Defence Reservists have played an important part in Australian history, since early colonial days.

The Reserve pre-dates Federation, when each of the States (colonies at the time) maintained locally based naval and army militia. These forces served in the Sudan, in China during the Boxer Rebellion and in South Africa during the Boer War.
The modern Australian Army was drawn from this base at Federation on 1 January 1901, with the Royal Australian Navy and Royal Australian Air Force following some years later.
Volunteers participated in active service during World Wars I and II, with large numbers transferring into the permanent armed forces. At the end of hostilities, many seasoned veterans returned to the Reserve force, maintaining a pool of expertise and experience to be drawn on in a defence emergency.
In the years between the two World Wars, the Reserve maintained strong links with many community and State-based units. Since World War II, the role has changed gradually from separate Reserve units and formations with their own identities and roles, to a concept where permanent and Reserve personnel have combined to form a strong and viable force.
With Australia's regular Army not formed until 1948, the Reserve has been a fundamental part of the nation's defence policy.
ModernisationIn early 2001, Federal Parliament passed key legislation to enhance and modernise the Reserve. This legislation affects both Reservists and their employers, and has resulted in significant changes to Reserve conditions of employment.
The Defence Legislation Amendment (Enhancement of the Reserves and Modernisation) Act 2001 and the Defence Reserve Service (Protection) Act 2001 addressed five key areas:- Extending options available to the Government for calling out Reservists.
- Providing an overhaul and modernisation of the organisation and structure of the Reserve force.
- Paying compensation to employers who release their employees for Reserve service.
- Providing a modern, streamlined code of protection for employers, Reservists (including the self-employed) and students.
- Enhancing conditions of service for Reservists and providing support initiatives to employers and self-employed Reservists.
The legislation followed the release of a package of Government initiatives in 2000, designed to enhance the Reserve force.The package provided civil accreditation of Reserve military training and a survey of Reservists designed to help formulate Reserve policy, and enhanced the Defence Reserves Support Council. Previous legislation only allowed Reservists to be called out for full-time military service related to the defence of Australia and defence emergencies. It did not allow the Reserve to be activated for operations such as disaster relief, humanitarian assistance, and peacekeeping or peace enforcement.With the Reserve accounting for a significant part of the total Defence Force capability, a change was needed in the way Reservists could be employed. Although Reservists have always been able to volunteer for full-time service, there was no protection of their jobs except in cases of individual agreements with employers. There was also no protection or incentive for employers who released staff for full-time military service. Potentially, employers faced a loss of earnings from the absence of key employees or additional costs in employing temporary staff. In addressing these issues, the 2001 legislation made major inroads into the modernisation of the Reserve.