Defence Annual Report 1998 - 1999 - Prelims · 2014-10-23 · iii Department of Defence 19 October 1999 The Hon John Moore MP Minister for Defence Dear Minister We are pleased to

defe

nce

annu

al re

port

1998

–199

9

ii

Front Cover: The photographs depict aspects of the redevelopment of the Russell complex of Defence officesin Canberra. The redevelopment is enabling the collocation of Defence personnel into new and refurbished‘smart’ buildings which are equipped with contemporary information technologies. It is also facilitating improvedwork practices, providing opportunities for creative synergies and delivering significant management efficienciesto the organisation.

Contact Officer

The production of this document was coordinated by the staff of the Portfolio Reporting and EvaluationSection of Management and Reporting Division, Department of Defence.

The contact officer to whom comments and inquiries about this report may be addressed is:

DirectorPortfolio Reporting and EvaluationR1-2-A028Department of DefenceCANBERRA ACT 2600

Telephone: (02) 6265 6277Facsimile: (02) 6265 6246E-mail: [email protected]

(c) Commonwealth of Australia 1999

ISSN 1323 5036ISBN 0 642 295255

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced byany process without prior written permission from AusInfo. Requests and inquiries concerning reproduction and

rights should be directed to the Manager, Legislative Services, AusInfo, GPO Box 84, CANBERRA ACT 2601.

iii

Department of Defence

19 October 1999

The Hon John Moore MPMinister for Defence

Dear Minister

We are pleased to present the annual report of the Department of Defence for the year ended30 June 1999 in accordance with subsection 25(6) of the Public Service Act 1922, and wecertify that this report complies with the requirements referred to in subsection 25(7) of theAct.

Under subsection 25(8) of the Act, you are required to cause a copy of the report to be laidbefore each House of Parliament by 31 October 1999.

This report presents our overview of the performance and outputs of the Department ofDefence for 1998-99, as well as the Group performance and other reports required byParliament.

Yours sincerely

Hugh White CA Barrie AO RANActing Secretary AdmiralDepartment of Defence Chief of the Defence Force

iv

v

��

Contact Officer ................................................................................................ ii

Letter of Transmission ...................................................................................... iii

User Guide .............................................................................................. vii

��

Defence Mission ................................................................................................ 3

The Year in Review ............................................................................................. 4

Defence Reform Program ............................................................................... 12

Financial Resources

Summary of 1998-99 Outlays .............................................................. 19

Summary of the 1998-99 Financial Statements ................................... 25

Human Resources

Staffing Overview ................................................................................. 26

Overview of Social Justice and Equity ................................................. 26

Non-Operational Training and Development ........................................ 26

Performance Management and Evaluation

Internal Scrutiny .................................................................................... 28

External Scrutiny .................................................................................. 30

Auditor-General’s Reports ................................................................... 32

Defence Force Ombudsman ................................................................. 33

Decisions of Courts and Tribunals ....................................................... 34

Defence Service Charter ...................................................................... 34

1998-99 Organisational Structure ........................................................ 35

��

A. Australian Defence Force Units and Establishments ........................... 40

B. Ship and Aircraft Availability ................................................................ 50

C. Peacekeeping, Humanitarian Assistance and Other Operations .......... 55

D. Australian Defence Force Exercise Program ...................................... 58

E. Defence Cooperation ........................................................................... 70

F. 1998-99 Financial Statements .............................................................. 79

G. Financial Statistics for 1998-99 ........................................................ 149

H. Reconciliation of Defence Reform Program Gains andReinvestment by Group ...................................................................... 157

I. Personnel Statistics 1998-99 ............................................................. 160

J. Social Justice and Equity .................................................................... 167

K. Report on the Operation of the Defence Service Charter for1998-99 ............................................................................................ 170

L. Parliamentary and External Scrutiny .................................................. 174

vi

��

Group One: Defence Headquarters ....................................................... 179

Group Two: Navy .................................................................................... 189

Group Three: Army ................................................................................... 201

Group Four: Air Force ............................................................................ 213

Group Five: Intelligence ........................................................................ 225

Group Six: Support Command ............................................................. 229

Group Seven: Joint Education and Training .............................................. 239

Group Eight: Defence Personnel Executive ........................................... 247

Group Nine: Acquisition ......................................................................... 261

Group Ten: Science and Technology .................................................... 275

Group Eleven: Defence Estate ................................................................... 289

Group Twelve: Defence Information Systems ........................................... 303

Group Thirteen: Defence Corporate Support ............................................... 313

Group Fourteen: Finance and Inspector General .......................................... 321

��

1. Participative Work Practices .............................................................. 331

2. Legislation/Regulations Impacting on Business ................................ 331

3. Occupational Health and Safety .......................................................... 332

3. Freedom of Information Section 8 Statement ................................... 335

4. List of Discretionary Grants .............................................................. 343

5. External Consultants ........................................................................... 344

6. Advertising and Market Research ....................................................... 354

7. Annual Report on the Administration and Operation of theDefence Force (Home Loans Assistance) Act 1990 ......................... 360

��

Glossary ......................................................................................................... 364

List of Acronyms............................................................................................ 366

Annual Report Compliance Index .................................................................. 368

Alphabetical Index .......................................................................................... 369

vii

��

The format and content of this annual report reflect the requirements approved by the JointCommittee of Public Accounts and Audit in March 1994 and updated in May 1999. Therequirements give emphasis to accountability, outcomes and achievements. The annual reportis also the mechanism for reporting to Parliament the outlays for the financial year.

The Defence Annual Report 1998-99 addresses the Department of Defence and the AustralianDefence Force (ADF) which are collectively known as the Defence organisation, while theDepartment of Veterans’ Affairs, which is part of the Defence Portfolio, has a separate annualreport.

This report is divided into three parts. Part One contains an overview of portfolio performanceand outcomes for 1998-99. The overview includes a summary of significant achievementsand issues, financial and human resources and performance management. It also includesorganisational charts that show the formal structure of the Defence organisation as at30 June 1999, a range of financial statistics and the audited Section 49 Financial Statements.

Part Two provides information about Group performance. The Defence organisation isdivided into fourteen Groups. This provides a framework for the devolution of managementauthority, the allocation of resources and reporting on performance against objectives. Foreach Group, there is an objective and a description; a summary of achievements; performancemeasures and outcomes; outlays and staffing data; a reconciliation of appropriations; and anexplanation of major resource variations.

Part Three contains information required under specific statutory provisions relating to theannual reports of all Commonwealth agencies.

Finally, the index section of this report includes a compliance index which identifies wherethose matters required by the Joint Committee of Public Accounts and Audit to be includedin annual reports are located; a glossary; and an alphabetical index.

��

In general, figures provided in this report are rounded to the nearest $100,000, althoughthere are some tables in which the figures are rounded to $m or, in some cases of smalleramounts, three significant figures. The convention used is that rounding downwards occursif the end digit is less than five, and rounding upwards occurs if the figure is five or more.This has the effect of causing small apparent errors in the totals of some tables. Such smallerrors in table totals should be disregarded as rounding errors.

There is one significant exception to this convention. The amounts in the 1998-99 FinancialStatements, contained in Appendix F to Part One, are rounded to the nearest $1,000 inaccordance with an order issued by the Minister for Finance and Administration pursuant tothe Financial Management and Accountability Act 1997. See Note 3 in the Notes to theFinancial Statements for further explanation.

viii

1

PART 1

CORPORATE PERFORMANCE

2

Part One

3

��

The most fundamental responsibility of the Government is to provide for the security ofAustralia, its people and its interests. This fundamental responsibility is reflected in theDefence mission:

To prevent or defeat the use of armed force against our country or its interests.

This statement of the enduring reason for the existence of the Defence organisation guides thedevelopment of defence policy, planning, programs and activities. The core defence businessis to ensure, should it be necessary, that the ADF is able to operate effectively in conflict, andto contribute to managing Australia’s national security interests in such a way that conflictdoes not occur. The mission involves, therefore, two key dimensions. The first is thedevelopment and maintenance of the capacity to defeat any use or threat of armed force againstAustralia or its interests. The second dimension involves the promotion of a regional andglobal security environment that enhances Australia’s security by reducing the likelihood ofarmed attack against Australia or its interests.

Australia is geographically positioned within a region of rapidly-changing economic, politicaland social circumstances. The challenge for Defence is not only to provide a force with thecapabilities necessary to carry out its mission, but also a force that provides the Governmentwith options with which to respond to given circumstances or threats. It is a force structuredfor war but adapted for peace, able to anticipate change and react effectively to emergingcontingencies, and offering a viable defence of Australia while also capable of operating inconjunction with allies and neighbours.

As a corollary to our combat forces, Defence actively promotes effective strategic relationshipswith our regional neighbours and strives to maintain strong alliances. Defence also offersactive support for the United Nations and engages in a range of regional endeavours thatpromote Australian and global security.

Ultimately, the goal of the Government and of Defence is to ensure that Australia is, andremains, a secure country in a stable global and regional environment.

4

Part One

��

The delivery and enhancement of forces capable of meeting the challenges facing Australia hasbeen the primary focus of Defence activities throughout the last year. This imperative has beengiven added impetus through deterioration in our strategic circumstances, while the activitiesof the Defence Reform Program are driving the internal reform process for the Defenceorganisation. A structure for meeting the challenges facing Defence in delivering and enhancingour forces was set out by the Defence Executive in November 1998 with the release of thedocument Defence Our Priorities.

Defence Our Priorities recognises that Defence is facing difficult decisions in balancing themaintenance of the current force and the requirements of future capabilities within the limitationsof available resources. In February 1999, the entire Defence senior management team met atWollongong in New South Wales to reinforce the responsibilities of the team in meeting thechallenges of Defence Our Priorities and to provide the leadership necessary to ensure thatDefence remains a high performing organisation.

��

The ADF has undertaken a wide range of operational and unforeseen assistance tasks thathave rigorously tested present capabilities and personnel readiness and have demonstratedthat appropriate levels of preparedness/readiness are being maintained. These include:

• the deployment of the guided missile frigate, HMAS Melbourne, to the Persian Gulf inMay 1999 in support of United Nations sanctions against Iraq (the Melbourne returnedto Australia on 3 September 1999);

• peacekeeping on Bougainville, with approximately 250 Defence personnel participatingin the Peace Monitoring Group which is monitoring and reporting on the maintenanceof the permanent ceasefire agreed in April 1998, and logistic support from the ADF forthe entire operation;

• assistance to the United Nations Assistance Mission to East Timor through the provisionof personnel and other support. (Australian troops have subsequently been committedto the International Force in East Timor - Interfet);

• disaster relief to Papua New Guinea following the tidal wave in July 1998, with airliftsupport and medical personnel playing a major role in the disaster relief effort;

• numerous search and rescue missions, most notably during the catastrophic weatherconditions that beset the Sydney to Hobart fleet on 27 to 29 December 1998. Navypersonnel have received recognition for their courage and professionalism during thismission;

• disaster relief in the wake of cyclone Vance in Western Australia in March 1999;

• surveillance and interdiction support in our maritime approaches, with the Navy beinginvolved in 22 incidents related to vessels suspected of carrying illegal immigrants;and

• ongoing support for refugees from Kosovo through Operation Safe Haven.

More detailed information on ADF force elements and units, ship and aircraft availability,peacekeeping and other humanitarian operations, the ADF exercise program and DefenceCooperation activities can be found in the appendices at the end of Part One of this report.

5

Year In Review

Much work was done during the year to ensure that our forces have the military capabilitiesrequired to successfully undertake operations that the Government deems necessary. Manycapabilities, and their vital supporting elements, are being enhanced and refined to ensure thatany military operations undertaken will be both successful and sustainable.

Defence has chartered a high-speed catamaran, now named HMAS Jervis Bay, from aTasmanian company, International Catamarans Australia, to provide a sea-transport capabilityfrom which to deploy personnel, vehicles and related support equipment. The vessel also hasthe potential to undertake evacuations and to assist in disaster relief. HMAS Jervis Bay providesa valuable addition to Defence amphibious capabilities while modification and refit work onthe two amphibious transport ships, HMA Ships Manoora and Kanimbla, is completed. Workon these ships will provide an enhanced amphibious and helicopter capability and sea-trainingfacilities for the ADF.

Progress has also been made in enhancing other naval capabilities. HMAS Huon, the first ofsix new minehunters with low acoustic and magnetic signatures, was commissioned inMay 1999. A deployable aerial target system used for both Air Force and Navy training hasalso commenced operations. HMAS Westralia is expected to return to service early in 2000following the onboard fire in May 1998 and subsequent refit to augment the afloat supportprovided by HMAS Success.

To ensure that the Collins-class submarines are brought into operational service as early aspossible, the Government appointed Dr Malcolm McIntosh and Mr John Prescott, inFebruary 1999, to conduct a full and independent review of the submarine project. While theirreport, which was released in June 1999, makes it clear that the submarines are well-suited toAustralian conditions, it also highlighted a number of serious problems in relation to the combatsystem, noise signature and engine reliability.

In response, Defence has established a team to critically examine all facets of submarinecapability and make a full report to the Government, including recommendations on optionsto achieve a fully operational and sustainable submarine force, complete with schedules andlikely extra costs. Defence has targeted December 2000 as an achievable date for having twoCollins-class submarines at a minimum level of operational capability. HMAS Otama, thelast of the Oberon-class submarines, is currently the only submarine in operational service.

Along with the hardware necessary to ensure that our forces are combat ready, Defence hasalso been working to ensure that we have the right people to operate these capabilities and thefacilities to support them. A number of initiatives commenced in 1998-99 to correct shortfallsin particular personnel categories. Navy instituted retention incentives for some technicalsailors, but also experienced high separation rates for officers and sailors in the latter half ofthe year which may create capability gaps in later years if not corrected. The Air Force institutedthe fighter-pilot recovery program that includes initiatives to improve recruiting and selectionprocesses. The aim of this program is to increase the percentage of pilots graduating frominitial pilot training that will be suitable for fast-jet training.

The Army has implemented the Government’s decision to expand, by 30 June 1999, the ReadyDeployment Force, with associated Navy and Air Force support elements, to improve theability of the ADF to respond to short-notice contingencies. The force maintains designatedforce elements at specified readiness levels in Darwin and Townsville. The force has beenexpanded to include a light mechanised brigade-size organisation that not only enhances theexisting Ready Deployment Force capability but also improves the flexibility of the ADF todeal with concurrent operational requirements that may arise at short notice.

6

Part One

The Army continued work on enhancing its structure and mobility. The first phase ofRestructuring the Army trials concluded in 1998-1999 and informed decisions about thecapability to defend Australia. The second phase of the trials are planned to commence later in1999-2000 and will be focused on force modelling and simulation. The Army is also set toreceive more light armoured vehicles and, in June 1999, Australian Defence Industries wasnamed as the preferred tenderer for the supply of 360 Bushmaster infantry mobility vehicles ata cost of more than $180m. These projects are significantly improving the Army’s mobilityand warfighting capabilities.

RAAF Scherger, near Weipa in north Queensland, was opened during the year, thus completingthe chain of strategic airfields in northern Australia. Other facilities projects are providingimproved facilities at RAAF bases Amberley, Townsville, Darwin Tindal and Learmonth,Army facilities in Townsville and Darwin, and Navy facilities in Darwin and Perth.

Defence also made substantial progress during the year towards ensuring that all computersystems are Year 2000 (Y2K) compliant and support ADF capability. The 8th CommonwealthYear 2000 Quarterly Progress Report shows that Defence has 99.9% of business-criticalfunctions that are ‘fit for purpose’. The achievement of mission-critical Y2K clearance during1998-99 does not mean the end of activity within Defence. Defence will continue to work onthe many non-critical items identified as requiring cost-beneficial action to ensure that theycontinue to meet to Defence needs. The total cost to Defence of achieving Y2K compliancehas been $255m.

�� !�!��

Defence is facing a significant challenge in the coming years in replacing a range of weaponsplatforms and systems that are approaching the end of their military life. Block obsolescencewill require the careful management of Defence resources and the careful evaluation of ourstrategic and military priorities. Over the last year, substantial progress was made on improvingthe capability development process. The focus has been on a balanced ‘whole-of-capability’approach to future capabilities. The improvements are intended to focus more sharply ondefining the capability required and to providing an increased level of stakeholder involvementand endorsement. This will ensure that all aspects of a capability are thoroughly consideredduring the development process.

The development of integrated all-source surveillance of our air and maritime approaches is acornerstone of planning for the defence of Australia. A project is awaiting approval to providecommand and control for the air approaches, which will integrate the air picture from a varietyof sources, including air defence radar, military and civilian air traffic control radar, and theJindalee operational radar network. Boeing has been announced as the preferred tenderer forthe delivery of seven airborne early warning and control aircraft that will further enhance thesurveillance capability of the ADF. Command, control and communications will also beenhanced, which will allow greater interoperability between the Services, as well as with alliedforces.

A range of electronic warfare self-protection equipment will be fitted to ADF aircraft to enhancetheir survivability in the air battlefield. The F-111 and C-130H aircraft will be the first aircraftfitted with such equipment. For the F/A-18, fitment of new electronic warfare self-protectionequipment is complemented by a range of approved or planned capability upgrades to theF/A-18 avionics that will enhance their offensive and defensive capabilities as well as theirinteroperability with allied forces. Defence is also proceeding with a major program tostrengthen F/A-18 and F-111 offensive capabilities through the acquisition of both short andlong-range precision guided munitions. The lead-in-fighter project, which will deliver the

7

Year In Review

new generation of jet training aircraft for our pilots, had design work completed during1998-99, with the first aircraft to be delivered in mid-2000. Commensurate with thesetechnology upgrades and new capabilities are improvements to supporting facilities and training.

The combat power of the FFG and Anzac-class frigates is being enhanced. A project is currentlyunder way to ensure the effectiveness of FFG self-defence and offensive systems against regionalcapabilities until at least 2010. A project definition study has been completed, with approvalto proceed to detailed design and equipment acquisition stages and installation into the ships.The contract was signed with Australian Defence Industries in June 1999.

A shortlist of tenderers has been announced to provide armed reconnaissance helicopters tothe Army. This project will deliver a day/night capable helicopter, designed for operations inthe environmental conditions prevalent in the north of Australia, that will enhance Land Forceoperations through their ability to conduct aerial reconnaissance and fire support tasks.

Further details relating to the acquisition of a range of new capabilities and capabilityenhancements are included in the Acquisition Group’s report in Part Two of this report.

��"��#�"�� #��"$��"

Defence has continued to develop strategic policy and maintain a network of high-level bilateralcontacts to ensure that our alliances and regional defence relationships remain robust andcontribute to the maintenance of a stable regional and global environment. Defence hasenhanced its position as a credible and constructive regional defence partner and worked toengender a sense of confidence among regional defence forces so that they can remain effectivecontributors to regional strategic stability.

Our relationship with Indonesia is central to Australia’s long-term security outlook. While theevents in East Timor have not affected the strategic importance to Australia of Indonesia, theenvironment has been sufficiently altered to make maintaining the bilateral relationship atprevious levels unlikely in the short to medium term. Indonesia’s abrogation of the Agreementon Mutual Security is an indicator of the challenges ahead.

The past year in Papua New Guinea has been a period of political instability and economicdifficulties. Despite this, past difficulties in our important relationship have been largelyresolved. Papua New Guinea has produced a new defence white paper and the program ofactivities under the New Defence Partnership, including strategic planning and forcedevelopment assistance and aid for the provision of Papua New Guinea’s maritime security, iscontinuing. High-level strategic dialogue, temporarily delayed by the change of governmentin Papua New Guinea, is planned for later in 1999. Australia has provided $12m in defencecooperation funding to Papua New Guinea, which reinforces our commitment to the relationship.Defence has also made a substantial commitment to ensuring the success of the Bougainvillepeace process through the provision of a large contingent of personnel and logistics support tothe operation.

Australia has recently facilitated strategic security reviews for the Solomon Islands and Vanuatu,with further assessments planned for other Pacific Island countries. This has enhanced therecognition of Australia as a valuable strategic partner within the South West Pacific. The 22boats supplied under the Pacific Patrol Boat project continue to undergo half-life refits, withthree boats refitted during 1998-99. Fisheries-related assistance, infrastructure projects, andtraining assistance are all contributing to closer relations across the South West Pacific region.

Defence has continued the suspension of cost-sharing arrangements for many activitiesconducted with bilateral partners in South East Asia hit hard by the economic crisis, and so hasmaintained the level, quality and depth of these activities. This has made a significant

8

Part One

contribution to strengthening the ability of the region to manage security issues. Recentlyunder the Five Power Defence Arrangements, Malaysia has argued for limitations to be placedon some elements of the exercise program, which would reduce the benefits for the ADF.Strained relations between Malaysia and Singapore are also impacting on the arrangements.Defence is actively pursuing negotiations on the exercise program with all member nations toensure maximum value is gained from exercises. To assist regional military organisations,Defence has also conducted seminars, conferences and workshops on defence reform, strategicplanning and change management. Assistance has also been provided to regional defenceforces to overcome potential Year 2000 threats to their systems.

Our bilateral defence relationships with Japan, China and South Korea deepened significantlyin 1998-99. In May 1999, Minister Moore became the first Defence Minister to visit Chinaand South Korea, while his visit to Japan continued the pattern of regular ministerial contacts.The first visit to Australia by the Chief of the General Staff of the Chinese People’s LiberationArmy, General Fu Quanyou, took place in January 1999. Chinese, Japanese and South Koreanstudents are attending the Australian Defence College, which will assist the continueddevelopment of our relationship with these countries into the future.

Existing mechanisms for strategic and operational-level coordination with United Statesauthorities have proven effective. New liaison and exchange arrangements with Pacific andAtlantic Commands are expected to bring further improvement. Effective arrangements arebeing put in place that will strengthen the already close and rewarding partnerships with theUnited States in the surveillance and intelligence fields and a new high-level committee, theAusmin Defence Acquisition Committee, is expected to facilitate the release to Australia ofkey United States technologies.

��$��#��!��

To deliver effective national support, Defence has developed a national support agenda tohelp harness the nation’s wider economic, industrial and societal strength. The agenda treatsindustry and the wider civil infrastructure as integral to the nation’s defence. Defence’s relianceon civil support capabilities is becoming greater, requiring industry to have a more involvedand defined role in the development of ADF capability, potentially in direct support of combatforces. Defence has incorporated national support considerations in its strategic planningprocesses, including mobilisation planning for the national support base. Defence is alsoparticipating in a wide range of forums to ensure that national support considerations areincorporated into legislative and policy processes.

As an example of this, Defence has continued to build relationships with the national airlinesto provide an augmented capability for strategic airlift. Such relationships in peace will facilitatejoint planning and response options when contingencies arise. Defence has investigated theuse of reciprocal arrangements with airlines to facilitate these arrangements. Arrangementsaimed at facilitating the operation and contracting of support under memorandums ofunderstanding first signed in 1997, particularly for short-notice requirements, are also beingdeveloped with Qantas and Ansett.

Defence has worked to enhance industry’s support for the ADF and to ensure that Australianindustry has the best opportunity to participate in Defence contracts. By the end of June 1999,nearly all the recommendations of the Defence and Industry Strategic Policy Statement, releasedin June 1998, had been implemented or had progressed significantly. Three major forums thatwill be used to facilitate Defence’s direct engagement with industry are the Defence Industryand Advisory Council, the Capability Development Advisory Forum and the Industry PolicyConsultative Forum. These groups will have significant input into the development of a strategic

9

Year In Review

industry framework, into defence capability and into Defence policy for industry. They will alsocomplement the activities of the Exports, Contracting and Commercial Support Program forums.Defence is also working to ensure that industry is well informed on procurement plans, futurerequirements and Australian industry involvement policy through a series of conferences,workshops and briefing programs, as well as a suite of documents available on the AcquisitionGroup web site.

In December 1997, the Government announced its decision to sell Australian Defence Industriesthrough an open-tender trade sale. Bids were received on 30 June 1999 and the sale is expectedto be completed in the latter half of 1999.

The final plank in the national support framework is the use of the Commercial Support Programto maximise the use of civilian infrastructure and private industry. This also provides a majorcontribution to the achievement of Defence Reform Program targets and reinvestment in ADFcapabilities. This is achieved by market testing support services where it is operationallyfeasible, where a viable market exists and where industry can demonstrate that Defence willreceive an efficiency dividend from the process.

%��&�� '��"��(��&��

In June 1999, the Defence Executive released Defence Our People and How We Work, to setout a blueprint for the development and growth of a committed, skilled and enthusiasticworkforce. Defence explicitly acknowledges that the skills and knowledge of its people arecritical to military capability. Defence Our People sets out the approach Defence intends totake in managing its people and the core values that are expected of Defence staff.

Underpinning the integrated human resource strategy that Defence Our People articulates is arange of personnel management initiatives, including:

• the introduction of a personnel management system with the Personnel ManagementKey Solution project providing a single source of accurate and timely personnel data;

• an employment system based on competencies;

• a flexible career-management system and common career-management policies andpractices;

• succession planning for key appointments; and

• the introduction of common appraisal instruments for the ADF and a single appraisalsystem for all civilians.

Performance management arrangements for civilians were developed by the end of 1998, andtrialed from January to June 1999 to enable employees to become familiar with, and receivetraining on, the civilian performance management scheme. The arrangements were implementedthroughout the organisation from 1 July 1999.

As a step in ensuring that critical staff have access to the best education available, the AustralianDefence College at Weston Creek in Canberra was officially opened on 18 January 1999. Thecollege provides senior officers of the ADF and civilians within Defence, as well as overseasparticipants with the opportunity to gain the knowledge and skills required by senior leadersand managers. A range of other reviews and studies is presently under way to ensure thateducation and training within Defence is delivered effectively and efficiently and that it providesthe opportunity to all Defence staff to improve their skills and knowledge and make a realcontribution to the Defence organisation. At the Australian Defence Force Academy, theleading training institution for our future military leaders, most of the recommendations of thereport into the handling of unacceptable behaviour at the academy have been implemented.

10

Part One

Defence has been planning for the establishment of the Australian Strategic Policy Institute, asa centre for policy-relevant research and independent advice. The institute will be located inCanberra and will commence operations in early 2000. It will be overseen by a Board appointedby the Minister for Defence and will include high-level ADF and Defence civilianrepresentatives.

Reserve personnel are playing an increasingly important role in the structure and capability ofthe ADF while, at the same time, the recruitment of reserves is becoming more competitive.Defence is working to ensure that reservists are given access to the quality of training that isnecessary for them to contribute to Defence operational capabilities. Defence is also workingwith employers to ensure that reservists have the opportunity to participate in ADF activities.Training requirements are being reviewed and streamlined to meet the requirements of reservistswho need leave from their civilian employers to undertake their duties.

In May 1998, the Government appointed Mr Noel Tanzer AC to conduct a broad review ofexisting military compensation arrangements to ensure that military personnel have access toa fair military compensation scheme that recognises the different nature of military service. InDecember 1998, a discussion paper on issues and options being considered by the review waswidely circulated to interested parties. Mr Tanzer has now handed his report to the MinisterAssisting the Minister for Defence. The report is currently under consideration by theGovernment.

�� )��"$��*��

Since its inception in July 1998, the Defence Executive, which replaced the DefenceManagement Committee, has focused on providing high-level leadership and direction for theDefence organisation. The Defence Executive brings together the organisation’s most seniormanagers, with two external advisers providing a wider industry and professional perspectiveto deliberations.

In response to whole-of-government reforms to the public sector, and as a major step in ensuringthat Defence maintains an effective and efficient stewardship of its resources, Defenceimplemented a new accrual-based outcome and output management framework on1 July 1999. Considerable effort was expended during 1998-99 to position Defence to meetthis requirement. Defence is continuing to work to ensure that sustainable managementimprovements flow from these reforms and that accrual budgeting is established as an effectivetool to better management and produces the outputs, primarily military capabilities, requiredby government.

Military strategy and response options planning is being developed. The first cycle ofdevelopment of the Australian military strategy has been completed and approved by the Chiefsof Staff Committee for further planning and development purposes. The Australian militarystrategy provides military response options to be put to Government and provides militarystrategic planning guidance to the Defence organisation. The Australian military strategy, andin particular, the military response options, will become the framework against which theADF determines capability priorities and preparedness requirements.

Defence is developing its preparedness methodology to link more effectively strategicassessments, force requirements, resource allocations and the reporting of achievement. TheChief of Defence Force’s Preparedness Directive for 1998-99 was completed. Its releaseinitiated the production of the subsidiary directives that will stipulate the levels of preparednessthat forces are to maintain in order to ensure that the ADF is able to respond effectively and

11

Year In Review

efficiently to contingencies directed by government. The current plan is for all new preparednessdirectives to be effective from December 1999. Work has also been undertaken to examine thetransition of forces from existing to increased levels of readiness.

As part of the Defence Reform Program, Defence undertook to ensure that new major capitalequipment meets performance requirements, is acquired efficiently, optimises Australianindustry involvement, and is introduced into service on schedule and within cost estimates.To this end, Defence has established the Defence Acquisition Review Board. The board reviewseach of the more important major capital equipment projects on an annual basis and monitorsthe performance of the major capital equipment program as a whole. The board also ensurescontinuous improvement in the acquisition process and considers important policy andprocedural issues.

Finally, Defence has identified that its management of the information environment can providean important competitive edge in ADF operations and in Defence business generally. TheDefence Information Environment Board was formed in late 1998 to provide strategic directionfor the development of the information environment and a strategic plan has been formulatedto address a wide range of technical, organisational, personnel and process-related factors thatcontribute to superior decision making.

12

Part One

��+�%��

In April 1997, the Defence Reform Program was instituted to ensure that the Defence organisationfocused clearly on the achievement of its mission. The Defence Reform Program is making adirect contribution to the enhancement of Defence’s capability outputs through the reinvestmentof realised efficiencies in both new and existing capabilities. Key deliverables of the DefenceReform Program include:

• more resources for combat-ready units including improved logistic support and morecombat trained personnel;

• stronger future capabilities through increased resources for new capital equipment andfor the personnel and operating costs of certain new items of equipment being broughtinto service;

• enhanced national support by utilising the skills and abilities of Australian industry andincreasing opportunities for industry to support the Defence effort;

• improving Defence’s skills and knowledge base by streamlining the provision ofeducation and training; and

• improving management through streamlining processes, improving structures andmaking improvements to the committee structure and long-term planning processes.

The implementation of the Defence Reform Program remains ahead of its initial schedule. Bythe end of 1998-99, cumulative achieved on-going gains were $287m per annum, comparedwith an initial estimate of $250m per annum ($39m or 16% ahead of schedule). The majoractivities in the market testing schedule over the past year covered regional garrison support(security, firefighting, catering etc), logistics support, vehicle management and testing supportfunctions. Industry demonstrated its expertise in regional garrison support activities by winningthe six evaluations decided in 1998-99. The contracts, with a total value of $60m in 1998-99,will add significantly to the national support base.

Despite this record of achievement, Defence recognises that, as a long-term program of reform,there remain risks to the full achievement of the Defence Reform Program and related savings.These include the capacity of both industry and Defence to manage the increase in the scale ofDefence market testing, as well as the possibility of ‘reform fatigue’. Furthermore many ofthe gains will depend on market forces and the capacity of industry to perform tasks substantiallymore efficiently than those conducted in-house. To address these risks, the Governmentestablished the Defence Reform Program Strategic Management and Reporting Team in April1999, which reports directly to the Secretary. This team was tasked with reviewing progresson each major category of reform, reporting to the Defence Executive on any area of difficultyor risk, and undertaking associated change management and internal communications strategies.

The implementation of the Defence Reform Program is being measured and reported againstthe following major categories of reform, which together include some 150 individual initiatives.

��,��#�� "

Reform has continued through the clarification of the functions of senior commanders andexecutives within Defence and their roles and responsibilities. Savings have resulted from thecollocation and integration of staff at the strategic level, the elimination of duplication and thestreamlining of command arrangements and the rationalisation of headquarters elements. Thesereforms are now substantially complete, with the exception of the substantial efficiency gainsthat will flow from the establishment of a collocated headquarters for the Commander AustralianTheatre.

13

Defence Reform Program

��-��

Gains from the rationalisation of the former Forces Executive and Strategy & Intelligence Programshave been used to almost fully offset the cost of the reform program-endorsed initiative toprovide additional strategic guidance within the Australian Defence Headquarters.

�#.!�"�� !"��

Reform initiatives have included business process re-engineering, which is now beingimplemented in Defence Acquisition. The benefits will include shorter acquisition cycle timesand more efficient and effective acquisition processes. Gains to date have been achievedthrough the civilianisation of some military staff in Acquisition, although there has been aslowing in the rate of civilianisation. Efficiencies have been generated through the collocationof staff in new premises at Russell.

The rationalisation of industry functions has seen the wind back of the Acquisition presence inthe regions to small, streamlined ‘shop-fronts’, the restructuring of the quality assurance areaand other initiatives.

#��#��#$��

Specific savings have been made through general administrative efficiencies.

��#��"��)�� #��"��"��

Facilities gains include a series of one-off savings related to a program of base rationalisationand closures including RAAF Fairbairn in Canberra ($21.5m), Tighnabruaich in Brisbane($2.0m), and Jenner House in Sydney ($2.3m).

)� �"��#"

Logistic initiatives have seen the commencement in 1998-99 of a number of projects to improvethe efficiency and effectiveness of ADF logistic business processes and their supportinginformation technology systems. Market testing has been completed for commercial vehiclemanagement and PC9 Air Trainer Logistics Support, and a civilianisation program has begun.A one-off gain of almost $17m in equipment and stores in the Defence Corporate SupportGroup was due to the slowing of purchasing activity and the run down of stocks in advance ofcontracting arrangements.

+��"��+��

Personnel savings include the integration of civilian and military personnel functions. ThePersonnel Management Key Solution project will enable achievement of efficiencies inpersonnel management by ensuring that Defence has a single source of accurate and timelypersonnel data. During 1998-99, the project team finalised a plan for the phased implementationof the system across Defence. The project will enable, and assist with, the achievement ofsignificant savings, especially those associated with the establishment of the Defence ServiceCentre (the location of which is in the process of being finalised).

��!#��

Reform aimed at developing common joint training for the ADF has continued during1998-99 with ongoing planning for, and implementation of, the rationalisation of educationand training schools and courses. A number of tri-Service initiatives came to fruition this yearincluding the opening of the Australian Defence College in January 1999, as the senior institutionin Defence’s system of professional military education. A common Basic Medical Assistantcourse commenced, and the ADF School of Catering opened at HMAS Cerberus. An interimDefence Intelligence Training Centre has been established at the School of Military Intelligence,Canungra, with the Army as the single-service manager of joint training.

14

Part One

��"��-��!��

These initiatives relate to the rationalisation and market testing of support functions at Defencebases across Australia. Market testing of garrison support activities progressed, with decisionsin north and south Queensland, South Australia and Western Australia. The total value ofcontracts awarded in 1998-99 was $347m for services spanning the next five years. Themarket testing of clerical and administrative services has begun, with the issue of a request forquotation in April 1999 for the supply of clerical and administrative services to the SouthAustralian region.

��,��

Information management initiatives have seen the establishment of a single provider of corporateinformation management services, and a rationalisation of information management support.A new desktop operating environment completed the roll-out to Russell, while theimplementation on schedule of the Resource and Output Management Project, the new corporatefinancial management information system, will provide additional savings across the Defenceportfolio upon completion.

Table 1: Defence Reform Program Cumulative Resources Available for ReinvestmentDefence Reform Program Initiative: 1998-99 1998-99 1998-99 Variation

Budget Revised Actual (98-99 Actual LessEstimate Estimate Outcome Revised Estimate)

$m $m $m $m %Defence Command and Management 13 14 14 0 0Intelligence 1 1 1 0 0Capability Development 0 0 0 0 0Acquisition and Industry 26 29 31 2 6.9Science and Technology 1 1 0 -1 -100.0Facilities & Long Term Force Disposition 6 7 5 -2 -28.6Logistics 55 49 54 5 10.2Personnel Planning 27 31 28 -3 -9.7Education and Training 20 20 29 9 45.0Administrative Support 123 123 132 9 7.3Information Management 6 7 7 0 0Defence Cooperation 0 0 0 0Total 278 282 301 19 6.7Other:Unallocated 7 0 0 0 0Superannuation (1) 37 44 46 2 4.5Fringe Benefits Tax (2) 16 0 0 0 0Total Gross Resources Available (3) 338 326 347 21 6.4Provision for contractor support - Contracts Funded/Residual Provision (4) -88 -54 -60 -6 11.1Total Net Resources Available 250 273 287 14 5.1Add One-Off Savings (5)

Capital Facilities 5 26 26 0 0Equipment & Stores 0 17 17 0Defence Cooperation (one-off elements) 5 6 1 20.0Total One-Off Savings 5 31 48 17 54.8Unallocated $125mAdministrative Savings (6) 0 0 12 12 -Total Resources for Reinvestment 255 303 347 44 14.5

15


Notes to Table 1:1. The planned savings in superannuation have been calculated on the basis of the anticipated

reduction in personnel numbers.2. Due to the increased cost of Defence housing in 1998-99, the consequential Fringe Benefits Tax

gains in 1998-99 could not be realised and have been slipped to 1999-2000 (see p.14 of PortfolioBudget Statements 1999-2000).

3. The resource reallocations listed in the table are the gross resource reallocations to be achieved,including the salary and operating costs of support areas to be market tested.

4. This line represents the cost of contracts for service delivered by external providers as a result ofDefence Reform Program initiatives.

5. One-off gains relate to the facilities sales program, Defence Cooperation gains, some reducedinventory levels recommended by the Defence Efficiency Review and Defence Reform Programand other one-off reform program related gains achieved by Groups.

6. In the 1996-97 Budget, the Department of Defence made a reduction in administrative expendituretotalling $125m per annum (which was subsequently increased to $136m per annum), which hasbeen reallocated to a range of capability-related expenditure initiatives. Reinvestment of theunallocated savings from 1998-99 onwards has been combined with the Defence Reform Programreinvestment for reporting purposes. Reinvestment details for the $125m administrative savingsare as follows:

1998-99 1998-99 1998-99 VariationBudget Revised Actual (98-99 Actual Less

Estimate Estimate Outcome Revised Estimate)$m $m $m $m %

Programmed Savings 136 136 136 0Land Force Capabilities 73 72 17 -55 -76.3Strike 82 45 60 15 33.3Maritime and Air Defence 29 25 26 1 4.0C3I 6 6 4 -2 -33.3Personnel Initiatives 19 18 15 -3 -16.7Other Government Initiatives 1 2 1 -1 -50.0Total Reinvestment 211 168 123 -45 -26.8Unallocated Savings -75 -32 12 44 -137.5

The budget allocation of $211m was reduced to an actual outcome of $123m. Major expenditureactivities comprised personnel retention initiatives including the pilot retention bonus; and a rangeof combat-capability enhancements, including the acquisition of night fighting equipment; additionalHarpoon missiles, and air-to-air and air-to-surface weapons. Achieved reinvestment was less thanthat anticipated due to slippage in a number of projects including the purchase of additional CH-47Chinook helicopters, specialised surveillance ASLAV vehicles, and military satellite communicationsequipment for Anzac ships and Collins submarines.

Table 2: Cumulative Defence Reform Program Military Personnel Reductions (1) ( 2) ( 3)

Defence Reform Program Initiative 1998-99 1998-99 1998-99 VariationBudget Revised Actual (98-99 Actual less

Estimate Estimate Outcome Revised Estimate)%

Defence Command & Management 141 149 133 -16 -10.7Intelligence 16 16 14 -2 -12.5Capability Development 0 0 -1 -1 -Acquisition and Industry 150 150 118 -32 -21.3Science and Technology (4) 20 20 1 -19 -95.0Facilities & Long Term Force Disposition 40 40 40 0 0Logistics 617 617 604 -13 2.1Personnel Planning 425 425 425 0 0Education and Training 317 315 492 177 56.2Administrative Support 1,587 1,577 1,577 0 0Information Management 13 13 13 0 0Total Service Reductions 3,326 3,322 3,416 94 2.8

16

Part One

Table 3: Cumulative Defence Reform Program Civilian Personnel Reductions (1) (2) (3)

Defence Reform Program Initiative 1998-99 1998-99 1998-99 VariationBudget Revised Actual (98-99 Actual less

Estimate Estimate Outcome Revised Estimate)%

Defence Command & Management 92 142 151 9 6.3Intelligence 24 24 24 0 0Capability Development 0 0 0 0 0Acquisition and Industry 267 265 265 0 0Science and Technology (4) 101 0 1 1 -Facilities & Long Term Force Disposition 91 101 85 -16 -15.8Logistics 498 686 705 19 2.8Personnel Planning 402 110 110 0 0Education and Training 70 78 92 15 19.2Administrative Support 884 959 1,116 157 16.4Information Management 57 116 76 -40 -34.5Total Civilian Reductions 2,486 2,481 2,625 144 5.8Notes to Tables 2 & 3:1. These savings represent cumulative ongoing totals of actual personnel numbers to be reduced or

redirected to priority combat positions in any given year as a result of rationalisation, streamliningor market testing activities carried out as part of the Defence Reform Program. They do notrepresent average strength figures because of uncertainties due to the market testing program.

2. Figures represent both the positions to be abolished and an assumed 90% reduction of militarypositions (25% for civilians positions) in those functions to be market tested (market-test assumptionsare based broadly on historical experience).

3. These figures do not include the reinvestment of Defence Reform Program resources in ADF orAPS personnel (see Table 4).

4. This category relates to Science and Technology initiatives across Defence.

��,��#��,��+�� -�"��

The Defence Reform Program has reinvested a total of $372m in Defence capability in1998-99. The focus of this reinvestment has changed to reflect a greater emphasis on supportfor current capability (reflecting deteriorating regional strategic circumstances) and the decisionto sustain the ADF’s full-time strength at no lower than 50,000. In terms of investment incurrent capability, the most significant contribution of the Defence Reform Program has beenthe provision of most of the funding for the increased readiness of 1 Brigade and related unitsin 1998-99. The ADF is now at its highest state of readiness since the Vietnam War.

��&��-�"��

Funding for new capital investment projects will commence in 1999-2000, due to the leadtimes involved in project development. At maturity, annual major investment expenditure isplanned to increase by $139m or 5% of the $2,750m major capital equipment program.

��)� �"��#"

Logistics reinvestment represents a partial offset for the increasing real costs involved inmaintaining current capability, as well as increased logistic costs resulting from supporting ahigher operational tempo associated with increased levels of ADF readiness and operations.A total of $104m has been invested in additional logistic support in 1998-99. Funding hassupported priority areas such as the increased level of preparedness for 1 Brigade and relatedunits and increased maintenance and logistics support to Navy platforms.

17


��&��"�/��+��"�� "�"

Defence Reform Program funding also supports the through-life personnel and operating costsof new capabilities being introduced into service. Reinvestment of Defence Reform Programfunds of about $65m has supported new capabilities including in-service support for the Anzac-class ships and the Collins-class submarines, Anzac ship helicopters, minehunter coastal,hydrographic ship, the Bradshaw Field Training Area and the lead-in fighter projects.

��$��!"��

Reinvestment in this category enables the transportation, lodgement and support of a heavybattalion group (approximately 1,100 personnel) and its associated vehicles and equipment.Total reinvestment is $28m for 1998-99, which related primarily to the retention ofHMAS Tobruk.

��+�� -�"��

This funding ($43m) has facilitated the movement of Army personnel into the combat forceconsistent with the objectives of Restructuring the Army initiative and the 50,000 ADF.

012111�+��#��

Maintaining the ADF at about 50,000 and increasing the number of personnel in the combatforce to 65% will represent by far the largest reinvestment of savings with $11m invested in1998-99 rising to $632m at maturity. Although the ADF will be smaller in size than the56,600 in 1996-97, it will be far more capable. Additional costs result from the retention ofsubstantially higher numbers of ADF personnel in combat roles, while still meeting the civilianstaff and contractors costs to undertake the support tasks previously undertaken by many ADFpersonnel.

��,��#��#��#��/��+��3�#�"

Funding has continued to facilitate priority science and technology research projects in supportof land operations, command and control, information warfare, weapons systems, defenceagainst biological weapons and other projects to assist in achieving the most efficient andeffective operation of our capabilities. Reinvestment of $15m was made in 1998-99.

+��

This reinvestment of $4m in 1998-99 addresses the fast-jet pilot shortfall, and seeks to improvepilot training. Improved pre-recruitment screening, and a contracted tri-Service basic pilottraining course commenced this year, aimed at increasing the number and quality of pilotgraduates.

��"��"�"

Transition costs of $102m have been expended to facilitate the implementation of the DefenceReform Program. The major component is the funding of voluntary redundancies arisingfrom changes to the workforce, through market testing, civilianisation of military positionsand workforce rationalisations. Other costs are incurred in the market testing process.

Part One

18

Table 4: Reinvestment of Available Defence Reform Program ResourcesTable 4: Reinvestment of Available Defence Reform Program ResourcesTable 4: Reinvestment of Available Defence Reform Program ResourcesTable 4: Reinvestment of Available Defence Reform Program ResourcesTable 4: Reinvestment of Available Defence Reform Program ResourcesDefence Reform Program Initiative 1998-99 1998-99 1998-99 Variation

Budget Revised Actual (98-99 Actual lessEstimate Estimate Outcome Revised Estimate)

$m $m $m $m %Net Ongoing Resources Available 250 273 287 14 5.1Defence Reform ProgramOne-Off Savings 5 31 48 17 54.8Unallocated $125m Administrative Savings 0 0 12 12 0Total Resources Available forTotal Resources Available forTotal Resources Available forTotal Resources Available forTotal Resources Available forReinvestmentReinvestmentReinvestmentReinvestmentReinvestment 255255255255255 303303303303303 347347347347347 4444444444 14.514.514.514.514.5Reinvestment Initiative Details-New Capital Investment (1) 0 0 0 0 0-Amphibious Capabilities(2) 32 28 28 0 0-Capability - Related Logistics Costs (3) 107 104 104 0 0-New Capabilities – Net Personnel & Operating Costs (4) 67 64 65 1 1.6-Defence Science – Capability Projects 15 15 15 0 0-Army Program Reinvestment 43 43 43 0 0-Provision for 50,000 ADF (5) 11 11 11 0 0-Pilot Training 4 4 4 0 0-DRP Transition Costs 60 145 102 -43 -29.7Total Reinvestment Total Reinvestment Total Reinvestment Total Reinvestment Total Reinvestment (6)(6)(6)(6)(6) 339339339339339 414414414414414 372372372372372 -42-42-42-42-42 -10.1-10.1-10.1-10.1-10.1Notes:Notes:Notes:Notes:Notes:1. Expenditure on new capital investment is planned to commence in 1999-2000.2. Operational requirements relating to Operation Belisi have resulted in the slippage of the planned refit of

the HMAS Tobruk to early in 1999-2000.3. The installation of the diesel generators in the FFGs has been reprogrammed to accord with the upgrade

program.4. The increase relates to price increases associated with net personnel and operating costs activities.5. The 50,000 ADF provision for 1998-99 includes reinvestment and crew associated with the retention of

the HMAS Tobruk.6. Projected gross expenditure levels for these initiatives was in excess of the savings to be achieved through

the Defence Reform Program. This strategy has been adopted due to the uncertainty related to some leadtimes and achievable expenditure spreads, particularly in logistic items. This over-programming ensuresthat overall expenditure on the package will exceed savings. Expenditure in 1998-99 was matched to thefunds available by cash management techniques, review of priorities or provision of extra funds from theDefence outlay.

19

��)��4��

!��,�5667/66�!��"

The actual 1998-99 Defence function outlay of $11,182.9m was $156m higher than the1998-99 revised estimate of $11,026.9m and $179.4m more than the final adjusted 1998-99allocation of $11,003.5m. This was a managed overspend consisting of an advance of $99mfrom the Department of Finance and Administration for the early payment of claims and anadvance of $80m that was provided by the Government on 30 June 1999, in response to theMcIntosh report, for the Collins-class submarines. The early payment of claims was actiontaken as a risk mitigation measure to ensure a smooth transition to a new financial informationmanagement system and the new agency banking arrangements. In line with current Defencebudgetary arrangements, this overspend will be repaid in the 1999-2000 additional estimates.It should be noted that Defence manages and presents its resources on an outlay basis and thatthe 1998-99 outlays comprised expenditure of $11,686.1m and receipts of $503.2m. As aproportion of gross domestic product, the Defence function outlay was 1.9 % in 1998-99.

The following table provides a summary of the actual and estimated total Defence functionoutlays from the 1997-98 actual through 1998-99. The difference between the 1997-98 actualand the growth during 1998-99 is due to movements in below-the-line items. Below-the-lineitems relate to specific activities whose funding is included in total Defence outlays, but forwhich Defence is supplemented on a ‘no win-no loss’ basis.

Table 5: Summary of Defence Budgets1997-98 1998-99 1998-99 1998-99 VariationActual Budget Revised Actual (98-99 Actual less

Outcome Estimate Estimate Outcome Revised Estimate)$m $m $m $m $m %

Appropriations 10,908 11,526 11,585 11,686 101 0.9Receipts and Trust Accounts -495 -580 -558 -503 55 9.8Defence Function Outlay 10,415 10,946 11,027 11,183 156 1.4

The following tables provide a summary of achievement by Group for both outlays and staffingin 1998-99 and a comparison with the 1998-99 budget and revised estimates. More detail andexplanations for the variation between the 1998-99 actual outcome and the 1998-99 revisedestimate can be found in the individual Group sections in Part Two of this report.

