The outbreak of war in 1914 found the dominions in agreement with Britain in matters of defence and foreign policy, at least in so far as the fighting and winning of the war were concerned. In one sense this was not remarkable, since the British government had long enjoyed the right to make imperial foreign policy and the dominions, in general, had not disputed this. But the pattern of defence relations in the decade and a half before the Great War qualifies this view; the self-governing dominions enjoyed the right of control of their own armed forces and in the years following Federation the government of the Commonwealth of Australia gradually established and enlarged those forces, in a manner which at times ran contrary to British views and which did not always follow British patterns.

Defence was not a prominent issue in the early days of the first parliament, and in so far as the country's early legislators took an interest in the subject they were motivated by a desire to reduce spending on defence, not increase it. For some, the federation of the colonies provided an opportunity to rationalise the existing colonial defence forces and reduce their size and expense. Amalgamation was to bring about heightened efficiency, and efficiency was equated with reducing expenditure.

The states did not hand over their defence forces to the Commonwealth immediately on 1 January 1901; it was necessary first for the federal government to make various administrative arrangements before assuming its defence responsibilities.