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Chapter 1 - Reviews by the Secretary and the Chief of the Defence Force

Secretary’s review

Mr Dennis Richardson, AO, Secretary
Mr Dennis Richardson, AO, Secretary

In its simplest terms, Defence exists to defend Australia and to enhance and protect national interests. Its most visible manifestation is the Australian Defence Force (ADF), the quality of which is recognised globally as second to none.

Integrated in Defence are members of the ADF and civilians — public servants, contractors and service providers. The civilians constitute a diverse workforce from blue to white collar. They provide a range of professional services to government and to — and sometimes in partnership with — the ADF, including:

  • policy advice on issues as diverse as regional engagement, the South China Sea, the Korean Peninsula, Afghanistan, the Middle East, NATO, UN peacekeeping and the US rebalance, and which provides the framework within which governments make decisions on the commitment of the ADF to particular operations and activities
  • advice on defence and national security matters in the context of the Foreign Investment Review Board process — we apply a professional, consistent and rigorous perspective
  • intelligence collection and assessment consistent with the national intelligence collection priorities set by the Government; for example, counter-terrorism — over 10 per cent of the Defence Australian Public Service (APS) workforce is in intelligence
  • facilities planning, design, management and disposal — Defence is responsible for facilities and properties with a replacement value of over $60 billion
  • capability requirements, acquisitions and sustainment
  • research and development — over 22 per cent of the Defence APS workforce are engineers, technical or scientists/researchers
  • communications and logistics
  • financial management across a budget of over $32 billion, involving multiple projects of varying complexity and size
  • human services ranging from health, psychological, and family support to pay and conditions.

The Defence White Paper launched by the Prime Minister and Minister for Defence in February 2016 will remain central to Defence planning and investment over the coming years. Predicated on growing the Defence budget to 2 per cent of GDP by 2020–21, it is, at its core, a rebuilding of the Australian Navy. In this context, early and good progress has been made in respect of the future submarines, future frigates and offshore patrol vessels.

Launched with the White Paper was an Integrated Investment Program covering defence hardware, facilities and ICT, and a Defence Industry Policy Statement committing the department to work more closely with the Australian defence industry.

Commencing on 1 July 2015 was the two-year implementation of the First Principles Review, the biggest change program in Defence for some decades, and which is critical to ensuring we are able to deliver against the requirements of the White Paper. Central to the First Principles Review is the concept of ‘One Defence’, i.e. a single enterprise — albeit large and diverse — working together in a well coordinated way for agreed purposes and outcomes set by government. It is against this backdrop that the Defence Legislation Amendment (First Principles) Act 2015 came into effect on 1 July 2016 and formally recognised the primacy in the ADF of the Chief of the Defence Force and the Vice Chief of the Defence Force — likewise, the consistent formation of Groups across a single enterprise and the abolition of two ‘organisations’, i.e. Defence Materiel and Defence Science and Technology. Of course, the substance of these changes was about attitudes and approaches, not words, and this does take time.

New governance arrangements recommended by the First Principles Review have been put in place and are functioning well — the Defence Committee (reduced from 17 to 6 members), the Enterprise Business Committee (chaired by the Associate Secretary and which monitors in-year organisational performance) and the Investment Committee (chaired by the Vice Chief of the Defence Force and which considers future investments).

A new capability lifecycle, which is the end-to-end process for planning, developing, acquiring and maintaining Defence capability, is being put in place and will be bedded down by 1 July 2017. This will, however, require change, not only across Defence, but in some other parts of government.

As at 28 October 2016, 40 of the 75 recommendations of the First Principles Review had been implemented. But the tougher ones going to complex management and attitudinal change will continue to require discipline and commitment. The Oversight Board, chaired by Rio Tinto’s former Managing Director David Peever, is there to keep us honest and reports direct to ministers for that purpose.

The public service workforce changes recommended in the First Principles Review, and reinforced in the White Paper, are being carried through. The Senior Executive Service and executive-level staff have been reduced in size. The department’s actual full-time equivalent staff has reduced from about 22,300 in 2012 to 17,423 at 30 June 2016. We will now build public service numbers back to the government’s ceiling of 18,200 to accommodate the growth in cyber security and other specialised areas outlined in the White Paper, and to accommodate additional staff needed in those areas responsible for shipbuilding.