20

Part One

Table 6: Defence Function Outlays by GroupGroup 1998-99 1998-99 1998-99 Variation


$m $m $m $m %Defence Headquarters 201.7 171.1 159.1 -12.0 -7.0Navy 786.2 781.0 787.9 6.9 0.9Army 1,304.2 1,268.3 1,268.8 0.5 0.0Air Force 741.8 694.3 701.7 7.5 1.1Intelligence 141.4 160.3 159.4 -0.9 -0.6Support Command 2,095.6 2,203.0 2,224.6 21.6 1.0Joint Education and Training 102.9 92.6 90.3 -2.3 -2.5Defence Personnel Executive 1,086.3 1,210.6 1,087.3 -122.1 -10.2Acquisition 2,756.3 2,612.5 2,733.0 120.5 4.6Science and Technology 207.5 217.3 221.3 4.0 1.8Defence Estate 672.4 661.2 699.5 38.3 5.8Defence Information Systems 250.4 305.3 349.2 43.9 14.4Defence Corporate Support 584.5 633.9 675.3 41.4 6.5Finance and Inspector-General 14.2 15.5 25.4 9.9 63.7Total Defence Function Outlay 10,945.5 11,026.9 11,182.9 156.0 1.4

Table 7: Group Staffing (1) (2)

Group 1998-99 1998-99 1998-99 VariationBudget Revised Actual (98-99 Actual less

Estimate Estimate Outcome Revised Estimate)Defence Headquarters 1,311 1,409 1,316 -93 -6.6Navy 12,458 12,256 11,908 -348 -2.8Army 44,867 44,376 39,629 -4,747 -10.7Air Force 11,306 11,218 10,817 -401 -3.6Intelligence 1,491 1,479 1,432 -47 -3.2Support Command 10,968 10,445 10,038 -407 -3.9Joint Education and Training 1,423 1,315 1,307 -8 -0.6Defence Personnel Executive 5,699 5,622 5,727 105 1.9Acquisition 2,057 1,857 1,832 -25 -1.3Science and Technology 2,206 2,143 2,090 -53 -2.5Defence Estate 574 542 537 -5 -0.9Defence Information Systems 1,224 1,275 1,343 68 5.3Defence Corporate Support (3) 5,340 6,272 6,228 -44 -0.7Finance and Inspector-General 385 371 348 -23 -6.2Total Group Staffing 101,309 100,580 94,552 -6,028 -6.0Notes:1. For further information see Appendix I to Part One of this report.2. Staffing numbers are average funded strengths. The figures for reserves represent the average

number of personnel funded, rather than full-time staff-year equivalents.3. Includes figure for trust account staff (see Table 8).

21

Financial Resources

Table 8: Portfolio StaffingPersonnel 1998-99 1998-99 1998-99 Variation


Civilian 17,042 16,851 16,570 -281 -1.7Permanent Forces:

- Navy 13,850 13,748 13,661 -87 -0.6- Army 24,400 24,426 24,169 -257 -1.1- Air Force 15,785 15,500 15,065 -435 -2.8

Total Permanent Forces 54,035 53,674 52,895 -779 -1.5General Reserves: (2)

- Navy 1,836 1,803 1,227 -576 -31.9- Army 26,507 26,100 21,486 -4,614 -17.6- Air Force 1,800 2,063 2,303 240 11.9

Total General Reserves 30,143 29,966 25,016 -4,950 -16.5Total Staffing 101,220 100,491 94,481 -6,010 -6.0Trust Account Staff 89 89 71 -18 -20.2Total Staffing 101,309 100,580 94,552 -6,028 -6.0

Table 9: Summary of Defence AppropriationsDivision/Appropriation Item 1997-98 1998-99 1998-99 Variation

Actual Revised Actual (98-99 Actual lessOutcome Estimate Outcome Revised Estimate)

$’000 $’000 $’000 $’000 $’000180 ADMINISTRATIVE180-01 RUNNING COSTS

Permanent & Reserve Force(incl. Super) 3,239,603 3,194,017 3,191,195 -2,822 -0.1Civilian Salaries (incl. Super.) 883,426 894,598 894,993 395 0Administrative Expenses 1,176,784 1,340,340 1,317,265 -23,075 -1.7Facilities Operations 235,867 226,480 234,029 7,549 3.3Sub Total Division 180-01 5,535,680 5,655,435 5,637,482 -17,953 -0.3

180-02 OTHER SERVICESPayment for ASTA Ltd 2,610 3,000 1,003 -1,997 -66.6Payment for DefenceScience Research 565 620 617 -3 -0.5Payments-Section 34(A)1of Audit Act 79 117 65 -52 -44.4Emergency Management Australia 6,827 6,785 6,785 0 0Woomera Village Operating Expenses 7,378 7,499 6,499 -1,000 -13.3Voyager Compensation 2,420 1,000 1,085 85 8.5Compensation & Legal Services 121,836 149,359 129,776 -19,583 -13.1Payment to UNSW for ADFA 34,535 35,256 35,206 -50 -0.1Grants to IndependentOrganisations & Individuals 1,528 1,574 1,474 -100 -6.4Compensation for Detriment 89 350 41 -309 -88.3Ex-Gratia Payments 4,539 2,200 1,554 -646 -29.4Young Endeavour 1,808 1,818 1,818 0 0Sub-Total Division 180-02 184,214 209,578 185,923 -23,655 -11.3

22

Part One

Division/Appropriation Item 1997-98 1998-99 1998-99 VariationActual Revised Actual (98-99 Actual less

Outcome Estimate Outcome Revised Estimate)$’000 $’000 $’000 $’000 $’000

181 EQUIPMENT & STORES 4,337,088 4,823,727 4,973,792 150,065 3.1182 DEFENCE COOPERATION 63,436 65,696 62,732 -2,964 -4.5183 DEFENCE PRODUCTION 17,739 25,787 24,096 -1,691 -6.6184 PAYMENTS TO ADI 0 50 0 -50 -100.0185 CAPITAL FACILITIES 502,340 495,054 494,740 -314 -0.1186 DEFENCE HOUSING 253,590 291,300 289,869 -1,431 -0.5

(A) Sub-Total 10,894,087 11,566,627 11,668,634 102,007 0.9SPECIAL APPROPRIATIONSMSBS – Retention Benefit 15,201 16,043 15,650 -393 -2.4Housing Loan AssistanceScheme 2,921 4,000 3,642 -358 -9.0DETYA Subsidies 0 150 0 -150 -100DFRDB Payments 952,315 971,280 987,103 15,823 1.6MSBS Payments 177,765 178,901 178,093 -808 -0.5 (B) Sub-Total 1,148,202 1,170,374 1,184,488 14,114 1.2(C) Total Defence PortfolioAppropriations (A+B) 12,042,289 12,737,001 12,853,122 116,121 0.9(D) Total Defence Portfolio Receipts(Offset Within Outlays) (2) -578,257 -646,190 -583,427 62,763 -9.7(E) Total Defence Portfolio Outlay (C+D) 11,464,032 12,090,811 12,269,695 178,884 1.5Less Non-Defence Function Appropriations (3)

180-02-09 Young Endeavour 1,808 1,818 1,818 0 0DFRDB Payments 952,315 971,280 987,103 15,823 1.6MSBS Payments 177,765 178,901 178,093 -808 -0.5 (F) Sub Total 1,131,888 1,151,999 1,167,014 15,015 1.3Less Non-Defence Function ReceiptsDFRDB Contributions -45,541 -43,564 -42,034 1,530 -3.5MSBS Contributions -39,834 -47,372 -57,249 -9,877 20.9Sale of AAG 120 0 0 0 0 (G) Sub Total -85,255 -90,936 -99,283 -8,347 -9.2Add Other Portfolio ReceiptsAdvance to States under Commonwealth-State Housing Agreement -2,029 -2,816 -19,043 -16,227 576.2 (H) Sub Total -2,029 -2,816 -19,043 -16,227 576.2Total Defence FunctionOutlays (E-F-G+H) 10,415,370 11,026,932 11,182,921 155,989 1.4

Notes:1. Defence portfolio appropriations are composed of funds listed within Appropriation Bills No. 1 and

3 and the Statement of Savings, as appropriated to the Department of Defence. They includespecial appropriations for Defence Force Retirement and Death Benefits, the Military Superannuationand Benefits Scheme and the Home Loan Assistance Scheme, and a proportion of Department ofEmployment, Training and Youth Affairs funds for employment subsidies for trainees.

2. Defence portfolio receipts shown in the table represent only those Department of Defence receiptswhich are offset within outlays. Other receipts (eg. Defence Housing Authority and AustralianDefence Industries dividends to the Commonwealth) are not included as they are credited to theConsolidated Revenue Fund and are not offset within Defence outlays.

3. The non-Defence function appropriations and receipts are composed of Defence superannuationpayments and contributions and the Young Endeavour Youth Scheme. While these outlays liewithin the Defence portfolio, they are not classified as part of the Defence function.

23

Financial Resources

��,��#��!��3��

The following table provides a breakdown of the expenditure of Defence outlays.

Table 10: Defence Function Outlay: 1997-98 and 1998-99Category 1997-98 1998-99

Revised Total Actual Total Revised Total Actual TotalEstimate Estimate

$m % $m % $m % $m %Service Salariesand Superannuation 3,264.8 29.7 3,239.6 29.7 3,194.0 27.6 3,191.2 27.3Civilian Salariesand Superannuation 879.0 8.0 883.4 8.1 894.6 7.7 895.0 7.7AdministrativeExpenses (1) 1,424.4 12.9 1,359.2 12.5 1,548.1 13.4 1,501.4 12.8Capital Equipment 2,552.0 23.2 2,504.9 23.0 2,812.4 24.3 2,895.7 24.8Maintenance andStores 1,787.6 16.3 1,832.2 16.8 2,011.3 17.4 2,078.1 17.8DefenceCooperation 71.9 0.7 63.4 0.6 65.7 0.6 62.7 0.5DefenceProduction 17.8 0.2 17.7 0.2 25.8 0.2 24.1 0.2ADI Ltd 1.2 0.0 0.0 0.1 0.0 0.0 0.0Capital Facilities 490.2 4.5 502.3 4.6 495.1 4.3 494.7 4.2Facilities Operations 232.0 2.1 235.9 2.2 226.5 2.0 234.0 2.0Defence Housing 253.6 2.3 253.6 2.3 291.3 2.5 289.9 2.5Other (2) 25.6 0.2 18.1 0.2 20.2 0.2 19.3 0.2Total Expenditure 11,000.0 100.0 10,910.4 100.0 11,585.0 100.0 11,686.1 100.0Receipts -568.2 -495.0 -558.1 -503.2Total DefenceFunction Outlay 10,431.8 10,415.4 11,026.9 11,182.9Notes:1. Includes Division 180-02: Other Services.2. Other includes MSBS Retention Benefit, Australian Trainee Scheme/Career Start Traineeships

and Housing Loan Subsidies.

��.!��

In 1998-99, development activity continued on some 230 approved major capital equipmentprojects, including a number approved in previous years but not yet to contract. Total approvedfunding for these projects is $42,700m, of which $26,000m has already been spent, includingthe $2,614m spent in 1998-99. Major developments and outcomes are detailed in Part Two ofthis report in the Acquisition Group performance report.

��#��"

Significant progress was made on numerous capital facilities projects during 1998-99, with anumber of projects completed, including facilities at RAAF Townsville for 5 Aviation Regiment,RAAF Scherger near Weipa, and facilities for 6 Squadron at RAAF Amberley. Significantproject outcomes and property sales are detailed in Part Two in the Defence Estate Groupperformance report.

+��"��

As detailed in Table 8, the average permanent ADF strength for 1998-99 was 779 lower thanthe 1998-99 revised estimate, an outcome which reflected higher than forecast separation ratesand lower than forecast recruiting achievement across all three Services. The overall reduction

24

Part One

of $2.8m in Service salaries and superannuation was the net effect of the lower than forecastaverage strength, offset by higher than anticipated payments to employees on separation.

��"��-��8��"�"

Actual outlays on administrative expenses were $46.7m lower than the revised estimate duemainly to lower than anticipated expenditure in travel and subsistence and to compensationand legal services.

��#��"

Actual outlays in 1998-99 were $66.8m higher than the 1998-99 revised estimate of $2,011.3m.This was due primarily to increased expenditure on the repair and overhaul of equipment andstores, and an increase in the expenditure on weapons, armaments and ammunition.

��#��"��"

Expenditure on facilities operations was $7.5m or 3.3% more than the revised estimate. Thisis due primarily to increased maintenance activities, including the dredging of the CaptainCook Dock at Garden Island, and the upgrading of facilities to provide temporaryaccommodation for the Kosovo refugees as part of Operation Safe Haven.

��!"��

In 1998-99, the Defence Housing Authority provided 90% of the Defence housing requirementfor married members at a cost of $269.6m. This amount was offset by member contributionsof $101.5m. The balance of the housing requirement for married members was met by theprivate rental market, at a cost to Defence in 1998-99 of $20.8m. Defence also incurred afringe benefits liability for housing for married members totalling $77.9m.

��,��#��

Expenditure for Defence Cooperation was $62.7m in 1998-99 as outlined in Appendix E toPart One of this report. Key activities in 1998-99 included the conduct of combined activitieswith elements of the Indonesian, Malaysian, Philippines, Singaporean and Thai armed forcesand the provision of additional movement support to Indonesia, Malaysia and Thailand toenable their continued participation in high-priority training and personnel exchange programs.Assistance was provided to the Solomon Islands in the conduct of a national strategic reviewand the program of half-life refits for Pacific patrol boats continued. Provision of in-countrytraining advisers to Papua New Guinea continued.

+��#�'�� $��!��"

Defence outlays for peacekeeping and other operations during 1998-99 were $31.2m as outlinedin Appendix C to Part One of this report. Major activities in 1998-99 included Defenceinvolvement in the Bougainville Peace Monitoring Group; the deployment of a Navy guidedmissile frigate as a contribution to the Multinational Interception Force enforcing United Nationsanctions against Iraq; Defence participation in the Multinational Observer Force in the Sinai;drought aid in Papua New Guinea and Irian Jaya; and a Defence contribution to the UnitedNations Truce and Supervisory Organisation to monitor ceasefire agreements, truces and peacetreaties negotiated between Israel and Arab nations.

��#��"

Defence portfolio receipts in 1998-99 were $503.2m, which was $54.9m lower than the revisedestimate of $558.1m. Receipts that dropped significantly were for rations and quarters (reducedby $16.7) and Defence property disposals ($28.0m).

25

Financial Resources

4�� 5667/66��)��

This is the fifth year in which Defence has prepared a set of accrual financial statements. Thestatements have been compiled to meet the requirements of the Financial Management andAccountability Act 1997, the Finance Minister’s Orders and Australian Accounting Standards.The 1998-99 Financial Statements are set out in Appendix F to Part One.

As has been the case in past years, resources were budgeted and managed on a cash basis butreported on an accrual basis. 1998-99 is the last year that this will occur. On 1 July 1999, anaccrual-based output budgeting and accounting framework was introduced.

The statement of revenues and expenses, or operating statement, for 1998-99 indicates that thenet cost of services fell from $11,070m in 1997-98 to $10,837m in 1998-99. Total expensesfell by $102m in 1998-99 compared to the 1997-98 result while revenues from independentsources increased by $130m. Accumulated results increased from $33,404m in 1997-98 to$34,905m in 1998-99.

The statement of assets and liabilities, or balance sheet, indicates that the total assets of Defenceincreased from $37,327m in 1997-98 to $40,065m in 1998-99. During 1998-99, a majorrevaluation was undertaken of the Defence estate and this, together with purchases of specialistmilitary equipment, was the major cause of the increase in assets. The increase in the assetrevaluation reserve of $818m was due principally to the revaluation of the Defence estate.Provisions for employees rose by $311m due to a higher level of accrued salaries, superannuationand annual leave as well as an increase in the provision for military workers compensation.

26

Part One

�4��4��

��,,�� -��-��&

The actual strength of the permanent component of the ADF as at 30 June 1999 was 52,019(comprising 13,399 Navy, 23,906 Army and 14,714 Air Force personnel). Enlistments for thetwelve months to June 1999 were 3,705 made up of 3,157 men and 548 women. This is 378(9%) less than for the same period last year. Navy enlistments decreased by 227 (18%), Armyenlistments increased by 358 (22%) and Air Force enlistments decreased by 509 (43%) whencompared with the figures for the same period last year.

Separations for the twelve months to 30 June 1999 were 6,645. This is 708 (12%) more thanthe same period in 1997-98. Navy separations increased by 144 (9%), Army separationsincreased by 386 (14%) and Air Force separations increased by 178 (11%) compared with thesame period in 1997-98.

Since 30 June 1998, the number of reserves with training obligations has decreased by 10%from 27,701 to 24,848. The Navy decreased by 79 (6%) to 1,217, the Army decreased by2,878 (12%) to 21,959 and the Air Force has increased by 104 (7%) to 1,672.

As at 30 June 1999, there were 17,191 Defence civilian personnel made up of 15,009 staffemployed on a continuing basis and 2,182 other staff employed primarily as short-termtemporary staff, an increase of 388 since 30 June 1998. Civilian numbers include part-time,paid, unpaid, operative and inoperative personnel.

More detailed information on personnel can be found in Appendix I to Part One of this report.

-��-��&��,��#��9!"��#��.!��

Defence contributes to social justice and equity issues through the implementation of personnelpolicies and practices based on merit and a philosophy of a ‘fair go’ for all staff.

Social justice is the over arching concept that forms the legislative cornerstone from whichequity and diversity evolved in Defence. During the last year, Defence continued coordinatedreporting, network creation, and awareness and training activities. Policy and procedureswere consolidated into a Defence Instruction (General) and Departmental Personnel Instructionscovering discrimination, harassment and unacceptable behaviour in the ADF. Several bookletson behaviour were issued throughout the year.

More detailed information on social justice and equity can be found in Appendix J to Part Oneof this report.

��/�� -��

In 1998-99, Defence spent a total of $40.5m on purchasing non-operational training anddevelopment activities. This included expenditure on professional service providers for deliveryof training courses and on activities such as attendance at conferences and seminars, externaltraining courses, information technology training and attendance for both Service and civilianmembers at university for an approved course of study.

Major initiatives during this reporting period included the development and promulgation of adedicated training package to support the implementation of the civilian performancemanagement scheme across Defence and the introduction of an executive leadership programfor senior officers at the lieutenant colonel (equivalent) and above level (both civilian andmilitary).

27

Human Resources

Defence continued to give high priority to the recruitment of graduates. In 1998-99, Defenceemployed 50 graduates under the general Australian Public Service scheme, 46 graduateacquisition trainees and 20 graduate acquisition trainee engineers.

A Graduate Resource Officer Scheme was also undertaken in 1999 with 19 participants. Thisscheme was a one-off program to recruit graduates with the finance and accounting relatedqualifications and skills to assist with Defence’s transition to accrual accounting and budgeting.

During 1998-99, Defence also recruited 29 Trainee Administrative Service Officers under thePublic Administration Traineeship Program. Upon successful completion of their traineeship,these officers receive a Certificate II in Public Administration and are advanced to an ASO1position.

As a result of devolving responsibility for training to individual Groups, a consolidated recordof attendance of personnel at external training courses is no longer available. The corporatepersonnel management system, which is currently under development, will include aprofessional development and training database that will record non-operational trainingstatistics. On current timing, the first statistics to be recorded will be those for 2000-01.

Major internal training providers in Defence have recorded the following information onattendances and training days for the non-operational training and development that theymanage. This includes the areas of financial management education and training, acquisitioneducation and training, the joint education and training agency and regional education trainingand development units.

Table 11: Non-Operational Internal Training Statistics

Person Days Spent on Training Non-Operational Training Attendances

55,029 27,928

28

Part One

+��%��)4��

��#�!��

��,��#��!��+�� -��!��

The Defence Audit and Program Evaluation Committee met four times (July, September, Decemberand April) in 1998-99. During the year the revised composition and functions for the committeewere agreed by the Secretary to the Department of Defence as Chief Executive. The revisedcomposition and functions take into account the requirements for audit committees in accordancewith section 46 of the Financial Management and Accountability Act 1997 and associatedFinance Minister’s Orders.

The committee membership is drawn from the Defence Executive and comprises Deputy SecretaryResources and Management - Chair, the Vice Chief of the Defence Force - Deputy Chair, DeputySecretary Acquisition, and Commander Support Australia, an appointed independent member(currently Mr Will Laurie of PriceWaterhouseCoopers). The Auditor-General or a representativehas permanent observer status, while the First Assistant Secretary Resources and FinancialPrograms and the Inspector-General advise the committee.

During 1998-99, the committee addressed the following subjects:

• Management Audit Branch Annual Report for 1997-98 and the Audit Work Program for1998-99;

• 1998-99 Australian National Audit Office Performance Audit Work Program;

• Defence Financial Statements 1997-98 Progress Report and an Australian National AuditOffice Interim Audit Report on the 1997-98 Financial Statement Audit;

• Management Audit Branch Brief on the Global Audit Information Network Report;

• Consideration of the 1997-98 Defence Financial Statements;

• Progress Report on the 1998-99 Portfolio-Level Evaluations;

• Progress Report on Accrual Budgeting/Reporting Implementation;

• Progress report on the Implementation of an Internal and External Audit RecommendationFollow-up System;

• Management Strategy for the 1998-99 Financial Statements;

• 1998-99 Financial Statements - Progress Report;

• Medium Term Audit Strategy; and

• Schedule of Portfolio-Level Evaluations 1999-01.

The Auditor-General, Mr Pat Barrett, addressed the committee on corporate governance at theJuly 1998 meeting.

+��,��-��!��

The Defence portfolio evaluation strategy has been promulgated as a Defence Instruction(General). In accordance with that strategy, the Defence Executive has authorised a scheduleof portfolio evaluations covering both 1999-2000 and 2000-2001. In 1999-2000, the principalevaluation topics include strategic workforce management, risk management and further activityon customer/provider arrangements.

Reports on these portfolio evaluations will be forwarded to the Defence Executive through theDefence Audit and Program Evaluation Committee and outcomes will appear in next year’sannual report.

29


+��,��#$��!��,��-��!��"� ,��5667/66

The following evaluation activities were completed in 1998-1999:

• Minor Capital Acquisition Processes - A desktop review was completed in lieu of a fullevaluation. It was concluded that there were obvious similarities in the way the threeServices had separately acquired minor capital equipment; there were no majorimpediments to adopting a common minor capital management methodology; and therewas a potential to increase alignment between the minor and major capital acquisitionprocesses. A Report was submitted and accepted by the Commander Support Australia.The issue is now being progressed in the context of the ongoing reforms within SupportCommand Australia.

• Defence Community Organisation - The Final Evaluation Report has been presented tothe Secretary and the Chief of the Defence Force for their endorsement.Recommendations have been made on ways to improve the effectiveness and efficiencyof the newly integrated organisation, including in particular the need for full needs andusage analysis on services, cost-effectiveness studies and clear definition of the role ofthe Defence Community Organisation in support of Australian Defence Force operations.

• Customer/Provider Arrangements - A survey entitled ‘The Development of Customer/Provider Arrangements within Defence’ has been completed. In general terms, thesurvey illustrated the diverse nature of current arrangements and raised questions as tothe need for central guidance and the necessity for more formal structures and standards.These outcomes have informed the decision of the Defence Executive to commissionfurther work in the context of the 1999-2000 Schedule of Portfolio Evaluations. Anevaluation assessment has been initiated, and aimed at a more detailed and in-depthdescription of Customer/Provider Arrangements within a representative sample ofDefence Capability Outputs. A report is anticipated by December 1999.

• Interaction between Strategic Workforce and Capability Planning - The evaluationwas not completed in the intended format, with the issue being addressed in part withinthe Capability Management Improvement Team deliberations in 1998-99. Based uponthose deliberations and other factors, the Defence Executive has directed further workin the context of the 1999-2000 Schedule of Portfolio Evaluations. An evaluationassessment has been initiated into Strategic Workforce Management within Defence.As a first step, a report describing current processes and systems is anticipated byDecember 1999.

• Processes for Accounting for Uniformed Personnel and Management of Service Salaries- The evaluation has not been completed because of the effect of other initiatives. Theimplementation of the Personnel Management Key Solution project will involve newdefinitions and processing capabilities which, along with the reshaping of the ADF toreach its 50,000 level, require further research into their impact on accounting forpersonnel. The development of the department’s approach to strategic workforceplanning and the management of the ADF workforce towards its 50,000 level havemeant that a more corporate approach to the management of Service salaries has startedto evolve.

• Financial Management Skills within Defence - The evaluation was not completedbecause it was incorporated into the development of training requirements andcompetencies for the accrual framework and the implementation of a new resource andfinancial management system.

30

Part One

�8��#�!��

+��"

This section reports on the status of inquiries or other action by parliamentary committees inrelation to the Defence organisation in 1998-99. Significant issues are detailed here and furtherinformation can be found in Appendix L to Part One of this report.

9��!��,�+!��#��##�!��"��!��

Report 368, June 1999 - Review of Audit Report No. 34, 1997-98 New Submarine Project

The committee held a public hearing on the Australian National Audit Office Audit ReportNo. 34 of 1997-98, New Submarine Project, which was tabled in Parliament on 25 March 1998. The committee conducted three public hearings on 29 April 1998, 5 and22 March 1999, at which evidence was taken. The hearings focused initially on the findings ofthe audit report and, in the 1999 hearings, on submarine capability. A Government responseto the report is currently being prepared.

9�� ,,��"2��,��#��

Inquiry Into Military Justice Procedures

A Defence witness appeared before the Defence Sub-Committee on 24 July 1998. The Chiefof Navy forwarded a submission to the sub-committee on 18 August 1998. Some members ofthe sub-committee visited the Defence Force Corrective Establishment at Holsworthy on6 May 1999. The report of the inquiry was tabled on 21 June 1999 and the Department ispreparing the Government response.

Inquiry into the Level of Funding Required for the ADF

The Government response had not been tabled as at 30 June 1999.

Inquiry into the Suitability of the Australian Army for Peacetime, Peacekeeping and War

On 27 April 1999 the Minister for Defence requested that the committee investigate and reporton the suitability of the Australian Army for peacetime, peacekeeping and war. The inquirywill review the current and proposed changes to the Army to ensure that it provides viable andcredible land forces able to meet a range of contingencies. The committee was requested totake into account:

• The Fundamentals of Land Warfare document, released in March 1999;

• the Restructuring of the Army initiative;

• the Defence Reform Program;

• ADF force structure and preparedness;

• the role and impact on full-time and part-time personnel; and

• Australia’s Strategic Policy (1997)

The Defence submission was submitted on 2 July 1999.

31


9��!��+!��#��'"

Lavarack Barracks Redevelopment Stage Two

The Parliamentary Works Committee hearing for the second stage of the Lavarack Barracksredevelopment was held on 25 August 1998. The project was approved by Parliament on17 February 1999 with the committee recommending the project proceed at an out-turn cost of$139.3m. The project includes construction of air-conditioned living-in accommodation,messes, a communications centre, facilities for a transport squadron, a deployment and assemblyarea, an east-west trunk road and waste collection facilities.

RAAF Townsville Redevelopment

The committee hearing for the RAAF Townsville redevelopment was held on 16 June 1999.Parliamentary approval is awaited.

Collocated ADF Staff Colleges Canberra

The committee held a public hearing for the ADF collocated staff colleges projects in Canberraon 11 June 1999. Parliamentary approval is awaited.

RAAF Darwin Redevelopment

The committee reviewed the project on 11 February 1999 and agreed that it could be deliveredas three medium works, without further requirement for a public hearing. Tender documentationis being prepared and works are planned to be completed by December 2000.

�� ,,��"2��,��#��)� �"��

During the year, Defence witnesses appeared before the Senate Foreign Affairs, Defence andTrade Legislation Committee on three occasions. Each appearance related to the organisation’songoing performance and external reports, such as the Defence Annual Report 1997-98 andthe Defence Portfolio Budget Statements 1999-2000. Approximately 200 questions were takenon notice and responses provided.

The committee also produced a report examining the Defence Annual Report 1997-98. Thecommittee noted an improvement in the presentation and cohesiveness of the report althoughthe committee criticised Defence for not explicitly addressing performance measurement inthe Program section. Defence has attempted to address this criticism in the current annualreport by directly reporting Group performance measurement as forecast in the Defence PortfolioBudget Statements 1998-99 or, if applicable, revised in the Defence Portfolio AdditionalEstimates Statements 1998-99.

32

Part One

�!��/%��:"��"

Five Auditor-General’s reports relating specifically to Defence were tabled during the year. Thefindings and recommendations of each report have been referred to the relevant Defence Groupfor implementation.

Audit Report No. 2, 10 July 1998 - Performance Audit - Commercial Support Program

The audit was conducted in order to assess whether the Commercial Support Program wasmeeting its objectives and to identify any areas where it may be possible to improve its timelinessand therefore its cost effectiveness.

The Audit Office made 17 recommendations aimed at improving Defence administration andthe outputs and outcomes from the market-testing process. The Department agreed with 10 ofthe recommendations, agreed with qualification to a further five and disagreed with two.

Audit Report No. 17, 25 November 1998 - Performance Audit - Acquisition of AerospaceSimulators

The objective of the audit was to assess whether Defence had developed appropriate policiesto provide guidance to personnel in the acquisition and use of aerospace simulators and theeffectiveness of its acquisition procedures in achieving best value for the Commonwealth.The scope of the audit was restricted to aerospace simulators due to their importance for Defencetraining and because issues that apply to aerospace simulators acquisition also are applicableto many other training simulators in Defence. Aerospace simulators have a particularsignificance for the safety of personnel.

Defence responded positively to the audit and agreed to implement the Australian NationalAudit Office recommendations, with two subject to qualification.

Audit Report No. 41, 24 May 1999 - Performance Audit - General Service Vehicle Fleet

The objective of the performance audit was to assess the effectiveness of, and to identifypossible areas for improvement in, Defence management of the general service vehicle fleet.The focus of the audit was on the through-life management of the in-service fleet, includingthe determination of vehicle requirements and associated approaches to fleet replacement.The scope of the audit did not, therefore, specifically address the purchasing/acquisition anddisposal processes in the life-cycle of the vehicle fleet.

The Australian National Audit Office made 15 recommendations directed towards improvingmanagement and accountability, achieving savings in operating costs and greater efficiencyand effectiveness. The Department agreed to all recommendations.

Audit Report No. 44, 27 May 1999 - Performance Audit - Naval Aviation Force

The objectives of the audit were to assess whether planning, management and resource allocationmechanisms and practices were conducive to achieving the Naval Aviation Force’s objectivesin a cost-effective manner.

The focus of the audit was on the efficiency and effectiveness of Defence’s management ofthe Naval Aviation Force in achieving its required capability within budgeted resources.

The Australian National Audit Office made 12 recommendations aimed at improving theefficiency and effectiveness of the management of the Naval Aviation Force. Defence agreedto all of these recommendations.

33


Audit Report No. 46, 10 June 1999 - Performance Audit - Redress of Grievances in theAustralian Defence Force

The objective of the audit was to ascertain whether the redress of the grievances system couldbe refined to improve efficiency and timeliness in processing complaints, while preserving theequity and transparency the current system provides.

The Australian National Audit Office made 14 recommendations aimed at improving theefficiency and effectiveness of the current system. Defence fully agreed to eight of therecommendations, while the remaining six recommendations were agreed with qualifications.

��,��#��#��!�"��

There were no formal reports issued to the Chief of the Defence Force pursuant to Section 15of the Ombudsman Act 1976, nor were there any reports raised under sections 16, 17 or 19 ofthe Act relating to the operations of the ADF during the period under report. However, theOmbudsman has raised the matter of ongoing delays in the processing of applications forredress of grievance for ADF members and the delays in processing of military compensationreview scheme cases, with delays being attributed to the level of resources committed to suchmatters.

At the Chief of the Defence Force’s suggestion, the Australian National Audit Office conductedan audit of redress of grievance in the ADF between April 1998 and June 1999. The Ombudsmanwas asked to comment on the 14 audit recommendations but is adopting no public stance, asthey are Defence issues.

An Ombudsman implementation team has been working on a number of recommendationsmade by the Ombudsman in relation to the way the ADF responded to allegations of seriousoffences. These recommendations, which were released by the Ombudsman and Vice Chiefof the Defence Force in January 1998, have to a large extent been subsumed by the ParliamentaryInquiry into Military Justice Procedures. The inquiry’s recommendations are being examined.Most of these recommendations were anticipated in view of the Ombudsman’s recommendationsand have been incorporated in the newly-drafted manual entitled Administrative InquiriesManual (previously entitled Administrative Inquiries and Investigations in the ADF). Thismanual is expected to be released in the near future.

34

Part One

��#�"��"��,��!��"��!��"

During the year, there were no decisions of a court or tribunal in relation to matters handled bythe Defence Legal Office which resulted in a significant change to current law.

Litigation continues in relation to common-law actions for negligence by former crew membersof the former HMAS Melbourne. Generally, the plaintiffs are claiming post-traumatic-stressdisorder arising out of the collision of former HMA Ships Voyager and Melbourne in 1964.All claims have been lodged recently and are subject to the defence that the claims are statute-barred under statute of limitations legislation. Matters are being settled on a case-by-casebasis.

��,��#��-�#��$��

The Defence Service Charter was introduced on 1 August 1998. Defence has complied fullywith all government requirements in the first year of the charter’s operation. An effectivemonitoring system is in place, feedback from customers has been evaluated and cost-effectivemeans of improving performance against standards and raising customer/staff awareness arepresently under consideration.

As part of its reporting obligations under the charter, Defence committed to reporting to theMinister for Defence annually on the extent to which it is meeting the performance standardsrelating to the charter. In addition, Defence has provided mandatory input to an annual whole-of-government report and is required to publish information on the charter in its departmentalannual report. The report to the Minister is reprinted in full in Appendix K to Part One of thisreport.

35

Defence Organisational Structure

5667/66��%��)��4��4��

+��"�� "��$�� "

Over the past year, there have been several significant movements at the senior levels of theDefence organisation, including new appointments to the position of Chief of the DefenceForce, Vice Chief of the Defence Force and Service Chiefs.

In July 1998, Admiral Chris Barrie replaced General John Baker as the Chief of the DefenceForce. At the same time, Lieutenant General Frank Hickling and Air Marshal Errol McCormacktook up the posts of Chief of Army and Chief of Air Force respectively. Air Marshal DougRiding took up the post of Vice Chief of the Defence Force. In July 1999, Vice Admiral DavidShackleton took up the post of the Chief of Navy.

Other senior personnel changes included the appointment of Mr Patrick Hannan as Head,Defence Information Systems Group in November 1998 and Mr Claude Neumann as Inspector-General in September 1998. In May 1999 Air Commodore Ken Birrer was appointed to act asHead, Joint Education and Training Group.

%��!��!#�!��$�� "

After the major organisational changes resulting from the Defence Efficiency Reviewrecommendations, the organisation of Defence consolidated during 1998-99. Twoorganisational changes during the year were as follows:

9��!#��

The Sub-Group Education and Training Services changed its name from Joint Officer Educationat the 1998-99 Budget.

��,��#��,��"��"

The Defence Information Systems Group changed its name from the Corporate InformationGroup in November 1998.

36

Part One

��%��)��

Strategic Policy and Plans

International Policy

Group 1 Capability Program and Resources Planning

Defence Capability Development

Headquarters National Support Division

Strategic Command

Australian Theatre

Group 2 Combat Forces

Navy Executive

Training


Army Executive

Training


Air Force Executive

Training

Group 5 Defence Intelligence Organisation

Intelligence Defence Signals Directorate

Executive

Group 6 Logistics Operations - Navy

Support Command Logistics Operations - Army

Logistics Operations - Air Force

Emergency Management Australia

Group 7 Education and Training Policy

Joint Education

and Training Education and Training Services

37

Defence Organisational Structure

Group 8 Personnel Executive

Defence Personnel Personnel Policy

Executive Personnel Management

Defence Health Services

Group 9 Capital Equipment

Acquisition Industry and Procurement Infrastructure

Group 10 Aeronautical and Maritime Research

Science and Electronics and Surveillance Research

Technology Executive and Support

Resources and Policy

Group 11 Project Delivery

Defence Estate Property Management

Estate Operations and Planning

Group 12 Information Policy and Plans

Defence Information Information Management Services

Systems Information Infrastructure

Year 2000 Project Office

Group 13 Corporate Support

Defence Corporate Base Support

Support Public Affairs

Legal

Group 14 Inspector-General

Finance and

Inspector-General Resources and Financial Programs

38

Part One

178

Part Two

179

��

��

To achieve Defence objectives and the production of related outputs through:• developing strategic policies, force structures and warfighting strategies which enable

the ADF to achieve its mission;• providing strategic and operational level command capabilities for more effective and

efficient command of ADF operations;• shaping Australia’s long-term strategic environment to reduce the likelihood of threats

to Australia and its interests, and increase opportunities to work with others to dealwith any threats;

• shaping Australia’s national support base to ensure the ADF is supported as costeffectively as possible;

• providing strategic policy advice to government;

• developing a strategic planning and management framework to provide better decision-making and organisational effectiveness in long-term planning and short to medium-term resource decisions; and

• attracting, developing, and retaining highly-skilled, educated and motivated people aspart of an integrated Defence Headquarters.

� ��

The Group is jointly managed by the Vice Chief of the Defence Force and Deputy SecretaryStrategy and Intelligence. The Group comprises seven areas; Strategic Policy and Plans,International Policy, Capability Program, Capability Development, National Support Division,Strategic Command, and Australian Theatre.

��

Advice on strategic policies provided to government is accurate, timely, responsive andinnovative, and offers practical and cost-effective approaches to fulfil the Government’s defenceresponsibilities

The Australian Military Strategy ,with its framework of five subordinate strategies, has beenapproved by the Chiefs of Staff Committee for planning and development purposes. Thestrategy provides military response options to government and military strategic planningguidance to Defence.

Defence resources are efficiently matched to strategic priorities to ensure that the ADF developsthe maximum appropriate capability for each dollar spent

Senior Defence committees considered a range of capability proposals to ensure that theallocation of Defence resources matched strategic priorities. The subsequent recommendationsto the Government reflected levels of investment consistent with strategic priorities, as well asthe primacy of value-for-money principles. Major achievements included the preparation ofthe new major investment section of the November 1998 and the 1999-2000 budget submissionsto Cabinet, which agreed all major investment proposals, and Government approval of interimminimum operational capability for the Collins-class submarine.

180

Part Two

Long-term planning is improved to allow better and earlier decisions to be taken to achievemajor strategic objectives

The Office of the Revolution in Military Affairs has been established and commenced its taskof monitoring and identifying emerging technologies to enhance ADF combat capabilities.The development of the long-term planning process continued to inform decision making inDefence Headquarters and subsequent advice to government.

Force development decisions are made quickly and rigorously taking full account of strategic,technical, operational and industrial factors

As a major priority, a revised capability development process is being implemented as aconsequence of the recommendations of the capability management improvement team beingendorsed by the Defence Executive. The aim is to develop a more iterative and rigorousapproach to seeking information on capability proposals, and to develop a better appreciationof whole-of-capability and strategic resource issues. Internal feedback indicates that ongoingeffort is required to promote a better understanding of these processes throughout Defence.

Clear direction is provided to other parts of the Defence organisation on priorities for allaspects of capability development including equipment, training, support and doctrine

The Defence Headquarters provided guidance to the Defence organisation on capabilitydevelopment matters through support to the Defence Capability Committee. This committeemade recommendations to the Government on a range of capability proposals including the1999-2000 budget submission and the production and distribution of guidance documentationfor Defence major capital equipment proposals.

A new unclassified ‘Pink Book’, the primary guide to Defence major capital equipmentproposals, was produced in conjunction with Industry Procurement Infrastructure Division.The document included expanded project descriptions to provide assistance to industryundertaking Defence contracts. There was an increased participation in acquisition source-selection activities through input to equipment acquisition strategies, requests for proposal,tender evaluations and project review boards, interpreting and advising on endorsed capabilitypriorities and ensuring that post-approval considerations were consistent with guidance.

Australia’s strategic interests are served by the development of defence relationships andinternational cooperation, especially in regard to the maintenance of peace and stability inthe Asia-Pacific region

Details on the achievement of this measure are contained under Performance against Forecastssection in this Group report.

New strategic and operational headquarters provide effective command for ADF operationsat reasonable cost

Headquarters Australian Theatre has brought together the maritime, land, air, and specialoperations headquarters under the Commander Australian Theatre. This has enhanced theeffective planning and execution of ADF operations and the development of military responsesoptions for possible regional contingencies.

National support policies are developed which provide better support for the ADF to conductoperations more cost effectively

The endorsed National Support Agenda has established a basis for a coordinated approach todeveloping national support capability. Revisions to the long-term agreement for the supplyof ammunition have been structured to allow Australian industry to work with the ADF tomeet its changing requirements. The ADF capability for movement at strategic and operational

181

Group One: Defence Headquarters

levels was enhanced by a better understanding with Australia’s civil airlines and by the ADF’soperational requirements being recognised in national road transport reform. Work continueson removing or reducing constraints on contractor deployment to give the ADF access to abroader range of more responsive and reliable contractor support. A revised acquisition andcross-servicing agreement facilitates combined operations with the United States forces byproviding access to operational-level logistic support on a reciprocal basis.

The ADF is able to respond in a timely and effective manner to operational contingencies

Key outcomes have included continued strategic-level management and coordination ofcontingencies and crises, with production of appropriate Military Strategic Planning Guidanceand operational parameters for Defence. The command centre was able to deal effectivelywith contingencies arising in the period. Closer working relationships were achieved withinDefence, with other government departments and with allies.

��

The achievements for the Defence Headquarters in 1998-99 include:

�� !"�#� !$$�"%

� Developing warfighting concepts and doctrine for the Australian theatre

Partially Achieved as Forecast An interim edition of Australian Warfighting Concepts toGuide Campaign Planning has been promulgated and continues to influence the suite of ADFdoctrines. During the period, the focus on doctrine has been limited to developing and ensuringthe currency of doctrine needed specifically to support operations. The formal validation ofthe many volumes of current operational doctrine was a major objective of ExerciseCrocodile 99. Its conduct has provided an abundance of practical lessons that mark a maturingin the management of joint and combined operations and a divergence from published doctrinalpractice. Lessons captured from the exercise will be evaluated and integrated into doctrine ata faster rate, which will overcome recent limitations.

� Developing military contingency and campaign plans for the Australian theatre

Partially Achieved as Forecast The development of campaign planning continues, subjectto the finalisation of the Australian military strategy and its framework of five subordinatestrategies. Until these strategies are finalised, Headquarters Australian Theatre will focus onimproving internal processes associated with campaign and operational planning. It isanticipated that relevant campaign concepts will be completed by the end of 1999-2000.Experience derived from operations and exercises throughout the year contributed to a morerobust and mature process at the operational level. Relevant campaign concepts will be furtherdeveloped by the end of 1999-2000. Similarly, development of associated contingency andoperational plans will be facilitated by approval of the military response options being developedfor the Operational Preparedness Directive 1999 in conjunction with the Chief of the DefenceForce’s Preparedness Directive 1999.

� Conducting joint and combined operations

Achieved as Forecast Headquarters Australian Theatre completed a number of majoroperations during the reporting period. All of the completed operations satisfied their respectivestrategic military objectives. Further details on operations and exercises are available inAppendices C and D to Part 1 of this report.

182

Part Two

&&�'� (��"��"�� !"�#��&�"'��#�� !")* �)��"%� !"�� +,� !"��!��"��"�� !"�#��'� ( � �)

� Further development of international defence relationships consistent with Australia’sstrategic policy

Partially Achieved as Forecast The dramatic unfolding of events in East Timor, and thesubsequent passing of a United Nations Security Council mandate inviting Australia to lead amultinational force in East Timor, has recast the context in which the bilateral defencerelationship with Indonesia was being conducted. Military exercises and skills training havebeen suspended. Further progress on achieving the earlier strategic objectives will be subjectto meeting the Government’s priorities in East Timor.

Defence has managed the impact on the Five Power Defence Arrangements of complexdevelopments in the bilateral relationship between Singapore and Malaysia. A cooperativedefence relationship with Vietnam has been established and a Defence Attaché position createdin Hanoi.

The Defence Headquarters coordinated an expanded Australia/New Zealand personnel exchangeprogram, as agreed in the Joint Ministerial Statement of Future Directions in Closer DefenceRelationships, and prepared for significant changes in the modalities of the intelligencerelationship with the United States.

The Group contributed to the whole-of-government approach to defence relations in SouthAfrica and the management of the defence aspects of the Government’s response to nucleartests by India and Pakistan. Defence Headquarters provided policy advice to government onthe legislative implementation of Australian obligations under the Ottawa Treaty on Anti-Personnel Landmines leading to Australian ratification of the treaty on 17 December 1998.The Group participated in the international diplomatic conference that saw the establishmentof the Statute of the International Criminal Court in July 1998, and contributed to Defenceadvice on the whole-of-government position on the international control of small arms as wellas the use of child soldiers.

Consideration was given to options for ADF basing in the Gulf, in the event that the internationalcoalition against Iraq is reformed, and reinforcing defence relations with Gulf states throughthe provision of ADF training courses.

� Enhancement of alliance relationships through activities such as Ausmin 98, political/military talks, defence and strategic dialogue and bilateral regional discussions

Achieved as Forecast Key outcomes that contributed to the enhancement of relationshipsincluded the CDF/PANGAB forum, which was designed to assist the Indonesian Armed Forcesto adjust constructively to the wider changes in the Indonesian state. This promisingdevelopment has subsequently been overtaken by events in East Timor and the furtherdevelopment of this process must await the future realignment of defence relations withIndonesia.

High-level seminars with Thailand have sought to influence the approach to reform of theRoyal Thai Armed Forces. Strategic dialogue discussions were held with the People Republicof China in August 1998. Defence gave support to the regional security and disarmamenttalks in December 1998.

Defence participated in annual high level dialogue with the United States through ministerialmeetings (Ausmin 98) and meetings of high-level military representatives (Milreps 98).Dialogue was conducted with Japan through the Asia Pacific Forum for policy officers and theAsia-Pacific Defence Authorities Forum. The first political/military talks were held with Russiain November 1998. Defence also supported the political/military and military/military talkswith the Republic of Korea in September 1998.

183


� Organising and conducting, on behalf of both Defence and Foreign Affairs, a regionalseminar conducted under the auspices of the Association of South East Asian NationsRegional Forum, on the production of defence policy documents

Achieved as Forecast

� Developing and instituting enabling arrangements for logistic support to and fromfriends and allies

Achieved as Forecast Key outcomes included the initiation of negotiation of a memorandumof understanding on defence logistic support with the Republic of Korea and participation inbilateral logistics working groups and multilateral forums. The completion of a revisedAustralian/United States acquisition and cross-servicing agreement, signed in December 1998,and continued development of improved mutual logistics support arrangements with the UnitedKingdom, Canada, New Zealand, Singapore, Thailand and France were further outcomes.

��- '� !$$�"%��"%��!# '.

� Developing and introducing new strategic planning processes including long-termplanning, the Australian Military Strategy and its five subordinate strategies andimproved preparedness planning

Partially Achieved as Forecast The framework of military strategies, including DefeatingAttacks against Australia; Defence of Regional Interests, Defence of Global Interests, Protectionof National Interests, and Shaping the Strategic Environment was completed. Work continueson the overarching Australian military strategy.

The proposed production of a Defence future directions paper by November 1998 was revised.The Chief of the Defence Force and the Secretary to the Department decided that assuring theproposed process was more important than forcing consideration within the November time-frame. The process will be refined through 1999.

Other key outcomes have included production of the Defence corporate plan Defence OurPriorities. The Defence Executive reviewed capability assessment reports and endorsed theDefence capability planning system in December 1998. Attribution rules to support thetranslation of Group-based budgets to the first output/accrual five year Defence program weredeveloped.

� Improving the mechanisms for coordination and management to deal with crises

Achieved as Forecast Key outcomes have included the continued effective strategic-levelmanagement and coordination of contingencies and crises. Appropriate military strategicplanning guidance and operational parameters for Defence have been produced and a responsiveand capable command centre to deal with contingencies has been established. The ADFcontribution to the national crisis management machinery has been improved. Close workingrelationships, agreed doctrine and communications interoperability have been developed withclient organisations including other government departments, allies and potential coalitionpartners.

� Ensuring a more strategic capability focus in ‘whole of Defence’ resource decisionmaking and management

Achieved as Forecast A number of capability analysis studies have been completed intointegrated surveillance, bulk liquids distribution, the Jindalee operational radar networkdevelopment path, ADF afloat support, littoral operations, and nuclear, biological and chemicalweapons defence. The study into integrated surveillance resulted in several proposals concerningthe management of the capability being accepted and the study into bulk liquids distribution

184

Part Two

identified a number of innovative low-cost, high-return options, and initiated a number ofimportant capability enhancements.

A conceptual framework for describing the ‘knowledge edge’ as a key capability priority isbeing prepared. This will be published to enable informed public considerations of this complexissue. Numerous ad-hoc cost/capability analyses were conducted, including the scrutiny ofthe British Aerospace data on the Euro Fighter 2000, the business case on the future of theHS748 aircraft, the possible utility of small satellites and commercial remote-sensing data andthe possible utility of high-speed patrol vessels. A commercial high-resolution remote sensingsystems has moved from the study phase to a project for early progression.

� Improving the capability development process with particular focus on ‘whole ofcapability’

Achieved as Forecast The revised capability development process has been implemented.The new process will facilitate a more iterative approach to seeking information on capabilityproposals prior to their entry into the future investment program or consideration by committee.The earlier engagement of stakeholders will provide more rigorous analysis and robustinformation on whole-of-capability issues, including personnel, training and logistic support.

The new process will also enable examination of capability proposals in the context of Defenceoutputs to develop a better appreciation of whole-of-capability and resource issues. It willalso provide stakeholders with better information about the resource environment and moretimely consideration of issues relating to real cost increases.

� Providing advice to government on Defence capabilities and force structure prioritiesthrough the development and review of all proposals for major equipment and facilitieswhich are planned for Government approval during 1998-99 and in the 1999-2000Budget

Partially Achieved as Forecast The Government approved the November 1998 investmentsubmission. Recommendations were made to extend the life of patrol boats but decision onthe acquisition of new vessels, acquiring new infantry mobility vehicles, rescoping the approachto electronic self-protection for ADF aircraft and installing the countermeasures system on theF-111 aircraft were deferred.

The Government approved the 1999-2000 budget submission including acquiringreconnaissance and aerial fire support helicopters, acquiring additional air-to-air missiles forthe F/A-18 aircraft, further developing the joint command support system and the jointintelligence support system, providing F-111 aircraft with electronic countermeasures andacquiring an enhanced air combat training system. In addition, the Government approved, inJune 1999, the interim minimum operational capability for Collins-class submarine.

Rigorous analysis of all capability proposals was undertaken prior to their consideration for1998-99 and 1999-2000 funding.

