argues that the biggest productivity losses in major defence programmes occur at the interface between government and industry, rather than within individual organisations. It says those losses can only be addressed through shared investment in common systems, data frameworks and performance disciplines.

According to TBH, the average major project is running 21 months behind schedule. Persistent underperformance, it argues, stems from three structural problems: weak performance measurement, misaligned commercial incentives, and a lack of systematic organisational learning.

The proposed framework centres on tighter project controls, collaborative contracting models and a shared lessons-learned system. It also sets out 20 priority actions for government, the planned Defence Delivery Agency and industry.

TBH managing director Jonathan Jacobs said the ingredients for such a system already exist across several policy and budget settings, but remain fragmented.

"The building blocks of our white paper are already present across the 2026 National Defence Strategy, the FY2026-27 Defence budget, and the Productivity Commission's December 2025 final reports on national productivity priorities. However, those building blocks are operating as disconnected reform streams rather than a coherent, jointly governed system," Jacobs said.

He linked the proposal to the scale of expected defence investment and the record of project delays.

"With Defence expenditure approaching $100 billion annually by the mid-2030s and the average major project running 21 months behind schedule, formally naming and integrating these initiatives into a whole-of-sector agenda is both achievable and urgent," Jacobs said.

Shared systems

A central element of the proposal is a sector-wide data architecture designed to show where productivity losses are concentrated across defence projects. The paper says this would rest on consistent earned value management, common standards for project controls and a shared taxonomy for lessons learned.

TBH national defence director Peter La Franchi said the approach is intended to make productivity performance visible across the sector, rather than only at project level.

"We're proposing a sector-level data architecture that gives Australia, for the first time, a systematic view of where productivity losses are concentrated across the entire defence sector. Built on consistent earned value management, common project controls standards, and a shared lessons taxonomy, it's what makes productivity improvement measurable, governable, and improvable over time," La Franchi said.

The paper identifies the forthcoming Defence Delivery Agency as the main institutional route for embedding the approach. It argues that decisions now being made on information systems, governance and reporting should include shared project controls from the outset, rather than adding them later.

"The TBH white paper identifies the forthcoming Defence Delivery Agency as the primary organisational vehicle for embedding a whole-of-sector productivity agenda. The foundational design decisions being made right now, on information systems, governance architecture, and performance reporting, must embed shared project controls disciplines from the outset. Retrofitting them after the fact is substantially more expensive and substantially less effective," La Franchi said.

Policy backdrop

The intervention comes as Australia expands defence investment and seeks to improve delivery of complex capability programmes. Large projects in the sector often involve long supply chains, multiple contractors and extensive oversight, making delays and cost overruns difficult to trace to a single cause.

TBH argues that these pressures require a system-level response rather than a series of isolated reforms. In its view, a jointly governed agenda between Defence and industry would provide a clearer basis for measuring performance and identifying where responsibilities and incentives are misaligned.

The paper proposes that the Treasurer, the Minister for Defence and the Minister for Defence Industry should formally initiate a Whole-of-Sector Defence Productivity Agenda. It also calls for a national forum to bring together the public and private sides of the sector under a single productivity framework.

TBH works on complex programmes across defence, infrastructure and major capital projects, with a focus on areas including risk analysis, schedule assurance and programme governance. Its latest intervention places project delivery performance at the centre of the debate over how Australia manages a defence investment pipeline set to grow sharply in the years ahead.