One of the Navy's recently upgraded Anzac class frigates has been stuck in dry dock since 2017, because the ADF is struggling to find enough sailors to put the warship to sea.
The Australian Strategic Policy Institute's (ASPI) latest "The Cost of Defence" report confirms military spending will easily reach the Government's target of 2 per cent of GDP by next financial year.
However, the ASPI study also found the ADF had failed to achieve "modest" personnel recruitment goals laid out in the most recent defence white paper, published in 2016.
"Overall, it's only increased by 600 actual people against a target of around 1,730 over the period since the white paper," the report concluded.
Report author and former Defence official Marcus Hellyer said the recruitment problem was underlined by the case of an Anzac frigate that had been out of operation since October 2017.
"HMAS Perth, one of Navy's frigates, had gone through a very extensive refit and upgrade, got new radar capabilities, so a lot of investment went into that, but at the end of that process Navy couldn't find a crew for it," Dr Hellyer said.
"So, it's essentially sitting up on blocks for two years, out of the water because Navy doesn't have the people and I think that's really a microcosm of the challenges the defence force is facing.
Australia maintains a fleet of eight Anzac class frigates, although Dr Hellyer noted two of the warships were almost always in deep maintenance, meaning only six at most were available at any one time.
The ASPI report also called on the Australian Defence Force to "devote more resources to autonomous systems", such as unmanned submarines and aircraft drones.
"One of the advantages of autonomous systems is less people, because these systems can do a lot of the job themselves," Dr Hellyer said.
"Much of the cost of military platforms is due to the need to keep the crew alive, as is much of the complexity of design.
"Remove the crew, and the cost, risk and schedule needed to design and build the platforms decreases dramatically."