� Developing concepts, high-level strategies and policies and establishing agreementsand other arrangements which will enable the engagement of national supportcapabilities

Achieved as Forecast The Defence Executive endorsed a whole-of-Defence strategic-levelagenda under which the Government’s policy for national support (announced in the 1998Defence and Industry Strategic Policy Statement) will be pursued. Determination of the ADF’sstrategic-level requirements for national support (including critical infrastructure) was initiatedusing defence futures concepts, the suite of military response options and associated strategicguidance. Arrangements at both the federal and state/territory government level were made to

185


identify and influence relevant infrastructure and legislative developments. ADF strategicand operational requirements for industry support were included in such commercialdevelopments as the sale of Australian Defence Industries limited, the revision of the ammunitionsupply agreement with Australian Defence Industries and support for Navy ships in WesternAustralia.

• Developing and implementing arrangements for early and effective industry engagementin capability planning and development

Achieved as Forecast Industry engagement in capability planning and development hasbeen enhanced in 1998-99 with the establishment of the Capability Development AdvisoryForum and the subordinate environmental working groups. The aim of these bodies is toexpose Defence’s capability proposals to industry at an early stage in development and toinvite industry interaction and feedback. An initial meeting with industry representatives washeld in December 1998 and the first forum meeting for 1999 was held in April. The full effectof these changes is currently being assessed.

��

Table 1.1: Defence Function Outlays Summary

Sub-Group 1998-99 1998-99 1998-99 VariationBudget Revised Actual (98-99 Actual less


1.1 Strategic Policy and Plans 5.3 5.6 5.6 0 0.31.2 International Policy 81.5 82.3 78.1 -4.2 -5.01.3 Capability Program and

Resources Planning 58.1 17.7 8.1 -9.6 -54.41.4 Capability Development 12.1 11.1 10.9 -0.3 -2.51.5 National Support 4.8 3.9 4.0 0.1 3.01.6 Strategic Command 6.7 4.5 5.2 0.7 14.51.7 Australian Theatre 33.2 46.0 47.3 1.2 2.7Group Total 201.7 171.1 159.1 -12.0 -7.0

Table 1.2: Staffing Summary


Estimate Estimate Outcome Revised Estimate)Personnel Numbers No %

1.1 Strategic Policy and Plans 64 63 64 1 1.61.2 International Policy 221 222 221 -1 -0.51.3 Capability Program and

Resources Planning 71 74 70 -4 -5.41.4 Capability Development 132 124 128 4 3.21.5 National Support 57 38 42 4 10.51.6 Strategic Command 80 51 51 0 01.7 Australian Theatre 686 837 740 -97 -11.6Group Total 1,311 1,409 1,316 -93 -6.6

186

Part Two

Table 1.3: Staffing Profile

Personnel Sub-Group1.1 1.2 1.3 1.4 1.5 1.6 1.7 Total

Permanent 98-99 Budget 21 155 7 121 38 71 449 862Force 98-99 Revised 22 157 11 112 19 42 602 965

98-99 Actual 22 157 11 112 19 42 602 965Civilian 98-99 Budget 43 66 64 11 19 9 28 240

98-99 Revised 41 65 63 12 19 9 26 23598-99 Actual 42 64 59 16 18 9 26 234

Reserves 98-99 Budget 0 0 0 0 0 0 209 20998-99 Revised 0 0 0 0 0 0 209 20998-99 Actual 0 0 0 0 5 0 112 117

Total 98-99 Budget 64 221 71 132 57 80 686 1,311Personnel 98-99 Revised 63 222 74 124 38 51 837 1,409

98-99 Actual 64 221 70 128 42 51 740 1,316

��&�"'��&!�$��!-��$��!-��))

The Defence Reform Program gains in 1998-99 related primarily to across-the-board efficienciesgenerated in administrative expenses. In the area of capability development, gains from therationalisation of the former Forces Executive and Strategy & Intelligence Programs wereused to almost completely offset the Defence Reform Program-endorsed initiative to provideadditional strategic guidance within Defence Headquarters. The one-off Defence Cooperationsavings of $5.7m reflected a general scaling back of assistance activities in line with a morestrategic approach to Defence Cooperation funding.

Table 1.4: 1998-99 Defence Reform Program Resources Available for Reinvestment



Capability Development 0 0 -0.1 -0.1 0Science and Technology 0 0 0.1 0.1 0Administrative Support 0.4 0.4 0.4 0 0Defence Cooperation One-Off Gains 0 5.1 5.7 0.6 11.8Total 0.4 5.5 6.1 0.6 10.9

Table 1.5: 1998-99 Defence Reform Program Personnel Reductions - ADF

Category 1998-99 1998-99 1998-99 VariationBudget Revised Actual (98-99 Actual less


Capability Development 0 0 -1 -1 -Science and Technology 0 0 1 1 -Total Personnel Reductions 0 0 0 0 0

Table 1.6: 1998-99 Defence Reform Program Reinvestment



DRP Transition Costs 0 0 0.3 0.3 -Total 0 0 0.3 0.3 -

187


Table 1.7: Reconciliation of Appropriations for the Australian Defence Headquarters



180-01 Running CostsService Personnel 51.1 58 58.5 0.5 0.9Civilian Personnel 14.4 14.6 15.4 0.8 5.4Administrative Expenses 15.3 20.6 20.0 -0.6 -3.0Facility Operations 0 0 0 0 0

180-02 Other Services 0.1 0.1 0.1 0 0181 Equipment & Stores 54.5 13 3.7 -9.3 -71.5182 Defence Cooperation 67.4 65.7 62.7 -3.0 -4.5Total Defence FunctionAppropriations (A) 202.8 172.0 160.5 -11.6 -6.7Total Defence Function Receipts(Offset within Outlays) (B) -1.1 -0.9 -1.4 -0.5 53.3Total Defence Function Outlays(C) = (A+B) 201.7 171.1 159.1 -12.0 -7.0

Full accrual information for this Group is available in the 1998-1999 Financial Statements inAppendix F to Part One of this document.

Table 1.8: Major Variations between 1998-99 Revised Estimate and 1998-99 ActualOutcome

Appropriation $m180-01 RUNNING COSTSService Personnel ($0.5m)

Miscellaneous minor variations 0.5Civilian Personnel ($0.8m)

Miscellaneous minor variations 0.4Net Group transfers 0.1Defence Reform Program ReinvestmentDefence Reform Program related redundancies 0.3

Administrative Expenses (-$0.6m)Net Group transfers 0.1Miscellaneous minor variations -0.2Lower than anticipated requirement for studies related to newcapital equipment projects -0.5

181 EQUIPMENT & STORES (-$9.3m)Miscellaneous minor variations 0.4Net Group transfers, primarily associated with the new majorinvestment program -9.7

182 DEFENCE COOPERATION (-$3.0m)General reduction in activities primarily associated with PNG andASEAN including reduced training activities and the deferment andcancellation of projects. -2.4Defence Reform Program GainsRelated to one-off gains -0.6

DEFENCE PORTFOLIO RECEIPTS (-$0.5m)Miscellaneous minor variations -0.5

188

Part Two

189

��/��0

��

The Navy Group objective is:

• to be able to fight and win in the maritime environment as an element of a joint orcombined force;

• to assist in maintaining Australia’s sovereignty; and

• to contribute to the security of our region.

� ��

The Royal Australian Navy contributes to the achievement of Defence objectives through theprovision of forces for maritime operations, including patrol and response, interdiction andstrike, and peacetime activities.

The Group Manager is the Chief of Navy, who commands the Navy and is responsible for thepreparation of forces for the conduct of maritime operations and the efficient and effectivestrategic management of the Group. The Navy Group comprises three areas: Combat Forces,Executive, and Training.

��

The achievement of the Navy’s outcomes has been measured as follows:

��(.1)��!�#�

The degree of professional competence, as measured by the ratio of unqualified incumbents tobillets filled, the degree of retention (the willingness to continue in Navy service as opposed toother alternatives) and personal satisfaction of Navy uniform and civilian staff as measuredby their attitudes to their work

Navy’s improved performance measurement framework has provided a more effectivemechanism for measuring and analysing personnel data across the service. Management ofNavy’s uniformed workforce has proved a difficult management challenge during 1998-1999in view of a number of factors:

� Average strength was 189 under the Budget forecast of 13,850 personnel.

� Navy separations increased by 144 or 9% in 1998-99 when compared to 1997-98 results.The high separation rates are compounded by very low recruiting outcomes with targetsfailing to be achieved by an average of 24% across all categories, with up to 30% in thetechnical categories.

� The areas most affected by the separation rates are guided missile destroyer marinetechnical sailors, guided missile frigate Mark 92 weapons system specialists, submariners(Collins-trained personnel) and the clearance diver category.

Seventy-six percent of uniformed personnel have the required qualifications for their billetsand reviews of billet training requirements are ongoing. In an effort to overcome shortfalls intrained submariners, Training Command has significantly increased the throughput of submarinetrainees. Training throughput has increased 40% from last financial year to 168 personnel forthis financial year. Personal satisfaction data was not measured during the period but wasincorporated into an ADF-wide survey conducted in July 1999.

��(.1)��!�#�

190

Part Two

�� !")��"%��%"�))

The Navy’s ability to meet the requirements of Chief of Defence Force’s Preparedness Directive1998 and Commander Australian Theatre’s Operational Preparedness Directive 1998. Actualachievement of planned operations and exercises will be measured against the requirementsof the Overseas Activities Directive and the Program of Major Scheduled Activities

The Navy was able to meet the Government’s preparedness requirements in respect to thedeployment of HMAS Melbourne to the Multinational Interception Force (Operation Damask)in May 1999 and the acquisition and deployment of HMAS Jervis Bay to Darwin by 30 June1999. The Navy continues to successfully support Operation Bel Isi (peace monitoring inBougainville).

The Navy’s ability to maintain core skills and professional standards for readiness continuesto be challenged from personnel and logistic support pressures.

�!�'��,'�,��

New capabilities being introduced into service will be compared against the detailed operationalrequirement prior to acceptance. New equipment proposals will be compared against endorsedstrategic guidance

The Chief of Navy currently manages six defence outputs. Active programs for the introductioninto service for Anzac-class ships, Huon-class minehunters, and Collins-class submarines areunder way. A similar process has been initiated for the amphibious lift capability.

�,) "�))��'� '�)

The implementation of a more structured approach to planning and decision making; thedegree to which Defence Reform Program savings and reinvestment targets for 1998-99 aremet; and the degree to which linkages can be drawn between resource levels, capability outputsand the Navy’s Future Directions

To account for the Chief of Navy’s role as a capability manager, the Navy Headquarters wasreorganised in late 1998. The Headquarters retains three branches covering capabilitymanagement, strategy and management, and resources planning. In support of the capabilitymanagement role, a Naval Capability Management Board has been established. The Groupachieved 92% of the revised Defence Reform Program savings forecast of $7.7m.

The framework for attributing resources to capability outputs was established in preparationfor the 1999-2000 budget and will be improved as part of the wider Defence managementframework in the new accruals and output-based environment. Improvements were introducedin the identification of budget levels to capability outputs, particularly for logistic costs.

!��!��)�!") + # � �)

Measurements will address the deployment and engagement of Navy assets to produce non-military outputs

The Navy continued to contribute to national support tasks in the form of providing assets insupport of civil surveillance and response operations, search and rescue operations and othernational support tasks. Specific details are provided under the Corporate Responsibilities inthe Performance against Forecast for 1998-99 section following.

191

Group Two: Navy

��

��(.1)��!�#�

� Continue progress, in conjunction with the Defence Personnel Executive Group, inimproving equity in the Navy workplace and integration of the civilian EqualEmployment Opportunity and Navy Good Working Relationships programs

Achieved as Forecast The Chief of Navy has reaffirmed the Navy’s commitment to socialjustice and equity through dedicated positions for training, education and visits to naval shipsand establishments. The Navy places high emphasis on eliminating all forms of unacceptablebehaviour. Uniformed and civilian members have the responsibility, and are encouraged, toreport and manage instances of unacceptable behaviour, including fraternisation betweenmembers posted to seagoing ships. The result has been a greater confidence to bring complaintsforward, as evidenced by the number of incidents reported during 1998-99. During the reportingperiod, the Navy continued its high level of training for equity advisers and has recentlyimplemented equity and diversity training specifically for managers and supervisors.

The recommendations arising from the 1998 Royal Australian Navy Employee Attitude Surveyregarding acceptance of the Good Working Relationships program and diversity issues will beimplemented shortly.

� Achieve improved cost effectiveness in training by further application of Recognitionof Prior Learning and Recognition of Current Competencies principles, the ‘just-in-time’ philosophy and the use of flexible learning practices in conjunction with continueddevelopment of flexible-learning centres ashore and afloat

Achieved as Forecast Navy Training Command has implemented a range of initiatives toincrease the effectiveness and efficiency of training. The application of Recognition of PriorLearning and Recognition of Current Competencies has allowed fast tracking of personnelthrough initial technical training and the attainment of qualified entry status for other personnelwith a subsequent reduction in training time. Mechanisms are being developed to track andquantify these savings as an ongoing imperative.

The application of ‘just in time’ training was limited to courses which could be delivered byflexible means employing advanced computer-based methods. Every effort is being made toutilise advanced technology where appropriate. The full impact of the initiatives will not berealised until courses can be piloted and results compared with traditional delivery methods.Successful initiatives include the following:

– A contract for the cooperative development of a computer-based navigationtraining package with the Singapore Defence Force which was signed in August1999. The final product is due for delivery in early 2000.

– Navy Training Command Lead Authorities have investigated the functionalityof various advanced delivery packages developed overseas. Four computer-aided instruction packages from the Republic of Singapore Navy, under thenew cooperative arrangement, have been identified. These cover sailing, astro-navigation, meteorology and the history of mine warfare. The Republic ofSingapore Navy will provide these packages at nominal cost to the Navy.

– A cooperative venture with the Army, whereby the Navy has shared productioncosts of computer-based training elements of the Introduction to ServiceDiscipline and Law, has been delivered and is currently being used in the NavyInitial Training Faculty.

192

Part Two

� Extend the implementation of Competency Based Training Assessment to all new traininginitiatives and in the redevelopment of existing areas such as the Aviation, Logisticsand Bosun’s Mate Categories, and submarine escape and rescue training

Achieved as Forecast Competency-based training and assessment has been implemented inthe Navy to align with the Australian National Training Authority guidelines. Areas of higherimportance already in Navy training system format are being transformed as required and allnew training is being developed in a competency-based training and assessment format. NavyTraining Command has received provisional ‘registered training organisation’ status with fullaccreditation expected later in 1999.

� Implement in-service training and other initiatives for personnel for Anzac, amphibioustransport, minehunter coastal and hydrographic class ships

Achieved as Forecast The responsibility for training of Anzac and minehunter personnelhas been passed to the Navy from the Acquisition Group. Action is under way to ensuresustainment of the required training throughput once the final ship-fit commences for theAnzac class. In-service training for amphibious transport, coastal and hydrographic classships is presently being passed to the Navy. Minehunter training contract negotiations arealmost finalised with final contract signature expected in late 1999.

�� !")��"%��%"�))

� Enhance combat capabilities and interoperability with other Services and with ourregional neighbours and allies through participation in exercises. Enhance jointexpertise by the participation of Navy forces in the exercises that are conducted by theADF to meet ADF operational requirements

Partially Achieved as Forecast Due to the suspension of activities under the Five PowerDefence Arrangements, Exercise Stardex (an annual multilateral major maritime and airexercise) was cancelled. There were no significant operational consequences of the cancellation,although the opportunities for improving interoperability with our allies was curtailed. ExercisesParadise, Rimpac, Cassowary and Singaroo proceeded as forecast and provided the Navy withopportunities to practise and develop a wide range of warfare and mariner skills while alsodemonstrating improvements in interoperability with our allies. Outcomes for forecastoperations are contained in Appendix D to Part One of this report.

� Achieve the predicted availability of Maritime Forces

Achieved as Forecast Outcomes for platform availability are contained in Appendix B toPart One of this report. Although the predicted availability was achieved, there are significantlogistic-support pressures that have the potential to adversely affect the sustainability ofoperations. Strategies have been implemented to ameliorate shortfalls in order to meetcontingency requirements.

For the 1999-2000 budget, the Navy has adopted a more rigorous measurement system fordetermining the capability level available against the Government’s preparedness targets. Themeasurement system, based on the concept of a minimum level of capability, takes into accountpersonnel and equipment status and training outcomes.

� Reinvigorate naval aviation capability over the next few years, including through anincrease in flying hours

Achieved as Forecast The reinvigoration of naval aviation continued through 1998-99 withincreased aircraft availability, effective attainment of forecast rates of effort and enhancedsquadrons for most aircraft types as well as significant progress in the development of the

193

Group Two: Navy

Naval Aviation Force master plan. Outcomes for forecast aircraft availability are contained inAppendix B to Part One of this report.

�!�'��,'�,��

� Produce a workforce plan to implement the requirements of the Defence Reform Programand meet the requirements of the changing force structure

Achieved as Forecast The Navy’s workforce plan was first produced in April and wasreissued in June 1999. The intention is to republish the plan on a quarterly basis with theobjectives of:

– providing the framework and the methodology for a ‘total workforce’ concept;– acting as a single point of reference for the management of the Navy’s workforce

as capabilities phase in and out over time; and– ensuring that the Navy’s workforce is capability based, affordable and sustainable.

� Seek approval for the Fremantle Class Patrol Boat Life of Type Extension project andAnzac Warfighting Improvement project for a Year of Decision in 1999-2000

Achieved as Forecast In November 1998, the Government approved a ‘life of type’ extensionfor the Fremantle class boats to allow them to remain in service for another eight years. TheAnzac warfighting improvement project is to be considered later in 1999. This will not delayimplementation, as contract signature is planned for June 2001.

�,) "�))��'� '�)

� Use enhanced planning processes for the preparation of the accruals-based1999-2003 Five Year Defence Program and Forward Estimates, with an emphasis oncapability outputs

Achieved as Forecast Considerable progress was made in refining budgetary estimates oflogistics support to meet Navy capabilities following implementation of the ‘class logisticsoffice’ concept in the Support Command Group. Close liaison was also maintained with otherkey service-provider Groups during the construction of Group contributions to Navy capabilityoutputs. New output presentations, including performance information, were developed forthe Portfolio Budget Statements 1999-2000.

� Manage the implementation of Defence Reform Program savings initiatives

Achieved as Forecast See Defence Reform Program Progress in the Resources section ofNavy Group’s report.

� Implement a better performance management framework through the Navy businesscycle so as to monitor the achievement of the Navy’s Future Directions priorities

Achieved as Forecast The Chief of Navy now has an improved, reliable form of ‘scorecard’reporting based on analysis of some ten enduring key result areas, with further improvementsto provide more regular reporting on progress against key priority issues including personnelmanagement and sustainability.

� Integrate Activity Based Management across the Navy’s business processes

Not Achieved as Forecast While most system implementation targets have been met andconsiderable work has been initiated on business applications, full integration with core businessprocesses is yet to be achieved. Incorporation of the activity-based approach to the NavyGroup budget process is now in preparation for 2000-2001. Further application of thesetechniques will be influenced by the examination into its application more widely acrossDefence.

194

Part Two

� Achieve appropriate Year 2000 compliance of all Navy operational and administrativeinformation systems

Partially Achieved as Forecast The Navy Group has completed almost all necessary activitiesto ensure that mission, business and safety-critical items, systems or services that are theresponsibility of the Group are Year 2000 compliant. One mission-critical system remains inthe process of remediation.

!��!��)�!") + # � �)

� Conduct geographic and hydrographic data collection activities over 10,000 squarenautical miles, with an emphasis on Northern Territory waters, Queensland waters offGladstone and further within the Great Barrier Reef, southeast Papua New Guineanwaters and Spencer Gulf in South Australia

Not Achieved as Forecast During 1998-99, hydrographic units conducted surveys in theabove areas. Data was also obtained from the Macquarie Island area under a contractarrangement. Just over 4,000 square nautical miles of survey was completed. The area surveyedwas less than that planned primarily due to delays in delivery of the new hydrographic shipsand the complexity of some survey areas.

� Provide 1,800 patrol boat days for surveillance of the Australian Fishing Zone, andprovide at least 33 ship visits for patrol of the Bass Strait oil rigs

Significantly Achieved as Forecast The Navy provided 1868 patrol boat days, exceedingthe requirement for this reporting period, and conducted 366 boardings and effected 55apprehensions. Surveillance and support to Bass Strait oil rigs was provided through 32 shipvisits. The Navy was involved in 22 incidents with suspected illegal-entry vessels.

In addition, the following search and rescue activities involved Navy assets or assets under theMaritime Commander’s operational control:

– HMAS Newcastle was involved in rescuing a foreign fishing vessel off MiddletonReef.

– HMAS Darwin and a Seahawk helicopter were involved in the search and rescueof the MV Monray Frontier.

– HMAS Geelong towed a stranded fishing vessel to Matouta Harbour.– The rescue of a balloonist involved a New Zealand frigate under the operational

control of the Australian Maritime Commander.– HMA ships Newcastle and Young Endeavour, two Seahawk and two Sea King

helicopters and an HS748 aircraft were involved in the Sydney to Hobart Yachtrace rescue efforts.

– HMAS Newcastle and two Seahawk helicopters were involved in the search forthe yacht Lady Lloyz.

– HMAS Warnambool, a Sea King and a Seahawk helicopter were involved inthe search for the vessel Green Hornet.

– HMA ships Canberra, Success and Tobruk, a Sea King helicopter and an HS748aircraft were involved in the search and rescue operation of an F-111 crew inApril 1999.

195

Group Two: Navy

��



Estimate Estimate Outcome Revised Estimate) $m $m $m $m %

2.1 Combat Forces 515.2 530.9 560.8 30.0 5.7 2.2 Executive 41.5 28.5 23.8 -4.7 -16.6 2.3 Training 229.5 221.7 203.4 -18.3 -8.2 Group Total 786.2 781.0 787.9 6.9 0.9




2.1 Combat Forces 8,001 7,908 7,963 55 0.7 2.2 Executive 243 258 240 -18 -7.0 2.3 Training 4,214 4,090 3,705 -385 -9.4 Group Total 12,458 12,256 11,908 -348 -2.8


Personnel Sub-Program2.1 2.2 2.3 Total

Permanent 98-99 Budget 6,786 174 3,844 10,804Force 98-99 Revised 6,766 172 3,744 10,682

98-99 Actual 7,024 171 3,444 10,639Reserves 98-99 Budget 708 35 252 995

98-99 Revised 658 51 228 93798-99 Actual 445 32 143 620

Ready 98-99 Budget 142 0 0 142Reserves 98-99 Revised 126 0 0 126

98-99 Actual 142 0 0 142Civilian 98-99 Budget 365 34 118 517

98-99 Revised 358 35 118 51198-99 Actual 352 37 118 507

Total 98-99 Budget 8,001 243 4,214 12,458Personnel 98-99 Revised 7,908 258 4,090 12,256

98-99 Actual 7,963 240 3,705 11,908

��&�"'��&!�$��!-��$��!-��))

A wide range of savings measures are being implemented under the Defence Reform Program ata number of geographic locations around Australia. These are being managed by Navy’s threeheadquarters in Canberra, Sydney and Southern Victoria. During 1998-99, action was completedfor those initiatives involving Navy Headquarters in Canberra, while a number of activities atboth Maritime and Training Commands will be implemented progressively over the next fewyears. This involves seeking competitive offers from industry to provide a range of supportservices.

196

Part Two

Efficiency gains have largely been made in implementing reductions to staff at both NavyHeadquarters in Canberra and Maritime Headquarters in Sydney as part of the revised DefenceCommand and Management Arrangements. The savings target for 1998-99 is slightly behindschedule compared to the position advised at Additional Estimates due to delays in commencingmarket testing of some activities in Maritime Command. Gains have also been achieved throughefficiencies achieved in Naval Training Command Headquarters and through the opening ofthe ADF School of Catering at HMAS Cerberus with training being delivered by the ChisholmInstitute of TAFE based in Dandenong.




Defence Command and ManagementArrangements 3.2 5.0 4.3 -0.7 -14.0Acquisition and Industry 0.1 0 0 0 0Science and Technology 0.1 0 0 0 0Logistics 3.5 0 0 0 0Education and Training 0.7 0.6 0.6 0 0Administrative Support 2.0 0 0 0 0Superannuation 0.8 2.2 2.2 0 0Total 10.4 7.7 7.0 -0.7 -9.1




Defence Command and ManagementArrangements 53 61 35 -26 -42.6Education and Training 11 9 9 0 0Administrative Support 10 0 0 0 0Total Personnel Reductions 74 70 44 -26 -37.1

Table 2.6: 1998-99 Defence Reform Program Personnel Reductions – APS



Defence Command and ManagementArrangements 11 67 71 4 6.0Science and Technology 2 0 0 0 0Education and Training 67 1 3 2 200.0Total Personnel Reductions 80 68 74 6 8.8

Reinvestment been directed to two main areas - enhancing amphibious lift capability throughthe retention of HMAS Tobruk and the reinvigoration of naval aviation; in particular, aviationtraining.

197

Group Two: Navy




Amphibious Capabilities 0.7 0.7 0.8 0.1 14.3Net Personnel and Operating Costs 12.5 9.4 9.4 0 0Provision for 50,000 ADF 11.3 11.3 11.3 0 0Transition Costs 0 0.3 10.2 9.9 3,300Total 24.5 21.6 31.7 10.0 46.3

Table 2.8: Reconciliation of Appropriations for the Navy Group

Division/Appropriation Item 1998-99 1998-99 1998-99 VariationBudget Revised Actual (98-99 Actual less


180-01 Running CostsService Personnel 614.1 619.4 626.1 6.7 1.1Civilian Personnel 24.0 25.5 25.9 0.4 1.7Administrative Expenses 60.6 51.9 52.9 0.9 1.8

181 Equipment & Stores 92.3 89.7 89.1 -0.5 -0.6Total Defence FunctionAppropriations (A) 791.0 786.5 794.0 7.5 1.0Total Defence Function Receipts(Offset within Outlays) (B) -4.9 -5.5 -6.1 -0.6 11.2Total Defence Function Outlays(C) = (A+B) 786.2 781.0 787.9 6.9 0.9Non-Defence Function Outlays180-02-09 Young Endeavour (D) 1.8 1.8 1.8 0 0Total Defence Portfolio Outlays(E) = (C+D) 787.9 782.8 789.7 6.9 0.9


198

Part Two



Reduction in the level of cash held by fleet units -1.9Lower than anticipated salary costs due to shortfall in AFSachievement -1.9Defence Reform Program GainsRelated to Defence Command and Management Arrangements 0.9Defence Reform Program ReinvestmentDefence Reform Program related redundancies 9.6

Civilian Personnel ($0.4m)Miscellaneous minor variations 0.2

Defence Reform Program Gains

Related to Defence Command and Management Arrangements -0.2Defence Reform Program ReinvestmentDefence Reform Program related redundancies 0.4

Administrative Expenses ($0.9m)Increased costs associated with Hughes LEASAT costs 2.9Lower than anticipated cost for HMAS Platypus -1.0Reduced requirement for trainee travel -1.0

181 EQUIPMENT & STORES (-$0.5m)Increased requirement for Y2K remediation expenses 2.7Reallocation from Admin Expenses primarily associated with thepayment of Hughes LEASAT costs 2.4Increased requirement for marine survival and rescue equipment 0.6Increased costs associated with Operation Damask 0.1Lower than anticipated cost for HMAS Platypus -0.8Reduced requirement for the Port Services & Support Craft contract -1.3Net Group transfers primarily associated with increased naval logisticssupport to Group 6 -4.2

DEFENCE PORTFOLIO RECEIPTS (-$0.6m)Higher than anticipated administrative recoveries -0.6

199

Group Two: Navy

200

Part Two

201

��2��0

��

To provide a potent, versatile and modern Army to promote the security of Australia andprotect its people and interests.

� ��

The Army provides land forces that contribute to the ADF’s capacity to defeat attacks againstAustralia, defend regional interests, defend global interests, shape the strategic environmentand protect national interests. Capabilities include the capacity to defeat incursions on, andrecapture, Australian territory; to seize and protect forward operating bases; to conductsurveillance and reconnaissance operations; to conduct special operations; to conduct specialrecovery, Counter Terrorist and Combat Search and Rescue operations; to provide ServiceAssisted and Service Protected Evacuation; to provide command, control, communicationsand information to support tasks; to provide operational-level sustainment of land-basedoperations; and to provide humanitarian assistance.

The Group Manager, the Chief of Army, commands the Army and is responsible for thepreparation of forces for the conduct of land operations, efficient and effective strategicmanagement of the Group and the future development of the Army. The Army Group comprisesthree areas; Combat Forces, Executive and Training.

��

The Army’s performance has been measured by the extent to which:

The Army meets ADF operational requirements and is able to conduct effective land operations

The Army met ADF operational requirements and was able to conduct effective land operations.The expansion of the Ready Deployment Force to include elements of 1 Brigade means thatthe Army can now undertake a much broader range of tasks and provide government withmore options. However, it should be noted that, in order to have sufficient resources to achievedirected joint and combined activities, it is sometimes necessary to reduce the standard ofenabling exercises. This practice impacts negatively on the Army’s ability to conduct effectiveland operations in the medium to long term. Detail of directed activities is contained in theexercise objectives and outcome tables for joint and combined operations at Appendix D toPart One of this report.

Objectives and outcomes of Restructuring the Army and the Defence Reform Program areachieved

These issues are being achieved progressively. All Restructuring the Army trial activities willbe completed by December 1999. The outcomes from phase-one-and-two studies will beevaluated in early 2000 to develop recommendations for the outline structure, doctrine andrange of capabilities required for the enhanced combat force. The final report will be presentedin April 2000. The Army continues the personnel transfer and drawdown to meet the objectivesof the Defence Reform Program.

The Army Group planning, management and budgeting processes support the economic use ofavailable resources to deliver agreed outputs

These processes support the economic use of available resources effectively within endorsedpolicies and approved programs and the achievement of agreed Army objectives. A focus on

202

Part Two

Y2K compliance has been conducted to ensure optimum output delivery. To date, 99% ofmission-critical equipment is compliant. Project Diary will complete compliance for computer-based equipment. Development of the Army Plan (due for release in October 1999) addressesthe issue of best-practice management and establishes specific performance indicators to guideachievement in line with the Defence outputs.

The lessons from Army, joint and combined exercises and operational experience areincorporated into war-fighting doctrine; and individual training and education meets userrequirements

The Army has established the Combined Arms Training and Development Centre to ensurethat lessons learned are incorporated into Army doctrine. The Special Forces Training Centreand the Army Aviation Training Centre have been established to provide enhanced training inspecialist fields and assist in meeting user requirements. Common induction training wastrialed over the reporting period and was found to be successful for the recruit training of bothfull-time and part-time personnel. The concept is designed specifically to meet the userrequirements of training.

Interoperability with the United States, New Zealand, United Kingdom and Canada andcompatibility with regional forces is optimised

The Army conducted three exercises with the United States, four exercises with New Zealandand nine exercises with regional countries during 1998-99. Details of exercise objectives andoutcomes can be found in Appendix D to Part One of this report. The Army also conducted anumber of exchange postings with the United States, Canada, New Zealand, the UnitedKingdom, some southwest Pacific nations and some south-east Asian nations. This providedexposure to allied and regional procedures, processes and ideas and achieved a limited level ofinteroperability and compatibility.

Provision of emergency and non-emergency assistance is successful, and public understandingand support for the Army is achieved

All emergency and non-emergency support requests have been met within the Army’s resources.Achievements in this area include the provision of accommodation for, and Army personnelassistance to, 4000 displaced persons from Kosovo. The Army also provided 400 personnelfor two weeks for support to Sydney residents after the destructive hailstorm in April/May1999. Assistance was provided to customs, immigration and the police in the search andapprehension of suspected unlawful citizens and suspected illegal-entry vessels across northernAustralia, with most of the support being provided by Regional Force Surveillance Units and5 Aviation Regiment.

��

Enhance output capability for Land Task Force and Special Forces operations, Ground BasedAir Defence and operational-level sustainment of land-based operations by:

� Improving operational effectiveness and achieving ADF operational requirements,including the objectives of directed joint and combined exercises and the objectives ofUN and international-related activities

Achieved as Forecast The Ready Deployment Force maintained designated elements atspecified readiness levels. The Ready Deployment Force has commenced expansion to includea light mechanised brigade-size organisation. This enhances the existing capability to includeconcurrency of deployable forces for a number of peace operations within 28 days notice tomove and allows a degree of flexibility to deal with concurrent requirements. Sustainabilityissues connected with the expansion of the Ready Deployment Force are still being analysed.

203

Group Three: Army

Special Forces conducted a number of joint and combined operations over the period. Thesewere all successful in developing and maintaining the skills required for special operationstasking. They also made a positive contribution to defence relations within Australia’s regionand with the United States and the United Kingdom.

Details of joint and combined exercise outcomes can be found in Appendix D to Part One ofthis report.

� Achieving training, preparedness and support task requirements within planned flyinghours

Not Achieved as Forecast The Black Hawk helicopters achieved 85% of their allocatedflying hours. The reasons were a change in priority between Special Forces and Task Forceexercises over the period and a realignment of exercise objectives.

Squirrel helicopters achieved only 82% of their allocated flying hours. The reasons were ahigher than average rate of student failures on flying courses and the cancellation of one ofthree scheduled Pilot Rotary Wing Basic-Navy courses. Nine personnel graduated from thetwo courses held.

The King Airs achieved 86% of their allocated flying hours. This was due to King Air allocationsbeing based on a twelve-month cycle commencing March each year. There was also a significantaeromedical evacuation commitment to 1 Brigade. Aeromedical evacuation duties often donot involve flying, but require immediate availability of aircraft in case of emergency. Theaircraft are expected to achieve their annual rate of effort by the end of February 2000.

All other Army aviation units achieved flying hours within 10% of their allocation. This isassessed as a satisfactory standard of resource management and task achievement.

� Introducing into service new major capital equipment, including night fightingequipment, very high frequency manpack combat net radios, a battlefieldtelecommunications network, global positioning systems for ADF foot and mountedunits and clip-on night sights for the RBS70 Very Low Level Air Defence WeaponSystem

Partially Achieved as Forecast Night-fighting equipment, delivered under Project Ninox,includes night-vision goggles for close and extended ranges and night aiming devices. Thisequipment enhances a soldier’s ability to operate on a 24-hour battlefield. The equipment is inservice with the Ready Deployment Force. Introduction into service to the rest of the ADFwill take another 12 months.

The introduction into service of modern very high frequency manpack combat-net radios,under Project Wagtail, together with a new armoured-vehicle communications harness, hasimproved Land Force communications significantly in terms of reliability.

Equipment for the battlefield telecommunications network, under Project Parakeet, continuesto be delivered. This project is providing a mobile, integrated, high-capacity secure tacticaltrunk communications system to the Army and the Air Force. The equipment has significantlyimproved communications for voice, telegraph, data and facsimile within and between formationheadquarters, providing enhanced joint interoperability.

Delivery of global positioning systems equipment for ADF foot and mounted units has beendelayed to 1999-2000 due to project scheduling changes. A global positioning system prototypefor the armoured vehicle is due for installation in September 1999. Introduction into serviceof this equipment will continue over the next two financial years.

204

Part Two

Clip-on night sights for the RBS70 very-low-level air defence weapon system were introducedinto service in 1998-99. This now allows the weapon system to operate at night, which is asignificant enhancement to low-level air defence capability.

� Introducing into service new minor capital equipment, including new combat boots,small lightweight very high frequency combat net radios for platoon-levelcommunications, the Weapons Training Simulation System, the Special Forces WideArea Network, the Special Recovery Command Support System and 16kva generatorsets

Achieved as Forecast New combat boots were introduced into service in 1998-99. They aredesigned for hot weather, take advantage of advances in rubber and leather technology andprovide increased durability. Delivery into service will continue into 1999-2000.

Small, lightweight, very high frequency combat-net radios for platoon-level communications,under Project Pintail, were delivered to infantry platoon level and other similar-level units.These radios are now being acquired for simple vehicle fits and for the Air Force. This projectis close to completion.

The first site of the new weapon simulation system was commissioned in May 1999. Thesystem is an indoor, laser-based visual simulation that is used to train soldiers in marksmanshipand battle shooting. A further six facilities will be introduced into service over the next financialyear. The land-force sniping capability has been significantly enhanced with the introductioninto service of the 7.62mm anti-personnel rifle. For programming reasons, the delivery of the12.7mm anti-materiel rifle and camouflage, concealment, communications and navigationequipment will continue into 1999-2000 and 2000-2001.

A Special Forces wide-area network and special recovery command support system commencedservice in 1998-99. This system enhances the Special Forces’ capability by allowing officeautomation and e-mail capability to units and a set of intelligence, planning and commandsupport tools to assist in special recovery operations.

The Army began introducing a 16kva generator set into service in October 1998 which willcontinue until July 2000. The generator allows for continuous operations and has been usedsuccessfully in Bougainville, Groote Eylandt and in government aid to Aboriginal communities.

� Further enhancing Army capability through the trial and evaluation of concepts outlinedin Restructuring the Army

Achieved as Forecast The Army continues to move from a platform replacement focus to aconcept-led approach to capability development and Restructuring the Army objectives remainon track. An outcome is that it will launch the Army’s experimental framework for futurecapability development. The ‘battlelab’ process and the relationship between the Science andTechnology Group and the Combined Arms Training and Development Centre will be integralto the success of this framework. Current studies represent an early maturation of the trialprocess, providing a bridge between the trials and the introduction of new concepts into theArmy.

� Continuing the rationalisation of the structure supporting the delivery of individualtraining and education

Achieved as Forecast The Special Forces Training Centre was established at Singleton inDecember 1998. The establishment of the centre provides efficiencies in conducting the SpecialForces selection course. The Army Aviation Training Centre was established at Oakey inFebruary 1999. The establishment of the centre provides Army pilots and maintenance staffwith central training locations; previously, pilots were trained at three separate locations. The

205

Group Three: Army

centre also achieved efficiencies by providing a training continuum for all aspects of aviationflying and maintenance.

Army training and education programs have been further developed and refined againstcompetency requirements. Training has been centred on a competency-based trainingassessment system. All training management plans have been redefined to reflect the trainingassessment principles. Two hundred and three of the 870 individual training courses have hadcompetency-based training assessment embedded. The approach is still under trial and isbeing improved continuously. This system offers greater accountability for resource usageand efficiency outcomes than has been achieved in the past. A trend analysis is currentlybeing developed.

The introduction of common induction training has continued. Common induction trainingincorporates both initial recruitment training and initial employment training. The trial of thisprogram has continued during the 1998-99 period. Part-time training has been conducted atArmy regional training centres and 7 Task Force. In 1998-99, 1,224 full-time and 2,077 part-time students completed the recruit training course. The common induction training conceptis deemed to be a success.

The Combined Arms Training and Development Centre has continued to be developed. Thecentre was established at Puckapunyal in December 1998. The centre will present and developoptions for the Army’s continuous modernisation and capability development. It incorporatesthe Combined Arms Training Centre, which includes the individual training responsibility forthe land-based combat force.

The integration of courses for full-time and part-time soldiers against common corecompetencies has continued on a progressive basis. All corps have identified a continuum ofcorps competencies for both full and part-time soldiers. This describes the knowledge, skillsets, competencies and attitudes required for the ranks of private to warrant officer class 1. Asimilar study has been conducted for officers, where competencies and functional areas areidentified for the rank of lieutenant to lieutenant colonel. Recruit training and initial employmenttraining are continuing to be developed using the common induction training process.

� Maintain effective international relationships and contribute to international activitiesthrough individual training exchanges, combined exercises and Defence Cooperationactivities

Achieved as Forecast The Army has contributed to international relations through combinedexercises with foreign armies, the training of students and via the Army exchange programincluding the attachment of personnel overseas. For 1998-99, 725 foreign students from withinthe region attended individual training courses, and 148 Army personnel underwent trainingoverseas. The Army currently has 129 exchange personnel posted overseas and 74 personnelattached to the Defence Cooperation Program for employment overseas. Operation Belisi IIcurrently involves 250 ADF personnel supporting the peace process in Bougainville.

� Contribute effectively to National Support Tasks including the progression of the ATSICArmy Community Assistance Project

Achieved as Forecast During 1998-99, the Army successfully completed a number ofAboriginal and Torres Straight Islander Commission projects. These include works atKaltukatjara (Docker River, Northern Territory), Marthakal (Elcho Island, Northern Territory),Milyakburra (Bickerton Island, Northern Territory) and Oak Valley in South Australia.Completed tasks included construction of a variety of health-related projects and the provisionof training and health-service support. Planning and design for the Jumbun project inQueensland has been completed.

206

Part Two

Other contributions to national support tasks by the Army include:

– the provision of Army personnel, accommodation and facilities to Kosovorefugees;

– the deployment of 400 Army personnel to support victims of the Sydney hailstormin April/May 1999;

– the provision of support by the Pilbara Regiment and medical assets to the victimsof tropical cyclone Vance in north-west Australia;

– medical support to victims of flooding and disease in the eastern provinces ofPapua New Guinea in April 1999; and

– support to Queensland government organisations on Salai Island (Torres Strait)by land force medical personnel.

��

Table 3.1: Defence Function Outlay Summary



3.1 Combat Forces 899.5 907.5 914.9 7.5 0.8 3.2 Executive 85.8 56.8 69.4 12.6 22.2 3.3 Training 318.9 304.1 284.5 -19.6 -6.5 Group Total 1,304.2 1,268.3 1,268.8 0.5 0.0



Estimate Estimate Outcome Revised Estimate)

Personnel Numbers No % 3.1 Combat Forces 31,545 31,653 28,544 -3,109 -9.8 3.2 Executive 618 574 542 -32 -5.6 3.3 Training 12,704 12,149 10,543 -1,606 -13.2 Group Total 44,867 44,376 39,629 -4,747 -10.7


Personnel Sub-Group3.1 3.2 3.3 Total


98-99 Actual 13,931 465 4,020 18,416Reserves 98-99 Budget 17,270 74 7,309 24,653

98-99 Revised 17,287 29 7,365 24,68198-99 Actual 14,090 8 6,211 20,309

Civilian 98-99 Budget 480 65 571 1,11698-99 Revised 544 66 396 1,00698-99 Actual 523 69 312 904

Total 98-99 Budget 31,545 618 12,704 44,867Personnel 98-99 Revised 31,653 574 12,149 44,376

98-99 Actual 28,544 542 10,543 39,629

207

Group Three: Army

��&�"'��&!�$��!-��$��!-��))

During 1998-99, the Army continued to transfer personnel performing clerical andadministrative and garrison support-related functions to Defence Corporate Support for inclusionin the relevant regional market-testing initiatives. In addition, personnel savings were achievedunder training and education related initiatives.




Defence Command and Management 7.1 6.6 6.9 0.2 3.0Acquisition and Industry 0.2 0.1 0 -0.1 -100Facilities and Long-Term ForceDisposition 0.1 0 0 0 0Logistics 2.4 0.6 0 -0.6 -100Personnel Planning 0.6 0.1 0 -0.1 -100Education and Training 14.7 15.3 20.4 5.1 33.3Administrative Support 4.5 1.1 1.5 0.4 36.4Information Management 0.1 0 0 0 0Superannuation 3.8 4.8 5.1 0.3 6.3Total 33.5 28.6 33.8 5.2 18.1

As a result of Defence Reform Program reinvestment, actual personnel numbers in the combatforce have increased by 1,398, (from 12,564 as at 30 June 1996 to 13,962 as at 30 June 1999).At the completion of the reform process, the Army will have 23,000 full-time personnel, ofwhich 15,000 will be employed in the combat force, representing an increase of 2,400 personnel.The resultant increase in personnel within the combat force is contributing to the reduction inlong-standing hollowness within combat force units. Reinvestment has also allowed the Armyto commence the development of an expanded Ready Deployment Force.

Defence Reform Program reinvestment funding for capability logistics has also improved theArmy’s ability to meet limited short-notice operational requirements and preparedness objectivesin line with government requirements. New funding levels provide additional resources tosupport high-readiness units.




Defence Command and ManagementArrangements 88 88 88 0 0Education and Training 271 271 378 107 39.5Total Personnel Reductions 359 359 466 107 29.8

208

Part Two




Defence Command and Management 81 75 77 2 2.7Education and Training 62 62 64 2 3.2Total Personnel Reductions 143 137 141 4 2.9




Amphibious capabilities 0.2 0.2 0.2 0 0Net Personnel and Operating Costs 0.6 0.6 0.6 0 0Army Reinvestment 43.0 43.0 43.0 0 0DRP Transition Costs 0 0 0.9 0.9 0Total 43.8 43.8 44.7 0.9 2.1

Table 3.8: Reconciliation of Appropriations for the Army Group



180-01 Running CostsService Personnel 1,133.2 1,116.0 1,117.0 1.1 0.1Civilian Personnel 41.6 40.1 38.4 -1.7 -4.3Administrative Expenses 92.6 76.5 74.2 -2.4 -3.1

180-02 Other Services 0.1 0.1 0.05 -0.05 -51.0181 Equipment & Stores 50.0 48.9 49.4 0.5 1.0Total Defence FunctionAppropriations (A) 1,317.5 1,281.6 1,279.0 -2.6 -0.2Total Defence Function Receipts(Offset within Outlays) (B) -13.3 -13.3 -10.2 3.1 -23.3Total Defence Function Outlays(C) = (A+B) 1,304.2 1,268.3 1,268.8 0.5 0.0


209

Group Three: Army


Appropriation $m

180-01 Running Costs

Service Personnel ($1.1m)

Increased requirement for allowances 8.8

Higher than anticipated requirement for Operation Belisi II (BougainvillePeace Monitoring Group) 2.1

Variation in accrual based superannuation and 3% productivity benefitliability based on movements in average staffing levels, changes inper capita rates and the impact of pay increases 1.4

Reduced requirement for Pilot Retention Bonus payments -3.3

Lower than anticipated expenditure on Army Reserve Training Salaries -3.8


Related to Defence Command and Management Arrangements -0.2

Related to variations in Superannuation Gains -0.3

Related to Education and Training -4.5

Defence Reform Program Reinvestment

Defence Reform Program related redundancies 0.9

Civilian Personnel (-$1.7m)

Higher than anticipated achievement for Defence Reform Programrelated redundancies 2.0

Variation in Accrual Based Superannuation and 3% Productivity benefitliability based on movements in average staffing levels, changes in percapita rates and the impact of pay increases -0.2

Savings associated with Defence Reform Program redundanciesresulting from Garrison Support market testing -0.5

Net Group transfers primarily associated with the rationalisation offunctions between Group 3 and Group 13 -2.7



Administrative Expenses (-$2.4m)

Variation in Fringe Benefits Tax payments 1.0


Reallocation to Civilian Salaries associated with the civilianisation ofArmy positions seconded to the Regional Security Vetting Agencies -0.2

Lower than anticipated achievement for Multinational Force andObservers-Sinai peacekeeping deployment and Operation Belisi II(Bougainville Peace Monitoring Group) -0.6

Reallocation to Equipment & Stores for Operation Belisi II (BougainvillePeace Monitoring Group) -0.6

Reduced expenditure to offset lower achievement in recoveries -1.6

Miscellaneous minor variations -0.3

210

Part Two

Appropriation $m


Related to Logistics 0.6

Related to Acquisition and Industry 0.1

Related to Personnel Planning 0.1


Related to Administrative Support -0.4

180-02 Other Services (-$0.05m)

Reduced requirement for Military History Grant -0.05

181 Equipment And Stores ($0.5m)

Reallocation from Administrative Expenses for Operation Belisi II(Bougainville Peace Monitoring Group) 0.6

Miscellaneous minor variations 0.4

Net Group transfers primarily associated with the rationalisation offunctions between Group 3 and Groups 6 and 13 -0.5

Defence Portfolio Receipts ($3.1m)

Lower than anticipated collection of recoveries 2.6

Lower than anticipated collection due to reprogramming of timing ofMultinational Force and Observers Sinai peacekeeping deploymentrecoveries 0.5

211

Group Three: Army

212

Part Two

213

��3��

��

To prepare for, conduct and sustain effective air operations to promote Australia’s securityand interests.

� ��

The Air Force Group provides forces for air operations, including offensive and defensivecounter air operations, precision strike operations, airlift, reconnaissance and surveillance.The Group Manager is the Chief of Air Force who is responsible for the command of theRAAF, for the preparation of forces for the conduct of air operations and for the efficient andeffective strategic management of the Group. The Air Force Group comprises three areas;Combat Forces, Executive, and Training. The Chief of Air Force drew on an agreed level ofsupport and resources from other Groups, particularly Support Command, Defence PersonnelExecutive and Defence Corporate Support, in managing the Air Force and achieving Air Forceperformance targets for 1998-99.

��

The Air Force’s performance is measured by reference to the key result areas of:

Capability for Air Strike/Reconnaissance

The Strike Reconnaissance Group met all individual military strategic option requirements ofthe Chief of the Defence Force’s Preparedness Directive for the provision of capability.However, for short periods, insufficient reconnaissance (RF-111C) airframes were availableto meet the concurrent requirements of the Preparedness Directive. This was due to scheduledmaintenance and modification actions to improve capability. Ninety-five percent of flyingrate of effort was achieved. The shortfall was due to cancellation of some flying tasks in thewake of an accident in April 1999, in which an F-111G and its crew were lost.

Capability for Tactical Fighter Operations

The Tactical Fighter Group met all requirements of the Chief of the Defence Force’sPreparedness Directive for the provision of capability. Ninety-six percent of the plannedflying rate of effort was achieved. The under achievement was caused primarily by a lack ofqualified pilots in F/A-18 squadrons. Nevertheless, this year’s flying rate was a 4% increaseover the 1997-98 effort. Initiatives have been taken to improve fast-jet pilot numbers.

Capability for Strategic Surveillance

The Surveillance and Control Group was formed in September 1998 to manage surveillanceand control assets as a capability. The group met all of the Chief of the Defence Force’sPreparedness Directive requirements and conducted a number of additional ad-hoc nationalstrategic surveillance tasks.

Capability for Maritime Patrol Aircraft Operations

The Maritime Patrol Group met all requirements of the Chief of the Defence Force’sPreparedness Directive for the provision of capability. The original rate of effort of 8,700hours was based on projections of aircraft availability during the aircraft upgrade project.Actual availability was better than expected. The capability was enhanced by the introductionof the P-3 Orion training aircraft airframes, which are used for pilot and flight engineer training,thereby relieving this burden from the fully-equipped operational aircraft.

