Australia Confirms Monitoring Chinese Naval Fleet While Announcing Sweeping Defence Restructure

The Australian government has confirmed it is actively tracking a Chinese military naval group moving through the Philippine Sea, potentially heading toward Australian territory, while simultaneously announcing one of the most significant transformations of the nation's defence bureaucracy in decades.

Defence Minister Richard Marles and Defence Industry Minister Pat Conroy unveiled the restructuring plan on Monday, which represents the largest shake-up of defence operations since the 1970s. The initiative consolidates three separate agencies: the capability acquisition and sustainment group, the guided weapons and explosive ordinance group, and the naval shipbuilding and sustainment group.

Australian defence minister Richard Marles has announced a major overhaul of the defence bureaucracy

The consolidation will create a fresh independent delivery agency responsible for administering billions of dollars in complex defence and military undertakings. This new entity will oversee nearly 40 percent of the department's current operational responsibilities.

Marles confirmed that Australia is maintaining surveillance on the People's Liberation Army navy flotilla as it moves through regional waters. The naval formation possesses the capacity to reach Australian territory before year's end, though its final destination remains undetermined.

"We maintain constant maritime domain awareness in our geographic areas of interest," Marles stated. "We will routinely monitor the movements of PLA vessels when there are movements such as this. We will monitor them particularly until we know they are not coming in the vicinity of Australia."

The Defence Delivery Agency will focus on streamlining procurement processes and eliminating costly project delays that have plagued the department. Earlier this year, Marles indicated that "everything is on the table" when discussing potential remedies for the department's well-documented problems.

The minister explained the rationale behind the overhaul: "The establishment of the defence delivery agency will see a much bigger bang for buck for the defence spend, and that is at the heart of the decision that we have made."

Marles emphasised the scale of the transformation: "This is one of the biggest changes to defence that we have seen. It will greatly change how defence operates. It will greatly improve the quality of the defence spend, and it will make sure that as we spend more money in the defence budget, we are doing so in a way which sees programs delivered on time and on budget."

Currently, approximately 30 defence initiatives are underway, with the entire portfolio running 97 years behind its intended schedule. The government's strategic defence assessment determined that existing procurement mechanisms were inadequate, plagued by fractured oversight and excessive bureaucratic impediments.

The new Defence Delivery Agency is scheduled to commence operations in July 2026 under the direction of a newly appointed national armaments director. By July 2027, it will operate as a fully independent entity separate from the core defence department.

A temporary taskforce will begin work immediately to establish the framework for the new organisation. The government has indicated that no substantial workforce reductions are anticipated from these changes.

Under the revised operational structure, the national security committee of cabinet will provide final authorisation on defence acquisitions, drawing on recommendations from defence officials and the new agency. Once approved, the new agency will assume full control of project management responsibilities.

Greens defence spokesperson David Shoebridge criticised the restructure, suggesting it fails to address fundamental systemic problems. "The same group of people who have overseen defence's procurement mess are the same people who will head this new agency. That is not fixing an issue, it's just moving it along and popping a different name tag on it."

Separately, a dedicated Aukus coordination group has been established within the Department of Prime Minister and Cabinet to manage the trilateral defence partnership. The unit is headed by deputy secretary Kendra Morony.

The timing of the defence overhaul comes as officials from the Trump administration have publicly urged Australia to increase its defence spending commitment from the current 2 percent of GDP to between 2.5 and 3.5 percent.

Last week, the government outlined plans to divest property assets, including Brisbane's Victoria Barracks and Spectacle Island near Sydney, which form part of a proposed restructuring of the department's $34 billion property portfolio. Revenue generated from these sales would be redirected back into defence operations.

February 2025 witnessed a notable incident when a Chinese cruiser, frigate and support vessel approached Australian waters without advance notification, conducting live-fire military exercises in the Tasman Sea. The operations forced multiple commercial airlines to alter flight paths due to safety risks posed by the military activity.