As well as changing the professional mix of the APS workforce, we have made some small progress in recruiting women and Indigenous Australians. Over the course of the financial year, the percentage of women has increased from 40.6 per cent to 41.2 per cent. The percentage of Indigenous employees increased from 1.2 per cent to 1.7 per cent. Better representation at a senior level and retention remain major challenges.

We have undertaken two initiatives in the employment of people with disability, which are our own and outside specific government requirements:

  • Working with Hewlett Packard, we are implementing a Dandelion@Defence program, where we are developing a specialised cyber capability, staffed by people on the autism spectrum with unique skills and attributes (initial group of nine).
  • In 2014, Defence commenced a program, in partnership with local community organisations, to employ people with intellectual disabilities at Defence establishments across Australia. Modelled on a longstanding and successful program in Canberra, the program has already been rolled out at selected bases in Queensland, Western Australia and South Australia. It will be operating in New South Wales and Victoria before the end of 2016 and will commence in the Northern Territory in early 2017. The program, called the Defence Administrative Assistance Program, will provide employment to some 120 people. This is a small but worthwhile contribution, which is making a real difference to individuals and families.

We continue to actively engage Indigenous-owned companies in Defence business. In fact, of the $200 million spent across government under the Indigenous Procurement Policy, which enables direct sourcing to Indigenous-owned businesses, about $145 million was from contracts let by Defence.

In any organisation, challenges abound. Change has no end point. Some of the challenges facing Defence are longstanding while others are more specific:

  • providing accurate and timely policy advice on the changing strategic dynamics in the Indo-Pacific region and the continuing challenges in Afghanistan, the Middle East and elsewhere
  • following through and embedding the US force posture changes in northern Australia
  • growing cyber security and other specialised capabilities which are important not only to Defence but to the Government as a whole
  • increasing selected professional skills in some parts of the workforce
  • putting in place a follow-on to Pathway to Change, which is a five-year cultural change program ending in April 2017
  • continuing to work with staff and their representatives on a new enterprise agreement, noting that the last agreement expired in June 2014 and that two proposed agreements have been narrowly voted down
  • working with other relevant government departments to address the contamination issues around some Defence bases
  • putting in place agreements with France to ensure that Australia’s interests are properly protected (e.g. sovereign sustainability) in the Future Submarine Program
  • maintaining effective budget management, especially with an eye on the pressure which will arise down the track as the naval shipbuilding programs get underway and the Joint Strike Fighter comes on stream — reform in naval shipbuilding, consistent with the 2015 RAND report, will be essential in this context
  • trying to avoid unnecessary red tape. For instance, Defence is now required annually to put a ‘fair value’ on specialised military equipment. This comprises 54 major platforms and 1.6 million military support assets (i.e. spares). We are told we are required to do this under Australian Accounting Standards, despite the fact fair value is not compulsory in the private sector. Apart from in New Zealand and the United Kingdom, we are not aware of other Defence enterprises that are required to do this. Fair value is not used for any decision making in Defence as the information is not relevant to policy, operational or capability investment decisions. It takes time and money but for no identifiable benefit
  • maintaining a balanced organisational focus during a period of big change, and big demands flowing from major procurement decisions.

Finally, my thanks go to all Defence public servants, contractors and service providers for their hard work and commitment throughout 2015–16. My admiration extends to ADF members.

Dennis Richardson AO

Chief of the Defence Force’s review

Air Chief Marshal Mark Binskin, AC, Chief of the Defence Force
Air Chief Marshal Mark Binskin, AC, Chief of the Defence Force

The past 12 months have clearly demonstrated the Australian Defence Force’s capability and agility over a wide variety of operations and deployments (shown in Figure 1.1). In the Middle East, we expanded our air operations to include Syria while maintaining our ongoing commitments on the ground in Iraq, Afghanistan and the Middle East more broadly. We continued our work on border protection operations while simultaneously supporting whole-of-government humanitarian and disaster relief efforts. This was most evident in February 2016 when the ADF embarked on one of our largest humanitarian assistance missions.

The Fijian Government requested Australia’s assistance after Tropical Cyclone Winston struck with deadly force. At its peak, around 1,000 ADF personnel were deployed on Operation Fiji Assist and many more were supporting our operations from Australia. Our contribution to the whole-of-government effort focused on Suva, Koro, Taveuni, southern Vanua Levu and Rakiraki, where Australian personnel worked side by side with their counterparts from the Republic of Fiji Military Forces to assess damage, clear debris and rebuild critical infrastructure.