214

Part Two

Capability for Airlift

The Air Lift Group met all individual military strategic option requirements of the Chief of theDefence Force’s Preparedness Directive for the provision of capability. However, insufficientassets were available to meet some concurrent requirements. The combined achieved flyingrate of effort for the aircraft in the Group was only 92% of that planned, and was 87% of the1997-98 achievement. The reduced rate of effort was caused by a combination of maintenanceproblems on ageing aircraft fleets and the need to release aircraft for modification activitiesthat will improve capability and supportability in the longer term. Measures have been takento overcome maintenance problems to improve aircraft availability and preparedness levels.

Capability for Combat Support of Air Operations

The combat support capability is still being developed and has undergone major restructuringdue to the downsizing of the Air Force to 13,000 personnel and other changes resulting fromthe Defence Reform Program. The mature capability will be able to provide ground defenceand support to a number of deployed air bases and will be funded largely through reinvestmentof Defence Reform Program savings. In the interim, the Chief of the Defence Force’sPreparedness Directive requirements for this capability are running at a reduced level inrecognition of its developing nature.

Contribution to International Relations

All Air Force Commands and Force Element Groups contributed to international relationsthrough an extensive program of exercises and training activities. The Air Force also contributedto several international operations and peacekeeping activities.

Contribution to National Tasks

The Air Force contributed to a wide variety of national tasks including disaster-relief operations,medical evacuations and search and rescue missions.

Safety

Defence flying safety has undertaken an active aircraft accident-prevention program for allpersonnel involved in aviation activities within the ADF. This education program has includedthe conduct of flying safety officer courses and briefings to aircrew, air traffic controllers,maintenance personnel and flying supervisors. A formal biennial audit of air traffic controland accident emergency response at Defence airfields also forms part of this education program.

Effective and Efficient Management of Personnel and Resources

The Air Force Group planning, management and budgeting processes supported the optimumuse of available resources within endorsed policies and approved programs to achieve agreedobjectives. During the year, Air Force Headquarters’ management processes were restructuredto focus on outputs and to prepare for the implementation of accrual budgeting. Preparationand training were undertaken for accrual accounting and this continues as new financial softwarepackages are introduced to replace current systems. The focus was also on the management ofinformation against outputs, management of the significant changes revolving around theDefence Reform Program and the drawdown of the permanent Air Force workforce.

��

� Achieve the forecast flying hour program to meet training, preparedness, developmentaland other tasks

Not Achieved as Forecast With the exception of the Air Lift Group, all Force ElementGroups achieved rates of flying effort which were close to their planned figures and broadly

215

Group Four: Air Force

similar to those achieved in the previous year. The Air Lift Group achieved only 92% of itsplanned flying rate, even after a significant revision downwards of the C-130 rate of effortduring the year. Of the six aircraft types operated by the group, only the B707 fleet achievedits planned rate of effort. The ageing C-130, Caribou, HS748 and Dakota fleets all sufferedfrom maintenance problems which reduced their availability for tasking. C-130H availabilitywas also affected by commitments to provide airframes for a number of modification programsthat have been initiated to improve capability and supportability in the longer term. Remedialaction has been taken to improve C-130E and Caribou availability until their plannedreplacement dates. C-130 and Caribou tasking was actively managed so that aircraft availabilityfor contingency operations was not affected.

The greatest impact of the shortfall in flying effort was felt by the Army and HeadquartersAustralian Theatre which make extensive use of Air Lift Group assets to fulfil their exerciseprograms. The HS748 is being supplemented with leased aircraft for its primary role of navigatortraining and will be replaced as soon as possible with more leased aircraft. The Dakota aircraftwas withdrawn from service in December 1998 and its main role of trials support for theAircraft Research and Development Unit was taken over by leased aircraft.

Training Command achieved 90% of its planned flying rate in the PC9/A training aircraft.This under achievement was due to a reduced need for training hours as a result of fewer thanexpected pilot students.

� Improve operational capability through training, operations and exercises, and enhancecooperation with regional and allied forces, by participating in exercise programs

Achieved as Forecast The flying programs for all Force Element Groups provided a goodbalance between training, participation in exercises and operational tasking.

Air Command units conducted an extensive exercise program with only minor variations fromthat originally planned. Fifteen exercises were conducted with other ADF elements to meetjoint preparedness requirements. Air Command units also took part in a further 25 internationalexercises which involved forces from 12 regional and allied nations. Of these, the mostsignificant was Exercise Churinga which was conducted in two phases and involved unitsfrom the Strike Reconnaissance, the Tactical Fighter and the Air Lift Groups in over 1000hours of flying, including air combat practice with the Royal Singapore Air Force and RoyalMalaysian Air Force. The varied program of exercise activities provided Air Force personnelwith valuable training in joint and combined operations, and improved interoperability withother forces.

The Air Force participated in seven planned operations during the year. Although the primereason for participation in these operations was to support national interests and to meetinternational obligations, Air Force personnel gained much valuable experience, therebyimproving their operational capabilities.

� Successfully conduct maritime surveillance operations

Achieved as Forecast Throughout the year, the Maritime Patrol Group maintained asurveillance presence in the South China Sea, the Indian Ocean approaches to the MalaccaStraits, the south-west Pacific and the Australian Exclusive Economic Zone. This presencewas maintained through the conduct of Operations Gateway and Solania and through regularAustralian zone patrols. The commitment of 1,366 P3C flying hours to these tasks honouredAir Force obligations to support the Defence Cooperation Program and the Five Power DefenceArrangements. It also assisted Coastwatch in maintaining surveillance throughout Australianterritorial waters and the Exclusive Economic Zone.

216

Part Two

� Maintain a force that is trained, fit and ready to fight

Achieved as Forecast The Air Force maintains an extensive program to promote and monitorthe combat readiness of its serving personnel. In particular, all uniformed personnel are requiredto undertake training in operational skills, fitness and personal weapons training and todemonstrate competencies in these areas annually. As a result, a high percentage of Air Forcepersonnel can be deployed quickly for operations at any time. In addition, training and educationprograms for air and ground safety ensure that personnel have the necessary skills andknowledge to conduct Air Force operations safely.

� Contribute to international relations including Defence Cooperation, regionalengagement, peace operations and international obligations

Achieved as Forecast Air Force contributed to international relations and regional engagementthrough participation in operations and exercises with regional and allied partners. All AirForce Commands and Force Element Groups were involved in international activities. Bilateraland multilateral exercises and activities were conducted with Indonesia, Malaysia, Thailand,the Philippines, Singapore, Japan, Papua New Guinea, the United States, Canada, New Zealandand the United Kingdom. Defence Cooperation training was conducted in Australia and inregional countries. Two hundred and twenty-one foreign defence personnel were trained inAustralia by the Air Force. The Air Force also contributed to government-directed peaceoperations.

� Contribute to national tasks including the provision of aid to the civil community,assistance to other government agencies and support to events of national significance

Achieved as Forecast The Air Force contributed to 28 national tasks over the reportingperiod. Operations in support of the civil community included the transportation of medicalsupplies, food, water, and electrical generation equipment to north-west Australia in the wakeof cyclone Vance. Five successful aeromedical evacuations, including those of four civilians,were conducted in remote areas of Australia. The Air Force also participated in 10 civil searchand rescue operations, the most significant of which was the involvement of C-130 and P3Caircraft in the 1998 Sydney to Hobart Yacht Race rescue effort. The bodies of two World WarII RAAF airmen discovered in the wreckage of a Wirraway aircraft in Papua New Guineawere air-lifted to Port Moresby where they were accorded full military funerals in the presenceof surviving relatives. The Roulettes formation aerobatics team carried out an extensive programof activities that included displays at several major sporting events.

� Manage ADF flying safety and airworthiness

Achieved as Forecast Recommendations from a recently conducted review of aviation safetymanagement have been considered and those accepted have been, or are in the process ofbeing, implemented. During the year, one aircraft accident was investigated by the Defenceflying safety unit. This was the loss of F-111G A8-291 at Pulau Aur, Malaysia on 18 April1999. This accident brought to an end a record aircraft accident-free period of 21 months forthe ADF and four and a half years for the Air Force.

� Manage efficiently and effectively the financial resources allocated to Air Force

Achieved as Forecast Air Force financial resources were managed to within 1.1% of the19998-99 Revised Estimate. Staffing resources were managed within the allocations andDefence Reform Program efficiency gains were ahead of targets.

217


� Implement Air Force aspects of the Defence Reform Program

Achieved as Forecast The Air Force Group is actively managing the overall restructure ofthe permanent Air Force as it draws down to 13,000 under the reform program. Furtherrationalisation and market-testing activity will continue in 1999-2000, particularly in relationto training delivery, in Aircraft Research and Development Unit support and in maintenanceactivity. Reinvestments in capability-related logistics initiatives and operating costs for newequipment continued under Support Command guidance.

A new ADF basic flying training course commenced in January 1999 with 10 Army pilotsgraduating in June 1999. The next course commenced in March 1999 for 10 Army and fiveNavy pilots who are due to graduate in September 1999 and the first fully tri-service coursecommenced in June 1999 (19 Air Force, 10 Army, and five Navy). 1998-99 expenditure was$3.9m; the minor variation was due to course timing issues.

� Complete a review of Air Force’s workforce structure, including use of Reserves andthe ability to recruit, train and qualify within warning time

Achieved as Forecast A comprehensive review of the Air Force peacetime establishmentstructure has been conducted, including the workforce requirements of the Force ElementGroups. Establishment reductions resulting from the Defence Reform Program have beentaken into account and reinvestment of savings into new combat capability has been planned.Continuing work includes identification of the Air Force wartime establishment requirementsto support a force structure to defeat attacks on Australia. When this structure is complete, thedifference between the peacetime establishment and the wartime establishment can bequantified. This will allow follow-on studies of workforce sustainability, the size and structureof the Reserve establishment and the additional support that can be obtained from the recruit-train-qualify process.

� Enhance performance management at the Group level within Air Force

Ongoing Defence Reform Program principles and objectives have been employed to restructureAir Force Headquarters and improve management practices. Work continues on a furtherreorganisation that will see the Headquarters structured along output lines and on increaseduse of performance-based reporting.

� Establish appropriate agreements for effective transition of new capabilities and capitalequipment into service through the weapon system capability management process

Not Achieved as Forecast Air Force Headquarters has been working with Australian DefenceHeadquarters and the Acquisition Group to establish arrangements that will ensure much earlierinvolvement of the Air Force in the introduction of new capabilities. A key feature of the newarrangements will be appropriate Air Force representation on the integrated project teams thatare being established for all new acquisition projects.

� Promote a wider understanding of air power doctrine throughout the Defenceorganisation, the community and the region

Achieved as Forecast A regional air-power workshop was conducted in September 1998with representatives from 11 regional countries attending. The workshop focused on theprofession of arms generally and professional mastery in air forces specifically.

The 1998 RAAF history conference was held in October 1998 and attracted over 300 delegatesincluding serving and retired Defence personnel and other interested members of the widercommunity. Papers and proceedings were published and distributed to delegates and throughoutthe Defence community.

218

Part Two

A wide-ranging educational program was conducted that included lectures, presentations andthe provision of material to the Air Force, Army, Navy, Defence civilians and the widercommunity. Air Power Studies Centre staff participated in seminars and debates on topicalair-power issues organised by local academic institutions. The centre’s staff also participatedin regional engagements attending conferences or presenting lectures in such countries as thePhilippines, Indonesia, Thailand, Malaysia, New Zealand and Guam.

� Conduct an Air Force cultural assessment to identify and address issues relevant tomaintaining the ethos, values and attitudes of Air Force personnel

Achieved as Forecast The Air Force conducted the assessment with the analysis of findingsand the final report presented to the Chief of Air Force Advisory Committee in March 1999.The summary of overall findings suggested that Air Force culture is largely demographicallyhomogeneous in relation to the issues surveyed. While there are differences in values onmany of the issues, and in some cases quite seemingly opposed values, those variations arelargely consistent across the Air Force. These issues and other aspects of human resourcecapability management will be addressed by the Air Force Human Resource Capability Forumto ensure a holistic overview of personnel capability in achieving Air Force outputs.

� Implement training initiatives which ensure the development and maintenance of AirForce values and attitudes

Achieved as Forecast The Chief of Air Force directed the development of local trainingcourses to be conducted under the auspices of the airmen education training scheme. Leadershipextension workshops have been developed and facilitators for each location have completedfacilitation training. Ongoing assessment of the process will be undertaken.

� Establish a formal process for matching available funding to required capability levels

Achieved as Forecast To link into the new management framework and to readily identifycapability funding issues, the weapons system master planning system has been further evolvedto include a resource plan with linkages to the development, operational, and personnel sub-plans of each weapons system. The Air Force is using the weapons system managementstructure together with capability-based management to effect a holistic management of AirForce capabilities. By identifying all costs associated with a weapons system and relatingthose costs to the development of capability, capability-based management will determine thetotal cost of each weapons system’s roles. This will enable a capability to be costed, whichwill lead to more accurate costing of Defence outputs.

� Evaluate implementation of the Air Power Education Program

Not Achieved as Forecast The Air Power Education Program was deferred due to the reviewand restructure of the Base Staff Course for which the program was intended. On completionof the restructure, the third edition of the air power manual was issued, changing air powerdoctrine significantly. Development of the replacement program is subject to advice from theAir Powers Studies Centre.

� Conduct operational tasks as directed by the Government

Achieved as Forecast Operation Belisi II was initiated to provide ADF support to the PeaceMonitoring Group in Papua New Guinea. Over the reporting period, the Air Force devotednearly 1,500 hours of air transport support from C-130 and Caribou aircraft to this task andprovided a number of personnel to the monitoring group. The Air Force assisted in tidal-wavedisaster relief in Papua New Guinea and contributed ground personnel to Operation Safe Haven(support to Kosovo refugees) and Operation Concord (logistic support to United Nations forcesin East Timor).

219


� Form a Surveillance and Control Group to manage surveillance and control as acapability

Achieved as Forecast The Surveillance and Control Group was formed at RAAF Williamtownin September 1998. The new organisation comprises HQ 41 Wing, the Air Surveillance Controland Reporting Units, No 1 Radar Signals Unit, the Air Defence Ground Environment StandardsDevelopment Unit and the Surveillance and Control Training Unit. The Jindalee OperationalRadar Network and the Wedgetail airborne early warning and control aircraft will be includedwithin the Surveillance and Control Group upon their acceptance into operational service.

� Introduce the C-130J aircraft into service

Not Achieved as Forecast Problems with the development of the C-130J aircraft has delayedits entry into Air Force service. Conditional acceptance of the first airframe is now scheduledfor September 1999. Delays in the C-130J program are affecting the Air Lift Group’s abilityto meet its planned rate of effort because the ageing C-130E aircraft, that the C-130J is scheduledto replace, need increased maintenance. Mitigation strategies include the increased use of theB707 fleet to carry out some C-130 tasking. Additional resources have also been allocated tomaintain the C-130E fleet in service for longer than planned so that the requirements of theChief of the Defence Force’s Preparedness Directives can be fulfilled.

� Improve the electronic self protection capabilities of RAAF aircraft

Not Achieved as Forecast Projects have been initiated to upgrade the electronic warfareself-protection capability of selected RAAF aircraft. The first elements of these equipmentupgrades are currently being installed.

� Increase pilot numbers in operational fast-jet squadrons

Not Achieved as Forecast A Fighter Pilot Recovery Program has been instituted that includesinitiatives to improve recruiting and selection processes. The aim is to increase the percentageof pilots graduating from initial pilot training that will be suitable for fast-jet training. Apredicted short-term effect of this program has been a temporary decrease in the number offrontline fast-jet pilots, as pilots are diverted to flying training units to increase training capacity.

��




4.1 Combat Forces 541.2 522.9 544.2 21.2 4.14.2 Executive 55.4 34.8 22.2 -12.5 -36.14.3 Training 145.2 136.6 135.3 -1.2 -0.9Group Total 741.8 694.3 701.7 7.5 1.1

220

Part Two




4.1 Combat Forces 8,490 8,106 8,426 320 3.94.2 Executive 737 1,072 350 -722 -67.44.3 Training 2,079 2,040 2,041 1 0Group Total 11,306 11,218 10,817 -401 -3.6




98-99 Actual 6,633 248 1,810 8,691Reserves 98-99 Budget 1,100 405 0 1,505

98-99 Revised 1,261 759 0 2,02098-99 Actual 1,581 45 96 1,722

Ready 98-99 Budget 295 0 0 295Reserves 98-99 Revised 43 0 0 43

98-99 Actual 43 0 0 43Civilian 98-99 Budget 166 78 137 381

98-99 Revised 164 61 135 36098-99 Actual 169 57 135 361

Total 98-99 Budget 8,490 737 2,079 11,306Personnel 98-99 Revised 8,106 1,072 2,040 11,218

98-99 Actual 8,426 350 2,041 10,817

��&�"'��&!�$��!-��$��!-��))

The Air Force is actively managing the overall restructure of the permanent Air Force as itdraws down to 13,000 under the reform program. During 1998-99, actual strength reducedfrom 15,750 to 14,785. Overall, the Air Force has saved 142 positions (115 ADF and 27civilian) to 30 June 1999, 73 positions more than forecast. Rationalisation of training activitiescontinued with some 128 positions being saved during the reporting period (105 permanentAir Force and 23 civilian). Market-testing activities are continuing. The business process re-engineering of the Aircraft Research and Development Unit continues. The first support contracthas been implemented with work under way on the second.

221





Defence Command and ManagementArrangements 1.1 1.1 1.8 0.7 63.6Acquisition and Industry 0.3 0.3 0.3 0 0Science and Technology 1.1 1.1 0.1 -1.0 -90.9Logistics 0.2 0.2 0.2 0 0Personnel Planning 1.0 1.0 1.0 0 0Education and Training 2.6 3.1 6.7 3.6 116.1Administrative Support 1.1 -1.9 -1.9 0 0Superannuation 0.6 2.0 2.1 0.1 5.0Contracts Funded 0 0 -0.4 -0.4 0Total 8.0 6.9 9.9 3.0 43.5




Defence Command and Management 0 0 10 10 0Science and Technology 20 20 0 -20 -100Education and Training 35 35 105 70 200Total Personnel Reductions 55 55 115 60 109.1




Defence Command and Management 0 0 3 3 0Science and Technology 0 0 1 1 0Education and Training 0 14 23 9 64.3Total Personnel Reductions 0 14 27 13 92.9




Net Personnel and Operating Costs -1.6 -1.6 -1.6 0 0Pilot Training 4.0 4.0 3.9 -0.1 -2.5DRP Transition Cost 0 0.9 1.7 0.8 88.9Total 2.4 3.3 4.0 0.7 21.2

222

Part Two

Table 4.8 Reconciliation of Appropriations for the Air Force Group



180-01 Running CostsService Personnel 547.2 530.5 546.2 15.7 3.0Civilian Personnel 17.2 16.5 16.4 -0.1 -1.0Administrative Expenses 64.1 53.1 54.7 1.6 3.1

181 Equipment & Stores 139.6 120.5 107.9 -12.6 -10.5Total Defence FunctionAppropriations (A) 768.2 720.6 725.3 4.6 0.6Total Defence Function Receipts(Offset within Outlays) (B) -26.4 -26.4 -23.5 2.8 -10.8Total Defence Function OutlaysC) = (A+B) 741.8 694.3 701.7 7.5 1.1



Appropriation $m180-01 Running CostsService Personnel ($15.7m)

Net variations due to reduced AFS and changes in rank profile 4.8

Increased payment for members undertaking overseas servicemainly due to exchange rate variations 3.6

Increased payments in lieu of long service related to separations andReform Program initiatives 3.9

Higher than anticipated accrual-based superannuation and3% productivity liability based on movements in average staffing levels,changes in per capita rates and the impact of pay increases 2.6

Increased payment in lieu of recreation leave, related separationsand Reform Program initiatives 3.0

Higher than anticipated take up rate for Pilot Retention Bonus 0.7

Increased payments for members undertaking higher duties 0.6

Higher than anticipated expenditure on Air Force Reserve Personnel 0.4


Re-attribution of Air Force Reserve Salaries to better reflect distributionbetween Groups previously held against Group 4 -2.1


Related to Science & Technology 1.0

Related to Education & Training -3.0



Related to Service Redundancies 0.5

223


Appropriation $m


Variation in voluntary redundancy payments associated with CSP 0.7

Over estimate of civilian personnel cost estimates mainly to do withprofile assumptions -0.6

Net Group transfers 0.1



Related to Superannuation -0.1

Related to Education & Training -0.4


Related to civilian redundancies 0.3

Administrative Expenses ($1.6m)

Variation in Fringe Benefits Tax liability 1.1




Related to Defence Command and Management Arrangements -0.1Related to Education & Training -0.2

181 Equipment & Stores (-12.6)

Purchases of essential equipment associated with the development of thecapability of Combat Support in particular in the provision of enhancedground defence and deployed airfield support equipment 2.1

Early payment of 99-00 claims to allow for an orderly transition tooutput-based accrual accounting 0.2

Reduced fuel purchases for foreign governments -5.4

Reduced expenditure relating to lower than budgeted fuel prices -5.1

Net inter Group transfers primarily associated with funding forF404 engines ($-3m), between Group 4 and Group 6 -3.3

Adjustment to CSP Basic Flying Training contract to reflect changedimplementation schedule -1.4


Related to Contracting 0.4

Defence Reform Program Reinvestments

Related to ARDU Contract -0.1

Defence Portfolio Receipts (2.8)

Reduced proceeds from fuel sales to foreign governments 5.4Higher than anticipated Special Purpose Aircraft receipts -2.6

224

Part Two

225

��4��55��

��

To provide intelligence, primarily on strategic and military issues, to Defence and other partsof government and to the ADF for the conduct of military operations.

� ��

The Intelligence Group collects, assesses and distributes intelligence to inform Australia’sstrategic, defence and wider government policies and for the conduct of military operations.The Defence Intelligence Organisation assesses and distributes intelligence on strategic andmilitary developments and is responsible for the provision of intelligence support for theplanning and conduct of ADF operations. The Defence Signals Directorate collects anddistributes foreign signals intelligence and provides advice and services to Defence and otherparts of government on computer and communications security. The Australian ImageryOrganisation provides imagery and spatially-derived intelligence and information in supportof defence and national interests.

��

The Defence intelligence agencies are committed to meeting their customers’ needs throughthe provision of intelligence that is timely, accurate and relevant. They have continued tointroduce measures to improve collection, assessment and distribution of intelligence to increasetheir responsiveness to customer demands and to tailor their products to specific customergroups. Customer requirements were reviewed and factored into intelligence collection,production and dissemination.

The Defence Signals Directorate continued to refine its intelligence product and adjust itscapabilities in line with customer demands and it achieved a greater degree of cooperationwith the ADF. The Defence Intelligence Organisation focused its product on supporting theplanning and conduct of ADF operations, defence policy formulation, strategic planning andcapability development. Wider government needs were also provided for in the area ofinformation security. The Australian Imagery Organisation gave priority to supporting ADFoperations, operational planning and capability development.

��

Achieved as Forecast. The development of improved data collection and processingcapabilities continued throughout 1998-99, providing a valuable basis for better performance.Timeliness has improved considerably by the adoption of advanced information-technologysystems and the use of Defence-wide information and communications infrastructure todisseminate products to customers. Feedback mechanisms were provided for all distributedproducts. Customer responses indicated their overall satisfaction with services provided,especially with current intelligence and tailored information and with timeliness.

The Intelligence Group is seeking to improve the quality of its analysis, and give it a morecomprehensive and strategic focus to support policy making, defence capability and doctrinedevelopment. It is also seeking better fusion and exploitation of intelligence sources to tailorproducts to customers’ exact needs including better situational awareness reporting for ADFoperational planning. Reporting, tasking and workload management and intelligence productionand dissemination processes were all enhanced during 1998-99.

226

Part Two

��




Group Total 141.4 160.3 159.4 -0.9 -0.6




Group Total 1,491 1,479 1,432 -47 -3.2

��&�"'��&!�$��!-��$��!-��))

There has been significant progress against the Defence Reform Program initiatives relating tothe Intelligence Group and the majority of the mature savings target has already been achievedin 1998-99. The savings involve a number of small-scale changes and efficiencies to themanagement, administration and support of intelligence functions. Several market-testinginitiatives have been implemented dealing with building and grounds maintenance, guarding,cleaning and stores maintenance. The civilianisation of a number of military positions is alsocurrently being implemented.

Funding has been made available to support a number of projects including the replacement ofDefence’s intelligence communication systems and to modernise and standardise equipmentacross the Defence Signals Directorate.




Intelligence 0.4 0.4 0.4 0 0Administrative Support 0.4 0.4 0.4 0 0Superannuation 0.3 0.3 0.3 0 0Provision for Contractor Support 0 0 -0.2 -0.2 0Total 1.1 1.1 0.9 -0.2 -18.2




Intelligence 16 16 14 -2 -12.5Total Personnel Reductions 16 16 14 -2 -12.5

227




Intelligence 24 24 24 0 0Total Personnel Reductions 24 24 24 0 0




Net Personnel and Operating Costs 3.2 3.2 3.2 0 0DRP Transition Costs 0 0 0.5 0.5 0Total 3.2 3.2 3.7 0.5 15.6

Group Five: Intelligence

228

Part Two

229

��6��

��

To deliver at minimum cost the materiel support required by the ADF to train and fight.

� ��

The Group Manager is the Commander Support Australia. The Group comprises five areas;the Executive, Logistic Operations - Navy, Logistic Operations - Army, Logistic Operations -Air Force, and Emergency Management Australia.

��

Support Command’s performance has been measured by financial and non-financialperformance indicators to assess the extent that:

Customers are satisfied with the delivery of agreed levels of information, services and materieland optimal through-life-support arrangements are established for new equipment

Support Command is finalising a materiel-support service charter, supported by lower-levelservice agreements, with capability managers. These documents define the customer/providerframework, customer requirements, service-delivery performance measures and mechanismsfor performance reporting. While data collection is currently manual, the introduction nextyear of a performance management information system will automate collection, collationand performance measurement to improve the assurance of customer satisfaction. SupportCommand has also developed the policy for formal customer satisfaction surveys as anothermechanism for assessing customer satisfaction. In addition, Support Command and theAcquisition Group completed a joint study into improving the incorporation of life-cycle costinginformation into source selection considerations, including the establishment of life-cyclecosting-agreement standing offers with industry. The Defence instruction on life-cycle costingwas rewritten.

A significant opportunity for improvement lies in through-life support and associated businessprocesses. While there is much single-Service-specific policy and procedural documentation,it is inconsistent and has no standardised approach to achieving optimal through-life support.Furthermore, Defence does not have a single, coordinated through-life support training programand many logistics staff are under-skilled and lack relevant experience. Therefore, SupportCommand has initiated the through-life support disciplines project which is to be completedover the next two years. The project is supported by a second project to provide a through-lifesupport planning and requirements system, which will significantly reduce the time and effortrequired in producing supporting documentation.

In addition to supporting ongoing training and administrative requirements, Support Commandhas contributed to the military planning process at the strategic and operational levels. Materielsupport to the Bougainville peace monitoring process, support of coalition operations in theMiddle East and support to United Nations activities in , Sinai, Bosnia and Cambodia was alsoprovided. In addition, considerable effort has been devoted to support of the various phases ofExercise Crocodile 99 and to support for the Sydney Olympics.

The Support Command workforce acquires and maintains required competencies and continuesto learn and grow

Support Command initiated the requirement to profile key positions within the Command,especially those deemed to be associated with corporate governance activities. Position profiling

230

Part Two

will identify the skills, competencies and qualifications required for a particular position, willbetter identify training shortfalls in Support Command and lead to a more targeted use ofportfolio-sponsored training. Profiling will also assist in placing the best individual in a position.Profiling of key positions continued during 1998-99 with an anticipated 60% completion byDecember 1999.

Support Command management must have not only the technical skills, but also the leadershipand change management skills to ensure an effective transition from a largely militaryorganisation to one based on extensive commercial support. The Group has continued todevelop a major leadership development and culture-building program, with specific coursesdesigned for senior, middle and junior management. The roll-out of the program is on target,with 3000 key personnel having undertaken the training courses to June 1999 and a further1000 to attend by December 1999.

A comprehensive workforce attitude survey was conducted in the period. Internalcommunication was identified as the most significant shortcoming and is being rectified throughthe implementation of a comprehensive communications strategy which will ensure all membersof the Support Command workforce are aware of, and grow with, the strategic change occurringwithin the Group. Support Command components, business units and agencies have beenprovided with their specific survey results to enable local action to address performance/expectation gaps.

Business processes are rationalised, standardised and improved and the migration to integrated,reliable and user-friendly information systems is achieved

Support Command has adopted the balanced scorecard methodology in its strategic planningand has developed objectives and related performance measures against five strategic goalsthat are consistent with, and linked to, the six Defence priorities. Through the balancedscorecard, Support Command has identified that one of its most significant opportunities forimprovement is in business processes.

Support Command inherited a disjointed network of single-Service processes including over300 different stand-alone logistic information systems. The overarching requirement has beenthe development of an enterprise framework that will cover all of the Group’s business. Thelogistics enterprise architecture project is aimed at developing an enterprise-level businessand information technology framework which will shape Support Command’s logistics businessprocesses. The first two stages of the project were completed during 1998-99 and the thirdstage of the project, planning for and delivery of architecture implementation, will be completedin 1999-2000. Closely related to this is the commencement of a supply-chain managementproject, which will establish and map a standardised supply-chain baseline for the ADF. Itwill set a baseline from which system and performance enhancements can be launched andwill allow commonality of performance measurement, management and reporting for the supplychain. Key to this outcome will be the concurrent progression of the standard Defence supplysystem open enterprise project. This project will enable the acquisition of a primary logisticssystem with an asset visibility and deployable capability, implementation of common logisticsbusiness processes, achievement of quantifiable savings through inventory reductions andrationalisation of current systems.

The book value of current and non-current assets is reduced

Inventory reduction is being achieved through a combination of disposal of obsolete items andreduced stock purchasing. As Support Command develops into a modern, integrated logisticbusiness, the former business practice of holding large inventories at many sites is changing tosmaller inventories at fewer sites and employing ‘just-in-time’ methodology. Accordingly, a

231

Group Six: Support Command

review of the accounting classification rules of inventory recognition for financial statementpreparation purposes was completed in 1998-99. Approximately $370m of inventory (currentassets) has been reclassified as non-current assets.

Work has commenced to verify low confidence prices of inventory holdings in the standardDefence supply system. Approximately 140,000 stock records have been identified as lowconfidence and, at 30 June 1999, the prices of approximately 125,000 of these had been verified.Support Command has also targeted approximately 730,000 inventory items in the system tobe reviewed for obsolescence/surplus classification. At 30 June 1999, 350,000 items valuedat approximately $750m have been assessed as obsolete/surplus and are being processed fordisposal. In addition, assessment of explosive ordnance inventory indicates that approximately$185m is obsolete/surplus.

Industry is informed of Support Command procurement requirements for goods and servicesand strategic alliances and partnering arrangements are put in place

The strategic alliance between Support Command and industry is vital to the Group’s futuredevelopment. At the market-testing project level, partnering is a key aspect to the delivery ofeffective and efficient services. At the strategic level, all market-testing activities are postedto the Commercial Support Group home page for free access by industry. This allows a completeoverview of all market-testing activities, both current and future, for the Group. For all activitiesbeing market tested, comprehensive information, through invitations to register interest, isdelivered to industry on the goods and services to be tested. As part of the market-testingprocess, both contract and in-house options identify opportunities for partnering.

��

� Consolidating establishment of Support Command Group

Achieved as Forecast Support Command has consolidated and completed the transfer offunctions between components to rationalise the management of materiel support. Commonfunctions are now managed by the appropriate single-Service element of Support Command.

� Reducing the number of logistic information systems

Achieved as Forecast Substantial progress has been made on developments which willsupplant many of the existing information systems and result in a significant reduction ofdisparate systems over the next two years. The implementation of the Support Commandenterprise architecture in the next period will accelerate the further review of systems that donot meet enterprise standards. The logistics enterprise architecture project, supply-chainmanagement and standard distribution and supply system open enterprise projects will deliverstandard logistic systems for the Group. As part of the Y2K Review, 38 non-Y2K compliantsystems or applications were identified for termination during 1998-99.

� Continuing the process of rationalisation and market testing

Achieved as Forecast Support Command is continuing the process of rationalisation andmarket testing. The Joint Ammunition Logistics Organisation has been established, providingfor the warehousing, maintenance and distribution of all ADF ammunition and explosiveordnance. Navy and Air Force proof elements have been transferred to Support Command(Army), which now provides all ADF proof and experimental functions. A range of market-testing projects is under way, with F-111 maintenance to be finalised in 1999-2000. Explosiveordnance, the Defence integrated distribution system, F-111 avionics, engines and weapons,C130 avionics and maintenance, and Army engineering, laboratories and proof and experimentalfunctions will be finalised in 2000-01.

232

Part Two

� Improving logistic and financial management competency through a comprehensivetraining strategy

Achieved as Forecast During the last year, work has been undertaken with the Joint Educationand Training Group to identify logistic management competency standards required of personnelworking in Defence logistic appointments. Work to date has identified some 60 Defence-specific competencies for personnel across the portfolio. The logistic competency standardswill be used to assist the development of Support Command position profiles, as the basis oftraining-needs analysis, and to review and develop career structures for logisticians. It ishoped that the competencies will lead to qualifications at the diploma and advanced diplomalevel.

The Defence Logistic Education and Training Customer Advisory Group was established inJune 1999. It will progress a range of Group logistic training reviews over next year includingreviewing the rationalisation of logistic training delivery.

� Improving inventory management, taking into account the Australian National AuditOffice report number 5 on Performance Management of Defence Inventory publishedin October 1997

Achieved as Forecast Measures to improve the performance management of DefenceInventory are directed through the strategy of the Support Command Australia BalancedScorecard. A Performance Management Information System is now being implemented whichwill enable comprehensive reporting and management of key performance indicators forinventory management. The Supply Chain Management Project now in progress will establisha single management regime for Defence inventory, including standard procedures andinstructions. The Supply Chain Segmentation Project has developed inventory segmentationprofiles which are planned to be implemented from late 1999, allowing procurement andmanagement according to agreed criteria. Development of a logistics enterprise architecturenow under way will provide the framework for rationalising logistics business processes andtheir supporting information systems.

� Adopting continuous improvement emergency management strategies

Achieved as Forecast Emergency Management Australia has worked with the states andterritories in formulating new courses in emergency management, has facilitated 10 nationalstudies into aspects of emergency management and conducted 59 workshops/courses. As aboard member, Emergency Management Australia contributed to the Public Safety IndustryTraining Advisory Board, which is developing the national training package for emergencyservices.

� Implementing a national approach to disaster mitigation

Achieved as Forecast Emergency Management Australia has formed a national mitigationworking party to progress the development of a national framework for disaster preventionand mitigation. The working party has identified nine priority areas that will improve mitigationin Australia and thereby reduce the impact of disasters on Australian communities. The NationalEmergency Management Committee has endorsed a program to advance work in these areasincluding the development of guidelines on land-use planning for natural hazards and asubmission to the Australian Building Codes Board to develop building codes for flood andstorm-surge areas. Progress currently accords with the agreed timetable.

233


��




6.1 Executive 25.9 52.7 33.1 -19.6 -37.16.2 Logistics Operations – Navy 634.0 667.9 646.1 -21.8 -3.36.3 Logistics Operations – Army 594.6 594.7 606.8 12.1 2.06.4 Logistics Operations – Air Force 830.2 877.1 927.9 50.8 5.86.5 Emergency Management

Australia 10.8 10.7 10.8 0.1 0.8 Group Total 2,095.6 2,203.0 2,224.6 21.6 1.0




6.1 Executive 138 266 279 13 4.96.2 Logistics Operations – Navy 2,554 2,717 2,292 -425 -15.66.3 Logistics Operations – Army 3,977 3,279 3,301 22 0.76.4 Logistics Operations – Air Force 4,239 4,127 4,110 -17 -0.46.5 Emergency Management

Australia 60 56 56 0 0 Group Total 10,968 10,445 10,038 -407 -3.9


Personnel Sub-Group6.1 6.2 6.3 6.4 6.5 Total

Permanent 98-99 Budget 49 518 1,249 3,460 0 5,276Force 98-99 Revised 49 518 1,249 3,460 0 5,276

98-99 Actual 49 518 1,249 3,210 0 5,026Reserves 98-99 Budget 0 525 459 0 0 984

98-99 Revised 0 591 10 0 0 60198-99 Actual 0 371 47 136 0 554

Civilian 98-99 Budget 89 1,511 2,269 779 60 4,70898-99 Revised 217 1,608 2,020 667 56 4,56898-99 Actual 230 1,403 2,005 764 56 4,458

Total 98-99 Budget 138 2,554 3,977 4,239 60 10,968Personnel 98-99 Revised 266 2,717 3,279 4,127 56 10,445

98-99 Actual 279 2,292 3,301 4,110 56 10,038

234

Part Two

��&�"'��&!�$��!-��$��!-��))

The initiatives within Support Command have continued with the commencement of a numberof projects to improve the efficiency and effectiveness of ADF logistic business processes andtheir supporting information technology systems. Market testing has been completed forcommercial vehicle management and PC9 air trainer logistics support.

A civilianisation program for 600 ADF positions has commenced with the first tranche of 230civilian positions created and consequent reductions in ADF numbers.




Logistics 44.1 45.6 51.2 5.6 12.2DRP Savings not yet Allocated 6.6 0 0 0 0Superannuation 6.6 8.2 8.2 0 0Provision for Contractor Support 0 0 0 0 0

Contracts Funded -25.4 -24.5 -26.1 -1.6 6.5Residual Provision -25.2 -11.4 0 11.4 100.0

Total 6.7 17.9 33.4 15.5 86.6




Logistics 617 617 604 -13 -2.1Total Personnel Reductions 617 617 604 -13 -2.1




Logistics 496 684 703 19 2.8Total Personnel Reductions 496 684 703 19 2.8

235





Amphibious capabilitiesLanding Platforms Amphibious 7.9 7.9 7.9 0 0Tobruk refurbishment 23.1 19.1 19.1 0 0

Sub Total 31.0 27.0 27.0 0 0Capability Related LogisticsClose in weapons systemsrefurbishment 2.0 2.0 2.0 0 0Missile launcher refurbishment 1.0 1.0 1.0 0 0Patrol Boat engine repairs 3.2 3.2 3.2 0 0Encapsulated Harpoon training vehicle 2.2 2.2 2.2 0 0Mk 48 torpedo spares 2.4 2.4 2.4 0 0ADI long term ammunition agreement 4.0 4.0 4.0 0 0FFG/DDG hull/ship equipment work 12.8 9.8 9.8 0 0Land Force

Ammunition 7.1 7.1 7.1 0 0B-Vehicle maintenance 4.6 4.6 4.6 0 0Clothing 3.3 3.3 3.3 0 0Combat Ration Packs 1.2 1.2 1.2 0 0Petrol, Oil & Lubricants 2.5 2.5 2.5 0 0Medical & Dental stores 1.7 1.7 1.7 0 0A Vehicle maintenance 1.4 1.4 1.4 0 0General Stores 1.0 1.0 1.0 0 0Combat Net Radio sparesmaintenance 1.0 1.0 1.0 0 0Trunk, Satellite & EWCommunications maintenance 0.8 0.8 0.8 0 0

Army Aviation 1.5 1.5 1.5 0 0Logistic support for engineer,workshop & electrical maintenance 1.9 1.9 1.9 0 0Naval Aviation maintenance & spares 11.5 11.5 11.5 0 0Tactical Fighter F404 enginesrecovery program 20.0 20.0 20.0 0 0Maritime Patrol maintenance & spares 10.0 10.0 10.0 0 0Maintenance & spares - B707, C-130,Caribou and T56 engine spares 10.0 10.0 10.0 0 0

Sub Total 107.1 104.1 104.1 0 0Net Personnel and Operating CostsCollins Subs in-service support 11.7 11.7 11.7 0 0ANZAC in-service support 15.3 15.3 15.3 0 0Huon Minehunter 4.2 4.0 4.0 0 0Land Force - Ninox, Parakeet 1.2 1.2 1.2 0 0Naval Aviation - Seasprite 7.6 8.5 8.5 0 0Lead-In-Fighter 9.0 9.0 10.2 1.2 13.3B707 Simulator 1.2 1.2 1.2 0 0

Sub Total 50.1 50.8 52.1 1.3 2.6DRP Transition Costs 2.1 16.3 31.0 14.7 90.2Total 190.3 198.2 214.2 16.0 8.1

236

Part Two

Table 6.8: Reconciliation of Appropriations for Support Command

Divison/Appropriation Item 1998-99 1998-99 1998-99 VariationBudget Revised Actual (98-99 Actual less


180-01 Running CostsService Personnel 302.7 299.4 290.6 -8.8 -3.0Civilian Personnel 210.1 204.3 218.0 13.7 6.7Administrative Expenses 62.9 82.4 70.1 -12.3 -14.9Facilities Operations 0 0 0 0 0

180-02 Other Services 6.8 6.8 6.8 0 0181 Equipment & Stores 1,606.6 1,693.5 1,715.8 22.4 1.3183 Defence Production 0 17.1 16.6 -0.5 -3.2Total Defence FunctionAppropriations (A) 2,189.1 2,303.5 2,317.9 14.4 0.6Total Defence Function Receipts(Offset within Outlays) (B) -93.5 -100.5 -93.3 7.2 -7.2Total Defence Function Outlays(C) = (A+B) 2,095.6 2,203.0 2,224.6 21.6 1.0



Appropriation $m180-01 RUNNING COSTS

Service Personnel ($-8.8m)

Variation in Accrual Based Superannuation and 3% Productivitybenefit liability based on movements in average staffing levels, changesin per capita rates and the impact of pay increases 0.4


Variations in rank profile, per capitas and ADF allowances -9.6


Related to Logistics 0.5

Civilian Personnel ($13.7m)

Additional costs associated with civilianisation 1.2






Increased freight requirements associated with the movement of storesfrom overseas 0.8


Variation in Fringe Benefits Tax liability -0.3

Reduced requirement for Y2K remediation funding -10.2

237


Appropriation $m


Related to Logistics -1.1

181 EQUIPMENT & STORES ($22.4m)

Increased support costs for F/A-18 15.0

Increased support costs primarily related to ammunition, small arms,Army Aviation, minewarfare and patrol boats 10.1

Net Group transfers primarily associated with the rationalisation offunctions between Group 6 and Group 13, increased F111 supportfrom Group 4 and increased Naval logistics support from Group 2 7.9

Increased support costs for FFG 5.0

Increased support costs for C130 3.0

Increased support costs for Anzac ships 1.5

Purchase of vaccine for overseas deployments 1.3

Increased support costs for ASLAV 2.1

Increased support costs for amphibious watercraft 0.8


Reduced support costs for HS748 pending withdrawal from service -4.7

Reprogramming of repair costs for HMAS Westralia -6.5


Related to Logistics -14.8


Increased exchange costs for the lead-in-fighter 1.2

183 DEFENCE PRODUCTION (-$0.5m)


DEFENCE PORTFOLIO RECEIPTS ($7.2m)

Lower than anticipated receipts from the sale of commercial vehicles 4.2

Lower than anticipated receipts from the sale of Defence stores 3.0

238

Part Two

239

��7��

��

Joint Education and Training Group objectives are that:

• Defence education and training policies support Government priorities, Defenceobjectives and client/stakeholder needs;

• education and training is a key driver to Defence capability through the provision ofDefence personnel with the smart edge;

• Defence education and training systems are efficient and effective and make best use

of the National Training Framework; and

• the Group has processes, procedures and systems, which effectively support its businessactivities.

� ��

The purpose of the Joint Education and Training Group is to put in place joint education andtraining policies that will enable Defence to have a workforce capable of promoting the securityof Australia and protecting its people and its interests. ‘Joint’ in this context is inclusive ofcivilian personnel. The Group Manager is the Head, Joint Education and Training. The Groupcomprises two areas; Education and Training Policy and Education and Training Services.

��

The Joint Education and Training Group achieved the following outcomes for 1998-99:

Policy analysis is completed to support the concept of an Australian Defence College

Achieved as Forecast During 1998, Joint Education and Training Group completed thedevelopment of policies to support the establishment of the Australian Defence College at theWeston Creek site. The college was officially opened on 18 January 1999. Its aim is toprovide senior military officers, civilians within Defence and overseas participants with theknowledge and skills required by senior leaders and managers.

The curriculum study on collocation and partial integration of single-Service Staff Collegesand the Defence Management Diploma Program, and development of a joint staff coursecomponent is completed

Achieved as Forecast The curriculum study to support the collocation and partial integrationof the single-Service Staff Colleges was completed in December 1998. In February 1999, aproject team was established to oversight the total project. This team is responsible for thedevelopment of the common and joint operations elements of the new course, entitled theAustralian Command and Staff Course. Curriculum development activity is on schedule.

The civilian equivalent of the single-Service Staff Colleges, the Defence Management DiplomaProgram, will also be part of the Australian Command and Staff Course, further exploiting thesynergies in integrating Defence’s military and civilian education and training.

Planning for, and implementation of, the rationalisation of common training schools and coursesare completed in accordance with the Defence Reform Program

Achieved as Forecast The Group has completed planning and feasibility work for a widerange of training rationalisation studies in concert with the single-Service training commands,Defence Estate and Corporate Support. Implementation of these studies is being progressed

240

Part Two

under the management of the Group and the single Services. Rationalisation of education andtraining institutions will result in common modularised course structures across Defence.

Rationalisation of education and training schools and processes will result in greatereffectiveness and real efficiencies by reducing numbers of Service personnel and Defencecivilians involved in training and thus achieving lower personnel, support and delivery costsas well as infrastructure savings. Two new tri-Service schools opened in 1999 as a result oftraining rationalisation reviews. A common basic medical assistant course, now known asmedical assistant level 2, commenced in January and the ADF School of Catering opened atHMAS Cerberus in February. In addition, an interim Defence Intelligence Training Centrehas been established at the School of Military Intelligence, Canungra, with the Army as thesingle-Service manager of joint training.

Planning and feasibility work for the rationalisation of policies and processes in the followingDefence schools and courses have also been completed:

• Phase one (planning and curriculum studies) of the Australian Command and StaffCourse project.

• Service police and security training.

• Communications and information systems training.

• ADF School of Health.

• ADF common technical training:- aviation technical training, and- continued use of Macchi aircraft as off-the-job training aids.

ADF common technical training courses progressing from planning to feasibility study stageinclude:

• electronics initial technical training;

• small categories initial technical training;

• common skills training; and

• explosive ordinance training.

Competencies for both Service and civilian personnel in joint operational, staff and policyappointments are identified and documented

Achieved as Forecast The competencies have been identified and validated. They havebeen supplied to the ADF Warfare Centre, the Australian Defence College and the AustralianCommand and Staff Course project to inform curriculum development.

A statement of requirement for the academic program to be delivered by the University College,Australian Defence Force Academy is completed

Achieved as Forecast Defence has had exploratory discussions with the Vice Chancellor ofthe University of New South Wales on how the University College at the Australian DefenceForce Academy can best meet the needs of Defence for the education and development ofjunior officers to meet the challenges of the next century. To support further discussions,Defence is developing a policy framework to guide the future development of the academyand an academic statement of requirement has been prepared and is currently being consideredby the University.

A policy for coordinated Defence intelligence training is developed

Achieved as Forecast A Defence Intelligence Organisation/Joint Education and TrainingGroup study that established a policy framework for rationalising the Defence intelligencetraining system has been completed. The study recommended the consolidation of management

241

Group Seven: Joint Education and Training

of intelligence training – in terms of both direction and resources – into one entity and theconduct of training at one site, where practicable, to achieve effectiveness and efficiency gainsfor Defence. An interim Defence Intelligence Training Centre has been established at theSchool of Military Intelligence, Canungra, with the Army as the single-Service manager ofjoint training.

Policy development for coordinated logistics management training has progressed

Achieved as Forecast This initiative involved developing an overarching policy to guide thedevelopment of a Defence logistics education and training system. In June 1999, stakeholdersendorsed the outcomes of the study, including a set of principles and terms of reference for ahigh-level advisory group to guide the development of the future logistics training and educationsystem. A logistics customer advisory group has been established and will oversight tworelated initiatives – a logistics competency identification study, which has identified andvalidated 58 logistics competencies across the Defence organisation, and a training needsanalysis.

The coordinated review of the Australian College of Defence and Strategic Studies and theJoint Services Staff College is completed and new higher Defence courses are implemented

Achieved as Forecast The review of the curricula for the colleges has been completed andthese colleges subsequently closed. A revised curriculum framework resulted in thedevelopment of two new higher Defence courses, the Defence Staff Course and the Defenceand Strategic Studies Course.

The new courses, which are tailored to meet current and future Defence needs more effectively,commenced in 1999.

Defence education and training is integrated into and maximises use of the National TrainingFramework

Achieved as Forecast Policy to support implementation of this measure has been drafted.The three Service training commands, the Acquisition Group and the Department of Defenceare Registered Training Organisations. All are committed to attaining quality-endorsed trainingorganisation status within the National Training Framework. National training packagesdeveloped within the framework have been utilised in the redevelopment of the Defenceorganisation’s vocational education and training.

Defence has actively sought formal accreditation of its vocational education and trainingprograms within the National Training Framework. As at 30 June 1999, some 355 accreditedDefence programs, each leading to one or more nationally-recognised qualifications, werelisted on the National Training Information System database maintained by the AustralianNational Training Authority.

The delivery of education and training programs and services meets Defence and client needs

Achieved as Forecast Further initiatives aimed at improving client service and ensuring thatexisting education and training services are meeting client expectations and departmental needswere implemented during 1998-99. These include a number of human-resource developmentconsultancies for other Groups including:

• the development of training in support of the Civilian Performance Management Scheme;

• the establishment of standing offers for the delivery of competency-based training andassessment modules, occupational health and safety training for non-military personneland desktop application training.

242

Part Two

A review of non-military middle-management career development has commenced to coincidewith the migration of the Defence Management Diploma Program into the Australian Commandand Staff Course. A review of the regional network for human-resource development staff,including assigned regional education network staff, has commenced.

