Henry Ergas and Mark Thomson "Defence outlays amount to 1.8 per cent of Australia’s GDP. Nonetheless, the processes by which those amounts are allocated, and the efficiency with which they are used, have received very little attention outside of the defence sector itself. This paper identifies the major issues involved in securing efficiency in defence expenditure and surveys efforts to ensure that the Australian defence establishment makes good use of public resources. Recommendations are made regarding the operation of the Department of Defence and the scrutiny of crucial defence decisions." Published in 'Agenda: A Journal of Policy Analysis and Reform', Vol.18, No. 3., December 2011.