The ADF delivered more than 580 tonnes of humanitarian and disaster relief stores, supplied almost 40,000 tonnes of food and 30,000 litres of drinking water, and delivered almost 10,000 hygiene kits. Australian personnel provided close to 3,000 shelter kits and, together with their Fijian counterparts, our deployed personnel helped repair nine schools, two medical centres and a hospital, as well as several churches and community centres. The Fijian people were deeply moved by the ADF’s compassion and extremely grateful for our assistance, and the two months we spent working together with the Fijian military allowed us to impart new skills and strengthen the existing friendship between our two nations.

Operation Fiji Assist highlighted what the ADF can achieve as an integrated joint force. On its maiden operational deployment, HMAS Canberra was probably the most visual representation of our contribution, but the Army also provided a significant engineering element plus four of the seven MRH-90 multi-role helicopters, while Air Force AP-3C aircraft conducted initial aerial assessments followed by C-17A and C-130J crews, who conducted 44 sorties. In addition, we provided assistance through our aeromedical evacuation and deployable medical capabilities. This clearly demonstrates our ability to deploy a range of high-end capabilities at short notice while maintaining our ongoing commitments to border protection and operations across the Middle East region.

The expansion of Operation Okra air operations into Syria and the addition of Australia’s Building Partner Capacity mission in Iraq in 2015 increased our operational tempo and the number of Australian Defence Force personnel on deployment. Known as Task Group Taji, the combined Australian–New Zealand training team is tasked with instructing the regular Iraqi Army to improve their fighting skills. The Iraqi officers and soldiers are taught weapon handling, building clearances and obstacle-breaching techniques, as well as training for a range of operations. The mentoring program also includes the principles of the law of armed conflict, human rights obligations and the appropriate use of force.

The Building Partner Capacity mission, combined with the Special Operations Advise and Assist mission, has produced tangible results reflected in steady progress and significant territorial gains across Iraq. The Australian-trained Iraqi Forces played a significant role in recapturing the city of Ramadi in December and retaking Fallujah in June with support from Australian joint terminal attack controllers and our Air Task Group.

Our work to train local forces to defend and secure their people and territory extends to Afghanistan, where around 270 ADF personnel are deployed as we continue to work with the Afghan National Defense and Security Forces (ANDSF). The majority of Australians are based at the Afghan National Army Officer Academy in Kabul, where they are training the next generation of officers to further strengthen the Afghan National Army’s capability. The remaining personnel provide training, advice and assistance at the Afghan Command South Headquarters in Kandahar and the Air and Garrison Commands in Kabul.

This is important work that builds on the contribution that tens of thousands of Australians have made to Afghanistan over many years. It will ensure the ongoing development of the ANDSF as a mature and capable military. The insurgents continued to test the local security forces over the past year, but the ANDSF has demonstrated its willingness to fight and beat the Taliban.

In mid-2016, the political unrest in the Republic of South Sudan created a turbulent and challenging environment for the 25 ADF personnel deployed to the United Nations Mission in South Sudan under Operation Aslan. The Australian contingent showed great discipline and professionalism in difficult circumstances. Despite the relatively small number of personnel deployed, the ADF is making a significant contribution to the overall UN mission, protecting the people of this young nation by monitoring human rights and providing humanitarian aid deliveries.

On average, around 1,450 Navy, Army and Air Force personnel were assigned to Joint Task Force 633 on Operations Highroad, Okra and Accordion at any given time during the reporting period. Additionally, four major fleet units, HMAS Newcastle, HMAS Melbourne, HMAS Darwin and HMAS Perth, maintained the Navy’s maritime security presence in the Middle East region throughout 2015–16 as part of Operation Manitou. Most notably, HMAS Newcastle’s crew seized and destroyed 1.5 tonnes of narcotics in four months while Melbourne and Darwin intercepted two vessels transporting more than 4,000 illegal firearms.

In June, Defence appeared before the Royal Commission into Institutional Responses to Child Sexual Abuse. The survivors’ courage in telling their stories is changing the ADF and has strengthened the leadership’s resolve to stamp out abuse in all its forms. I am particularly pleased that we have maintained our commitment to creating a more inclusive and diverse workforce through our cultural reform program while meeting our operational requirements across a broad range of tasks. Our achievements throughout 2015–16 are testament to the skill, professionalism and dedication of our service men and women.

Mark Binskin AC
Chief of the Defence Force

Figure 1.1 ADF operations during 2015–16

Figure 1.1 ADF operations during 2015–16