The cadet population at the Australian Defence Force Academy at the end of June 1999 was955, of which 253, or 26.5%, were female. The academy achieved a satisfactory undergraduategraduation rate for 1998 of 65.7%. A total of 290 bachelor degrees were awarded including66 degrees with honours and one university medal. Total enrolments for the University Collegein 1998 were 1207 undergraduates (including the advanced students) and 546 postgraduates.

The Australian College of Defence and Strategic Studies completed its fourth and final year ofacademic operation in December 1998, meeting all its educational objectives effectively with37 participants graduating. There were 13 Service members, five public servants and 17overseas graduates from 14 countries, as well as two part-time affiliates from the NSW FireBrigades. The training and educational objectives of the Joint Services Staff College werealso met, with 25 ADF members, five public servants and 13 course members from overseasgraduating from its final course.

The first Defence Staff Course, provided through the Australian Defence College, was completedon 30 April 1999, with 55 full-time and two part-time students having taken part. The firstDefence and Strategic Studies Course commenced on 10 May 1999, with 51 people from 18countries enrolled.

The recommendations of the 1998 Australian Defence Force Academy review are progressed

Achieved as Forecast Of the 77 recommendations relating to the Australian Defence ForceAcademy, 58 have been completed, 14 have started and five are due to commence by January2000. Some of the major changes that have occurred include the introduction of a new militarycommand-wing structure, increased staff training and awareness, the introduction of a newyear-one induction and familiarisation program, the development of a year-two and threeintegration strategy, the introduction of equity and diversity training and a revision to thecadet assessment and reporting system.

��

The details of the Group’s performance against forecasts for 1998-99 are included under thePerformance Outcomes for 1998-99 section for this Group..

��




7.1 Education and Training Policy 5.3 4.5 4.3 -0.2 -4.57.2 Education and Training Services 97.6 88.1 86.0 -2.1 -2.4Group Total 102.9 92.6 90.3 -2.3 -2.5

243





7.1 Education and Training Policy 44 38 37 -1 -2.67.2 Education and Training Services 1,379 1,277 1,270 -7 -0.5Group Total 1,423 1,315 1,307 -8 -0.6


Personnel Sub-Group7.1 7.2 Total

Permanent 98-99 Budget 12 1,223 1,235Force 98-99 Revised 14 1,163 1,177

98-99 Actual 14 1,163 1,177Reserves 98-99 Budget 0 0 0

98-99 Revised 0 0 098-99 Actual 0 0 0

Civilian 98-99 Budget 32 156 18898-99 Revised 24 114 13898-99 Actual 23 107 130

Total 98-99 Budget 44 1,379 1,423Personnel 98-99 Revised 38 1,277 1,315

98-99 Actual 37 1,270 1,307

��&�"'��&!�$��!-��$��!-��))

Ongoing planning for, and implementation of, the rationalisation of education and trainingschools and courses in accordance with the Defence Reform Program has continued during1998-99. Major achievements in the integration and streamlining of education and trainingwithin Defence are listed in the Group’s Performance Outcomes for 1998-99.




Education and Training 0.1 0.1 0.1 0 0Administrative Support 0.3 0.3 0.4 0.1 33.3Provision for Contractor Support 0 0 -0.9 -0.9 0Total 0.4 0.4 -0.4 -0.8 -200




Education and Training -59 1 2 1 100Total Personnel Reductions -59 1 2 1 100

244

Part Two

Table 7.6: Reconciliation of Appropriations for the Joint Education and TrainingGroup



180-01 Running CostsService Personnel 44.0 40.7 41.8 1.2 2.9Civilian Personnel 9.1 8.6 6.7 -1.9 -22.3Administrative Expenses 8.7 9.1 7.9 -1.2 -13.1Facilities Operations 0 0 0 0 0

180-02 Other Services 35.3 35.3 35.2 -0.1 -0.1181 Equipment & Stores 8.9 1.5 0.8 -0.7 -47.8Total Defence FunctionAppropriations (A) 106.0 95.1 92.4 -2.7 -2.9Total Defence Function Receipts(Offset within Outlays) (B) -3.1 -2.5 -2.1 0.4 16.6Total Defence Function Outlays(C) = (A+B) 102.9 92.6 90.3 -2.3 -2.5




Higher than anticipated accrual-based superannuation and 3%productivity benefit liability based on movements in average staffing levels,changes in per capita rates and the impact of pay increases 1.2Civilian Personnel (-$1.9m)Under-achievement in corporate development pool, mainly ingraduate recruitment -1.9

Administrative Expenses (-$1.2m)Education and Training contract previously estimated against Commercial Support Program contracts 0.7Slippage in projects -0.7Under-achievement in support of corporate development poolactivities, mainly in graduate recruitment schemes -2.0Defence Reform Program GainsRelated to contractor support 0.9Related to administration -0.1

180-02 OTHER SERVICES (-$0.1m)Under achievement in ADF Centenary History Project -0.1

181 EQUIPMENT & STORES (-$0.7m)Education and Training contracts previously estimated againstCommercial Support Program contracts -0.7

DEFENCE PORTFOLIO RECEIPTS ($0.4m)Under-achievement in estimated receipts for foreign fee-payingstudents at the Australian Defence Force Academy and AustralianDefence College 0.4

245


246

Part Two

247

�� 5�8 ��

��

To develop integrated personnel policies and services that meet current and future Defencecapability and support needs.

� ��

The Defence Personnel Executive develops ADF and civilian personnel policies and practicesand provides personnel support services. Defence Personnel Executive also conducts ADFrecruiting, provides health policy and advice to the ADF and has technical control of healthunit services. The Group manager is the Head of the Defence Personnel Executive. TheGroup comprises four area; Personnel Executive, Personnel Policy, Personnel Managementand Defence Health Services.

��

The extent to which:

The personnel management framework, including the roll out of the PMKEYS (PersonnelManagement Key Solution) personnel management system, facilitates the effectiveimplementation of the Defence Reform Program

The Personnel Management Key Solution project remains the key enabler for achievement ofthe efficiencies in personnel management identified by the Defence Reform Program by ensuringthat Defence has a single source of accurate and timely personnel data.

During 1998-99, the project team finalised a plan for the phased implementation of the systemacross the entire Defence organisation and advanced preparation for the implementation ofphase one, covering personnel and payroll services for some 16,500 Defence civilian employees,2,000 officers and instructors of cadets and 1,000 fortnightly payees under the MilitaryCompensation and Rehabilitation Scheme. The current plan is for the first civilian pay to bedelivered from the new system on 14 October 1999, some ten months later than scheduled.This slippage was caused by difficulties with technical infrastructure and in obtainingappropriately-skilled personnel for the project.

Personnel issues are embedded into the Defence longer-term capability development process

In early 1999, the Defence Capability Committee considered a procedure developed by theGroup that sought to integrate the personnel component of capability into the capabilitydevelopment decision-making process. This process is now incorporated into capabilitydevelopment decisions. The committee recognised that the Group undertakes a range ofworkforce analysis, including the achievability, sustainability and affordability of changingpersonnel requirements. The Group manager now attends both the Defence CapabilityCommittee and the Defence Executive.

Stakeholders are satisfied with staff recruited and effectively posted to meet their requirements

Defence recruited 80% of the ADF full-time (permanent) target and 50% of the part-time(reserve) target. The recruiting environment is becoming increasingly competitive due to thegradual shrinkage of the primary target group of 17-24 year olds, changes in career perceptionsand lifestyle expectations, increased competition in the market place for quality applicants anda current high rate of job availability in the community.

248

Part Two

Outcomes for the three Services were mixed. Not all non-Service groups were able to be fullystaffed due to a shortage in Navy personnel in comparison to demand and the slippage ofmarket testing of positions and gaps occurring in Naval operational elements. The ArmyStaffing Plan was implemented through detailed consultation with key stakeholders and inaccordance with the Chief of Army’s priorities. Key stakeholders expressed satisfaction withthe level of consultation and the provision of staff within financial guidance. The drawdownof Air Force personnel numbers to the 2001 peacetime establishment of 13,000, together withthe slippage being experienced in the market testing of some 3,500 Air Force positions, hasresulted in a significant vacancy rate within Air Force positions as at 30 June 1999. To reducethis impact, Career Management (Air Force) staff and the Air Force change management teamhave continued close liaison with Air Force Headquarters and other Group managers to ensurethe highest priority is given to filling positions critical to capability. Career Management (AirForce) staff developed a tool to assist in analysis of Air Force staffing levels across the outputsand Groups. Information on recruiting for the Reserves can be found in the Performanceagainst Forecast for 1998-99 section for this Group.

There have been no general recruitment problems with civilian staff, although there have beensome particular difficulties with some categories, for example, information technology andproject management.

Approved staffing levels are reached

The following figures detail the achievement of average funded strength by Service and forcivilians for 1998-99.

Budget Revised Achieved Average Estimate Estimate Funded Strength

Navy 13,850 13,748 13,661Army 24,400 24,426 24,169Air Force 15,785 15,500 15,065

Civilian 17,131 16,940 16,641

The under-achievement in the average funded strength of the revised estimates for the ADF isdue to shortfalls in recruiting for the Army and the Navy and an increased separation rate in allthree Services. While this has assisted in drawing down the force towards a 50,000 averagefunded strength, it will create gaps in certain employment categories which will in turn affectcapability.

A series of ADF ‘lifestyle’ multimedia advertisements are scheduled during 1999-2000 in anattempt to dispel some of the more common misconceptions, identified by market research,about the lifestyle associated with an ADF career.

Work continues on the shape and attribution of the 50,000 force. This includes ongoingdiscussions with each Group to ratify the size and shape of their workforce requirements withinthe limitations laid down by each Service.

The proportion of personnel deployable in combat roles is achieved

In 1996, the proportion of the ADF personnel identified as combat and combat-related wassome 42%. Since then, the proportion has increased to be around 55% as at May 1999. Theincrease has resulted from a combination of factors. The reduction in the numbers of permanentforce personnel employed in support roles, the inclusion of Air Force Initial Deployment Forcenumbers and the Navy’s sea-shore ratio have increased the proportion of personnel identifiedas being employed in combat and combat-related roles. Air Force Initial Deployment Force

249

Group Eight: Defence Personnel Executive

support personnel are identified as the primary deployable force. The Air Force expeditionarycombat support squadrons, a component of the Initial Deployment Force, are analogous to theArmy’s brigade administrative support battalions. These elements are essential for thesustainment of combat operations.

0%

10%

20%

30%

40%

50%

60%

70%

80%

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Navy Army Air Force ADF

Environmental data, including the ADF attitudes survey, is used in planning, policy developmentand providing advice.

The third census of ADF members, conducted at four yearly intervals, was held in March 1999and, for the first time, included all active Reserve members. Production, analysis and reportingof census data will occur during 1999-2000.

A generic Defence attitude survey and ADF exit survey have been developed to replace thesingle-Service surveys. Administration and analysis of results to inform management willoccur during 1999-2000.

A number of personnel research tasks were undertaken for Defence clients and the results usedto inform management decisions. Studies included:

• a literature review and advice on fatigue in operational environments for the Navy;• development and trialing of tri-Service performance appraisal instruments;• a survey of the fixed costs of ADF Reserve health specialists;• occupational analysis of Navy pilots and Army loadmasters to inform training and

structural reviews; and• surveys of gender and sex-related harassment in ADF training institutions.

��

• Continue implementation of the Defence Reform Program recommendations for moreefficient and cost-effective management and administration of personnel in the Defenceorganisation.

Partially Achieved as Forecast On 2 November 1998, the Defence Personnel Executive wasrestructured to complete the full integration of staff and to align with the functional delivery ofservices provided by the Group.

250

Part Two

A revised implementation plan for the Personnel Management Key Solution project has nowbeen completed. Phase one of the project (now covering personnel and payroll services forDefence civilian employees) is planned to be rolled out on 30 September 1999, with the firstcivilian pay from the system planned for 14 October 1999.

In May 1999, the concept of rationalisation of civilian personnel administration across Australiainto three civilian personnel administration centres was developed. Implementationcommenced, in conjunction with the Defence Corporate Support Group, to establish thesecentres in Sydney, Canberra and Melbourne. Specialist assistance on complex personnel matterswill still be available to all locations. The Sydney and Canberra sites also incorporate callservices while Melbourne will be confined to transaction processing. Eventually all call serviceswill be located at one site in the Defence Service Centre.

The more cost-effective delivery of health services to members of the ADF within Australia isstill being pursued under a strategy aimed at identifying opportunities to rationalise servicedelivery, including market testing under the Commercial Support Program where appropriate.Pursuant to that strategy, the provision of ADF health services in Victoria, the ACT and southernNew South Wales is being market tested. The ADF requirement for pathology, radiology andoptometry services is also being reviewed on a national basis. A database enabling moreaccurate health costing data to be collected has been developed. These activities are beingundertaken in consultation with the Department of Veterans’ Affairs under the ‘Links’ project.(In March 1999, project teams in Defence and the Department of Veterans’ Affairs were set upto examine the rationalisation of a range of personnel functions between the departments.This group is referred to as the ‘Links’ project.)

� Further develop the Defence Human Resource Strategy including strategic personnelpolicy guidance, workforce, development and action plans

Partially Achieved as Forecast The Defence human resource strategy Defence–Our Peoplewas published in June 1999. The document details a new approach in the way Defence peopleare to be managed as well as providing strategic-level guidance to lower-level personnel plansand policies. A new ADF employment framework based on competencies was developedduring the reporting period and is to be fully implemented within two years.

A communications strategy for personnel issues was developed and implemented. This resultedin the release of material covering the future of remuneration in Defence. The lessons learntfrom this activity, and feedback at the two human resource symposiums held with other Groups,have been applied to subsequent communications initiatives with positive results.

Career Management (Air Force) has reviewed and modified its posting methodology by makingsignificant changes to the airman career management policy. The changes under the newairman career management system achieved a more extensive consultation process and aselection process focused on identifying the best available person for the job.

Defence has a well-developed approach to the management of civilian staff reductions. Themeasures include a national redeployment network to ensure the redeployment of skilled staffto suitable vacant positions, to facilitate job swaps and to encourage retraining. The Directorateof Civilian Redeployment and Retirement processes and monitors civilian redundancies forthe Defence organisation. Defence is considering the recommendations of the Audit OfficeReport No. 49 Staff Reductions in the Australian Public Service, tabled on 29 June 1999, toensure that its approaches to staff reductions meet all aspects of best practice.

251


� Continue equity education and practices in the Defence organisation

Achieved as Forecast Defence expends considerable resources on training its members andemployees to inculcate equity and diversity principles as positive values. To this effect, abroad Defence equity training strategy has been developed. The strategy provides trainingopportunities at all levels of Defence, varying in complexity commensurate with the workplacecircumstance. The strategy has four aspects: equity adviser network development and awarenesstraining; equity adviser training; general presentations to commanders, workshops andconferences; and ADF/APS career development equity training courses.

The Defence Equity Organisation has developed and promulgated anti-harassment policyinstructions. The instructions define unacceptable behaviour and detail the management ofsuch behaviour as well as incident reporting procedures.

An ADF Sexual Assault Information Pack for commanders, managers, complainants and peerswas launched in April 1999 to ensure the effective management of any sexual assault incidents.The publication of a booklet A Guide to Fair Leadership and Discipline in the ADF wasissued in April 1999. The guide addresses commonly held misconceptions about equity anddiversity issues and concerns in relation to good conduct and discipline. Furthermore, Diversityin Defence was issued in September 1998 to explain and promote workplace diversity.

A comprehensive visit schedule has been put in place to inform senior and middle managementof the roles and responsibilities of the Defence Equity Organisation and of equity advisers.The visits are also designed to discuss strategies available to eliminate unacceptable behaviour,to better manage incidents, to establish mediation and resolution mechanisms and to conducttraining.

� Further implement initiatives to improve the recruiting, operational effectiveness andcontribution of the Reserve Force

Not Achieved as Forecast The following recruiting outcomes for the reserves were achievedin 1998-99:

Target AchievedNavy 149 30Army 4,465 2,281Air Force 146 82

Further investigation of recruiting processes and initial employment training requirements isunder way to ascertain whether a more flexible delivery can be provided for those applicantswho have other employment or education commitments and experience attendance difficultiesin completing training for the required periods.

While the Australian Naval Reserve has, in previous years, experienced under-achievement interms of allocated funds, the reported impact on the readiness of permanent naval force unitshas been manageable. However, the Navy has moved in the last fifteen months to redefine therole of the Naval Reserve in a context aligned with the requirements articulated by the Chief ofthe Defence Force. This redefinition has allowed better integration of permanent and reserveforces and defined more clearly the role of the Australian Naval Reserve for recruitment andtraining purposes.

Under-achievement of Army recruiting targets in the last financial year occurred despite theADF recruiting organisation achieving record levels of inquiries for ADF careers. What isclear at this time is that there is rarely one factor that can be attributed to the overall cause forthe shortfall. Common induction training has been implemented across the Army since July

252

Part Two

1998. A consideration of alternative methods of delivering the recruit component is under way.However, until Army capability requirements are determined, the impact of lower than expectedrecruiting figures on Reserve capability cannot be ascertained.

The Air Force requirement for active Reserve personnel to meet Permanent Air Force deploymentcriteria (physical fitness, ground combat readiness etc) is now being enforced. Presently,approximately 70% of active Reservists meet operational deployment criteria. Recruiting targetsfor the Ground Defence Reserve Group were increased to the limit of current training capability.However, recruiting targets were difficult to achieve and failure rates were unacceptably high.In anticipation of expansion, Reserve squadrons have established training flights and streamlinedand modularised initial and deployment training to meet the challenges facing Reservists whofind difficulty arranging extended periods of leave from their civilian employers.

• Improve the effectiveness of health planning, intelligence and delivery across the ADF

Achieved as Forecast The effectiveness of health planning and intelligence has continued toimprove through the timely development of strategic health plans for 17 ADF operations anda number of planning contingencies during 1998-99. The development of timely, accurateand effective health intelligence, a refined process and the production of more comprehensivehealth and environmental information for Australia’s region of interest continued to improve.

• Implement the measures detailed in the Defence Employees Industrial Agreement andthe ADF Productivity Based Remuneration Arrangement 1997-99, including thedevelopment of remuneration-linked performance management

Achieved as Forecast Defence operates two principal workplace agreements; the DefenceEmployees Industrial Agreement 1998-99 covering civilian employees and the ADFProductivity Based Remuneration Arrangement 1997-99 governing ADF members. Conditionsof service for all Senior Executive Service and executive professionals within Defence arenow governed by Australian Workplace Agreements.

The improved conditions provided under the civilian agreement have enhanced theadministration of civilian employees. Successor arrangements to the agreement, which expiresin October 1999, are being developed. These arrangements will continue to support initiativesflowing from the Defence Reform Program, as well as supporting other changes inadministration including the Personnel Management Key Solution project and performancemanagement arrangements. The performance management arrangements for civilian employeeswere developed by the end of 1998. The arrangements were trialed between January and June1999 for implementation throughout the organisation from 1 July 1999.

The ADF arrangement expired in April 1999 but remains in force until the Defence ForceRemuneration Tribunal endorses a new agreement. This is being developed in conjunctionwith the civilian arrangements in order to maintain consistency in both outcomes and theimplementation of the broader reform agenda. The new arrangement will continue to facilitatethe productivity and efficiency reforms introduced under the Defence Reform Program.

Other ADF-specific reforms included the review of ADF pay setting arrangements conductedby Professor Valerie Pratt. The report is now being considered by the Government.

Flexible remuneration packaging was introduced in April 1999 for both the civilian workforceand the ADF. The arrangements are administered by a commercial provider on a fee-for-service basis that is borne by the individual.

• Review and rationalise personnel policy instructions to ensure innovative, equitable

253


and appropriate employment policies and practices

Achieved as Forecast The Defence Health Service Branch continued to develop and reviewjoint health policies. It issued 11 Defence Instructions (General), 24 health policy directivesand three health information bulletins.

There were 12 updated and revised policies issued on employment in the ADF coveringappointments, postings, career flexibility issues, general service requirements and civilianauthority in an integrated environment.

Two reviews concerning honours and awards and veterans’ entitlements were initiated. Theywere ‘The End of War List - Vietnam Review’ and a ‘Review of Service Entitlement Anomaliesin South East Asia between 1955 and 1975’. A booklet entitled Campaign and OperationalMedals Awarded to the Australian Defence Force was published which illustrates campaignmedals and their ribbons and provides a brief description of the eligibility for each award.

Defence introduced a revised civilian recruitment and selection policy. The new proceduresare quicker, simpler, more flexible and focus on outcomes. Powers have been devolved toADF and APS line managers of civilian staff. Line areas are responsible for filling theircivilian vacancies. Defence Corporate Support Group recruitment units offer a range of supportservices while managers can adapt assessment methods according to the requirements of eachvacancy.

Defence introduced a new ‘fitness for duty’ policy for its civilian employees. The policy takesadvantage of the flexibility provided by the Government’s March 1998 reforms to the APSemployment framework. The overall interest of the department and its staff are best served byseeking to facilitate the return to work of injured or ill staff as soon as practicable. Accordingly,the new policy focuses on the responsibilities of supervisors, working with case managers, toachieve an early return to work of sick or injured staff to the same job in the same workplace.Where it is not feasible for health reasons for an employee to return to the duties previouslyperformed, the policy introduced a new administrative mechanism for facilitating theredeployment of such sick or injured staff.

The new policy also streamlined procedures for handling disputes between the departmentand civilian staff regarding the consideration of medical evidence in non-compensation cases.The previous tripartite medical panel arrangements have been replaced by a process wherebya suitably-qualified medical specialist provides a medico-legal assessment as part of anindependent review and furnishes a single report which then forms the basis for further decisionmaking by the department.

A range of leave entitlements were streamlined including the devolution of the approval powerto ADF and APS personnel for annual leave, special leave, bereavement leave and certaintypes of other leave. The requirement to submit leave forms for certain types of absences wasabolished, further reducing personnel administration costs.

In May 1998, Mr Noel Tanzer AC was appointed to conduct a review of the MilitaryCompensation Scheme. The review examined options for a single peacetime compensationscheme, which covers only military personnel and recognises the different nature of militaryservice from civilian employment. Mr Tanzer completed the review in March 1999 and hisfinal report has been handed to the Minister Assisting the Minister for Defence. The reportrecommends that a new single scheme covering all service, short of a major declared war, beestablished for the ADF. It also advocates a holistic approach to injury prevention andmanagement in the ADF by integrating safety, rehabilitation and compensation elements intoone scheme. The review is now being considered by the Government.

254

Part Two

In 1997-98, Ms Sue Rabbitt Roff prepared and published a report on her study of the illness andmortality of members of the armed forces of the United Kingdom and New Zealand who wereinvolved in the British atomic weapons tests in Australia and in the Pacific in the 1950s and1960. In January 1999, the Minister Assisting the Minister for Defence asked the eminentepidemiologist Professor John Kaldor, of the University of New South Wales, to examine themethodology used by Ms Rabbitt Roff in conducting her study and to comment on the validityof her findings and any potential implications for those Australians whose health may havebeen affected by the atomic weapons tests in Australia. (Professor Kaldor’s report was receivedin July 1999 and has since been released publicly.)

��




8.1 Personnel Executive 278.1 441.3 354.1 -87.2 -19.88.2 Personnel Policy 275.3 274.3 276.7 2.4 0.98.3 Personnel Management 383.1 351.4 304.6 -46.7 -13.38.5 Defence Health Services 149.8 143.6 151.8 8.3 5.8Group Total 1,086.3 1,210.5 1,087.3 -123.2 -10.2




8.1 Personnel Executive 433 441 427 -14 -3.28.2 Personnel Policy 1,811 1,803 1,740 -63 -3.58.3 Personnel Management 1,991 1,969 2,107 138 7.08.4 Defence Health Services 1,464 1,409 1,453 44 3.1Group Total 5,699 5,622 5,727 105 1.9


Personnel Sub-Group8.1 8.2 8.3 8.4 8.5 Total

Permanent 98-99 Budget 341 709 667 1,239 0 2,956Force 98-99 Revised 341 710 668 1,239 0 2,958

98-99 Actual 341 710 668 1,239 0 2,958Reserves 98-99 Budget 0 798 337 4 0 1,139

98-99 Revised 0 798 312 4 0 1,11498-99 Actual 0 711 541 57 0 1,309

Civilian 98-99 Budget 92 304 987 221 0 1,60498-99 Revised 100 295 989 166 0 1,55098-99 Actual 86 319 898 157 0 1,460

Total 98-99 Budget 433 1,811 1,991 1,464 0 5,699Personnel 98-99 Revised 441 1,803 1,969 1,409 0 5,622

98-99 Actual 427 1,740 2,107 1,453 0 5,727

255


��&�"'��&!�$��!-��$��!-��))

The Defence Personnel Executive consolidated five former personnel organisations into one.The structure of Defence Personnel Executive is being further refined as the organisationmatures and the role of the Defence Personnel Executive is defined. The continuedrationalisation of personnel requirements, and associated savings, will continue as theorganisation matures and civilian and military personnel functions are further integrated asappropriate. The formation of the Defence Health Service from the three Service healthorganisations has enabled the centralised control of health activities and significantrationalisation of health policies and plans.

The contract for the new integrated, single personnel management system has been signed.Work continues on the implementation and development of the system within Defence withthe civilian payroll function to be undertaken by the system in October. The system will alsoenable, and assist with, the achievement of significant Defence Reform Program related savings,especially those associated with the establishment of the Defence Service Centre.




Defence Command and Management 1.2 0.8 0.6 -0.2 -25.0Intelligence 0.2 0.1 0.1 0 0Acquisition and Industry 0.5 0.2 0.2 0 0Science and Technology 0.1 0.1 0 -0.1 -100.0Facilities and Long-Term ForceDisposition 0.4 0.2 0.1 -0.1 -50.0Logistics 4.8 3.0 2.2 -0.8 -26.7Personnel Planning 25.1 30.3 27.0 -3.3 10.9Education and Training 2.0 1.2 0.9 -0.3 -25.0Administrative Support 16.3 13.7 9.7 -4.0 -29.2Information Management 0.7 0.4 0.3 -0.1 -25.0Superannuation 4.3 4.6 4.6 0 0Total 55.6 54.6 45.7 -8.9 16.3




Personnel Policy 425 425 425 0 0Total Personnel Reductions 425 425 425 0 0




Personnel Policy 402 110 110 0 0Total Personnel Reductions 402 110 110 0 0

256

Part Two




Net Personnel and Operating Costs 0.1 0.1 0.2 0.1 100Transition Costs 57.9 119.3 9.6 -109.7 -91.9Total 58.0 119.4 9.8 -109.6 -91.8

Table 8.8 Reconciliation of Appropriations for the Defence Personnel ExecutiveGroup



180-01 Running CostsService Personnel 276.6 241.7 220.6 -21.0 -8.7Civilian Personnel 139.6 129.4 73.2 -56.2 -43.4Administrative Expenses 436.5 546.0 524.0 -22.0 -4.0

180-02 Other Services 125.4 125.4 110.9 -14.6 -11.6181 Equipment & Stores 12.7 18.3 12.1 -6.2 -34.0184 Defence Housing 233.2 291.3 289.9 -1.4 -0.5

Sub Total 1,224.1 1,352.0 1,230.6 -121.4 -9.0Special Appropriations

- MSBS Retention Benefit 16.0 16.0 15.7 -0.4 -2.4- Housing Loan Assistance Scheme 5.5 4.0 3.6 -0.4 -9.0- DETYA Subsidies 0.1 0.2 0 -0.2 -100.0- Other Departments -2.5 -2.8 -19.0 -16.2 576.2

Total Defence FunctionAppropriations (A) 1,243.1 1,369.5 1,231.0 -138.5 -10.1Total Defence Function Receipts(offset within outlays) (B) -156.8 -158.8 -143.5 15.3 -9.6Total Defence Function Outlays(C) = (A+B) 1,086.3 1,210.7 1,087.3 -123.2 -10.2Non-Defence Function Outlays

- DFRDB Payments 1,071.5 971.3 987.1 15.8 1.6- MSBS Payments 167.1 178.9 178.1 -0.8 -0.5- DFRDB Contributions -42.2 -43.6 -42.0 1.5 -3.5- MSBS Contributions -36.5 -47.4 -57.2 -9.9 20.8

Total Non Defence FunctionOutlays (D) 1,159.9 1,059.2 1,065.9 6.7 0.6DoFA - Advance to States underCommonwealth-States HousingAgreement -2.5 -2.8 -19.0 -16.2 576.2Total Portfolio Outlays (F) = (C+D) 2,248.8 2,272.6 2,172.3 -100.3 -4.4


257



Appropriation $m

180-01 RUNNING COSTS

Service Personnel (-$21.0m)

Higher than anticipated requirement for rental assistance single members 1.9



Non achievement of rental assistance single members DRP savings 0.7


Reduced requirement for Defence Reform Program Transition Costs -12.0

Allocation of centrally held provision for redundancies -11.3


Non requirement of centrally held TASO scheme provision -1.9



Reallocation to Administrative Expenses for Tier 1 and 2 training linked tothe Portfolio redundancy program -3.9

Allocation of centrally held provision for redundancies -50.8


Increased requirement due to the introduction of the fast jet pilotselection scheme 2.5

Lower than anticipated FBT liability costs -2.3



Non achievement of removals DRP savings 5.0

Non achievement of health DRP savings 3.2


Reallocation from civilian salaries for tier 1 and 2 training linked to thePortfolio redundancy program 3.9

Reprogramming of Defence Service Centre setup costs due to delays insight selection -13.0

Allocation of centrally held provision for DRP transition costs -22.5

180 OTHER SERVICES (-$14.6m)

Lower than anticipated claims for one-off ex gratia payments for ADFcompensable injuries -0.6

Reduced compensation and legal expenses due to a continued levellingoff in the number of claimants -13.9

181 EQUIPMENT AND STORES (-$6.2m)

Reprogramming of transition costs for the Defence Service Centredue to delays in the site selection -2.8

Lower than anticipated costs relating to PMKEYS partially due to slippagein the project -2.9


258

Part Two

Appropriation $m

184 DEFENCE HOUSING (-$1.4m)

Impact of a slower than anticipated reduction in DHA housing stock 0.4

Impact of a fewer than forecast married members in receipt of rentalassistance -1.8

SPECIAL APPROPRIATIONS (-$17.2m)

MSBS Retention Benefit

Lower than anticipated number of members taking up the retention option -0.4

Housing Loan Assistance

Lower than anticipated number taking up assistance combined with a lowerthan predicted interest rate -0.4

DEWRSB Subsidies

Lower than anticipated requirement for the DEWRSB schemes -0.2

Other Departments

Due to the Victorian Government discharging its debt to theCommonwealth -16.2


Lower than anticipated rations and quarters receipts due to less thanexpected members living in and a change in the payment regime 16.7


NON-DEFENCE FUNCTION ($15.0m)

Defence Force Retirement and Death Benefits (DFRDB)

Higher than anticipated level of resignations of members reaching 20years of service 15.8

MSBS Receipts

Lower than anticipated increase in average value of benefit -0.8

NON DEFENCE FUNCTION RECEIPTS (-$8.4m)

Defence Force Retirement and Death Benefits (DFRDB) Contributions

Lower than anticipated contributions 1.5

MSBS Receipts

Higher than anticipated receipts due to a large payment by the fund, asa result of a reconciliation of member accounts since 1991 -9.9

259


260

Part Two

261

��

��

To realise the Government’s priorities for the development of Australian defence capabilitiesthrough:

• timely acquisition and delivery of major capital equipment and systems that meetendorsed operational requirements, achieve value for money and are supportable; and

• development of policies to enhance the capability of Australian industry in support ofdefence self-reliance.

� ��

The Acquisition Group acquires equipment and promotes industry support to underpinAustralia’s defence capability. The Group Manager is the Deputy Secretary Acquisition whois assisted by Division Heads. This body is known as the Acquisition Executive. The Groupcomprises the two areas: Capital Equipment, and Industry and Procurement Infrastructure.

��

The Acquisition Group achieved the following outcomes during 1998-99:

New major capital equipment meets operational and support requirements and acquisitionsoccur within approved cost estimates, on schedule and in accordance with government industryand procurement policies

The Acquisition Group manages over 200 major capital equipment projects. A realisticperformance measure for the Group is the achievement of the largest 20 or so projects, whichcomprises the bulk of expenditure on major capital equipment projects. While many of theseprojects have had real cost variations over their life (which can sometimes extend to 10-15years), these variations are less than 1% of the initial approved project budget. All acquisitionactivity undertaken in Defence is in accordance with government industry and procurementpolicies.

Most of the top 20 projects will deliver their respective capability on or near schedule. Themajor exceptions are the Collins-class submarines and the Jindalee Over-the-Horizon RadarNetwork, which are both significantly behind schedule in regard to full planned capability.

Defence industry policies, programs and procurement contribute to developing and sustainingcost-effective capabilities relevant to the nation’s defence

Defence is communicating its needs more effectively with industry, as evidenced by industry’sincreasing interest in the range of programs that facilitate its involvement in Defence business.Most of 49 initiatives identified in the Government’s Defence and Industry Strategic PolicyStatement (released in June 1998) were completed or substantially progressed. The sustainabilityof the local defence industry was enhanced through gaining export contracts worth over $120mand a more aggressive use of Australian industry involvement targets to help redress a significantfall in expenditure in Australia on major capital equipment.

Defence purchasing policies and processes represent best practice within the overall frameworkof government purchasing policy

Defence continues to be a public sector leader in procurement practices. This is evidenced bythe recent Joint Committee on Public Accounts and Audit Report No. 369 into Australiangovernment procurement, where current Defence practice has been recommended for use by

262

Part Two

other departments and agencies. The major effort Defence expends to maintain and broadenthe procurement and project management skills of its personnel is illustrated by the fact that in1998-99, around 2,000 personnel gained qualifications in simple procurement, a further 1,000achieved qualifications at the complex level and an additional 60 successfully completed studiesat the postgraduate level. Defence is also currently sponsoring procurement competency trainingto other departments and agencies.

The Group achieves Defence Reform Program savings and other targets

The Group exceeded its Defence Reform Program efficiency gains target for 1998-99 ($32.5machieved against $26.5m targeted in the 1998-99 budget). With one exception, all DefenceReform Program initiatives progressed according to plan, including the efficiency gains froma reduction of 265 in civilian staff numbers. The one disappointment concerned the shortfallin the rate of civilianisation of ADF positions; 118 achieved versus the target of 150 positions.This was due to the difficulties in attracting appropriately skilled civilians in place of Serviceofficers, for the remuneration being offered. Increased use was made of professional serviceproviders and other contracted staff to progress the major equipment projects.

��

��9!�� #�:, �$�"�

The internal reporting of the Acquisition Group focuses on the top 20 or so major capitalequipment projects because of their importance to the delivery of Defence outputs and themanagement of annual expenditure. The projects listed below were selected on their estimatedexpenditure during the 1998-99 financial year. The descriptions provide details of performancefor these major projects.

�";�'��* ��!9�'�

Partially Achieved as Forecast Anzac Ship 03 (Arunta) was delivered in October 1998 andcommissioned in December 1998. Delivery dates for Ships 03 – 07 were reviewed and extendeddue to excusable delay under the contract. As a result, Anzac Ship 04 (Te Mana) is scheduledfor delivery in September 1999. Ship 06 was launched in April 1999 and the keel laying ofShip 07 occurred in June 1999.

The delivery schedule of Ships 05 – 10 has been reviewed due to the proposed installation ofsignificant capability enhancements during construction. This review has resulted in anextension of four months to the delivery date for Ship 10 and adjusted schedules for earlierships.

��<��,+$�� "��!9�'�

Not Achieved as Forecast Submarine 01 (HMAS Collins) commenced post-delivery dockingand refit in June 1998. This activity was scheduled for completion in December 1998 butemergent work, largely related to repair of welds in those sections of the submarine fabricatedin Sweden, and other modifications to the submarine, extended the work until it was completedin August 1999. Submarine 02 (HMAS Farncomb) has continued to operate from her homeportin Western Australia. Submarine 03 (HMAS Waller) was delivered and provisionally acceptedin April 1999, 27 months later than the original schedule, before joining HMAS Farncomb inWestern Australia. Submarine 04 (Dechaineux) commenced sea trials in October 1998 asforecast and these are continuing. Submarine 05 (Sheean) was launched in May 1999 andSubmarine 06 (Rankin) remains under construction and is now 94% structurally complete.

The principal issues requiring management attention were related to the noise characteristicsof the submarines, combat system capability and the reliability of the diesel engines. These

263

Group Nine: Acquisition

were the most significant of a number of technical problems that have delayed the finalacceptance of the submarines into service. In June 1999, the Government-appointed reviewteam of Dr McIntosh and Mr Prescott delivered their Report to the Minister for Defence on theCollins-class Submarine and Related Matters.

� "�*,"�� !�)��#��!9�'�

Not Achieved as Forecast This project is now 85% complete but a few months behindschedule. MHC 01 (HMAS Huon) was delivered in March 1999, commissioned in May 1999and is currently undergoing operational trials prior to formal acceptance into service which isplanned for late 2000. MHC 02 (Hawkesbury) successfully completed shock trials in April1999 and is currently undertaking sea trials before delivery in December 1999. MHC 03(Norman) was launched in May 1999. MHC 04 (Gascoyne) and MHC 05 (Diamantina) areunder construction. MHC 06 (Yarra) had its keel laid on schedule in June 1999. The schedulefor ships 03-06 is considered tight, but achievable.

�.%�!-��* '��* ��!9�'�

Not Achieved as Forecast The delivery of Leeuwin and Melville has been delayed due to adispute between the Commonwealth and parties involved in construction. Negotiations arecontinuing and, subject to the resolution of the dispute, it is now expected that the ships will bedelivered in late 1999, a slippage of several months.

(!#(�%��)��!<�� )) #�

Achieved as Forecast Phase 2A of the project involves the integration of the missiles intoAnzac Ships 05-07 and the acquisition of trials and inventory missiles for the Anzac Ships andFFG’s. As a consequence of a slip in the NATO consortium schedule, missile deliveries willnow commence in late 2000, coinciding with the delivery of Anzac Ship 05.

��- '�� # &�� + # �.

Not Achieved as Forecast The delivery of the 12 C130J-30 aircraft is more than two yearsbehind schedule due to a number of developmental problems, as well as delays LockheedMartin, the contractor, experienced in obtaining United States certification for the aircraft.Contract payments by Defence have accordingly been re-phased from 1998-99 to 1999-2000.The Commonwealth and the contractor have amended their contract with regard to conditionalacceptance of aircraft with interim software configurations. The delivery of the first aircraft isnow scheduled to occur in September 1999, with the rest expected to arrive by mid-2000.Progressive software upgrades to the final capability are planned in December 1999 andDecember 2000.

5��%��"�� -*�� + # �.

Achieved as Forecast The physical design of the lead-in-fighter was finalised and productionramped up to the extent that 27 aircraft were in manufacture by the end of June 1999. Designand development of the aircraft avionics continued, with software loads and avionics equipmentbeing tested on a British Aerospace demonstrator aircraft. The first Commonwealth aircraftcommenced final assembly in the United Kingdom in May 1999. In Australia, the BritishAerospace support facility at Williamtown in New South Wales was completed and officiallyopened by the Prime Minister in April 1999. British Aerospace is progressively placing contractswith local industry and preparations for the local assembly of aircraft have commenced.

�";�'��# '!�� + # �.

Achieved as Forecast Of the major activities planned for 1998-99, the critical design reviewfor the helicopter hardware and software was conducted in February 1999 and the production

264

Part Two

readiness review was successfully completed in May 1999. The in-service contract supportfacility is under construction at Nowra.

��2 ��%��$�#�$�"�� !"

Not Achieved as Forecast The first of type aircraft completed its first flight in May 1999 andrefurbishment of the other aircraft is under way at Avalon. The first (prototype) AP-3C aircraftis expected to be delivered to Edinburgh by December 1999, several months behind forecast.Recent slippage in the delivery date is due to the late delivery of data management software byLockheed Martin Tactical Defense Systems and the need for Raytheon to resolve a number ofanomaly reports raised in testing to date. The last of three P-3B training aircraft arrived inEdinburgh in June 1999.

� "%�#�� !"�#��%��<!�=

Achieved as Forecast Work on this project is now at 80% of the budgeted cost of the project.With the imminent formal hand-over of Radar 2 in Western Australia to RLM ManagementCompany, GEC Marconi (a major subcontractor) will have completed its specific projectcontributions to the network. All responsibilities will now reside with RLM ManagementCompany, the joint venture managing the contract on behalf of Telstra. However, Marconiwill retain support obligations of a long-term nature, such as warranty and latent defectresponsibilities, spares availability and support. A major demonstration of actual target detectionand tracking is imminent. This will confirm that the network can operate successfully whenfully commissioned in late 2001 or early 2002.

� -*��:,�"'.��!%��" )�� !"

Not Achieved as Forecast The project incurred a delay of several months due to the revisionof the specifications for mobile platforms and their existing capabilities to allow the newsystem to be ‘backwards compatible’. A further delay was due to the contractor relocatingfrom Sydney to Brisbane and the recruitment of new staff. The system functional review wassuccessfully completed at the end of June 1999, but the system preliminary design review hasslipped from 1998 to late 1999. The accommodation for the network management facility atRussell Offices, in Canberra was completed in June 1999 but it is yet to be fitted out withfurniture and technical equipment.

�'� (�� )) #��'!.

Not Achieved as Forecast The active missile decoy launch subsystem is currently in thefinal stages of acceptance from the prime contractor. (The Nulka decoy has already beenaccepted into service). However, some last-minute problems have been discovered in thesubsystem software that will delay acceptance until early 2000. The software is complex andthe project office is placing stringent demands on safety and functionality. It will only beaccepted from the prime contractor when there is a high degree of confidence that it can beused successfully in combat. HMA Ships Melbourne, Darwin, Canberra and Newcastle havebeen fitted with the system in its current configuration. The remaining 10 major fleet unitswill be fitted between 2000-2004. The United States Navy, which has purchased the Nulkadecoy, has developed its own launch subsystem, which will be fitted to over 100 ships, withthe first in late 1999.

� # ��.��## �� !$$," '�� !")

Partially Achieved as Forecast A contract for the upgrade of the Defence mobile satellitecommunication network was awarded as planned. A contract for the planned ADF satellitecapability, as part of a shared military/commercial satellite, was not signed as planned as thetender offer was judged unsatisfactory. Negotiations are proceeding regarding a new offer by

265


the company involved and contract award is expected in October 1999. A contract for aircraftsatellite communications systems was not achieved as planned. The operational requirementis being reviewed and the possible changes may require new tenders to be called.

>�-�� #��'� '�#��% !)

Partially Achieved as Forecast The manpack radios are being delivered as forecast. Anadditional 360 radios were ordered in April 1999 in support of Project Bushranger. Themanufacturer of the armoured vehicle intercom systems experienced technical problems thatdelayed delivery. These problems have now been resolved and delivery is expected to becompleted by mid-2000.

��-��%��$�#�$�"�� !"

Achieved as Forecast This project is proceeding as planned with contract signature achievedin June 1999. All six ships will be upgraded in build order at Australian Defence Industries’Garden Island facility in Sydney. The first FFG is scheduled to commence the upgrade inmid-2002, while the last upgrade is scheduled for completion in early 2006.

�,)��# �"�5 -*��$!,��%��* '#�)

Achieved as Forecast All 111 vehicles have been delivered as forecast and the capabilityhas achieved acceptance by users of the vehicle. The third phase follow-on purchase fordelivery in 2000-01 is proceeding as planned.

� -*�� -*� "-�:, �$�"��"%��,�(� ##�"'�� + # �.

Partially Achieved as Forecast Delays have occurred in the delivery of sniper night-sightsand other night-fighting equipment due to production difficulties experienced by the contractor.These difficulties have now been resolved. The final perimeter surveillance equipment hasbeen delivered with the contract approaching closure. Racal Australia has been chosen as thepreferred tenderer for the ground surveillance radar project.

�?��!�"��-��%�

Achieved as Forecast Phase one design was completed with the acquisition of all hardwareand software now under contract and deliveries of some systems under way. A contract wassigned in June 1999 with Boeing for incorporation of the phase one aircraft modification andsupport equipment upgrades. Raytheon’s APG-73 radar was selected as the replacement radarand the process of source selection of the remaining phase two systems commenced. Severalrisk mitigation studies in regard to phase two were completed, in conjunction with Boeing, toidentify the major risks, establish risk reduction activities and develop the project schedule.

/ ��?2 �� !"��!#��"%��!�� "-��" �)

Not Achieved as Forecast The preferred tenderer, Boeing Australia Limited, was announcedin September 1998. The signing of the prime equipment and logistics support contracts hasbeen delayed in order to undertake a number of risk reduction activities arising from the tenderedproposals. Activities include re-analysis of the communications switch and scoping newapproved requirements for the specification to ensure that a capability can be brought intoservice within the current budget. The contracts are now scheduled to be signed early in 2000.

��'� '�#�� &�"'��%��.)��$)

Achieved as Forecast This project is proceeding as planned, with a contract signed withLockheed Martin Corporation in August 1998. The system functional review was completedin March 1999 and the system requirement review was completed in January 1999. Thepreliminary design review is on target for completion in July 1999.

266

Part Two

�,)��# �"��&�"'��!�'��! "�� !$$�"%��,��!��"( �!"$�"��@�*�)��4�A

Achieved as Forecast The basic installation of the ADF joint command support environmentat 17 bases has been achieved as planned and work is proceeding on the development ofplanned enhancements.

�"%,)��.��"%��!',��$�"��"&��)��,'�,��

Achieved as Forecast Effective communication is fundamental to developing and sustaininga cost-effective industry capability. There is positive and increasing interest from industryabout the direction of industry policy and about the programs that are used to facilitate theirinvolvement in the nation’s defence. This is evidenced by interest in the Industry PolicyConsultative Forum, record numbers at the annual Defence Procurement Conference and theassociated briefing program, and access rates from Acquisition’s web-site of documents suchas the expanded Unclassified Pink Book and the revised Defence Needs of Australian Industry.

The Defence and Industry Strategic Policy Statement, released in June 1998, saw significantimplementation action during the year with over 90% of the 49 initiatives complete orsubstantially complete. Updated on progress are placed regularly on the Acquisition web-site.

The annual Defence Procurement Conference continued to grow in significance attracting arecord of nearly 800 delegates. An associated briefing program undertaken in capital citiesand regional centres was similarly successful, and enjoyed record attendances. In addition,industry was provided with greater access to information with the launching of the Acquisitionweb-site. The site received a nomination for ‘best government site’ in the 1999 AustralianInternet Awards.

The sustainability of Australian defence industry was enhanced through defence supplierssigning export contracts worth in excess of $120m. In addition, assistance was provided tocompanies bidding for other overseas contracts valued at over $1b. These results were achieveddespite a slow-down in Asian markets due to the economic crisis.

Several long-term market opportunities were identified through the first defence industrymission ever to travel to the Middle East. Technology transfer, in support of Defence acquisitionprograms, was aided through the administration of export controls that protect equipment andtechnologies acquired from overseas suppliers from re-export.

These measures should help to redress a significant fall in recent years of expenditure in Australiaon major capital equipment from 68% in 1989-90 to 43% in 1998-99. This fall can be attributed,in large part, to a movement away from procurement in the maritime sector towards procurementin the aerospace sector, where the supporting infrastructure is less developed. The shift is notpermanent. To help deal with the decline, Acquisition has instituted more focused use ofAustralian industry involvement targets.

Dedicated staff support was, and will continue to be, provided to the Office of Asset Sales andInformation Technology Outsourcing for the sale of Australian Defence Industries Limitedand the Australian Submarine Corporation. The Group is involved in the evaluation of offersand the subsequent negotiations with the preferred purchasers. The sale of Australian DefenceIndustries Limited should be completed in 1999.

267


Table 9.1: Major Capital Equipment Expenditure for Top 20 Projects by 1998-99Expenditure

Project Name Approved Expenditure 1998-99 1998-99Project Cost to 30/6/99 Budget Actual

$m $m $m $mMARITIME AND GROUNDAnzac Ship 6,101.8 4,368.1 425.8 426.4Minehunter Coastal 1,205.9 867.4 139.4 160.0New Submarine 5,026.9 4,726.6 75.2 121.2Ninox 238.5 66.8 46.8 33.5Hydrographic Ship 217.1 159.4 45.0 29.0Amphibious Transport 98.6 61.2 29.6 19.0AEROSPACELead-In Fighter Capability 963.7 445.9 283.3 227.4Anzac Helicopter Capability 884.6 436.0 227.8 190.7Strategic Airlift Capability 1,020.2 702.3 172.1 170.6P3C Update Implementation 834.9 516.5 76.0 63.4Harpoon Missiles 98.3 57.3 34.7 47.6Air-To-Surface Weapon System- Training Capability 312.9 45.9 30.2 39.9Airborne Early Warning InitialDesign Activity 36.2 27.6 25.4 24.0P3C Update 209.7 199.2 12.1 12.1ELECTRONIC SYSTEMSActive Missile Decoy (Ph 2 & 3) 176.5 117.7 49.3 56.6Wagtail Tactical Radios 88.9 74.6 39.0 39.6Military Satellite Acquisition 106.3 52.2 21.4 26.6ADF Joint Command Support (Ph 3) 56.3 29.9 39.4 19.4HF Modernisation 531.3 51.0 18.1 18.7ATC Radars (ADATS) 196.0 131.3 19.9 16.6ADF Joint Command Support (Ph 5b) 53.5 20.6 25.3 15.8Total Top 20 Major CapitalEquipment Projects 18,458.2 13,084.0 1,835.7 1,758.4Note: A number of these projects are not included in the project reporting by outcomes above. This isbecause Table 9.1 shows the Top 20 Projects by 1998-99 expenditure only, not necessarily by total sizeof the Project.

