Australia to dramatically scale back spending on infantry fighting vehicles in major defence overhaul

Australia is set to dramatically scale back the number of infantry fighting vehicles it buys for the army as part of a defence overhaul to be announced on Monday.

But a review, billed by the Albanese government as the most significant update of defence planning in nearly 40 years, will recommend reducing this number to just 129 vehicles, enough for one mechanised battalion.

The government is likely to accelerate and expand numerous other projects, including a land-based anti-ship missile system and new landing craft for the army.

In addition to looking at what developments across the Indo-Pacific region mean for the Australian defence force, the review has identified $42bn in additional defence spending over 10 years that the former Coalition government had announced but not yet funded in the budget.

The review, carried out by the former defence chief Angus Houston and the former Labor defence minister Stephen Smith, was completed in February, but the classified final report has remained under wraps while ministers considered their response.

On Monday the government will release a declassified version of the report, together with a response to the recommendations.

While defence funding is expected to continue to rise overall, the review will recommend that a number of projects be delayed, reduced or cancelled.

This aims to free up funding and workforce for higher priorities within the defence portfolio, in line with what the deputy prime minister, Richard Marles, flagged in an interview with Guardian Australia in January.

Projects to be fast-tracked and expanded also include the acquisition of army landing crafts and long-range fires (Himars).

The government will announce on Monday whether it has accepted the recommendations, but it is considered likely to follow them.

This is believed to include $7.9bn in further funding for the Redspice cybersecurity program beyond 2025-26 and $32.2bn to establish a guided weapons and explosive ordnance enterprise in Australia.

Last month the three governments announced a multi-decade staged plan for Australia to acquire nuclear-powered submarines at a forecast cost of $268bn to $368bn between now and the mid 2050s.

The projected cost of the submarine project includes $9bn over the initial four-year budget period, or an increase of $3bn compared with the $6bn that was already earmarked for the abandoned French project over the same period.

Defence has been asked to offset that $3bn, probably through changes to other defence projects.

While the Aukus announcement last month focused on a single capability, the defence strategic review is supposed to look across the board at what posture and structure the ADF should take in light of increasingly challenging strategic circumstances.

Critics such as the former Labor prime minister Paul Keating have argued that Australia is too closely following the US in responding to the rise of China.