��




9.1 Capital Equipment 2,748.2 2,579.1 2,699.0 119.9 4.79.2 Industry & Procurement

Infrastructure 8.1 33.5 34.0 0.5 1.6Group Total 2,756.3 2,612.5 2,733.0 120.5 4.6

268

Part Two




9.1 Capital Equipment 1,775 1,585 1,586 1 0.19.2 Industry & Procurement

Infrastructure 282 272 246 -26 -9.6Group Total 2,057 1,857 1,832 -25 -1.3



Permanent 98-99 Budget 611 6 617Force 98-99 Revised 617 0 617

98-99 Actual 589 0 589Civilian 98-99 Budget 1,164 276 1,440

98-99 Revised 968 272 1,24098-99 Actual 997 246 1,243

Total 98-99 Budget 1,775 282 2,057Personnel 98-99 Revised 1,585 272 1,857

98-99 Actual 1,586 246 1,832

��&�"'��&!�$��!-��$��!-��))

Defence Reform Program implementation in 1998-99 focused on the civilianisation programand achieving savings from its collocation into new accommodation at Russell, AustralianCapital Territory. The program recommended that the proportion of military staff in Acquisitionbe reduced and replaced by civilians. The civilianisation program began during 1997-98, andthe Group, in conjunction with the Service Groups, has identified 278 military positions foreventual civilianisation; 118 military positions were civilianised and filled by public servicepersonnel to the end of 1998-99. This achievement was less than planned due to the difficultiesin attracting appropriately skilled civilians in place of ADF officers.

The majority of Acquisition staff located in Canberra have now been collocated in newaccommodation in Russell. Rationalisation of staffing levels was undertaken in 1998-99 witha saving of almost 10 percent of Acquisition positions (145 positions) located in Canberrareturned to the Portfolio.

The Defence Reform Program also made several recommendations relating to the rationalisationof industry functions in Acquisition. The wind back of the Acquisition presence in the regionsto small and streamlined ‘shop-fronts’, restructuring the quality assurance function and otherinitiatives, resulted in 84 positions and consequent savings.

During the year, further progress was made with Acquisition’s business process re-engineeringproject that has now entered its implementation phase. The benefits will include improvedacquisition cycle times and more efficient and effective acquisition processes. Also, theproposed sale of Australian Defence Industries was advanced considerably in 1998-99 withconsortium bids lodged by 30 June 1999. In August 1999, the Minister for Defence announcedthat the Transfield Thomson – CSF Joint Venture was the preferred tender for AustralianDefence Industries.

269


In summary, Acquisition achieved a cumulative and continuing efficiency gains of over $30million by end 1998/99, and is well advanced towards meeting the mature target of $36 million.




Acquisition and Industry 24.8 28.6 30.5 1.9 6.6Superannuation 1.7 2.0 2.0 0 0Total 26.5 30.6 32.5 1.9 6.2




Acquisition and Industry 150 150 118 -32 -21.3Total Personnel Reductions 150 150 118 -32 -21.3


CCategory 1998-99 1998-99 1998-99 VariationBudget Revised Actual (98-99 Actual less


Acquisition and Industry 267 265 265 0 0Total Personnel Reductions 267 265 265 0 0




DRP Transition Costs 0 0 7.1 7.1 0Total 0 0 7.1 7.1 0

270

Part Two

Table 9.9: Reconciliation of Appropriations for the Defence Acquisition Group



180-01 Running CostsService Personnel 40.5 40.2 38.9 -1.2 -3.1Civilian Personnel 81.4 75.7 82.1 6.4 8.5Administrative Expenses 32.7 35.5 32.7 -2.8 -8.0Facilities Operations 0 0 0 0 0

180-02 Other Services 1.6 6.2 1.0 -5.2 -83.9181 Equipment & Stores 2,700.4 2,525.7 2,648.2 122.5 4.9183 Defence Production 17.9 8.7 7.5 -1.2 -13.8184 Payments to ADI 0.1 0.1 0 -0.1 -100Total Defence FunctionAppropriations (A) 2,874.5 2,692.0 2,810.5 118.5 4.4Total Defence Function Receipts(Offset Within Outlays) (B) -118.2 -79.4 -77.5 2.0 -2.5Total Defence Function Outlays(C)= (A+B) 2,756.3 2,612.5 2,733.0 120.5 4.6


Table 9.10 Major Variations between 1998-99 Revised Estimate and 1998-99 ActualOutcome

Appropriation $m180-01 RUNNING COSTS

Service Personnel (-$1.2m)

Variation due to improvements in military attribution methods -2.6


Related to Acquisition and Industry 1.5



Variation in accrual based superannuation and 3 % productivity benefitliability based on movements in average staffing levels, changes inper capita rates and the impact of pay increases 0.4



Related to Acquisition and Industry -2.1




Higher then forecast expenditure on professional service providers 1.0

Lower than forecast expenditure on systems engineering, earnedvalue management and government business enterprise consultancies -0.4

Delays in contracting appropriate professional service providers forbusiness process re-engineering project -0.6

271


Appropriation $m

Lower than forecast expenditure on office requisites and incidentals -1.2



Related to Acquisition and Industry -1.3

180-02 OTHER SERVICES (-$5.2m)

Lower than forecast expenditure under the Sale and Purchase of sharesin ASTA Ltd agreement and other compensation and legal -5.2

181 EQUIPMENT & STORES ($122.5m)

Net variations for revised project deliveries, exchange rate variationsand cash flow requirements:

Bushranger Infantry Mobility Vehicle 46.7

New Submarine 46.0

FFG Upgrade 34.0

IH Missile Project 29.7

Minehunter Coastal 20.6

Training Capability for Air to Air Weapons 20.3

Harpoon Missiles 12.9

ALR 2002 Radar Warning Receiver 9.9

Air-to-Surface Weapon System – Training Capability 9.8

Active Missile Decoy (Ph 2&3) 7.3

Evolved Sea Sparrow 6.5

Wagtail Tactical Radios 0.7

Anzac Ship 0.6

Strategic Airlift Capability -1.5

P3C Update Implementation -12.6

Hydrographic Ship -16.0

MILSATCOM -26.8

Anzac/OPC Helicopter Capability -37.1

Lead-in Fighter Capability -55.9

Net variations for revised project deliveries, exchange rate variationsand cash flow requirements for other projects 19.7

Net Group transfers primarily associated with the new majorinvestment program 6.6

Reduction in minors program 2.0

Lower than forecast expenditure related to minimum essentialemergency network -1.0

Miscellaneous minor variation 0.1

272

Part Two

Appropriation $m

183 DEFENCE PRODUCTION (-$1.2m)

Payment of DRSC Mulwala invoices prior to the transfer ofresponsibility to Support Command 2.0

Reduced expenditure against Nomad due to slippage -0.4

Net Group transfers primarily associated with Defence Estateassuming responsibility for R&M Mulwala and DRSC Garden IslandDockyard -2.8

184 PAYMENTS TO AUSTRALIAN DEFENCE INDUSTRIES (-$0.1m)

Requirement did not arise to utilise contingency funds budgeted forOccupational Health and Safety and Environmental issues arisingfrom the Commonwealth’s previous ownership of Mulwala -0.1


Delay in refund from the ASTAAS Subsidy 3.5

Lower than forecast ANZAC receipts 0.9

Lower than forecast royalties from ADI Minesweeping and Support System 0.5

Higher than anticipated receipts from projects -2.9

273


274

Part Two

275

��B�� 5��0

��

To give advice that is professional, impartial and informed, on the application of science andtechnology that is best suited to Australia’s defence and security needs.

� ��

The Science and Technology Group provides the core of Australia’s skills in defence researchand its applications. There are four principal supporting objectives:

• to position Australia to exploit future developments in technology which show promisefor Defence application;

• to ensure that Australia is an informed acquirer of new capabilities and equipment;• to develop new capabilities where Australia’s circumstances require this; and• to support existing capabilities by increasing operational performance and reducing the

costs of ownership.The skills required to meet these objectives enable the Science and Technology Group tosupport Australia’s regional and global security interests and to interact with industry.The Group Manager is the Chief Defence Scientist.

��

This section summarises the performance outcomes for 1998-99, with more detailed informationbeing provided in the subsequent section on performance against forecasts. This summary isnecessarily selective, as the fields covered by the Science and Technology Group’s support toDefence are diverse, many research programs take place over several years and many activitiesare classified. The Group’s performance outcomes are measured by:

The extent to which clients’ needs and priorities are met, and in particular:– advice provided to the Defence organisation to make informed decisions on

new defence capabilities is timely and useful;– enhancements to existing defence capabilities provide increased operational

effectiveness, including more cost-effective use of personnel and materiel; and– the life-of-type of defence platforms is extended, with consequent cost and

operational benefits.

The Science and Technology Group provided scientific advice to assist Defence with decisionsin many capability areas. Examples include advice on airborne early warning and controlaircraft, the F/A-18 Hornet upgrade, the FFG upgrade, air-to-surface stand-off weapons,electronic warfare self protection for aircraft, the Anzac warfighting improvement program,modelling and simulation, and command support systems. Substantial contributions weremade towards through-life support, increased operational effectiveness, and the evolution ofvarious existing ADF platforms and systems including the Anzac class, Collins class, theF-111, C3I systems, information networks, and surveillance systems. The Science andTechnology Group contributed to the life extension of various air and maritime platforms andcomponents that will result in substantial cost and operational benefits to the ADF. Examplesinclude advice on extending the life of the F/A-18 aircraft structure, F/A-18 aileron hingesthrough bonded reinforcement repairs, turbine disks in the C-130 aircraft T56 engines, theF-111 aircraft crew module rocket motor, the F-111 airframe structure and the PC-9/A aircraft.

276

Part Two

The extent to which those emerging technologies relevant to Australia’s future needs areidentified and exploited

The Group exploited a wide range of technologies with potential to enhance Defence capabilities.Some examples are:

• biosensor technology to improve detection of biological agents;• development of smart structures to support life extension of aircraft;• a novel ‘stochastic resonance’ sensor technology for future sonar systems to enhance

detection of submarines;• adapting biological electric field sensors as found in some marine life-forms to improve

detection of sea mines; and• development of high frequency surface wave radar to improve surveillance capabilities.

The extent to which Science and Technology’s interactions with industry lead to an increasedability on industry’s part to support Australia’s national defence effort and to contribute tonational wealth creation

Initiatives taken during the year include:

• producing DSTO: Research Priorities for Australia’s Defence which gives industry athematic overview of the Group’s future directions and priorities;

• developing an industry communication strategy for implementation in 1999–2000 withthe aim of providing appropriate, timely information on Defence research anddevelopment needs;

• informing a wide range of industry consultative forums and associations on topics ofinterest to the Science and Technology Group and Defence; and

• issuing a new Science and Technology Group industry interaction policy frameworkmore closely aligned with the new Defence and industry policy and evolving industrycapability.

The Science and Technology Group continues to engage with industry through variouscollaborative and commercial arrangements which include technology and information transfer.Examples of these are provided in the Performance against Forecast section for this Group.

The extent to which the Science and Technology Group’s interactions with regional countriescontribute to Australia’s regional security

The Group’s interactions with regional countries have continued at modest levels. The focushas been on helping regional countries sustain and increase their abilities to defend themselvesin cost-effective ways and on defence issues of mutual interest. Examples of these are providedin the Performance against Forecast section for this Group.

The extent to which the Science and Technology Group’s international interactions contributeto alliance relationships and allow access by the Defence organisation to current and futuredefence science and technology relevant to Australia’s priorities

The Group has a strong program of international collaboration, mainly with the United States,the United Kingdom, Canada and New Zealand, but also with France and Sweden. This hascontributed significantly to Science and Technology’s ability to support Defence outputs acrossa wide range of technologies and their application, such as navigation warfare, management ofsurveillance assets and over-the-horizon radar.

The extent to which the overall management of, and support to, the Science and TechnologyGroup continues to improve

The Group continued during the year to improve management and leadership training, reviewingthe Graduate Program in Scientific Leadership and initiating a pilot Executive Leadership

277

Group Ten: Science and Technology

Development Program. Progress was also made towards the new Defence science careerstructure that will remove artificial barriers to employees’ productivity. Consolidation of theGroup’s facilities will also enhance its efficiency and effectiveness. The Group worked closelywith the Defence service-provider Groups to improve support services to its research activities.

��

�!# '.��"%� !$$�"%

• Operational Command:

– Providing scientific advice to assist Defence in the acquisition of a military payload onboard the Optus C1/D spacecraft

Achieved as Forecast Advice was provided to the Defence project team on the functionaland performance specifications for the Defence communications payload on board the spacecraftthe Defence ground control segment, and the Defence ground segment. This advice enabledthe project team to specify the Defence payload, to assess options and to assess tenders. Advicewas also provided on vulnerability of the spacecraft command link.

– Establishing an experimental distributed command, control, communication andinformation environment. This will be used to demonstrate candidate solutions tointeroperability of the distributed command, control, communications and intelligencesystems including the US Global Command and Control System. Network managementinfrastructures will also be provided.

Achieved as Forecast An experimental distributed command, control, communication andinformation environment has been established with nodes in Canberra, Salisbury, and theAustralian Theatre Joint Intelligence Centre/Headquarters Australian Theatre in Sydney.Network management for the environment has been installed. Limited interoperability betweenthe United States global command and control system and the ADF joint command supportsystem was demonstrated during the joint warrior interoperability demonstration.

– Establishing a group in Headquarters Australian Theatre to assist in researching,defining, developing and evaluating command and control support systems for theatre-level operations

Achieved as Forecast Command and Control Australian Theatre Group has been establishedand is now an integrated component of Headquarters Australian Theatre.

– Completing a command and control study that will identify capability shortfalls andpolicy trade-offs to aid high-level decision making on future command and controlcapability development

Achieved as Forecast The findings of the Command and Control Support Study werepresented to the Defence Information Environment Board. An architectural approach to theDefence information environment was proposed.

– Demonstrating the application of the Australian Membrane and Biotechnical ResearchInstitute ion channel sensor technology for Defence purposes by the fabrication of abiosensor for the detection of ricin

Achieved as Forecast The production of antibodies for use as recognition elements in thesensor is the key to this program. Purified ricin antibodies have been produced and theirselectivity determined.

278

Part Two

�� $�� + # � �)

• Capability for Major Surface Combatant Operations

– Improving the survivability of surface combatants against radar homing anti-shipmissiles through further development of the Nulka system

Achieved as Forecast This is a continuing bilateral product improvement activity with theUnited States. Science and Technology Group staff contributed in a number of joint UnitedStates/Australia technical conferences and worked with the Nulka project office to optimisethe production specifications for the payload. Technical advice was also given onelectromagnetic compatibility modifications.

– Enhancing the survivability of naval platforms through the development of a suite ofsoftware tools for damage assessment, damage control, operational planning andtraining for surface vessels and submarines. A key deliverable in the reporting periodwill be a damage-control command decision aid for use on board FFG-7 frigates

Achieved as Forecast The ‘Focus’ condition monitoring and damage control program hasbeen demonstrated to industry. Negotiations are under way to finalise a licence agreementthat will allow industry to produce this decision aid for use in the FFGs. The equivalentsubmarine program, ‘Merlin’, has been installed on HMAS Farncomb for evaluation by Navy.

• Capability for Submarine Operations

– Investigating the acoustic signature of Collins class submarines to develop means tomanage the acoustic signature and so increase the operational capability of thesubmarines

Achieved as Forecast Investigations have resulted in a number of recommendations for themodification of the submarine to reduce machinery and flow noise. These are presently beingtrialed on HMAS Collins. The Science and Technology Group has been actively engaged inall aspects of the acoustic signature work that is directed to producing a submarine that meetsthe interim minimum operational capability.

– Providing the Navy, the Science and Technology Group and industry with a laboratoryenvironment for the rapid prototyping and evaluation of combat system concepts forthe Collins class submarine, surface combatants and possibly airborne platforms. Thiswill provide a significant contribution to the evolution of the naval combat system

Achieved as Forecast A ‘virtual submarine’ has been developed in the laboratory environmentand a capability to allow rapid prototyping of submarine combat system human-computerinterfaces has been demonstrated. Significant progress has also been made in establishing a‘virtual ship’ and a ‘virtual minehunter coastal’. These will support the development anddemonstration of combat systems concepts for surface combatants and the development anddemonstration of operator and command decision aids.

• Capability for Major Surface Combatant Operations and Capability for SubmarineOperations

– Providing advice and technical assistance on the integration of weapon systems intothe Anzac class ships and Collins class submarines, including collaboration withAustralian industry to maintain a capability to support weapons systems/maritimeplatform combinations unique to Australia

279


Achieved as Forecast Technical advice on submarine/Harpoon missile integration, acquisitionof the Penguin missile and the Penguin tactical engagement simulator was provided to theNavy. A joint project plan with industry was established in the area of ship point defence andevolved Sea Sparrow missile integration. The Penguin missile simulator specification wasreviewed. Advice on the development of insensitive munitions was provided to Australianindustry.

• Capability for Mine Countermeasures and Defensive Mining

– Providing advice and technical assistance to ensure that appropriate quantitative datais obtained from the shock testing of the Minehunter Coastal, including development ofultrasonic inspection methods for the composites hull. This will assist in assessing thevulnerability of the vessel to underwater blasts

Substantially Achieved as Forecast The Science and Technology Group’s advice andassistance contributed to the successful conduct of the shock trial. Post-trial reports relating tostructural integrity, shock response, and quantifying the shock environment were presentedafter each event. Resultant maps of the locations of shock damage and characterisation of thetype of damage will contribute to through-life management of the minehunter coastal structure.It was unnecessary to develop an ultrasonic inspection method as a suitable commercial systemwas found.

5�"%��!�'�� + # � �)

• Capability for Land Task Forces Operations

– Developing the initial capability and technology demonstrator to demonstrate the utilityof a broad-area aerial surveillance capability in support of land operations in theRestructuring the Army trials

Achieved as Forecast The broad-area aerial surveillance capability was successfullydemonstrated during the Restructuring the Army trials in Exercise Phoenix. The demonstratorhas thus been trialed in a low intensity conflict scenario. Its utility for testing operationalconcepts for littoral operations has also been trialed.

– Conducting analysis of the Restructuring the Army Task Force structures and operationsto assess the effectiveness of the Task Force in conducting operations in the Top End

Achieved as Forecast The Restructuring the Army task force structure and concepts foroperations were evaluated using scientific processes that were rigorous and auditable. Anassessment of structures and operations was provided to Army Headquarters for consideration.

– Developing a ‘synthetic environment’ for linking simulations for the assessment ofcapability options. To demonstrate this concept, the ‘environment’ will be used toevaluate some specific cases of high priority to the Land Force

Achieved as Forecast A synthetic environment was built for Exercise Phoenix that includedlinks to a real operational command and control system, a prototype situation awareness system,and a pair of ‘virtual armed reconnaissance helicopters’ operated by real crews. The environmentwas integrated into the real exercise and allowed the headquarters to exercise the command,control, communication and information aspects of tasking the helicopters. The environmentprovided an opportunity to evaluate the helicopters in such an exercise without the availabilityof the real asset.

280

Part Two

– Producing and evaluating demonstrations of improved aggregation and presentationof information on the battle situation on the computer screens of Land Force commanders(Situation Awareness) to enable better decision making

Achieved as Forecast New concepts were produced and demonstrated to Army aviationstaff in a scenario based on the tasking and mission monitoring of an armed reconnaissancehelicopter. Significant reductions in the times required by commanders to plan and conducthelicopter missions were evident.

– Providing advice to the Army on the performance of night-vision goggles. This willlead to greater safety and awareness of the limitations imposed by the goggles in aviationoperations

Achieved as Forecast Studies on visual acuity performance using night vision goggles andthe light absorbing and reflecting properties of aircraft and terrain were conducted for theArmy. In addition, a study was conducted which will provide Army with information aboutthe advantages and disadvantages of incorporating flight and navigation symbols in nightvision goggles.

� ��!�'�� + # � �)

• Capability for Air Strike/Reconnaissance

– Conducting simulated fatigue loading of a full-scale F-111 wing and carry-throughbox, followed by a teardown inspection to identify potential failure locations and crackgrowth rates at these locations. This will help ensure safe operation of the F-111 fleetto its planned withdrawal date of 2020

Not Achieved as Forecast Completion of manufacture of the fatigue loading rig was delayedfor three months until September 1999 due to the need to rework defective components and todelays in the manufacture of some hardware items. Fatigue testing is scheduled to commencein October 1999. This program spans several years.

– Improving self-protection for the F-111 in reconnaissance and strategic roles throughsupport to the RAAF for full-scale engineering development of the ALR 2002 radarwarning receiver and its integration into the F-111’s new electronic warfare self-protection suite

Achieved as Forecast Technical advice was provided on full-scale engineering development,which is proceeding on schedule. The project was extended to include full scale engineeringdevelopment of variants of the radar warning receiver including helicopter and C-130 versions.Initial testing of all three variants commenced.

• Capability for Air Strike/Reconnaissance and Capability for Tactical FighterOperations:

– Improving aircraft electronic warfare self-protection capabilities through a jointresearch, development and engineering program with the United States by exchange ofdata, joint demonstration of aircraft electronic warfare using cockpit simulators, andcommencement of a number of joint research and development technology programs

Achieved as Forecast This is a continuing program which formally commenced in 1998–99. Major achievements since commencement include agreement with the United States on adetailed research, development and engineering program; commencement of activities in 10technology areas which will contribute to enhancements to each nations’ aircraft electronicwarfare self-protection capabilities; and a successful demonstration of new situational awarenessconcepts.

281


• Capability for Tactical Fighter Operations

– Developing models of pilots’ tactical reasoning using artificial intelligence technologyto contribute to more reliable evaluations of Australia’s air defence system

Achieved as Forecast Models have been developed with a focus on standard tactics.Development is continuing on a wider range of tactical options than is currently available topilots.

• Capability for Strategic Surveillance

– Contributing to the evaluation of responses to the Airborne Early Warning and Controlaircraft tender by providing advice on scientific issues

Achieved as Forecast Evaluation advice was provided in 19 subject areas. This involvedover 70 subject-matter experts, spanning seven science and technology divisions, and formedthe scientific and technological basis for the source evaluation. Contributions were also madeto the development of the evaluation methodology.

• All Defence Outputs Involving Aircraft

– Developing a sensor that has the capability to detect and measure rates of corrosion,thereby reducing the costly (in terms of dollars and aircraft availability) unscheduledmaintenance that results from corrosion

Achieved as Forecast A prototype sensor has been developed which uses electrochemistryas the basis for detecting and measuring corrosion. Through a licensing arrangement, thedevice is being miniaturised and developed for commercial application in the aircraft industry.

– Completing the fatigue testing on PC-9/A and providing Support Command Australiawith advice for extending the structural airworthiness clearance of PC-9/A from 6,000hours to 10,000 hours, and information on airframe modifications, fleet usagemanagement and life extension options

Substantially Achieved as Forecast Subject to the results of a residual strength test and‘teardown’ inspection, the fatigue test has shown that the PC-9/A aircraft can be operated to10,000 service hours. The fatigue test results will have a significant impact on fleet costreduction and fleet maintenance management.

�&�"'��' �"'��"%��'*"!#!-.��)��'*

– Developing new methods, based on thermal excitation and emission, for identifyingdefects and stress fields in structural components to reduce cost of ownership of ADFaircraft

Achieved as Forecast Methodologies have been developed to assist in the quantitativeinterpretation of thermographic data in the context of metallic corrosion and compositedelamination problems in aircraft. A new high-speed thermographic inspection system is tobe developed that will provide the requisite practical capability required to capitalise on theseachievements.

– Investigating the sonar reflectivity of the inhomogeneous sea bed and refractiveproperties of the sea, so that the maritime environment may be better used to theadvantage of the ADF

Achieved as Forecast This is a long-term research activity. The goal is to derive geoacousticmodels for the seabed at various Australian sites of interest to the Navy for use in tactical

282

Part Two

decision aids. Substantial progress has been made with the two permanent Navy sound rangesat Jervis Bay in the Australian Capital Territory and Thistle Island in South Australia.

– Research to improve the capability to develop guidance software for air defence, pointdefence and other missile systems

Achieved as Forecast A basis for algorithms has been established that will considerablyimprove the ability of air and point defence systems to defeat highly manoeuvrable targets hasbeen established.

�"%,)��.��"%�C��"�#��#�� !")

– Activities which will be pursued during 1998-99 include placing research anddevelopment contracts and licence arrangements with industry, universities and otherresearch organisations; developing existing and new industry alliances and othercollaborative arrangements in a variety of areas; and developing beneficial affiliationswith other research institutions

Achieved as Forecast During the period, the Group sourced research and development andtechnical support to the value of $23.04m from industry and other external agencies. It signedan additional six research agreements, 13 collaborative agreements, nine licences, and onealliance.

As at 30 June 1999, the Group’s portfolio of agreements comprised 12 research agreements,26 collaborative agreements, 64 licences, 18 industry alliances and five memoranda ofunderstanding. The Group also participated in nine cooperative research centres.

�"��"�� !"�#��"%��- !"�#� !!�� !"

– Extensive interaction and cooperation with the United States, the United Kingdom,Canada and New Zealand will continue under the auspices of The Technical CooperationProgram and bilateral agreements. Long-standing defence research and developmentarrangements with Sweden and France will continue

Achieved as Forecast The Science and Technology Group continued its strong program ofinternational collaboration, mainly with the United States, the United Kingdom, Canada andNew Zealand, but also with France and Sweden. In 1998-99, four new project arrangementsto the Deutch-Ayers Agreement with the United States were signed. These allowed Defenceaccess to information on such technologies as navigation warfare, management of surveillanceassets and over-the-horizon radar. The Group also entered into a collaborative program withthe United Kingdom for longer-term support of the ASRAAM missile.

– The Science and Technology Group will also continue to provide technical support toAustralia’s United Nations and global security activities

Achieved as Forecast Expert advice continued to be provided in support of internationalarms control with the emphasis shifting from the chemical protocol to cover both chemicaland biological protocols. Regional interactions have continued with efforts in Indonesiaculminating in that country’s ratification of the Chemical Weapons Convention. Staffparticipated in three United Nations Special Commission missions in Iraq.

– Revising the Memorandum of Understanding on Defence Science and Technology withCanada

Achieved as Forecast Collaboration with Canada is now covered by a contemporarymemorandum of understanding, which was signed in late 1998.

283


– Increasing collaboration with France and Sweden

Achieved as Forecast Significant progress was made in identifying collaborative opportunitieswith France and two technical arrangements were signed; one covering a trial of an infraredsearch and track system and the other in the area of composite materials for aircraft. Visitsbetween Sweden and Australia revealed several areas for collaboration; these include blasteffects of land mines and bonded composite aircraft repairs.

– Cooperation in our region in defence science and technology will continue through arange of collaborative activities conducted under existing bilateral defence, and scienceand technology, cooperation arrangements with Indonesia, Malaysia, Singapore andThailand

Achieved as Forecast Regular personal contact and ongoing discussions have been maintainedwith key personnel in all four countries. Despite the current South East Asian financialdifficulties, a number of activities have taken place. Among them were discussions withMalaysia and Thailand which addressed the repair and management of aircraft; Indonesia,Thailand and Malaysia on monitoring the ionosphere to optimise global positioning systemand high frequency communications; and Thailand on monitoring ambient sea noise. Anagreement to undertake a new joint project with Singapore on ship-shock modelling has beenfinalised.

� !��!��#�"" "-��"%��,��!��

– Implementing a new classification structure for Science and Technology Group staffworking in research and development which will remove unnecessary barriers to careeradvancement and allow a more flexible approach to working arrangements that willenhance the Group’s ability to achieve its outcomes

Partially achieved as Forecast The new unified industrial structure for the Science andTechnology Group, the Defence Science Career Structure, has been designed and is plannedfor introduction as part of the next Defence agency agreement during 1999–2000.

– Finalising approval of the property rationalisation in Melbourne; progressing planningand approvals for the relocation of elements of Maritime Operations Division fromPyrmont, Sydney; and obtaining approval for facilities needed to accommodateadditional staff and equipment resulting from the increase in the Science and TechnologyGroup’s Five Year Defence Program allocation

Substantially Achieved as Forecast The rationalisation of the Science and TechnologyGroup’s facilities in Melbourne was announced in the 1999–2000 Budget. Planning iscontinuing for other enhancements and rationalisation in Sydney and at Salisbury in SouthAustralia.

– Initiating an executive leadership development program to enhance the leadership andmanagement skills of senior research and development staff

Achieved as Forecast The executive leadership development pilot has been successfullyinitiated and consideration is being given to the ongoing program of executive leadershipdevelopment in the Group.

284

Part Two

��




10.1 Aeronautical & Maritime Research 93.2 98.3 101.1 2.8 2.810.2 Electronics & Surveillance Research 75.7 77.0 77.4 0.3 0.410.3 Executive & Support 38.6 41.9 42.8 0.9 2.1Group Total 207.5 217.3 221.3 4.0 1.8




10.1 Aeronautical & Maritime Research 1,045 1,000 981 -19 -1.910.2 Electronics & Surveillance Research 779 768 745 -23 -3.010.3 Executive & Support 382 375 364 -11 -2.9Group Total 2,206 2,143 2,090 -53 -2.5



Permanent 98-99 Budget 8 0 15 23Force 98-99 Revised 8 0 15 23

98-99 Actual 8 0 15 23Civilian 98-99 Budget 1,037 779 367 2,183

98-99 Revised 992 768 360 2,12098-99 Actual 973 745 349 2,067

Total 98-99 Budget 1,045 779 382 2,206Personnel 98-99 Revised 1,000 768 375 2,143

98-99 Actual 981 745 364 2,090

��&�"'��&!�$��!-��$��!-��))

In 1998-99, Science and Technology achieved its Defence Reform Program gains throughgeneral administrative efficiencies.

In 1998-99,the funding baseline was increased by $15m. Consistent with the priorities ofAustralia’s Strategic Policy, this additional funding was used to undertake research in theareas of:

• the knowledge edge (support to Headquarters Australian Theatre, information operations,ADF participation in regional coalition operations, surveillance, establishment of theTheatre Operations Branch, formation of Command and Control Australian TheatreGroup and its collocation with Headquarters Australian Theatre);

• defeating threats in our maritime approaches (improvements to weapons systemseffectiveness, performance of non cooperative target recognition, reducing thevulnerability of naval platforms to infra-red guided threat missiles, developing an

285


integrated hard and soft kill defensive system, support to the Collins-class submarines);• strike (advanced radio frequency countermeasures, beyond visual range modelling,

weapons and stores clearance); and• defeating hostile land forces (developing Land Operations Division, detection and

analysis of biological agents, logistics support of land operations).




Administrative Support 0.4 0.4 0.4 0 0Total 0.4 0.4 0.4 0 0




Science and Technology 99 0 0 0 0Total Personnel Reductions 99 0 0 0 0Note: The 99 civilian personnel reductions were recorded in the Portfolio Budget Statements 1998-99against the Science and Technology function relating to support personnel. These personnel savingshave been transferred to Defence Corporate Support (89) and to Defence Estate(10).




Science and Technology 15.0 15.0 15.0 0 0Total 15.0 15.0 15.0 0 0

Table 10.7: Reconciliation of Appropriations for the Science and Technology Group



180-01 Running CostsService Personnel 1.6 1.6 1.7 0 1.6Civilian Personnel 133.7 138.8 143.2 4.4 3.2Administrative Expenses 41.0 46.6 46.3 -0.4 -0.8

180-02 Other Services 0.6 0.6 0.6 0 0181 Equipment & Stores 32.8 31.9 32.7 0.9 2.7Total Defence FunctionAppropriations (A) 209.8 219.6 224.5 4.9 2.2Total Defence Function Receipts(Offset within Outlays) (B) -2.3 -2.3 -3.2 -0.9 40.1Total Defence Function Outlays(A+B) 207.5 217.3 221.3 4.0 1.8

286

Part Two



Appropriation $m180-01 RUNNING COSTSCivilian Personnel ($4.4m)

Increase for permanent staff due to higher than anticipatedper capita rates of staff recruited during the year. 2.9Increase for civilian redundancies associated with therestructure of Maritime Operations Division. 0.7Increase for management initiated civilian redundancies. 0.6Variation in accrual based superannuation payments and3 % productivity benefit liability based on movement in averagestaffing levels, changes in per capita rates and the impact of pay increases 0.5Miscellaneous minor variations -0.3

Administrative Expenses (-$0.4m)Increase in capability initiatives associated with aeronauticaland maritime research. 0.7Increase in capability initiatives associated with electronicand surveillance research. 0.7Miscellaneous minor variations 0.2Reduction in staff employed under technical support contracts -2.0

181-00 EQUIPMENT AND STORES ($0.9m)Net Group transfers primarily associated with Project Air 5417(for the purchase of missile flight simulators) from Group 1. 1.9Reduction in equipment & stores due to changing priorities inresearch tasks. -1.2Miscellaneous minor variations 0.2

DEFENCE PORTFOLIO RECEIPTS (-$0.9m)Increased receipts due to additional sales of surplus stores. -0.2Increased commercial receipts due to higher than anticipated activity. -0.5Miscellaneous minor variations. -0.2

287


288

Part Two

289

��

��

To shape and manage the Defence estate to meet government and Defence needs.

� ��

The Defence Estate Group is responsible for all land, buildings and infrastructure assets andmanages the estate functions of investment, reinvestment, repair and maintenance, acquisition,leasing and divestment. The Group develops strategic planning and business policy on estatefunctions, delivers capital facilities projects, undertakes corporate estate management andprovides planning and facilities operations support to client bases and establishments throughoutAustralia. The Group is comprised of four areas; Resources and Policy, Project Delivery,Property Management and Estate Operations and Planning.

��

Defence Estate, including regional offices, contributes to the achievement of relevant Defenceoutputs

The Defence Estate Group delivered a range of new facilities and enhancements to existingfacilities during 1998-99. These include facilities for the Army in the north of Australia,which has considerably enhanced the ability of the Army to undertake land task force operations,and facilities at RAAF Tindal, which has contributed to the Air Force capability for tacticalfighter and strike reconnaissance operations. A full account of facilities-related servicesdelivered by the Defence Estate Group is included in the Performance against Forecast sectionof the Group report. The network of Defence Estate regional offices ensured that all Defenceelements had facilities maintained to necessary levels through a high standard of client service.

Continued efficiencies are achieved in management of the Defence estate

The endorsement of the Strategic Plan for the Defence Estate is contributing to improved andefficient management by informing decisions on new investment and disposal of individualproperties. Master plans for major bases are also being progressed on a priority basis to ensurethe cost effective utilisation of existing assets and support the implementation of proposalsidentified in the strategic plan.

Rationalisation of Defence Estate regional offices has continued. Amalgamation ofresponsibilities and the implementation of comprehensive maintenance contracts have enabledthe regional structure to be reduced from 11 offices to nine.

Facilities management and projects reflect identified policy priorities and are managed tomeet operational/customer requirements within costs, on time and to specified quality standards

As an integral part of planning processes within the Group, development of projects andmanagement strategies is undertaken in consultation with Output Managers. Further detailson the cost, timeliness and quality of facilities projects are included in the Performance againstForecast section of this Group.

Estate management activities meet performance agreements negotiated with client programs

The Defence Estate Group has developed performance agreements with clients at variouslevels. Regular consultation on estate management activities occurs at all levels to ensureongoing client input is received.

290

Part Two

Appropriate state and local government consultative mechanisms are utilised in order to satisfystakeholder expectations

During 1998-99, Defence participated as a member of the consultative groups establishedwith each of the states and territories to discuss areas of mutual strategic interest. Defenceproperty is a prominent topic in these discussions. The Group is also involved in ongoingconsultation with state and local government planning authorities regarding current and futureuse of Defence properties, particularly in respect of those properties identified for disposal.Due to their local significance and/or location, state and local governments are interested inacquiring some Defence properties under a priority sale arrangement. Other issues are relatedto the environmental and heritage aspects in disposing of Commonwealth property.

The findings of internal reviews are accepted and implemented

The Defence Estate Group is committed to examining its performance, on a formal and informalbasis. The organisation has invested heavily in the corporate planning process that provideshigh-level direction on which the performance of areas and individuals is based.

��

Key performance indicators for the Defence Estate will be:

• The development of the Defence Estate Strategic Plan and the progressing of masterplanning and regional planning to reflect new strategic planning guidelines

Achieved as Forecast For further information refer to the Performance Outcomes for 1998-99 in the above section.

• Rationalisation of the Defence Estate through the continuing business review of selectedestablishments

Achieved as Forecast As part of development work for the Strategic Plan for the DefenceEstate, a study of the cost effectiveness of operating the Air Force’s southern operational andflying training bases was undertaken. The study, completed in late 1998, included RAAFbases at Amberley, Richmond, Williamtown, East Sale, Edinburgh and Pearce. The findingsof the study were incorporated into the strategic plan.

• The development of documentation for reinvestment proposals for bases identified inthe Green Book

Achieved as Forecast Documentation for a number of major projects has been developedfor progression to the Joint Statutory Committee on Public Works. This includes the relocationof Aeronautical and Maritime Research Laboratories from Maribyrnong to Fishermens Bendin Melbourne, the collocation of single Service staff colleges, the redevelopment of the Darwinnaval base, and over 20 medium works proposals. A number of major projects are also underdevelopment including the RAAF Edinburgh Redevelopment Stage 1 and the RAAF Collegecollocation.

• Review, in consultation with Groups, properties identified in the Defence ReformProgram for disposal in the short term, establish a timetable for disposal of propertiesand progress initial disposal action

Achieved as Forecast Progressed as part of the development and departmental endorsementof the Strategic Plan for the Defence Estate. Disposal action has commenced on propertiescleared for disposal in the short-term including Kelvin Grove in Queensland, Bomera/Toranain Sydney and the Albeura Street property in Hobart.

291

Group Eleven: Defence Estate

• The development of a program of living-in accommodation upgrades

Not Achieved as Forecast A significant issue for Defence is provision of adequate subsidisedaccommodation for certain categories of Defence personnel. In conjunction with revisedDefence policies, in especially the new ADF housing policy, the Strategic Plan for the DefenceEstate highlighted the high cost of providing, maintaining and managing on-base living-inaccommodation. The demand is difficult to predict and much existing stock falls short ofupgraded housing standards. In this context, the strategic plan developed some strategies forimplementation of the new ADF housing policy. A workshop was held in April 1999 todevelop and agree on broad policy principles for provision of living-in accommodation. Theprinciples include recognition of the need for flexibility in provision of living-in accommodationbased on case-by-case consideration, and agreement that, except where there are operationalor training imperatives, business case analysis will influence selection of preferred options.Options will include commercial provision, which might involve private finance initiatives,and involvement of the Defence Housing Authority.

• Budget management and achievement, including program development (Green Book)

Achieved as Forecast Expenditure to 30 June 1999 exceeded guidance by $10.1m, whichrepresents an overspend of 1.3%. The majority of this overspend was associated with increasedasset maintenance activities including expenditure on Operation Safe Haven to providetemporary accommodation for Kosovo nationals in military establishments.

• The delivery of projects within cost, on time and to specified quality standards

Achieved as Forecast Major deliverables in the past year included completion of works toupgrade facilities at 5 Aviation Regiment, HMAS Stirling (Stage 2B/C) and RAAF Amberley.Major investments approaching completion include works at RAAF Scherger, the joint Armydeployment facility (Stage 1) (formerly the Army Presence in the North project) and RAAFTindal Stage 4. A number of projects such as the Russell redevelopment, the joint Armydeployment facility (Stage 2) and facilities for 51 Far North Queensland Regiment are welladvanced and proceeding as planned. Performance targets of delivery within budget to specifiedquality and within schedule are being achieved through a number of initiatives. These includethe continued involvement of clients through the development and design phases to captureand refine user requirements, the Defence Reform Program-related reorganisation of the DefenceEstate Group to better focus and develop the competencies of project staff, and specific initiativessuch as the Defence Estate consultancy panels.

• Management of overseas leasing program

Achieved as Forecast The overseas leasing program comprises management of Defenceestablished overseas leases and Overseas Property Group leases established on Defence’s behalf.The 1998-99 spend on overseas leases was $11.5m.

• Achievement of a disposal revenue target of $90m

Not Achieved as Forecast Twenty properties were sold during the year and revenue receivedin 1998-99 totalled $83.7m and included Defence’s share of $21.5m from the sale of Canberraairport. Delays experienced with a number of disposals related to longer-than-expected Defenceuse, some properties identified for disposal being required for temporary accommodation forKosovo nationals and resolution of zoning and planning issues with state and local authorities.

292

Part Two

• Continued improvement in business practices and further development of informationsystems to support Program functions

Achieved as Forecast Enhancements to business practices are ongoing. Enhancementsinclude the review and further development of Defence Estate contracts and the Defence EstateManagement Guide, the development of life cycle costing principles and tools, the managementand review of Defence Estate panels, and the implementation of the national code of practicefor the construction industry. The implications for the Defence estate flowing from theimplementation of a goods and services tax are also being examined along with the provisionof support to the Group through the development of new systems and procedures. The Groupis also raising awareness of sources of information through the use of new technology.

• Further development and promulgation of policy and procedures in the Defence EstateManagement Guide

Achieved as Forecast The Defence Estate Management Guide has been restructured to raiseawareness of total estate management principles. New policy documents are incorporatedregularly, and maintenance of existing material is ongoing.

• The investigation and development of an implementation strategy for security of explosiveordnance and weapons storage facilities

Partially Achieved as Forecast In conjunction with Defence Security Branch and SupportCommand Australia, the Group completed a review of the security arrangements at sevenmajor weapon storage and repair facilities. Implementation of the review recommendationshas commenced. Reviews of security arrangements at other explosive ordnance and weaponsstorage facilities are progressing. Work to address deficiencies will be aligned with prioritiesand available funding.

• Promulgation of Defence (Area Control) Regulations for Oakey and Williamtown

Partially Achieved as Forecast The Defence (Area Control) Regulations covering the ArmyAviation Centre at Oakey were promulgated on 2 March 1999. The regulations are concernedwith providing height restrictions on structures around military airfields. Because of a numberof studies being undertaken at RAAF Williamtown, including a runway feasibility study, itwas decided not to proceed with the promulgation of the regulations for RAAF Williamtownin 1998-99.

• Construction of a multi deck carpark will commence

Not Achieved as Forecast A decision was taken not to construct a multi-level car park inassociation with the Russell redevelopment. Demolition of obsolete buildings at Russell willallow the construction of further on-ground parking facilities to commence in 1999-2000.

• Further improved consistency in dealing with industry and the development of soundbusiness relationships through panel arrangements

Achieved as Forecast The project services consultancy panel has been operating successfullyfor 18 months, while the new Defence-wide legal panel was established in May 1999. Thesepanel arrangements have streamlined the process of engaging consultants. Their performanceas panel members is monitored and feedback is provided on a regular basis.

Implementation of the national code of practice for the construction industry was achievedthrough the development of code procedures, training sessions and the incorporation of clausesin the Defence suite of contracts. These clauses and associated documentation have beenaudited by the Office of the Employment Advocate.

293


• Management of the Year 2000 problem in relation to the Defence Estate

Achieved as Forecast The Group has addressed all necessary activities to assure that allbusiness and safety-critical items, systems or services are Year 2000 compliant or fit for purposeas of 30 June 1999. Business continuity plans at both the strategic and local level will beavailable to manage situations that may arise during the critical event period. This is an extensionto the Group’s normal mode of operation at bases and establishments. A records managementsystem has been established which provides a clearly documented audit trail of actionsundertaken.

• The further development and establishment of a Portfolio Environmental ManagementSystem to facilitate a consistent, standardised approach to environmental management

Partially Achieved as Forecast A number of elements of the portfolio environmentalmanagement system have been developed. These include the development and disseminationof the Defence Environmental Policy Statement and the preparation and promulgation of theEnvironmental Compliance Manual on the Defence Intranet. The development of a riskassessment methodology for Defence exercises, the development of an environmental awarenessprogram for participants in Exercise Crocodile 99 and a program to promote communityawareness of environmental management procedures for the exercise have also proceeded. Anumber of other actions relating to the implementation of the environmental managementsystem are currently being advanced. These include the development of an environmentalmanagement system framework, convening of the Defence Environment and EnergyCommittee, the review of Defence regulations relating to environment and heritage protection,the drafting of a Defence Strategic Environment and Heritage Plan, and the development of amanual. In addition, the legislative input of the new Environment Protection and BiodiversityConservation Act 1999 will need to be analysed.

• The investigation, development and progressive implementation of new contractingmethodologies for regional operations

Achieved as Forecast The comprehensive maintenance contract was progressively developedand introduced and has now been adopted as the standard contract for the maintenance offacilities throughout Australia. A training package is being developed for delivery in all regions.

• Progression of accrual based output management of the Defence Estate

Achieved as Forecast Substantial progress was achieved in the development of businessrules which support the transition to accrual based output management. Defence estate aspectsof the 1999-2003 Five Year Defence Program and 1999-2000 budget were developed on anaccrual basis.

� -" & '�"��!9�'�)

Facilities will continue to be enhanced in northern and western Australia in support of ADFoperational capability.

• Joint Army Deployment Facility Development Stages 1 and 2

Achieved as Forecast The construction of facilities in support of the Army’s programmedrelocation of the 1 Brigade to Darwin. The first stage of this project, approved by Governmentin 1992, was completed within budget in 1999. The second stage, approved in 1995, will becompleted in late 2000, ahead of program and within the original budget. Reduced expenditureon the project is primarily due to better than anticipated prices realised for several majortenders and a reduction in the scope of this work.

294

Part Two

• Bradshaw Field Training Area

Not Achieved as Forecast The provision of the necessary infrastructure to allow the use ofthe Bradshaw property as a field training area for 1 Brigade has been delayed as the result ofboth native title and land claims on the training area. The issues are complex and, in somecases, are without legal precedence. In addition to the claimants, a number of Commonwealthand Northern Territory government agencies are involved. In accordance with the provisionsof the Native Title Amendment Act 1998, Defence is now developing an indigenous land useagreement.

• HMAS Stirling Stage 2 Development

Not achieved as Forecast There are three elements to the second stage development whichremain outstanding.

- The requirement for living-in accommodation for HMAS Stirling is stillunder review.

- The requirement for a small arms range is under review.- Problems in commissioning the static frequency converter as part of the

powerhouse upgrade are being addressed. Completion is anticipated byMarch 2000.

• HMAS Stirling Stage 3

Not achieved as Forecast Due to delays in design, development and initial set up, caused bycontractor resourcing problems, construction in 1998-99 reached 60% completion. The reviseddate for completion is now February 2000.

• Construction of RAAF Scherger

Partially Achieved as Forecast Due to adverse weather and a delay in the delivery of specialistfuel tank lining material, the aviation fuel storage facility was not delivered in 1998-99. Theproject was to be completed in August 1999. The proposed maintenance programs wereimplemented as forecast.

• Development of RAAF Tindal Stage 4

Achieved as Forecast The fourth stage, including aircraft pavements and operations andtechnical support facilities, was delivered on time.

• RAAF Darwin

Achieved as Forecast Continued development of enhanced operational works is planned forcompletion by June 2000.

• Army’s 5 Aviation Regiment

Achieved as Forecast The project to provide shelter and washing facilities at RAAFTownsville, to protect strategic helicopter assets operated by the Army’s 5th Aviation Regiment,was completed on time and within budget in August 1998.

• 51 Far North Queensland Regiment

Achieved as Forecast The design of facilities for 51 Far North Queensland Regiment is 90%complete. Construction commenced in April 1999 and is 20% complete.

295


• RAAF Learmonth

Achieved as Forecast The project was 99% complete in March 1999 when cyclone Vanceaffected the project. Remedial work is to be completed and the base handed over to Defenceby October 1999.

• Russell Offices Redevelopment

Achieved as Forecast The Russell Offices redevelopment will enhance the capability forstrategic and operational command and the provision of strategic and defence policy advice togovernment through the provision of an integrated and joint environment. Overall the projectwill be delivered within the cost cap and will be completed eight months earlier than originallyprogrammed. This has resulted in some expenditure on the project being brought forward.The following progress has been made:

- Construction of the two new buildings R1 and R2 and the refurbishment ofthree older buildings R3, R4 and R8 is now complete and 4,110 staff havebeen relocated into their new working environment.

- Refurbishment of R7 and the progressive occupancy of the building by theDefence Intelligence Organisation will be completed in December 1999.

- Demolition of eight buildings and work to complete the apex roundabout,roads and landscaping will be completed by April 2000 .

- The project has achieved significant savings which have been used to fundadditional project initiatives including a fibre-optic communication cablingnetwork and a higher occupancy level.

��!��.�� !"�# )�� !"?'!")!# %�� !"

• Albion Explosives Factory Decontamination

Achieved as Forecast Decontamination of the former Albion Explosives Factory sitecommenced and will continue to the extent required to permit disposal of the property. TheUrban Land Corporation is managing remediation and disposal of the site. Remediationcommenced in March 1999 and is progressing on schedule and within budget. The remediationis scheduled for completion by January 2001. Progressive transfer of the site to the UrbanLand Corporation for development and public sale commenced in May 1999 and is scheduledfor completion by August 2009.

• Disposal of Surplus Land at Salisbury

Achieved as Forecast Planning continued for the disposal of surplus land at Salisburyfollowing the consolidation of Science and Technology Group activities in the new laboratorycomplex.

• Property Disposal Activities

Achieved as Forecast Disposal activities associated with prominent properties continued,including Portsea and Maribynong in Victoria, Neutral Bay, Randwick and Rydalmere inNew South Wales and Kelvin Grove in Queensland.

• Staff College Collocation

Achieved as Forecast Planning has commenced for the collocation of the three single-Servicestaff colleges, with a view to occupying the selected site by 2002. A Joint Statutory Committeeon Public Works public hearing was held in mid-June 1999. Design consultants have beenengaged and the project is proceeding on schedule for a completion target of late 2000.

296

Part Two

• Property Review and Pre-Disposal Activities

Achieved as Forecast Reviews and pre-disposal activities associated with properties identifiedin the Defence Reform Program for disposal continued. Reviews in progress include ArtilleryBarracks, Leeuwin Barracks and Irwin Barracks, all in Western Australia.

��%�(�#!�$�"�D��-��% "-��"%��<� !")��,'� !"

• HMAS Albatross Redevelopment Stage 1

Achieved as Forecast Works to the air traffic control tower, the squadron complex, thetraining centre, and the parachute drop zone have commenced. The design and constructionphase of this project were delayed due to protracted contractual negotiations.

• RAAF Amberley

Achieved as Forecast The facilities for 6 Squadron were completed on time and withinbudget.

• Bandiana Military Area, Stage 2

Achieved as Forecast The second stage commenced in 1997-98 and is to be completed in1999-2000. The project is nearing completion with only minor works including the engineeringservices works package yet to be finalised.

• RAAF Williamtown- Eastern Region Operations Centre

Achieved as Forecast After consideration by the Joint Statutory Committee on Public Works,building works commenced in April 1999. The facility is required to be operational by June2000.

• East Coast Armaments Complex

Not Achieved as Forecast The construction of the East Coast Armaments Complex at PointWilson in Victoria, to provide support for the East Coast Fleet, was considered by the JointStatutory Committee on Public Works. The committee recommended that Defence consideralternative locations closer to the fleet base and exercise areas on the east coast. Preliminaryinvestigation of a site at Twofold Bay near Eden, NSW was conducted and a detailed feasibilitystudy, including an environmental impact assessment will be completed by December 1999.Subject to a positive outcome of the feasibility study, a proposal to construct a Navyammunitioning facility at Twofold Bay will be referred to Parliament early 2000. Subject toParliamentary approval, construction will commence mid-2000 for completion by early 2002,delivering a better outcome operationally within the original timeframe and budget.

• Facilities for Republic of Singapore Air Force, Oakey

Achieved as Forecast The project was successfully completed ahead of schedule and underbudget. The Republic of Singapore Air Force occupied the facilities in September 1998.

��<��9!��!9�'�)

• Lavarack Barracks Redevelopment Stage 2 – Townsville

Ongoing - The first stage of the redevelopment which commenced in 1992, provided upgradedliving and working facilities. The second stage will provide various facilities and infrastructure,including new single-soldier living accommodation, to ensure the long-term viability ofLavarack Barracks as the major base for the ADF Rapid Deployment Force. The third stage,

297


which is due to commence in 2000-01, will complete the redevelopment of the barracks. Amanaging contractor has been appointed for the project and planning is well advanced.

• RAAF Amberley Redevelopment

Ongoing - This project is to overcome immediate deficiencies in the existing facilities at thebase, and to provide improved aircraft maintenance, operation, support and training facilities.The primary role of units at the base is to support the Strike Reconnaissance Group. A managingcontractor has been engaged and several elements of the project will be completed by mid-2000, with project completion by May 2001 .

• RAAF Townsville Redevelopment Stage 1

Ongoing - This project is to provide new facilities, including loading aprons and aircraftsupport infrastructure, to support the operational role of the base. The Joint Statutory Committeeon Public Works conducted a public hearing on the project in Townsville during June 1999and Parliamentary approval is awaited.

• RAAF Darwin Redevelopment

Ongoing - This project is to rectify a number of deficiencies and to ensure the long-termability of the base to support air operations and training. The Joint Statutory Committee onPublic Works reviewed the project on 11 February 1999 and agreed that it could be deliveredas three medium works, without further requirement for a public hearing. Tender documentationis being prepared and works are planned to be complete by December 2000.

• HMAS Albatross Redevelopment Stage 2

Ongoing - HMAS Albatross is the Navy’s only air station and supports naval helicopteroperations as well as providing logistic support for various Navy units. The redevelopmentwill update a number of facilities including aircraft support, storage and maintenance facilities,the air traffic control tower and explosive ordnance storage and loading facilities. Developmentof parliamentary referral documentation is progressing on schedule for mid-September 1999.

�� #��' # � �)�C��"% �,��

The following table provides details of expenditure on significant facilities projects in progressduring 1998-99. Variations in expenditure between the 1998-99 budget estimate and 1998-99actual expenditure is generally related to variations in cash flows across a number of contracts.It is anticipated that all projects will be completed on time and within budget. Further explanationof some individual projects is available above.

298

Part Two

Program of Works Total Expend Budget Actual(State, Federal Electorate And Locality) Estimated to Estimate Expend

Cost 30/6/99 1998-99 1998-99$’000 $’000 $’000 $’000

Queensland- KennedyDalrymple Shire - Field Training Area Works 18,694 17,395 1,428 3,977Weipa - Development of RAAF Base Scherger 138,947 136,339 4,930 5,368New South Wales - GilmoreHMAS Albatross – Redevelopment Stages 1 & 2 109,917 8,723 22,881 8,392Victoria - IndiBandiana - Redevelopment Stage 2 20,181 17,328 10,000 12,380Western Australia - BrandHMAS Stirling - Base Development Stage 3 19,000 9,489 13,000 9,414KalgoorlieLearmonth – RAAF Base Development Stage 1 77,000 71,112 45,737 50,301Northern Territory - DarwinDarwin - Joint Army Deployment Facility Stage 2 268,300 184,042 65,500 55,624Darwin - Development of Operational Facilities 59,458 28,478 20,072 23,897RAAF Tindal - Base Development Stage 4 31,377 28,593 14,078 12,577Australian Capital Territory - FraserRussell - Redevelopment of Office Facilities 225,189 224,400 65,000 89,440

��




11.1 Resources and Policy 5.5 5.5 6.5 0.9 16.211.2 Project Delivery 436.9 428.9 410.8 -18.1 -4.211.3 Property Management -25.8 -22.7 23.8 46.5 -205.211.4 Estate Operations and Planning 255.8 249.4 258.5 9.1 3.6Group Total 672.4 661.2 699.5 38.3 5.8




11.1 Resources and Policy 40 40 42 2 5.011.2 Project Delivery 63 63 67 4 6.311.3 Property Management 22 22 22 0 011.4 Estate Operations and Planning 449 417 406 -11 -2.6Group Total 574 542 537 -5 -0.9

299



Personnel Sub-Group11.1 11.2 11.3 11.4 Total

Permanent 98-99 Budget 0 49 0 143 192Force 98-99 Revised 0 49 0 143 192

98-99 Actual 0 49 0 143 192Civilian 98-99 Budget 40 14 22 306 382

98-99 Revised 40 14 22 274 35098-99 Actual 42 18 22 263 345

Total 98-99 Budget 40 63 22 449 574Personnel 98-99 Revised 40 63 22 417 542

98-99 Actual 42 67 22 406 537

��&�"'��&!�$��!-��$��!-��))

Defence Reform Program gains reflect efficiencies made from the amalgamation of all estatemanagement functions into the Defence Estate Group. The establishment of the regionalestate centres has resulted in personnel and administrative gains. Asset sales, as identified inthe Defence Reform Program, will continue to provide one-off revenue benefits for reinvestmentto improve ADF capabilities. A change in the reporting methodology has resulted in somesavings originally reported against the Facilities and Long-Term Force Disposition category,now being reported within a number of different categories. This has not changed the savingstargets to be achieved by Defence Estate.




Defence Command and Management 0 0 0.1 0.1 0Acquisition and Industry 0 0 0.1 0.1 0Science and Technology 0 0 0.1 0.1 0Facilities & Long-term Force Disposition 5.8 6.6 5.2 -1.4 -21.2Logistics 0 0 0.3 0.3 0Personnel Planning 0 0 0.1 0.1 0Education and Training 0 0 0.2 0.2 0Administrative Support 0 0 0.5 0.5 0Superannuation 0.4 0.7 0.8 0.1 14.3One off savings 5.0 26.0 25.8(1) -0.2 -0.8Total 11.2 33.3 33.3 0.0 0.0Note:1. One-off savings category includes the proceeds from the disposal of RAAF Fairbairn ($21.5m),

Tighnabruaich ($2.0m), and Jenner House ($2.3m).

Table 11.5: 1998-99 Defence Reform Program Personnel Reductions – ADF



Facilities & Long Term Force Disposition 40 40 40 0 0Total Personnel Reductions 40 40 40 0 0

300

Part Two




Facilities & Long Term Force Disposition 91 101 85 -16 -15.8Total Personnel Reductions 91 101 85 -16 -15.8




Net Personnel and Operating Costs 1.2 1.2 1.2 0 0DRP Transition Costs 0 0.7 1.8 1.1 157.1Total 1.2 1.9 3.0 1.1 57.9Note: The variation in transition costs represents a redundancy provision and funding transferred to

Defence Estate by Support Command for the refurbishment of Victoria Barracks, Melbourne.

Table 11.8: Reconciliation of Appropriations for the Defence Estate Group



180-01 Running CostsService Personnel 12.1 11.9 12.2 0.3 2.9Civilian Personnel 18.4 18.2 19.4 1.3 7.0Administrative Expenses 7.2 6.4 7.0 0.6 9.0Facilities Operations 229.4 224.2 232.1 7.9 3.5

180-02 Other Services 0.1 0.1 0.1 0 0181 Equipment & Stores 1.5 1.5 0 0 0183 Defence Facilities 500.3 494.7 494.7 0 0Total Defence FunctionAppropriations (A) 768.9 756.9 767.1 10.1 1.3Total Defence Function Receipts(Offset Within Outlays) (B) -96.4 -95.7 -67.5 28.2 -29.5Total Defence Function Outlays(A+B) 672.4 661.2 699.5 38.3 5.8


301


Table 11.9 Major Variations between 1998-99 Revised Estimate and 1998-99 ActualOutcome

Appropriation $m


Service Personnel ($0.3m)


Variation in accrual based superannuation and 3% productivitybenefit liability, based on movements in average staffing levels,changes in per capita rates and the impact of pay increases 0.1




Defence Reform Program related redundancies. 1.1


Re-valuation of Defence facilities assets 1.2

Variation in Fringe Benefits Tax Payments -0.6

Facilities Operations ($7.9m)

Net Group transfers primarily associated with the rationalisation offunctions between Groups 6 and 9 and Group 11 4.4

Higher than anticipated expenditure primarily related to facilitiesmaintenance 1.6

New requirements for the establishment of Operation Safe Haven 1.5


DEFENCE PORTFOLIO RECEIPTS ($28.2m)*

Reduced revenue from property sales (including Port Kembla, Penrith,Dundas, and Brighton Barracks) following delays in the resolution ofzoning and planning issues with State and local authorities, longer thananticipated Defence use of properties and the use of some properties astemporary accommodation for Operation Safe Haven. 28.0

Miscellaneous minor variations 0.2*This figure does not include proceeds from the disposal of RAAF Fairbairn $21.5m.

302

Part Two

303

��/�� 0��

��

To provide a secure and cost-effective information management environment and associatedinfrastructure and systems to enable the achievement of the Defence mission.

� ��

The Defence Information Systems Group develops information management policy andprovides operations support for in-service systems, develops new information managementcapabilities, manages the Defence communications infrastructure and is the coordinating Groupfor Year 2000 within Defence. The Group comprises four areas; Information Policy andPlans, Information Management Services, Information Infrastructure and the Year 2000 ProjectOffice.

��

The Defence Information Systems Group achieved the following outcomes for 1998-99:

Corporate systems are refined to ensure timely and effective information flow to meet theidentified requirements of government and performance agreements with client Groups

Pending the introduction of major new Defence personnel and financial systems, the Groupmaintained existing corporate systems for its clients throughout the reporting period and madenecessary modifications to meet changes in government policy. The Standard Defence SupplySystem was further developed to improve the determination of ship allowance capability, theefficiency of ship provisioning and warehousing operations. An inventory managementreporting system was introduced to assist Support Command Australia in its rationalisation ofDefence inventory. Personnel and pay systems were modified to reflect implementation of theDefence Employees Industrial Agreement and other personnel policy changes. Essentialupgrades and maintenance to the Defence Management Information System were carried outpending the introduction of its replacement system, the Resource and Output ManagementAccounting Network, phase one of which was brought on-line as scheduled on 1 July 1999.Requested changes to the Canberra Region Information System Precinct operating environmentwere implemented to cater for a range of specialised business applications, primarily for theAcquisition Group.

Information management plans and policies are developed to support an enterprise-wideinformation management system

The Defence Information Environment Strategic Plan was endorsed by the Defence InformationEnvironment Board in March 1999. This plan provides strategic intent and direction to thedevelopment of the Defence information environment and addresses the wide range ofcapabilities (technical, organisational, personnel and process related) that contribute to betterdecision making in the conduct of operations and Defence business.

Development continued on the Defence common operating environment. Supporting policywas issued in respect of desktop operating systems and support software, network operatingsystems, terminal emulation and anti-virus software. A common environment will promoteinteroperability, reduce information technology operating, support and training costs, increasethe re-use and portability of applications, promote user effectiveness, enable the economies ofscale available in purchasing to be realised and simplify the implementation of new systems.

304

Part Two

A Defence Common Operating Environment Rationale Development and Use manual wasproduced to provide complete transparency of the development process to Defence stakeholdersand software vendors.

The provision of integrated computing support to the new Russell buildings is achieved inaccordance with the project schedule

Full migration to the Canberra Region Information System Precinct environment of all Russellpersonnel was completed in May 1999. Some cost increases over the original project budgetoccurred as a result of new requirements over and above the initial project scope. These newrequirements included additional secret-rated terminals in Buildings R1 and R2; a secondRussell gateway in Building R5 to ensure the site has redundancy of connectivity; installationof the environment into the National Capital Centre building, and additional business applicationmigration requirements, particularly from the Acquisitions Group. Planning was undertakenfor the introduction of the environment to Defence’s Campbell Park offices, following Defence’sdecision to retain these premises. This extension is also outside the original scope and budgetof the project.

While some initial teething problems were experienced migrating such a large number ofusers to a new environment, these were largely overcome and users are now receiving a reliable,quality service. In total, the network has around 4,500 terminals, with a further 1,500 on thesecret-rated network. The Group aims to expand the system environment to all areas of Canberrawhere it is cost effective.

Technical and infrastructure support to new corporate systems, especially PersonnelManagement Key Solutions, allows those projects to achieve their implementation targets

Under joint project management arrangements with the business sponsors of new enterprise-wide systems, the Group provided full-time information technology technical staff, as well asresources of the Defence Computing Bureau, to the project offices of the Resource and OutputManagement Accounting Network (financial), Personnel Management Key Solutions (humanresources) and the document and records management system. The assistance provided wascritical to these projects as they worked towards their first phase implementation deadlines.

Connectivity is provided across existing networks, and those networks are consolidated andrationalised into an homogenous network supporting the Portfolio

Improvements to the wide-area data-transport service were made to improve the capacity andspeed of interconnection of regional networks and to facilitate an improvement in thetransmission capacity of secure networks. Significant improvements in network functionalitywere introduced, including increased connectivity between the Lotus Notes and MicrosoftExchange e-mail systems and improved accuracy and completeness of the global address listand address book available to Exchange and Notes users.

In synergy with Year 2000 remediation activities, major advances were made towardsstandardisation of Defence’s information technology operating environment nationwide. Alongwith the development of the Defence common operating environment, this standardisationrepresents a critical first step towards the eventual goal of a single homogenous networksupporting Defence.

305

Group Twelve: Defence Information Systems

��

• Provide information management guidance to Defence Groups through the DefenceChief Information Officer

Achieved as Forecast The role of the Defence Chief Information Officer was strengthenedin the reporting period through reforms to the Defence Information Environment Board(formerly the Defence Information Management Board) and the adding of the Vice Chief ofthe Defence Force and the Deputy Secretary Strategy and Intelligence as executive members.Strategic planning for Defence information management was undertaken as a sub-set of broaderstrategic planning initiatives launched by the Defence Information Environment Board, ledjointly by Capability Development Division and the Defence Information Systems Group anddirectly engaging a wide group of stakeholders. The Group managed the Defence InformationEnvironment Board’s work plan and agenda as well as providing its secretariat.

• Continue to rationalise regional networks and improve inter-connectivity of networksand the capability of systems by introduction of policy standards for all facets of systemssupport

Partially Achieved as Forecast Major advances were made towards the rationalisation andstandardisation of Defence’s regional networks under the Defence Information ArchitectureRemediation for Y2K project. Activity under the project resulted in the Year 2000 remediationand, simultaneously, the standardisation and rationalisation of some 80% of Defence’s nationalinformation technology infrastructure. The project adopted a strategy of ‘intelligent’ remediationwith regional networks being rationalised and upgraded where it was cost effective and notdisruptive to the overall Year 2000 remediation program. Another project, Northern Exposure,integrated a significant number of Northern Territory bases and establishments into a singlegeographical network, thereby ensuring a more efficient, effective and reliable informationservice in this key region of ADF operations.

The Backbone Infrastructure Nodal Deployment project, a key element of the wide-area controlof the Defence restricted network, was initiated to facilitate the migration of the existing disparateDefence information environment into a single homogeneous corporate informationenvironment. The project is expected to be substantially complete by the end of 1999.

The complexity and rate of change of network development post-Defence Reform Programhas necessitated concomitant rapid development of new policies and procedures to support theoperation and maintenance of the evolving environment. However, the rapidity of change hasposed challenges for configuration management. The Defence Information Systems Group isaddressing this situation through the formation of the Directorate of Network Engineering,centralising previously-disparate configuration management elements within Defence. TheGroup, through this directorate, is progressing the development of a new configurationmanagement regime as a matter of priority.

• Implement and monitor Programs’ progress against the Year 2000 Project Plan andcoordinate external reporting requirements

Achieved as Forecast Defence has virtually completed its Year 2000 remediation of mission-critical systems, including full remediation for all weapons systems and operational assets,and has met all external reporting obligations required by government. In the 5th QuarterlyReport to Cabinet, covering up to July 1998, Defence reported that, for mission-critical systems,8% were under assessment, 28% were under repair, 17% were undergoing testing followingrepair, and 47% were Year 2000 compliant. This compares to the 8th Quarterly Report covering

306

Part Two

up to June 1999, which reported assessment at 100% complete and over 99% of mission-critical systems as Year 2000 compliant.

During the reporting period, the Defence Year 2000 Project Office developed a risk managementstrategy that included a contingency planning framework. This framework built on existingplans and procedures to ensure that an integrated Year 2000-specific, risk based, planningprocess is in place prior to and immediately after the Year 2000 event period. Work on refiningDefence’s contingency planning will continue.

• Implement infrastructure and systems into the new R1 building and progress towards astandard operating environment in Canberra through CRISP

Achieved as Forecast For further details, refer to the Performance Outcomes section.

• Progress, with the Defence Acquisition Group, the concepts and funding for theformation of the Joint Systems Support Agency for command, control communicationsand intelligence projects

Achieved as Forecast The Joint Systems Support Agency has been established to supportDefence’s operational command, control, communications and intelligence systems. Key tothe effective operation of the ADF, these systems have been in development for several yearsand are now transitioning into operational systems, necessitating the establishment of a supportagency to provide unified and cost-effective operational support and maintenance. A conceptof operations for the agency was developed by the Group and endorsed by both the DefenceCapability Committee and the Defence Information Environment Board.

Agreements were reached with Defence stakeholders on the client support requirements forthe agency. The Network Operation Centre at Deakin, in Canberra, was moved to 24-houroperation to raise the level of service. Funding for the agency in 1999-2000 was securedthrough the 1999-2003 Five Year Defence Program ‘net personnel and operating costs’ processand by drawing together extant funding for command, control, communications and intelligencesystems within Defence. Funding levels after 1999-2000 will continue to be refined.

• Provide advice, and assistance in the implementation and operation of all financial,human resource and other new systems

Achieved as Forecast The Group assigned full-time personnel to provide technical advice tothe project teams developing and implementing Defence’s new corporate systems. The DefenceComputing Bureau provided infrastructure support to the projects, acquiring additionalequipment as necessary. Separate environments were established for development, testingand training for the Resource and Output Management Accounting Network project. Thissupport enabled production to be completed in May 1999 and was a key factor in the projectmeeting its phase one implementation deadline of 1 July 1999. Continued support was providedto the Personnel Management Key Solutions project towards the start of phase one, which isscheduled to begin in October 1999.

• Identify, consolidate and rationalise software licensing arrangements across thePortfolio

Partially Achieved as Forecast Negotiations were conducted with current and potentialsoftware vendors to consolidate and rationalise Defence software licence holdings, standardiselicence terms and reduce overall licensing costs. However, due to the devolved nature ofDefence software licence holdings prior to the Defence Reform Program, as well as majororganisational changes over the past several years, the task of consolidating and rationalisingcorporate licence holdings remains an ongoing task for Defence. Nevertheless, evidence is

307


growing that activity in this area is directly reducing Defence exposure to unnecessary softwareexpenditure, with far greater scrutiny now afforded to the business case underlying eachproposed purchase. The development of the Defence common operating environment and thecentralisation of the software library function within the Defence Information Systems Grouphave also contributed to this improved outcome.

• Continue to invest in new technologies to provide efficiencies in wide-area networksfor the Department

Achieved as Forecast The core, wide-area transmission protocol was upgraded to‘asynchronous transfer mode’. This enables a flexible and scalable use of transmission andlower costs relative to other available technologies. Long-distance voice telephone traffic wasalso fully integrated into this system. As Defence makes almost three million voice calls permonth, significant savings are now obtainable by routing this traffic over Defence’s ownnetwork, traffic which would otherwise have been delivered via the public switched telephonenetwork at a significant cost (that is, at STD rates). New ‘help-desk’ technologies were alsointroduced in the reporting period for both voice and data services, a move that will significantlyimprove the provision of services to the Group’s customers as well as improve the efficiencyof providing those services. A standard set of network management, configuration and auditingtools were introduced to support the Defence Restricted Network infrastructure and operatingenvironments, following the Defence information architecture remediation for Y2K project.

• Implement information management Rules of Governance, an information managementframework and a revised Strategic Plan, and related policy standards and architecturesfor information management

Achieved as Forecast The rules of governance, introduced in May 1998 and revised in1998-99, provide the basis for the Defence information management framework and are thekeystone documents defining Defence information management responsibilities. A furtherrevision has commenced to reflect the recent restructure of the Australian Defence Headquarters.The Defence Information Environment Strategic Plan was endorsed by the Defence InformationEnvironment Board in March 1999.

• Develop a strategic program plan for the market testing of systems and infrastructuresupport

Not Achieved as Forecast Defence market tested the Defence Computing Bureau, prior tothe establishment of a whole-of-government information technology outsourcing initiative.As a necessary precursor to the market testing of remaining information technology supportfunctions, the Group commenced a product costing initiative during the reporting period withthe task of identifying the baseline costs of all information systems’ activities. Also establishedwas the related optimal cost of ownership program. Under the program, all informationtechnology networks and support will be reviewed to identify minimum cost of ownership toDefence, with all realisable savings harvested prior to the market testing of each nominatedinformation-technology support area. Though the work of both these initiatives is not yetfinalised, it will be a vital source of input to the Group’s market testing strategic plan currentlyunder development.

The Office of Asset Sales and Information Technology Outsourcing has commenced discussionswith Defence in relation to its requirements under the Government’s information technologyoutsourcing initiative. Defence is focusing on ensuring that all Year 2000 issues undertakenby the Group are resolved before going to the market. All Year 2000 initiatives undertaken bythe Group to date have been designed to complement and facilitate future market-testingactivities.

308

Part Two

��




12.1 Information Policy and Plans 16.5 17.5 16.3 -1.3 -7.112.2 Information Management Services 15.9 23.4 24.0 0.5 2.312.3 Information Infrastructure 207.4 208.7 306.2 97.5 46.712.4 Year 2000 Project Office 10.6 55.7 2.8 -52.9 -95.0Group Total 250.4 305.3 349.2 43.9 14.4




12.1 Information Policy and Plans 53 51 48 -3 -5.912.2 Information Management Services 248 243 240 -3 -1.212.3 Information Infrastructure 918 977 1,051 74 7.612.4 Year 2000 Project Office 5 4 4 0 0Group Total 1,224 1,275 1,343 68 5.3



Permanent 98-99 Budget 22 75 661 0 758Force 98-99 Revised 22 75 661 0 758

98-99 Actual 22 75 661 0 758Reserves 98-99 Budget 0 0 0 0 0

98-99 Revised 0 0 0 0 098-99 Actual 0 0 0 0 0

Civilian 98-99 Budget 31 173 257 5 46698-99 Revised 29 168 316 4 51798-99 Actual 26 165 390 4 585

Total 98-99 Budget 53 248 918 5 1,224Personnel 98-99 Revised 51 243 977 4 1,275

98-99 Actual 48 240 1,051 4 1,343

309


��&�"'��&!�$��!-��$��!-��))

The roll-out of the Canberra Region Information System Precinct environment to Russell wascompleted. Total efficiency gains in 1998-99 from this activity were $1.5m. Rationalisationof the Defence Voice Network commenced during 1998-99. Network rationalisation also willfacilitate future market testing of Defence’s information-technology service delivery.




Information Management 5.3 6.6 6.7 0 0Superannuation 0.1 0.4 0.4 0 0Provision for Contractor Support 0 0 -5.6 -5.6 0Total 5.4 7.0 1.5 -5.6 -80.0

Table 12.5: 1998-99 Defence Reform Program Personnel Reductions – ADF



Information Management 13 13 13 0 0Total Personnel Reductions 13 13 13 0 0




Information Management 57 116 76 -40 -34.5Total Personnel Reductions 57 116 76 -40 -34.5




DRP Transition Costs 0 0 2.2 2.2 0Total 0 0 2.2 2.2 0

310

Part Two

Table 12.8: Reconciliation of Appropriations for DISG Group



180-01 Running CostsService Personnel 43.1 43.0 43.3 0.3 0.6Civilian Personnel 29.0 31.6 36.7 5.1 16.2Administrative Expenses 137.4 184.9 196.5 11.5 6.2

181Equipment & Stores 40.9 56.5 82.7 26.3 46.5Total Defence FunctionAppropriations (A) 250.4 316.0 359.2 43.2 13.7Total Defence Function Receipts(Offset Within Outlays) (B) 0 -10.7 -10.0 0.7 -6.6Total Defence Function Outlays(C) = (A+B) 250.4 305.3 349.2 43.9 14.4


Table 12.9: Major Variations between 1998-99 Revised Estimate and Actual Outcome


Variation in Accrual Based Superannuation and 3% Productivity Benefitliability as a result of movements in average staffing levels, changes inper capita’s and the impact of pay increases. 0.1Miscellaneous minor variations 0.2

Civilian Personnel ($5.1m)Higher than expected recruitment levels to fill positions vacated byService personnel. 3.2Variation in Accrual Based Superannuation and 3% Productivity Benefitliability as a result of movements in average staffing levels, changes inper capita’s and the impact of pay increases. 0.3Net Groups Transfers primarily associated with transfer of functionsto Group 13. -0.3Defence Reform Program ReinvestmentDefence Reform Program related redundancies 1.9

Administrative Expenses ($11.5m)Increase in telecommunications, information technologyand initiatives associated with Y2K compliance. 10.7Net Groups transfers. 0.5Defence Reform Program ReinvestmentDefence Reform Program transition costs primarily associated withmarket testing 0.3

181 EQUIPMENT AND STORES ($26.3m)Increased for the replacement of non-Y2K compliant equipment. 20.7Defence Reform Program GainsDVCS contract costs 5.6

DEFENCE RECEIPTS ($0.7m)Variation due to the late receipt of OGIT contribution to Y2K compliance. 1.0Miscellaneous minor variations -0.3

311


312

Part Two

313

��2��

��

To contribute to maintaining and improving the efficiency and effectiveness of the Defenceorganisation through the provision of a range of corporate services across Australia, and byreducing the proportion of Defence resources spent on corporate functions.

� ��

The Defence Corporate Support Group is responsible for providing corporate and administrativeservices across Defence. The principal means of achieving its objective is to deliver servicesto meet the requirements of clients on time, fit for purpose and at a competitive cost. TheGroup has a central role in achieving savings from corporate services for transfer to Defencecapability. The Group comprises four sub-Groups: Corporate Support, Base Support, PublicAffairs and Legal.

��

The details of the Group’s Performance Outcomes for 1998-99 are included under thePerformance Against Forecast for 1998-99 section below.

��

In support of Defence objectives, the Defence Corporate Support Group has delivered thefollowing achievements.

• Deliver corporate services to Defence Groups that meet their requirements as set out inservice level agreements, statements of requirements, and contracts

Achieved as Forecast Clients are adjusting to the implementation of what is a major changein the delivery of common corporate services. Requirements are being met at a significantlyreduced cost but without detriment to Group outcomes.

• Complete rationalisation and market testing of garrison support functions in nine of 12regions and commence market testing in the remaining three

Achieved as Forecast Of the 12 Defence Corporate Support regions, only Southern Victoria,Riverina/Murray Valley and Sydney West/South had not completed the market testing ofgarrison support by 30 June 1999. (The Southern Victoria result was subsequently announcedon 5 August 1999 and the other two regions are currently completing tender evaluation, witha view to announcement before the end of the year.) The value of garrison support contractsnow let is some $1 billion over 5 years.

• Complete rationalisation of management and clerical and administrative services inall regions, and commence market testing in at least two

Achieved as Forecast Rationalisation in, across and between regions has been completed,applying a base-shopfront, central-processing and central-bureau service delivery model.Market testing is currently being evaluated in South Australia and Queensland (combinedNorth and South Queensland) tender documentation has been issued.

314

Part Two

• Deliver an appropriate range of legal advice and support to Defence from a fullyintegrated and functional Defence Legal Organisation, and continue to improve themilitary discipline and military inquiry system, taking into account outcomes from theParliamentary Inquiry into Military Justice Procedures and the Abadee Report intothe Arrangements for the Conduct of Trials under the Defence Force Discipline Act

Achieved as Forecast The Defence Legal Office has operated as an integrated organisationsince July 1997. During 1998-99, the Defence Legal Office delivered a broad range of legalservices and support to Defence. In late 1998, an organisational review was conducted of theDefence Legal Office in Canberra, complementing a 1997-98 review of legal service deliveryin the regions. Implementation of the recommendations of those reviews is well advancedtowards achieving closer integration on a national level and a more efficient and effectivedelivery of legal services to Defence.

The recommendations of the parliamentary inquiry into military justice, notably the developmentof a draft administrative inquiries manual and the recommendations of the Abadee Report,including the appointment of a Judge Advocate Administrator to provide independent adviceon the appointment of presiding and court officers for court martials, in addition to otherimprovements to the ADF disciplinary system, have been implemented.

• Complete the rationalisation of libraries and publishing including the establishment ofa Defence Library Service and Defence Publishing Agency respectively

Partially Achieved as Forecast The nationally-focused services have been established.Rationalisation strategies have been completed and are being implemented.

• Negotiate competitively priced energy contracts as electricity and gas marketsderegulate, and achieve first results from implementing the plan for effective energymanagement across Defence

Achieved as Forecast New energy contracts were negotiated for Defence sites in Victoria(electricity), Queensland (electricity) and New South Wales (gas) with estimated savings of$1.7m in the first year, bringing the savings since 1 July 1997 to $9.8m per annum. TheDefence Energy Efficiency project was established and is developing initial energy andgreenhouse-gas reduction initiatives.

• Deliver public affairs services from a single fully functional Defence Public AffairsOrganisation, and through this organisation formulate and disseminate a new Defencepublic affairs strategy, revise and update guidance on Defence Public Affairs in Timesof Tension and Conflict, and conduct a public opinion benchmark survey

Partially Achieved as Forecast A single fully-functioning Defence public affairs organisationhas been established, which incorporates the public affairs staff of the three Services with thedepartmental staff. Consultants have been chosen to develop a new Defence public affairsstrategy, incorporating internal and external communications. The new strategy is expected tobe completed by the end of 1999. Further contracts were let to conduct an audit of currentDefence communications and for the establishment of a standing panel to undertake publicaffairs activities as required.

• Complete a review of the way ahead for Woomera, taking account of the planned closureof the joint facility at Nurrungar, and commence implementation

Partially Achieved as Forecast The review was completed and implementation is expectedto commence in 1999-2000.

315

Group Thirteen: Corporate Support

• Develop and implement a common Defence policy for the management of trainingareas and ranges

Achieved as Forecast The new policy was promulgated as a Defence Instruction (General)on 24 June 1999.

• Provide regionally based Defence State/Territories support and liaison, and centrallymanaged protocol and visits services for the Defence Portfolio

Achieved as Forecast The main achievement in 1998-99 was the Defence contribution toOperation Safe Haven, which has provided temporary refuge for more than 4,000 displacedpersons from Kosovo.

• Deliver savings in 1998-99 of $60.3m from the above initiatives for re-allocation tocapability

Achieved as Forecast Achieved savings for re-allocation to capability were $83.8m, exceedingthe savings target by $23.5m.

��




13.1 Corporate Support 107.9 85.4 106.8 21.4 25.1 13.2 Base Support 451.4 505.3 525.5 20.2 4.0 13.3 Public Information 9.3 8.0 10.0 2.0 24.9 13.4 Legal 16.0 35.2 33.0 -2.2 -6.4 Group Total 584.5 633.9 675.3 41.4 6.5




13.1 Corporate Support 174 206 318 112 54.4 13.2 Base Support 4,965 5,865 5,678 -187 -3.2 13.3 Public Information 101 101 120 19 18.8 13.4 Legal 100 100 112 12 12.0 Group Total 5,340 6,272 6,228 -44 -0.7

316

Part Two



Permanent 98-99 Budget 66 2,311 43 40 2,460Force 98-99 Revised 66 2,767 43 40 2,916

98-99 Actual 66 2,686 43 40 2,835Reserves 98-99 Budget 0 184 1 35 220

98-99 Revised 0 198 1 35 23498-99 Actual 0 139 22 39 200

Civilian 98-99 Budget 108 2,470 57 25 2,66098-99 Revised 140 2,900 57 25 3,12298-99 Actual 252 2,853 55 33 3,193

Total 98-99 Budget 174 4,965 101 100 5,340Personnel 98-99 Revised 206 5,865 101 100 6,272

98-99 Actual 318 5,678 120 112 6,228

��&�"'��&!�$��!-��$��!-��))

Market testing of garrison support activities progressed across Australia, with decisions in theNorth and South Queensland, South Australia and Western Australia regions. The total valueof contracts awarded in 1998-99 was $347.9m. The market testing of clerical and administrativeservices began with the issue of a request for quotation for the cost of supplying clerical andadministrative services to the South Australia region on 1 April 1999.




Administrative Support 97.3 108.2 119.7 11.5 10.6Superannuation 18.3 20.6 20.6 0 0Provision for Contractor SupportContracts Funded -11.8 -17.8 -26.4 -8.6 48.3Residential Provisions -25.2 0 0 0 0Total One Off Savings 0 0 16.6 16.6 0Total 78.6 111.0 130.5 19.6 17.7




Administrative Support 1,577 1,577 1,577 0 0Total Personnel Reductions 1,577 1,577 1,577 0 0

317





Administrative Support 876 957 1,114 157 16.4Total Personnel Reductions 876 957 1,114 157 16.4




Net Personnel and Operating Costs 0.5 0.5 0.5 0 0DRP Transition Cost 0 7.0 35.9 28.9 412.9Total 0.5 7.5 36.4 28.9 385.3

Table 13.8 Reconciliation of Appropriations for Defence Corporate Support



180-01 Running CostsService Personnel 136.2 156.6 158.5 2.0 1.3Civilian Personnel 102.1 117.3 148.1 30.8 26.3Administrative Expenses 174.4 172.6 176.4 3.7 2.2Facilities Operations 0 0 0 0 0

180-02 Other Services 12.0 31.1 28.5 -2.6 -8.4181 Equipment and Stores 172.5 169.2 173.6 4.4 2.6185 Defence Facilities 0 0 0 0 0

Special AppropriationsDEETYA Subsidies 0 0 0 0 0

Total Defence FunctionAppropriations (A) 597.1 646.9 685.1 38.3 5.9Total Defence Function Receipts(Offset within Outlays) (B) -12.6 -13.0 -9.8 3.2 -24.3Total Defence Function OutlaysC) = (A+B) 584.5 633.9 675.3 41.4 6.5


318

Part Two


Appropriation $m180-01 RUNNING COSTSService Personnel ($2m)

Variation in Accrual Based Superannuation and 3% Productivity basedon movements in average staffing levels, changes in per capita rates andthe impact of pay increases 2.0

Civilian Personnel ($30.8m)Net group transfers primarily associated with Garrison Support andPublishing Functions from groups 3, 6 and 12 7.2Defence Reform Program GainsRelated to Administrative Support -5.3Defence Reform Program ReinvestmentDefence Reform Program related redundancies 25.9Defence Reform Program transition costs 3.0

Administrative Expenses ($3.7m)Revised arrangements - payments to copyright agency 2.5Increased security requirements associated with the Russellredevelopment project 1.5Net group transfers primarily associated with Garrison Support andPublishing Functions from groups 3, 6 and 12 1.5Increased costs for utilities and security associated with the new sharedsite services lease at Garden Island 1.1New requirement for the establishment of Operation Safe Haven 0.1Decreased requirement for DRP transition costs -9.1Defence Reform Program GainsDefence Reform Program Market Testing 8.6Related to Administrative Support -2.6

180-02 OTHER SERVICES (-$2.6m)Miscellaneous minor variations 0.1Reduction in services required at Woomera -1.0Lower than anticipated requirement for legal and compensation -1.7

181 EQUIPMENT AND STORES ($4.4m)Contractor support resulting from market testing 27.8New requirement for the establishment of Operation Safe Haven 1.3Lower than anticipated costs associated with the market testing program -1.4Net group transfers primarily associated with Garrison Support andPublishing Functions -3.1Defence Reform Program GainsRelated to Administrative Support -3.6Pre-market testing one-off gains -16.6

DEFENCE PORTFOLIO RECEIPTS ($3.2m)Lower than anticipated collection of receipts 4.9Net movements in the Woomera Trust Account -1.8

319


320

Part Two

321

��3�� 5

��

The objectives of the Group are:

a. to provide resource management, financial and accounting policies and services toachieve the proper and most cost-effective use of Defence resources;

b. to develop a resource planning and budgeting program which accords with Governmentstrategic and resource policies and priorities and which maximises Defence outputs;

c. to develop Portfolio performance evaluation and reporting so that they are moreinformative, accurate, comprehensive and strategic in focus;

d. to provide effective, timely and responsive support to Ministers, Cabinet and Parliament;e. to oversee the implementation of the Commercial Support Program;f. to improve the skills of Defence staff in the areas of ethics, performance improvement

and market testing, security practices and the conduct of evaluations; andg. to assess, manage and thwart security threats to the Defence organisation.

� ��

The Finance and Inspector-General Group develops policy on, and provides corporate servicesin, financial resource management, administration and accounting for Defence; independentprogram evaluation and management audit fraud control and investigation; physical, personnel,computing and project security; ministerial support and parliamentary liaison; and oversightof the Commercial Support Program. The Group comprises two areas; Resources and FinancialPrograms and the Inspector-General.

��

Corporate financial resource planning and in-year outlay management processes to enableeffective and efficient use of resources

The Resources and Financial Programs sub-Group successfully managed its budgetary andaccounting responsibilities. The budget was fully achieved against identified capability/outputpriorities including the adjustment of resource allocations to meet increased preparedness costsassociated with bringing an Army brigade to 28 days notice to move. Considerable effort wasmade to refine the Department’s management framework, positioning Defence to manageeffectively on an accrual and outcome/output basis from 1 July 1999. Roles for Output andGroup Managers were determined, with clear responsibilities assigned for the achievement ofoutput performance, the management of Defence resources and the delivery of internal supportservices. Further work was undertaken to refine Defence’s budget planning and managementprocesses, as well as its output and Group budget structures, to ensure full alignment with thenew management framework.

Defence financial processes and accounting meet the needs of Defence managers and statutory,audit and government requirements

Significant progress was made to ensure that Defence’s financial processes and systems metDefence management needs and external requirements in the new resource managementenvironment. A major milestone was the completion on schedule of Defence’s first accrual/output budget, with the Department being commended for the timeliness of its 1999-2000budget submission and the quality of budget information provided. Preliminary work alsobegan on developing the 2000-01 budget.

322

Part Two

Various initiatives were progressed to refine Defence’s accounting policies and systems. Amajor internal review was conducted of accounting policy, with a particular focus on assetrevaluation. In line with the government’s requirement to introduce an output-based accrualbudget, accounting and reporting framework, Defence reassessed its financial managementsystems capability. As a consequence, Defence undertook a major evaluation and selectionprocess in the year to choose a new financial management system capable of providing the fullrange of accrual functionality. In November 1998, it was announced that Defence wouldimplement the SAP R/3 financial software suite under the Resource and Output ManagementAccounting Network project. The project objective is to implement the software solution inconjunction with a re-engineering of business processes. The first phase of the project focusedon the implementation of treasury, banking and budgetary functionality. It commenced on 1July 1999 following completion of high-level integrated design in early 1999.

Defence also undertook a cost management study to improve decision making by achievingbetter visibility of its costs. As a result of the initial study, Defence is pursuing an appropriatecosting solution, with implementation planned to commence in 2000.

Defence Budget and external reporting processes and support services meet the needs ofMinisters, Cabinet and Parliament

Statutory reporting requirements were achieved in a timely manner, with the Budget documentsreceiving recognition for their accuracy and content. Support arrangements to Ministers, Cabinetand Parliament continue to be timely and effective.

Management is improved and resources are used more effectively and efficiently as the resultof performance evaluation and reporting

During the year, a medium-term audit strategy was developed by the Management Audit Branchof the Inspector-General sub-Group in consultation with the Australian National Audit Office.The strategy has been accepted by the Defence Audit and Program Evaluation Committee.The objective of the strategy is to focus on risk and materiality and to ensure that higher riskareas within the portfolio are systematically reviewed over a three-year period. The strategywas developed as a result of a recommendation in the audit office’s Report No. 46 - InternalAudit (Financial Control and Administration Audit) tabled on 28 May 1998.

Management Audit Branch also introduced a new audit recommendations management systemto record recommendations and monitor their implementation. This system records ManagementAudit Branch as well as Australian National Audit Office recommendations and will enhancecorporate governance through improved reporting to the Defence Audit and Program EvaluationCommittee.

In accordance with the Defence portfolio evaluation strategy, three evaluation topics from the1998-99 Portfolio Schedule of Evaluations were assigned by the then Defence ManagementCommittee to the Inspector-General for completion. A brief summary of outcomes is as followswhile further details are shown in Part 1 under the heading Portfolio Schedule of Evaluationsfor 1998-99.

• An evaluation of the Defence Community Organisation was conducted and a reporthas been forwarded to the Chief of the Defence Force and the Secretary for endorsementprior to public release, which is anticipated early in 1999-2000. The report highlightsdeficiencies in needs and resource usage data that require priority analysis, definitionand resolution.

323

Group Fourteen: Finance and Inspector-General

• The evaluation into minor capital equipment procurement was terminated after apreliminary survey and the submission of an interim report. The potential forrationalisation and integration identified has been incorporated into the ongoing businessre-engineering processes of Support Command Australia.

• The evaluation into the Defence Legal Reserve Panel was devoted to the conduct of anorganisational review of the Defence Legal Office in Canberra, with significantrecommendations directed at improvements in efficiency and effectiveness.

• A survey of customer/provider arrangements, post-Defence Reform Program, wasconducted as a preliminary to ongoing reviews of this aspect of Defence activities inthe 1999-2000 portfolio schedule of evaluations. The report of the survey has betterinformed senior management on the regime of customer/provider arrangements andthe issues warranting further analysis. In particular, an evaluation assessment willexamine the need for a more detailed and in-depth description within a representativesample of Defence capability outputs.

The coverage and usefulness of Group training and education initiatives within the Defenceorganisation increases

A concerted effort was made to raise Defence personnel awareness of changes being broughtabout by the introduction of accrual and outcome/output-based management through thedelivery of awareness seminars attended by some 1,900 staff. These seminars were held acrossAustralia including in Canberra, Bandiana, Glenbrook, Adelaide, Williamtown, Sydney,Wollongong, Melbourne, East Sale, Oakey, Cairns, Brisbane, Perth, Darwin and Katherine toafford the largest possible number of staff the opportunity to attend.

Considerable attention was also paid to the design and development of new financial trainingand education packages to meet the needs of Groups while training continued to be providedin respect of the financial management system being phased out. All training was aimed atensuring a high financial management performance was maintained. Financial training wasprovided to some 4,500 military and civilian staff during the year.

Ethics workshops were provided by the Inspector-General sub-Group for approximately 6,000Defence employees. Feedback from workshop participants and organisers was positive. Theseworkshops and the statement Defence and Industry: An Ethical Relationship have informedmanagers and employees of their ethical and fraud prevention responsibilities as required bythe Financial Management and Accountability Act 1997. Similarly, the completion of a majorpiece of research on values within Defence represented an ethical health-check of Defenceand positively answered the question “are we ethical managers in Defence?”.

The extent to which Defence security policies and practices manage the assessed threats tothe Defence organisation

The Defence Security Branch has continued to raise the profile of security within the organisationthrough the provision of policy development, strategic advice, education and training andinvestigative services. The Branch has provided threat assessments to a variety of clients,undertaken complex security investigations and provided specialised technical support toportfolio clients.

Negotiations have been finalised on international treaty agreements with several to be signedin 1999-2000. Re-evaluation and modification of Defence security policy has continued toensure that security practices are aligned to changing aspects in the strategic environment.The importance of all aspects pertaining to personnel security is reflected in the integration ofpositive and negative vetting functions into the Directorate of Personnel Security.

324

Part Two

��

• Successfully manage the budgetary, resource allocation, in year management andaccounting processes, including refinement of the processes to meet strategicmanagement needs and to focus on accrual-based output management

Achieved as Forecast For outcome details, see Performance Outcomes for 1998-99 above.

• Oversight the resource aspects of the implementation of the Defence Reform Program,including the tracking of savings and re-allocation

Achieved as Forecast For a full discussion of Defence Reform Program achievementsthroughout 1998-99, refer to Part One of this report.

• Continue provision of timely and responsive support to Ministers, Cabinet andParliament, including meeting statutory reporting requirements


• Continue development and implementation of an enhanced performance and resourcemanagement framework, including responding to the requirements of major resourceinitiatives and developing and enhancing corporate resource management informationsystems.


• Manage the design and delivery of financial training and education to meet the needsof Groups, including in relation to revised resource management responsibilities andaccountabilities.


• Deal with allegations of fraud fairly, professionally and expeditiously;

Substantially Achieved as Forecast While internal fraud case reviews indicate that allegationshave been dealt with fairly and professionally, there has been a 30% increase in open casesover 12 months old. Superficially, this points to a decrease in timeliness, but an examinationof these cases indicates that the investigations had been completed in all but one case. Thecases where investigations had been completed were waiting for reclassification on the databaseor completion of an investigation report. The delay in this action occurred because severalinvestigators were involved in a major investigation with the Australian Federal Policethroughout the year.

• Inform ethics promotion and fraud prevention activities and products by research aswell as policy development in relevant areas;


• Undertake successfully a comprehensive program of audits based on risk criteria andclient requests;

Achieved as Forecast One hundred and seven audits were completed or substantiallycompleted during the financial year. Eleven of these have been issued as draft reports and areawaiting final comments from clients. The audits included:

- two national audits;- nine capital investment reviews;

325


- eight major information technology audits, providing advice on efficientIntroduction of new systems;

- 17 financial management audits;- 33 regional audits;- 32 audits completed at the request of base/unit commanders; and- six tasks in support of general investigations and review.

These audits made 997 recommendations identifying improvement across a range of functions.Management accepted all of these except for 57 recommendations.

• Manage the Defence market testing program and implementation of the PerformanceImprovement Cycle to meet agreed targets

Achieved as Forecast The accelerated pace of market testing has resulted in the completionof 10, mainly garrison support, activities encompassing 1,512 positions. More than 30 furtheractivities are under way. Policy advice has been significantly revised through the issue of thefifth edition of the Commercial Support Program Manual and exposure draft booklets on themethodologies of the performance improvement cycle and the Commercial Support Program.A comprehensive report on Defence’s implementation of the performance improvement cyclehas been provided to the Department of Finance and Administration.

• Develop Defence security policies and practices to meet assessed threats, with increasingintegration of security activities across the Portfolio


• Complete the evaluations set out in the Portfolio Schedule of Evaluations, and undertakespecial reviews or tasks in the context of management improvement initiatives

Achieved as Forecast For details refer to the Portfolio Schedule of Evaluations in Part Oneof this document.

��




14.1 Resources and Financial Programs-13.8 -13.1 -3.1 10.0 -76.514.2 Inspector-General 28.0 28.6 28.5 -0.2 -0.6Group Total 14.2 15.5 25.4 9.9 63.7




14.1 Resources and Financial Programs 170 155 138 -17 -11.014.2 Inspector-General 215 216 210 -6 -2.8Group Total 385 371 348 -23 -6.2

326

Part Two



Permanent 98-99 Budget 0 26 26Force 98-99 Revised 0 26 26

98-99 Actual 0 26 26Civilian 98-99 Budget 170 189 359

98-99 Revised 155 190 34598-99 Actual 138 184 322

Total 98-99 Budget 170 215 385Personnel 98-99 Revised 155 216 371

98-99 Actual 138 210 348

��&�"'��&!�$��!-��$��!-��))

The Finance and Inspector General Group continues to achieve its planned Defence ReformProgram savings in accordance with its implementation schedule. Implementation of theResource and Output Management Accounting Network project, which is on schedule, willprovide additional, unforecast gains across the Defence portfolio upon completion.




Administrative Support 0.6 0.6 0.6 0 0Fringe Benefits Tax 16.0 0 0 0 0Total 16.6 0.6 0.6 0 0




Logistics 2 2 2 0 0Administrative Support 8 2 2 0 0Total Personnel Reductions 10 4 4 0 0




DRP Transition Costs 0 0 0.3 0.3 -Total 0 0 0.3 0.3 -

327


Table 14.7: Reconciliation of Appropriations for Finance and Inspector General Group



180-01 Running CostsService Personnel 1.9 1.9 1.9 0 0Civilian Personnel 21.4 21.9 20.1 -1.8 -8.2Administrative Expenses 22.5 34.9 36.1 1.2 3.4

180-02 Other Services 2.1 2.1 0.9 -1.2 -57.1181 Equipment & Stores 15.2 0.8 0.8 0 0183 Defence Production 0 0 0 0 0Total Defence FunctionAppropriations (A) 63.0 61.5 59.7 -1.7 -2.8Total Defence Function Receipts(Offset Within Outlays) (B) -48.8 -46.0 -34.4 11.6 -25.3Total Defence Function Outlays(C)=(A+B) 14.2 15.5 25.4 9.9 63.7



Appropriation $m




Net Group Transfers -0.3

Decreased civilian salaries and superannuation payments mainly due tounexpected turnover in staff and delays in recruiting -1.7


Defence Reform Program Transition Costs 0.3


Reprogramming of costs associated with the implementation of newfinancial management information system (Project Roman) 1.6



Reduced requirement for travel and other associated administrative costs -0.6

180-02 OTHER SERVICES (-$1.2m)

Lower than anticipated Compensation and Act of Grace payments -1.2


Reduced Foreign Military Sales receipts - lower than anticipated refunds 11.6

329

PART THREE

STATUTORYREPORTING

REQUIREMENTS

330

Part Three

��

��

�� !��"#�� $!��"��%��" ��"�&$��"��

'� ��$��"�!�(��!�)��"*��+��,

-� .��*�%��+��"+��%��"

/� 0��"��,� ��"��

1� 2��"�!�3�"�$!��"��

4� �*��" ��"*��)

5� �""$�!��"��)��*%�"��"��"*��"��+��)�

0�+�"��.��6(�%��"��"��7��889

331

��3��:��;��3��3�

Defence continued its commitment to participative work practices during 1998-99.

3��!��"

In May 1998 the Australian Industrial Relations Commission certified the Defence EmployeesIndustrial Agreement 1998-99 between the Department and its civilian staff covering termsand conditions of employment until October 1999.

Under the terms of the agreement, the department provided mechanisms for effectivecommunication and consultations with its employees. Departmental Managers consult withtheir employees or representatives at a workplace level on a regular basis regarding mattersthat impact on their employment.

Consultation at a national level takes place through the National Workplace RelationsCommittee. The committee comprises senior departmental representatives, including ADFrepresentatives, and employee representatives.

The improved conditions provided under the civilian agreement have enhanced theadministration of civilian employees. Successor arrangements to the agreement, which expiresin October 1999, are being developed.

��!��,

The ADF workplace arrangement was endorsed by the Defence Force Remuneration Tribunalin October 1997 with a formal expiry date of April 1999 and it remains in force until a successorarrangement is endorsed.

Although ADF members are not subject to the Public Service Act 1922, the departmentcommenced consultations during the reporting period with members of the ADF regarding thedevelopment of revised remuneration and conditions of service arrangements. Individual andgroup responses covering some 25,000 ADF members have subsequently been received.

� ��#�� 3�� &��

During 1998-99, no new Defence legislation or regulations, or amendments to existinglegislation or regulations, had any direct or significant indirect impact on business or acted torestrict competition. No regulation impact statements were required to be submitted.

��3��:��;��3��3�

��!��,

3��!��"

332

Part Three

�33��(��(��0��.��

In the publication, Defence Our Priorities, the Defence Executive set as a key objective theimprovement of safety management throughout Defence. In response to that challenge theHead Defence Personnel Executive instituted a review of the management of safety in Defenceand in March 1999, approved the formation of the Defence Safety Management Agency toreplace the Directorate of Defence Occupational Health and Safety.

On 13 July 1999 the Defence Safety Management Agency was officially launched by Mr PaulBarratt AO, Secretary to the Department of Defence. The Secretary linked the launch of theagency to the Defence Executive human resource strategy Defence Our People published inJune 1999, emphasising his commitment, and that of the Chief of the Defence Force, tostrengthening the safety performance of Defence.

The Defence Safety Management Agency has established a team of group safety adviserswithin individual Groups to assist in understanding and managing occupational health andsafety responsibilities and to promote relevant services, tools and products.

��$��"�!�(��!�)��"*��+��,��!��,

The Defence Occupational Health and Safety Statement has been re-drafted to reflect theDefence Executive’s renewed commitment to improving occupational health and safetymanagement in Defence.

The integrated Defence Occupational Health and Safety Manual was published in September1998 to replace the Departmental Occupational Health and Safety Manual and various DefenceInstructions (General). 1700 hard copies of manual have been distributed throughout theDefence and access is also available on the Defence intranet and the Defence Manager’sToolbox. In early 1999, additional policies were included on the following subjects:

• management of risks associated with plant;

• asbestos;

• synthetic mineral fibres;

• manual handling;

• laboratory safety;

• occupational overuse syndrome; and

• occupational first aid.

During 1998-99, additional policies were produced and circulated for comment on riskmanagement, the notification and reporting of accidents/incidents and composite fibres. Thepolicy on the implementation within the ADF and the Department of the Occupational Healthand Safety (Commonwealth Employment) Act 1991 has been redrafted. Extensive amendmentshave also been completed for the ADF publication, Aircraft Accident Occupational Healthand Safety Manual. In May 1999, the booklet Military Aircraft Accident Sites – SafetyGuidelines for Emergency Services Personnel was also reprinted and 2000 copies were issued.

��!��" �%�"��

The Defence Occupational Health and Safety Consultative Committee, involving Defence Groupsand interested unions, is the peak consultative committee which deals with civilian occupationalhealth and safety policy matters. The committee met twice during 1998-99.

��$��"�!�(��!�)��"*��+��,��!��,

��!��" �%�"��

333

Occupational Health and Safety

Following the significant organisational changes flowing from the Defence Reform Program,the Directorate of Defence Occupational Health and Safety reviewed the structure and functionof occupational heath and safety committees, designated work groups and the election andtraining of health and safety representatives. The review identified some areas needing guidanceand training, to be managed by the Defence Corporate Support Group, while most arrangementswere found to be functioning efficiently and effectively.

��"�"

Occupational health and safety training modules were redeveloped in 1998-99. The newcombined three-day course workplace safety management was specifically designed forsupervisors, commanders and managers to meet occupational health and safety competenciescontained in the National Guidelines for Integrating Occupational Health and SafetyCompetencies into National Industry Competency Standards [NOHSC: 7025 (1994)]. Therevised one-day managing health and safety in the workplace course was designed forindividuals in management positions.

A pilot defence radiation protection officer course was developed in conjunction with theAustralian Defence Force Academy to meet core competencies determined in conjunctionwith the Joint Education and Training Group. The Directorate of Defence Occupational Healthand Safety, in conjunction with the Australian Defence Force Academy, conducted two Defencelaser safety officer courses and, in conjunction with Telstra Learning, two radio frequencyradiation measurement officer courses.

0�+��$��%��*��"� �%�"��,��%�

The integrated occupational health and safety, compensation and rehabilitation managementinformation system for Defence, known as Defcare, was further enhanced during 1998-99with an intranet version developed for release in July 1999. The site contains a comprehensivesuite of on-line safety systems and tools, to assist Defence in meeting its duty of care, including:

• Chemwatch, the material safety data sheets and chemical management system;

• an electronic risk score calculator;

• an occupational health and safety incident recording system;

• a statistical reporting system;

• a workplace hazard management system;

• a workplace inspection and audit tools; and

• a health and safety reference library.

��<��2��$��!$��"��)�%�

The asbestos exposure evaluation scheme provides for the health assessment, counselling and,if necessary, testing for employees and ex-employees in Defence who may have been exposedto asbestos during their employment. During the year, 302 services were provided by HealthServices Australia to persons who accessed the scheme, at a cost to Defence of $52,332. Theservice agreement between Defence and Health Services Australia for the management of theasbestos exposure evaluation scheme has been renewed for 1999-2000.

3)�%��!�0��<��

In December 1998, Defence invited suppliers to tender for the provision of a material safetydata sheet and chemical management system. In March 1999 Ucorp Pty Ltd trading asChemwatch was selected, replacing the Infosafe system supplied by Acohs Pty Ltd. Thesystem commenced operation in Defence on 1 July 1999.

334

Part Three

=��"��!��"��+��0�+�"��!�"�

Defence has been granted a joint special licence to operate plant according to the requirementsunder regulations issued by the Safety Rehabilitation and Compensation Commission. Theregulations require that regular maintenance and testing inspections are being carried out onall plant and that records of maintenance inspections are kept.

0��!�,�<!��(�

A Chemical Assessment and Hazard Audit Team was deployed to Bougainville in January1999 to assist the Peace Monitoring Group involved in Operation Bel Isi. The team assessedthe risks associated with the location of the Peace Monitoring Group at Loloho, an areacontaining deteriorating stores of chemicals left over from mining operations in the 1980s.The management and administrative controls utilised by the group were judged to be largelyeffective.

�$��!��"��*��"��"��"*��$�!��+��,��888

The Directorate of Defence Occupational Health and Safety has invested considerable timeand effort working with the Australian Radiation Protection and Nuclear Safety Agency onthe drafting of the Act to ensure Defence compliance. The Act simplifies radiation safetymanagement within Defence by standardising state and territory radiation safety practices.

��+��"��"*��" ��+��$��">$��"*�0�" ��$��$��"��

In accordance with regulations to the Occupational Health and Safety (CommonwealthEmployment) Act 1991, Defence is required to notify Comcare, within specified times, ofspecified accidents and incidents. These notifications are to be followed up with a report toComcare within 28 days of the accident or incident. In 1998-99, there were 190 civilian and1,596 military notifications made to Comcare. This is a total of 1,786 notifications comparedto 1900 in 1997-98. In addition, there was a total of 588 reports made to Comcare up until1 January 1999, when the requirement to submit reports to Comcare ceased.

�"�� "��3�"*$��*�*$��" ��)��

There were 26 planned investigations and 44 ‘reactive’ investigations conducted by Comcareduring the year compared to nine planned and 31 reactive investigations in 1997-98. Thisincluded investigations and audits commissioned by Comcare and audits requested by units orestablishments.

��

In 1998-99, eight provisional improvement notices were issued by health and safetyrepresentatives. There was one prohibition notice issued by Comcare, two directions ‘not todisturb’ and two notices to remove plant or substances.

335

� .�0��.� ��.��3��5��

Section 8 of the Freedom of Information Act 1982 (FOI Act) requires each Commonwealthagency to publish information about the way it is organised, its functions, the decision makingand other powers it has that affect the public, arrangements for public participation in the workof the agency, and the categories of documents that are held by the agency and how these canbe accessed by the public.

Information about the structure of the Defence organisation can be found in the 1998-99Organisational Structure section in Part One of this report, while organisational functions areexplained by Group in Part Two. The remainder of the information required to be published inthe annual report is set out below.

In addition to the procedures of the FOI Act, other less formal avenues exist for accessinginformation from Defence. Examples of information available are under Categories ofDocuments Maintained later in this statement, while access details within Defence are at theend of the statement. Contact points for inquiries are located in all states and territories.

.��*$��"*��"��!�3�"��"��

A request for access to documents under the FOI Act must be made in writing and providesuch information concerning the documents as is reasonably necessary to enable a responsibleofficer of the Department of Defence to identify them. The request must be accompanied bya $30 application fee (unless the fee is not required or it has been remitted by the Department)and should include a telephone number and a return address by which the applicant can becontacted. Requests may be sent by post or delivered to an officer of the Department at theaddress of the central office (in Canberra - see below) or any regional office of the Departmentspecified in a current telephone directory. The following address is preferable:

Freedom of Information SectionDefence Legal Office – Canberra(R8 1-013)Department of DefenceCANBERRA ACT 2600.

Advice about making a request under the FOI Act may be obtained by telephoning the FOISection on (02) 6265 3683 or (02) 6265 1305 or by facsimile on (02) 6265 1270. Applicantsseeking access to documents may be liable to pay charges at rates prescribed by the Freedomof Information (Fees and Charges) Regulations.

�$�)��*�.��0��"?��

The authority to disclose documents is held widely throughout the Department and the ADF atDirector level (Senior Officer Grade A or B and Colonel or equivalent rank) and above.

The occupants of positions classified as Band 1 or higher in the Senior Executive Service ofthe Australian Public Service and the occupants of positions classified at Brigadier (orequivalent) or higher rank are authorised to refuse requests for access to documents under theFOI Act.

Authority to make decisions of other kinds under the freedom of information legislation, forexample, the power to impose charges on applicants, has also been granted to appropriateofficers. Details can be obtained from the FOI Section (see above).

336

Part Three

0��"?��" ��"*��)��@��++��" ��)��$<!��

Reference may be made to the fold-out organisation chart found at the end of this report whenreading this section. It should be noted that many powers invested in the specific positionsdescribed in this section may be delegated formally to subordinate officers.

3)��+��+��,

May declare by notice in the Commonwealth of Australia Gazette an area in or adjacent toAustralia to be a firing area; may make orders and give instructions in relation to canteens andclubs for members of the Navy; may grant to a person a licence to trade in a naval establishment.

��%��3�%%�"*��$��!��

May make decisions relating to public access to naval ships and military (Navy) areas; mayprovide assistance to civilian authorities in disaster relief or rescue situations; may make publiccomment in relation to visiting naval forces or ships; convenes courts martial which mayinvolve the summoning of civilian witnesses; provides Defence Assistance to the CivilCommunity when not managed by the commanding officer of the area.

3�%%�"*��"�" �A��,

May make decisions relating to public access to naval establishments and military (Navy)areas; may provide assistance to civilian authorities in disaster relief or rescue situations; maymake public comment in relation to visiting naval forces or ships; convenes courts martialwhich may involve the summoning of civilian witnesses; provides Defence Aid to the CivilCommunity when not managed by the commanding officer of the area.

3)��+��+��%,

May prescribe conditions for entry to the Army; place the names of officers and former officerson the retired list, grant them military title and authorise the wearing of uniforms and insigniaby such persons; determine who shall be employed, reside or stay in any military establishment;approve the possession, sale, supply and consumption of intoxicating liquor at a gathering ofmembers of the Army and their guests; and order the sale or destruction of unclaimed propertyheld in Army establishments or stores.

��"*�3�%%�"*��$��!��

May make decisions relating to public access to military (Army) areas; selects private, state orCommonwealth property for training exercises; provides Defence Assistance to the CivilCommunity as directed by the Commander Australian Theatre or Defence Headquarters; mayrelease Army personnel information; may approve local hire or lease of Army property; andmay impose constraints on Army personnel which impinge on public enterprise.

3�%%�"*��"�" �3�%%�"*

May authorise the provision of Defence Assistance to the Civil Community by any of theschools, colleges or training establishments and release information from the records of anymember and ex-member who has undergone training by the Command.

3)��+��+��.��

Has the power to determine the conditions for the appointment of officers and airmen to theRoyal Australian Air Force.

��3�%%�"*��$��!��

Provides Defence Assistance to the Civil Community and may summon civilian witnesses toattend Air Force courts martial.

3)��+��+��,

��%��3�%%�"*��$��!��

3�%%�"*��"�" �A��,

3)��+��+��%,

��"*�3�%%�"*��$��!��

3�%%�"*��"�" �3�%%�"*

3)��+��+��.��

��3�%%�"*��$��!��

337

Freedom of Information

3�%%�"*��$��$��!��

Has authority to issue invitations to register interest and requests for tender, to evaluate tendersand recommend source selection for minor capital equipment; authority to approve DefenceAssistance to the Civil Community; and may summon civilian witnesses to attend disciplinarytribunals.

(��*�=��"��*$��"��"*��"�"

Has the authority to issue invitations to register interest and requests for tender, to evaluatetenders and to recommend or approve source selection.

0�+�"��""�!�2��$�� $�

The Defence Personnel Executive develops ADF and civilian personnel policies and practicesand provides personnel support services, including accountability for agreed objectives andenabling services. The Defence Personnel Executive also conducts ADF recruiting and providesADF health services.

The Executive sub-Group provides support to the Head, Defence Personnel Executive andpolicy analysis and advice relating to Military Superannuation and Compensation andOccupational Health and Safety, and administers the office of the Assistant Chief of the DefenceForce -Reserves.

The Personnel Policy sub-Group develops personnel management policies and industrialrelations policies for all Defence personnel. It also recruits members for the Services (bothRegular and Reserve) whilst providing a framework for management and development ofpersonnel to meet current and future requirements and staffing in accordance with Defencepriorities and requirements of the Secretary and Service Chiefs.

• Powers that may affect members of the public include delegations held by seniorpsychologists to allow the release of information from individual psychological records.

The Personnel Management sub-Group provides the framework for the administration ofpersonnel, including pay and personnel systems, Service career management including postingsand promotions, family support services, civilian recruiting for the Department, and complaintsresolution services.

• Powers affecting members of the public. The Director Generals Career Management(Navy/Army/Air Force) may authorise the release of serving and former members’military history.

• Delegations are held by supervising staff in pay areas for write-off of irrecoverablerevenue, debts and overpayments or amounts uneconomical to recover; and may allowan amount payable to the Commonwealth to be paid in instalments.

The Defence Health Services sub-Group formulates policy and strategies and provides anintegrated health service for the ADF.

• The Director-General Health Services may authorise the release of serving and formermember’s medical and dental records.

0��$�,��,��B$��"

Has the authority to determine method of procurement and approve contracts for major capitalequipment.

338

Part Three

.��"��,�3��!�B$��%�"�

Has the authority to conduct independent reviews of tender evaluation reports and to recommendto Deputy Secretary Acquisition a preferred source of supply for major capital equipmentprojects, and to approve screening and short-listing of tenders.

(��*��+��,��%��B$��"�6!��"��,��%�7C��,��%��B$��"�6��%��"*� ��$"*7��"*

�,��%��B$��"�6��7

Have the authority to issue invitations to register interest and requests for tender, to evaluatetenders and to recommend source selection for major capital equipment. In specific cases,have the authority to determine the method of procurement and approve major capital equipmentcontracts.

(��*��"*$��,�D��$��%�"��"+��$��$��

Has the authority to issue approvals to export certain defence equipment and goods with dualcivil and military applications; to accept tenders and quotation recommendations for the purchaseof supplies and services; and, on behalf of Defence, to accredit suppliers’ quality systems.

(��*�0�+�"��

Has authority to determine the method of procurement, issue invitations to register interestand requests for tender, evaluate tenders, recommend source selection and approve contractsfor capital facilities, property transactions, facilities operations and the purchase of services.

(��*�0�+�"��3��$��

Has authority to provide Defence Assistance to the Civil Community; control public access tomilitary areas; approve the loan, hire or purchase of Defence stores and equipment and, indefined cases, determine the method of procurement; issue invitations to register interest andrequests for tender; evaluate tenders and recommend or approve sourcing; issue period contracts;and grant remission of fees and impose charges payable under the freedom of informationlegislation.

In accordance with an arrangement made between the Department of Defence and the NationalArchives of Australia pursuant to section 35 of the Archives Act 1983, the Director ClassifiedArchival Records Review provides advice to the Director-General National Archives ofAustralia specifying which matter, if any, contained in classified Defence archival records isconsidered to be exempt under sections 33(a) and (b) of the Act. Such advice is generated inthe course of the Department’s continuing program of clearing classified archival records forpublic release or in response to requests from members of the public for access to such records(pursuant to section 35 or 40, respectively, of the Act).

.��"��,��$��"*�.�"�"��!�� %�

Determines the rates of charge for the use of departmental stores and services: determines, inassociation with the Department of Finance and Administration, the costs to be recovered inrespect of Defence Assistance to the Civil Community; accepts the insurable risk in respect ofADF activities and stores on loan to the Department of Defence; may write-off irrecoverablerevenue, debts and overpayments or amounts uneconomical to recover; and may allow anamount payable to the Commonwealth to be paid in instalments.

339


��" �%�"��+��$��*��"

��"�!��!��!��"��3�%%��

The committee was established under the Defence Employees Industrial Agreement 1998-99to deal with a wide range of employment matters affecting Defence civilian employees. Involvesrepresentatives of departmental employees who may be union representatives.

=��"��3�"�$!��3�%%��

The committee was established under the Department of Defence (Commonwealth of Australia)West Malaysia Employees Agreement 1970 to negotiate and discuss matters relating to ratesof pay and conditions of employment for locally-engaged civilians working at RAAF SupportUnit, Butterworth. Involves representatives of Departmental employees who may be unionrepresentatives.

0�+�"��.��(��!�)�3�"�$!�� $�

The role of the group is to establish, at senior level, formal liaison between the Department ofDefence and appropriate civilian authorities and to provide advice on medical and health issueswhich have relevance to the Department. The group consists of the Surgeon General ADF andrepresentatives from other departments and professional bodies, including the AustralianMedical and Dental Associations.

�$��!��"�0�+�"��*��!��)��3�%%��

The committee was formed to consider and monitor the ethical implications of biomedicalresearch within Defence. The committee consists of a laywoman and layman not associatedwith the ADF, a minister of religion, a lawyer, a medical graduate with research experienceand a chairperson with research experience.

��"�!�3�"�$!�� $��+��.�%�!��

The group was established in 1987 with the purpose of improving the quality of life for Servicefamilies by providing a forum for expressing views, for reporting and making recommendationsto the Chief of the Defence Force and for influencing policy that affects them.

3��E�"��"��$��+��.��6��$��7�.$"*

The group was established through a Trust Deed approved by the Minister. In recent times thework of the trust has been almost exclusively to provide financial support for the Prince ofWales Award. There are four external trustees.

0�+�"��$��3�%%��

The committee aims to promote the benefits of reserve service to the community. As well asspreading the word informally about reserve service, the committee sponsors a number ofspecific activities to encourage business support.

��%��3�"�$!��3�%%��

The committee advises the Department of Defence on matters relating to the management ofWoomera and includes representatives from the Department of Defence, the United States AirForce and the Woomera Board, which comprises appointed and elected residents of Woomera.

�)��!@��&�,��"�" ��"��"%�"��!��*��,�3�%%��

The committee provides advice on environmental matters relating to the Shoalwater BayTraining Area, and includes representatives from the Department of Defence and localcommunity and business organisations.

340

Part Three

3�� +�0��$%�"��"��"�*

0��$%�"��!�<!��+��$<!�� "*��$<>��.��)��3)��

• Oceanographic data (copies of original survey documents, and hydrographic andoceanographic data held by the Navy on computer file).

0��$%�"��!�<!��+��$��)��<,��)��$<!��

• Aeronautical information (Annual Flying Safety Calendar); aeronautical maps andcharts; supplements and planning documents; aerial photographs.

• Defence cataloguing handbooks and information.

• Defence Annual Report, Defence Corporate Plan, the Defence Portfolio and AdditionalEstimates Statements (and other Departmental material are on sale through the AustralianGovernment Publishing Service).

• Draft and final Environmental Impact Statements (held by Defence Estate Group).

• Commercial Support Program Manual.

• Capital Equipment Manual and Defence Procurement Policy Manual (available forpurchase in hard copy or free through the Defence Acquisition Website).

• Journals and magazines published by Service Colleges and schools.

• Service newspapers (both the RAAF and RAN News may be bought individually or byannual subscription and the Army News by annual subscription).

• Tide tables (Australian national tide tables; navigational charts and publications, availablefor purchase either through appointed chart agents or direct from the HydrographicOffice in Wollongong by mail order).

0��$%�"��.��+�3)�� )��$<!��$��"��B$��

The Department holds a wide range of such material including, for instance, information on orin the nature of:

• academic calendars and prospectuses (for the Service colleges);

• the Defence Force Journal;

• information about the Defence Force Retirement and Death Benefits Scheme and theMilitary Superannuation and Benefits Scheme;

• Defence Science and Technology Organisation information and activities brochuresand booklets, research news and industry brief newsletters, selected technical reports,technical and research press releases, videos on projects and lectures given to professionaland public institutions;

• flying and ground safety (the Air Force makes magazines on these subjects available tosome professional organisations);

• a range of pamphlets and booklets, produced by Emergency Management Australia fordistribution through state and territory emergency services, on natural and man-madedisasters and civil defence as well as training manuals, films and cassettes. BothEmergency Management Australia’s headquarters and the Australian EmergencyManagement Institute maintain film and cassette libraries for use by schools and colleges.Particulars of courses, notes for trainers, course handouts and proceedings of seminarsare also available from the institute;

• notices to mariners (the Navy issues such notices, which contain hydrographic advice

341


to correct navigational charts and documents and detailed information of exercises andfirings);

• Defence Community Organisation provides a range of booklets and brochures;

• recruitment pamphlets, brochures and video media, the ‘Career Explorer’ computersoftware program on ADF career options, and Internet home page on ADF career options.

• organisational material (functional statements, organisation charts and duty statements);

• procurement policy and procedural guides, contract templates and Defence industrystatements;

• public relations materials;

• transcripts of public seminars conducted by the Department;

• speeches by the Ministers;

• technical material (including technical details of obsolete and selected current equipment;unclassified technical reports and Defence (Australia) Standards);

• personnel documentation and records including medical records; and

• pamphlets and brochures on graduate programs in Defence for civilians and the civiliangraduate careers page on the Internet.

��)��0��$%�"��

The Department maintains records in various forms and locations relating to the functions ofthe Defence organisation. Records are retained for varying periods, depending on theiradministrative and historical value, and are disposed of in accordance with standards andpractices approved by Australian Archives. Some particular categories of documents heldare:

• arrangements with other Commonwealth agencies and with state and territorygovernments and agencies;

• accounting records;

• Cabinet documents (including submissions and promulgation of decisions);

• committee records;

• conditions of service (including documents relating to compensation other than personalinjury and financial conditions relating to overseas service);

• contractual documents, requests for tender documents and industry study reports;

• Departmental instructions, circulars and reference books;

• industrial matters (including agenda and minutes of meetings of various industrialcommittees and councils, and occupational safety and health committees, and policyon industrial practices within the Department of Defence);

• guidelines held in electronic form by the Directorate of Classified Archival RecordsReview which are used in determining which matter, if any, contained in classifiedDefence archival records is exempt under sections 33(1)(a) and (b) of the Archives Act1983 from public access. New guidelines are created, or existing ones revised orabolished, progressively, as the need arises;

• intelligence reports;

• international agreements and arrangements held in a Register of Agreements;

342

Part Three

• personal documentation (for example, recruitment-enlistment, selection for promotiondocuments and those of a medical and psychological nature);

• personnel documentation and records, including medical records;

• press cuttings;

• documents concerning quality assurance;

• technical publications (relating to maintenance of ADF materiel, and drawings,specifications and standards relating to ships, aircraft and other equipment in use); and

• working papers (internal working papers are maintained throughout the organisationon a wide range of policy, technical and administrative subjects).

.��!��+��" �0��$%�"��

The following areas within the Department maintain access points at which information abouttheir activities is available:

�$��!��"�%�� "�,��"� �%�"��"��$��

The DirectorAustralian Emergency Management InstituteMACEDON VIC 3440Tel: (Information Officer) (03) 5421 5234)

%�� "�,��"� �%�"��$��!��

Manager, International Decade for Natural Disaster ReductionEmergency Management AustraliaPO Box 1020DICKSON ACT 2602Tel: (02) 6266 5408

0�+�"��"��"*��)"�!� ,�� "��"

ManagerCorporate CommunicationsDefence Science and Technology OrganisationDepartment of DefenceCANBERRA ACT 2600Tel: (02) 6265 7914

�"*$��,�D��$��%�"��"+��$��$��

Director Planning and CoordinationIndustry and Procurement Infrastructure DivisionDepartment of DefenceCANBERRA ACT 2600Tel: (02) 6266 3080

$<!��++�� 0�+�"��$<!��)�"

Director General Public Affairs Director Defence Publishing ServiceDepartment of Defence Department of DefenceCANBERRA ACT 2600 CANBERRA ACT 2600Tel: (02) 6265 2999 Tel: (02) 6265 6007

�$��!��"�%�� "�,��"� �%�"��"��$��

%�� "�,��"� �%�"��$��!��

0�+�"��"��"*��)"�!� ,�� "��"

$<!��++��

�"*$��,�D��$��%�"��"+��$��$��

0�+�"��$<!��)�"

343

� ��.�0��3��

The Minister for Defence approved the following grants for 1998-99.

��"��)��,�!��"��*��"��$��+��$��!��

The grant to the institute was established in 1974 and provides assistance in publishing Defencearticles in its biennial journal and in sponsoring lectures and seminars on strategic and Defenceissues. The grant also provides for the maintenance of a secretariat.

��"��+��$��!��"��!��,�(��,��)

The grant was established in 1993-94 to provide financial assistance for research into the roleArmy has played in the development of the nation. The grant is administered by the ArmyHistory Directorate through the Army Military History Projects Committee. Over the life ofthe program 64 research grants have been awarded varying in cost from $500 to $14,500.

��"��)�� "*�0�+�"��$*��3�"��)��$��!��"��"�!��"��,

The purpose of the grant was to encourage independent research into , and analysis of, defenceand security issues relevant to Australia and to encourage public debate on defence issues.The centre also provided a centre of expertise upon which Defence could draw. At this stageit is not envisaged that Defence will provide further discretionary grants to the centre.

��"��)��0�+�"��.�%�!,��$�� %

This program commenced in 1989-90, but the program was not funded as a discretionary grantuntil 1997-98. The program provides funds to support projects and services initiated by Defencefamilies. Grants are also available to existing groups in the community composed of, or benefiting,Defence families.

Table 3.4.1: List of Discretionary Grants

1998-99 1999-2000 2000-01 2001-02 2002-03Payments Estimate Estimate Estimate Estimate

$m $m $m $m $m

Royal United Services Institute ofAustralia 0.077 0.088 0.088 0.088 0.088

Australian Military History Research 0.049 0.050 0.050 0.050 0.050

Strategic and Defence Studies Centre,Australian National University 0.136 0 0 0 0

Defence Family Support Program 1.212 1.250 1.250 1.250 1.250

Total 1.474 1.388 1.388 1.388 1.388

��"��)��,�!��"��*��"��$��+��$��!��

��"��+��$��!��"��!��,�(��,��)

��"��)�� "*�0�+�"��$*��3�"��)��$��!��"��"�!��"��,

��"��)��0�+�"��.�%�!,��$�� %

344

Part Three

� F��3��

In 1998-99 consultants were engaged by Defence in the following areas:Communications Recruitment/Selection

Computing Research

Conducting Surveys Review/Advisory

Environment/Ecology Reviewing Tenders

Facilities and property Scientific

Health/Fitness Scribe Services

Legal/Accounting Teaching/Lecturing/Training

Manpower and Conditions Technical/Engineering

Public Relations/Photographic

The following table provides the total expenditure for consultancy services by Defence Groupsduring 1998-99.

Table 3.5.1: Summary of Consultancies by Groups – 1998-99

Groups Number of consultancies Expenditure in 1998-99$

Defence Headquarters 28 985,594

Navy 2 334,751

Army 29 456,667

Air Force 3 109,822

Intelligence 8 163,886

Support Command 53 4,415,112

Joint Education and Training 36 880,515

Defence Personnel Executive 77 2,356,132

Acquisition 46 3,195,301

Science and Technology 38 476,465

Defence Estate 5 68,031

Corporate Information 16 3,411,990

Defence Corporate Support 1 51,700

Finance and Inspector-General 9 214,903

Total 342 16,817,921

The following table provides detail on consultancy services utilised by Defence Groups during1998-99 that were in excess of $2,000.

345

External Consultants

0�+�"��(��*B$��

Consultant Name Purpose Total Amount Paid$

CDM IITS Internet & IT Security HQAUST site IT vulnerability assessment 6,000

COMTE Consulting Advice to Defence Executive on industryperspectives and high level changemanagement 76,800

Disney-Howe Associates Discussion paper on industry involvementin CDAF 20,000

Ecostructure Development of scenario planning skills 6,127

Hardin Tibbs Identify strategic decisions 15,000

Kinhill Engineers Progress payment for development ofmarket survey database 16,800

Kinhill Engineers The identification and removal/reductionof constraints on the deployment ofcontractors in support of ADF operations 243,225

KPMG Critical infrastructure for defencevulnerability assessments & risk matrix 61,107

KPMG Information Solutions As Above 73,600

Mark Leahy Training & IND DEF 98 analysis, ongoing civilian/militaryManagement liaison and planning 9,360

Mercadier Draft capability proposal land 125 phase 2 6,000

Mr D.B Cotton Worldwide perspective presentation to DefenceExecutive 10,463

Paul Dibb & Associates Briefings and advice on strategic futures 25,770

Product Life Cycle Management Develop database for Project Land 125 2,200

SMS Consulting Group Produce scoping papers and business caseand elementary methodology to map industrysupport capabilities 96,900

The Value Creation Group Advice and assistance to the improvingDHQ project 84,400

The Value Creation Group Review of IP division 111,507

World Competitive Practices Advice to Defence Executive on industryperspectives and high level changemanagement 108,523

��,

Maritime Safety Management Quality management 38,480

Sullanne Professional consultancy services - projectmanager 296,271

346

Part Three

��%,


Allan Platcher and Associates ABC software analysis 45,579

Allan Platcher and Associates Review costing methodology for armouredvehicles 10,800

Aspect Computing AMPTC migration of data Access 2 to Acess97 3,400

C&B Consulting Group FIGUD Survey 2,500

CDM On site consultancy support for establishment ofprototype regional training centre at Enoggera 90,360

Connell Wagner Design sewerage system (two consultancies) 43,420

Connexions Group Lotus notes issue management for HQ TRGcommand and CATDC 11,017

CSC Australia Training requirements studies 70,200

Kriegspiel Developments Software engineering consultancy 42,700

Mavor Operation analysis services 21,800

Pacific Rim Technology 37,425

Remote Rural Resources Cultural awareness training 5,815

Soil Engineering Services Soils investigation 4,730

UNIQ Professional Services Conduct systems administration, configurationand documentation audit of computer systemsfor HQTC-A and units under command 21,375

Viv Morgan & Associates SASR relocation study 32,912

��.��

Air Services Australia Revision of contact between RAAF and AirServices Australia: Darwin air traffic 22,412

Fisher Stewart Point Cook business feasibility study 26,000

Hewlett-Packard Australia Restore unix server configurations 61,410

�"��!!� �"��

Digital Equipment Corporation 16,159

Ernst & Young Development of professional profiles forDIO/AIO 45,000

Mercadier Logistics consultancy 28,295

MR Benjamin Lans Review of technical policy 9,800

Palm Management Review capability development plan andpeople development plan 8,800

Saville & Holdsworth Australia Job analysis and aptitude testing 21,264

Technology Australasia Provide specialist technical assistance 15,819

Tom Hayes and Associates Review the professional, technical &information technology career development& management in DSD 18,750

347


�$��3�%%�"*


Andersen Contracting Maritime Defence design study 22,106

Aspect Computing Y2K remediation 313,613

Asset Services Redesign an entrance 26,771

Azimuth Consulting (ACT) Advice on service level agreements 25,680

BHP Information Technology Y2K remediation (two consultancies) 60,717

Cogent Business Solutions Design a statement of requirements 4,400

CSC Australia Y2K remediation 756,429

Dames & Moore Advice on baseline 26,978

Dawson Consulting Advice on storage systems 35,000

Eden Technology Advice on preparatory project 50,782

Ernst & Young In house option feasibility study 47,039

Gardner Cooper & Associates Advice on business processes 5,000

GEAC Computers Y2K remediations 21,200

IBM Australia Advice on logistics architecture, businessimprovement, logistic business mappingand IT training (five consultancies) 1,205,773

IBM Global Services Australia Advice workshops 6,750

Keatsdale Advice on F111 lot storage 35,848

Keatsdale Facilitating business re-engineering 65,708

Kookaburra Business Imp Co Audit support for quality systems 6,000

McMahon White & Associates Upgrade software 5,870

MGSM Advice on in house options 22,765

Mr G Macdonald Install auto Q software 3,491

National Management Education Risk management assessment 2,350

Nolan Norton & Co Review of strategic communications 34,951

Paramedical Software Corp Y2K remediation 63,000

Planbowl Calibration and rationalisation 25,200

PricewaterhouseCoopers Develop Defence inventory distributionsystem (three consultancies) 910,074

PricewaterhouseCoopers Cost benefit analysis 93,284

PSI Consulting Scoping study on OH&S 11,328

Rational Management Advice on project management 67,200

Southmark Solutions Maintain IT capability 4,680

Standards Ass Quality Assurance Quality surveillance audit 3,844

System Documentation AUST Conversion of RAAFPSA management systemto hypertext markup language 18,000

Tallowillow Enterprises Ship repair strategy 60,805

Total Logistics Management Advice on equipment whole-of-lifemanagement system (two consultancies) 105,438

Transponder Technologies Supply and fit a fuel scan system 6,850

Wizdom Australia Advice on process development and businessre-engineering (three consultancies) 250,710

348

Part Three

=��"��*$��"��"*��"�"


Accounts Department Barton Institute of TAFE Identify competencystandards required of Defence officersin the single service 8,860

AUST Competency Research As Above 26,580Centre

Bayley and Associates Revision of CBTA module public sectorconditions of service 4,950

BCA Training and Development Develop service competencies for Defencelegal, medical/dental officers (therconsultancies) 79,056

BCA Training and Development Scoping studies for competencies 10,400

Carole Lane and Associates Review of the job training module on staffsupervision and guidance 2,470

Chisholm Institute Identify competency standards required ofDefence officers 26,580

Competency Training Institute Revision of communication skills courses 9,000

Coopers & Lybrand Provide review of the Australian College ofDefence and strategic studies 5,025

David J Foreman & Associates Identifying and developing Defence officerjoint competencies 57,261

Dorothy Outram & Associates Revision of CBTA module policy development 3,000

Implementing Quality For VET Review current training systems andrequirements for endorsed trainingorganisation 41,653

Implementing Quality For VET QETO debrief sessions to HQTC-AF andHQTC-A 3,770

Industry Network Centre Review of client service delivery 5,310

I & SK Pauza Competency profiling of AOC 3,000

John L Bates & Associates Review of government and the APS 3,000

Keatsdale Initial study of ADF developmental andadvanced rotary wing flying training 94,813

KPMG Requirement in the Defence for strategiceducation (two consultancies) 145,103

Lynn Stuart & Associates Review of core competency module, leadingand facilitating 2,400

Meecham Enterprises Prepare COSC agendum paper and updatedraft 36,320

New Focus Research Determine the impact on recruiting of ADFAcadets 74,662

Paul Dibb & Associates Review of the curricula of the JSSC andACDSS 12,822

People & Strategy Review the Graduate Development Program 27,140

Pioneer Education Training Revision of writing for a purpose 2,400

Precision Consultancy Develop training package quality auditing 29,680

PricewaterhouseCoopers Consulting services review of the role ofthe ADFA 73,810

349


=��"��*$��"��"*��"�" �6��"�7


SMS Consulting Group To support the implementation of a projectmanagement methodology for the JET group 52,737

Viv Morgan & Associates Development of a Defence logistics educationand training policy ( three consultancies) 31,652

Wilton & Wilton Project Consultancy services on education policy 2,960

0�+�"��""�!�2��$��

Bayley And Associates Evaluation of training package. 1,485

Cataylst Interactive Develop DCATS computer system 86,000

Cogent Business Solutions Chemical assessments and hazard audits 113,926

Cognos Development of a software package andprovide computer training courses 5,105

Contingency Planning Facilitator of services for OH&S workshop 3,174

CPM Public Service And Merit People management benchmarking study 32,500

Datacon Business Services Database management system for theredeployment and redundancy section 3,750

Dzine Source Webpage And Consultancy for web page 3,000

Eclectic Australia Housing policy workshop 7,216

Ericsson Australia Call centre technology services 1,600

Ernst & Young Review of ADF central health records 43,376

HRM Consulting Civilian management reporting pilot 29,120

IBM Australia Consultancy services for PSIP project 44,248

IBM Australia PMKEYS and service centre project 120,564

Infuse Analysing research data (two consultancies) 46,259

Jane Harte Consulting 360 degree appraisal 67,872

Medimorphosis Specialised service for dental database 4,538

Mercadier Leading change workshops 30,602

Moreton Institute of TAFE Providing training consulting services 13,000

Morgan & Banks Facilitation of a national workshop on markettesting 9,392

Mr C Hunt Grievance investigation 4,400

Mr E Davis Change management workshop 2,032

Mr G Kelly Review the DPSA re provisions of amenitiesand facilities to the ADF (two consultancies) 95,573

Mr N Tanzer Review of the military compensation scheme 107,500

National Recording Studios Production of video ‘Indigenous Australians’ 10,000

New Focus Research Research community attitudes towardscareers in the Defence force with associatedmaterial (two consultancies) 156,173

Newmedia Corporation Design and copyright of logo’s for homesearch and DSC 7,600

P J Arthur & Associates Tender documentation to Defence standardsfor various databases (two consultancies) 31,700

350

Part Three

0�+�"��""�!�2��$��6��"�7


PricewaterhouseCoopers High level review of the payroll and humanresources systems 27,450

PricewaterhouseCoopers Taxation consultant to the ADF 4,200

Professor K Taylor Review of psychology organisation 17,900

Qualitative & Quantitative ADFA review 50,000

Quality Assurance Services Health services information system 3,732

Reengineering Australia Change management – Defence servicecentre 40,425

Reengineering Australia Consulting services on general changemanagement, re-engagement, businesscase analysis 184,706

Roy Morgan Research Centre Conduct ADF census 187,356

RTK Corporate Human Resources DEFCARE rehabilitation software module(four consultancies) 57,640

SFC Consulting Services Business case study of service centre 3,000

SFC Consulting Services Services-establishment of service centre 38,253

Sigma Consultancy Assistance at the HDPE symposium 2,108

Sigma Consultancy Career decision support systems survey 81,072

Sigma Consultancy Personnel research 30,500

Simsion Bowles & Associates Re-engineering recruitment 13,500

Site-Safe Redesign OHS training (two consultancies) 32,779

SMS Consulting Group Review of strategy, structure & practices(three consultancies) 78,380

SMS Consulting Group Providing general project managementconsulting and ADF relocations 112,268

Southern Cross Computing Evaluate and manage technical systems 59,192

Southern Sydney Institute of TAFE Training package on ADF/IndigenousAustralian relationships 21,061

Tier Technologies (Australia) Development of business case for Defenceservice centre project (three consultancies) 145,472

Turnbull Porter Novelli Promotion of safety management 22,376

World Competitive Practices Site methodology development at ADFA 20,000

World Competitive Practices Review into policy and practices to deal withsexual harassment 12,000

��B$��"

AGC Woodward-Clyde Fishermans Bend assessment ofgroundwater contamination and flow 47,849

Australian Government Solicitor Contract advice 57,934

Ball Aerospace Tender preparation and evaluation 118,402

Blake Dawson Waldron Legal advice on loan 2,518

British Aerospace Air 5323 Study 317,143

Codarra Advance Systems TP progress tasks - C&I projects 105,143

351


��B$��"�6��"�7


Computer Power Develop acquisition management systemslife cycle costing model (two consultancies) 241,534

Coopers & Lybrand Review of admin function in DAO 16,200

SC Australia Develop computer aided logistic systeminformation pack 52,741

DPM Conferencing Additional support for sea 98 conference 15,296

Ernst & Young Program managers signoff 91,360

Falls Corporate Research Conducting ESA division survey 15,000

Granheme Implement safety management system - Huon716,374

Griffith University Instruction in PSM methodology

(two consultancies) 64,000

Gutteridge Haskins & Davey Assessment of Mulwala facility 27,830

IBM Australia Scope to map IP flows 3,949

IBM Australia Develop intellectual property flows 25,950

IBM Australia Planning of stage 2 for BPR project 124,037

Interim Technology Solutions Investigate cost of source selection decisions 18,141

John Moten & Associates Represent DAO interests in the projectROMAN scoping study 28,800

Karl Currier Engineering technical assistance 192,386

Ken Brown Structual advice and Engineering support 52,653

KPMG Cost investigation of claims on theCommonwealth under ASTA sale andpurchase agreement 19,845

Mallesons Stephen Jaques Solic Working group leader position 8,932

Monash University conduct safe carriage of troops in vehicles 29,991

Mr Colin Bentley PRINCE 2 implementation 3,000

N M Rothschild & Sons Investigate company dispute 12,864

PricewaterhouseCoopers Expenditure investigation into Defence relatedR&D 26,100

PricewaterhouseCoopers Branch review and planning initiative 12,600

Simulinc Accreditation of flight test data 28,055

Simulinc Accreditation of B707 & C130 simulator 26,368

Software Engineering Australia Contribution to Sea 99 conference 60,000

Software Improvements Independent validation and verification 21,600

Sverdup Technologies Project management 4,716

Tanner James Management Assist in PRINCE 2 implementation 178,895

TDA Systems Engineering Reports for operations and missions profiles 35,700

TDA Systems Engineering Study of Defence’s software engineeringpolicy (two consultancies) 192,704

Technology Australasia Implementing systems 45,782

Technology Australasia Video conferencing study 48,659

Total Logistics Management Change of scope for the ASLOGPAR projectdefinition study 18,430

352

Part Three

��B$��"�6��"�7


Uniquest Limited Services associated with specifying andacquiring safety critical systems 64,315

Unisearch Development of decision support tool 7,052

University Of South Australia Study into benefits/penalties of applyingsystems engineering in major capitalequipment acquisition 14,451

��"��"*��)"�!� ,

Adacel Technologies Limited Manned simulation consultancy services 18,750

AGEST Super contribution for Faulkner 21,606

Alltech Communications Manned simulation consultancy services 125,000

Booreea Rudd Develop OH&S manual 2,774

Carson Group Review and evaluate accommodationrequirements 11,000

Curtin University Of Technology Report on graphic database software rewrite 30,000

Deanmac Emergency Services Emergency management 3,558

Prepare emergency management plan 14,000

Dr David Warren Historical information gathering 5,000

Dr Gordon Long Consultancy review 29,800

Econnect Media training for scientists 2,800

Gray, Mac Lean & Company Evaluate and develop accommodationrequirements 7,000

Hamra Management Media training for scientists 3,150

JWEC Consulting Development of executive leadershipdevelopment program 27,398

KFPW Review of site 2,400

Mark Coleman And Associates Facilitate formulation of new strategic plan 14,500

McKenzie Associates HR planning workshop 7,941

Metropolitan Fire Brigades Fire protection audit 11,880

Mr D Faulkner DSP data analysis and software development 10,288

NCS International Quality management system certificationtriennial audit 1,900

PPK Environment & Infrastructure Defence requirements for environmentalclearance of research tasks, tests & trials 5,000

Risk Management Resources Conduct hazard audit and report andrecommend 35,000

Roy Morgan Research Centre Industry survey DSTO/industry interactions 6,600

Ryder-Self Group Develop SES/DSTO partnering agreement 7,063

Sicore International Conduct research on DSTO communicationwith internal and external audiences forbenchmarking and to ADI future planning 26,734

State Library Of Victoria Establish, list & report on heritage items 10,634

VCorp Consulting Technical & engineering services 21,600

353


0�+�"��


Bowdens Management strategy 5,500

Strategic Facility Services Performance based specifications 25,450

Tracey Brunstrom & Hammond DEO fraud risk review 30,826

Tracey Brunstrom & Hammond Review of costs and overheads of deliveringDEO Capital Projects 5,755

0�+�"��"+��%��"��,��%�

Allan Platcher And Associates Provide professional project managementassistance and advice (three consultancies) 181,377

Ardent Software Develop interface army TIMS and CLl0databases 6,000

AUST Marine Technologies Report on Defence embedded systems status 13,800

Australian Industry Group Report on DIS base line funding 3,760

Business Planning Associates Development and provision of financialmanagement training 9,800

CSC (Australia) Provide professional computing and projectmanagement assistance and advice(two consultancies) 2,688,945

Data Management Solutions Statistic planning initiatives 349,794

Gutteridge Haskins & Davey Provide professional technical services 39,712

Hewlett Packard Project management and planning advice 30,000

John Moten & Associates Business rules advice 6,750

KPMG Management Consulting Project management and planning advice 43,634

Palm Management Provide consultancy support for theproduction of the CI service charter 29,500

QAS Education & Training SVC To assess ISS for (& provide annualregistration) certification to IS09001 8,917

0�+�"��3��$��

PricewaterhouseCoopers DRMS consultancy 51,700

.�"�"��"*��"�� "��!

Acumen Alliance Develop methodology for life cycle of apps. 10,000

Aviation Consulting Services Independent investigation-maintenance and safeoperation of RAAF 707 2,500

Blackdog & Associates Compliance based auditing (two consultancies)32,190

Ernst & Young To provide advice on management andadministration for the payment of FBT 99,167

PricewaterhouseCoopers Auditing assistance in relation to end ofyear financial statements 31,350

The Communication Co Perform communications services ineditorial, design and publishing work of the “Values Report” 37,507

354

Part Three

�0:�� 0��;��3(

Table 3.6.1: Advertising and Market Research Expenditure by Group – 1998-99

Groups Expenditure in 1998-99$

Defence Headquarters 7,027

Navy 15,309

Army 34,295

Air Force 20,728

Intelligence 280,545

Support Command 252,173

Joint Education and Training 22,689

Defence Personnel Executive 15,354,230

Acquisition 178,870

Science and Technology 572,516

Defence Estate 98,609

Corporate Information 12,267

Defence Corporate Support 614,400

Finance and Inspector-General 22,739

Total 17,486,579

The following table provides detail on advertising services utilised by Defence Groups during1998-99 that were in excess of $1,500.

(��*B$��

Payee Amount Purpose

Media Advertising

CP Resourcing $1,072.75 Civilian recruitment

TMP World Wide $6,134.65 As Above

��,

Media Advertising

Advertising Investments $2,168.30 Newspapers - expressions of interest

AIS Media $6,425.40 Promotional Advertising

Multihull World $2,000.00 Promotional advertising

��%,

Advertising Agencies

Advertising Investment Services $4,166.42 Museum advertising pamphlets

Media Advertising

AAF Company $2,370.00 Advertising of new training methods

TMP Worldwide $3,159.48 Advertising of tender

TMP Worldwide $1,136.11 Range warnings

TMP Worldwide $3,101.68 Advertising of beating the retreat

TMP Worldwide $9,767.12 Conference advertising in nationalnewspapers

355

Advertising and Market Research

��.��


Media Advertising

3AW Southern Cross Radio $6,500.00 Radio advertising of RAAF museum

AIS Elliott Mathews $1,550.00 Live firing notification

Barton Marketing $2,085.00 Advertising RAAF museum

Newcastle Herald $2,000.00 Advertising in support of Air Force week

Star Publication BHD (Malaysia) $1,368.00 Newspaper advertising for tender

�"��!!� �"��

Media Advertising

Advertising Investment Services $80,297.96 Civilian recruitment

AIS Media $90,676.66 Recruitment

TMP World Wide $77,763.23 As Above

TMP World Wide $31,807.33 Civilian recruitment

�$��3�%%�"*��$��!��

Media Advertising

Advertising Investment Services $7,176.78 Advertisement for request for tenders

Advertising Investment Services $92,236.49 Recruitment advertising

AIS Media $9,327.25 Advertisement for request for tenders

AIS Media $15,819.04 Recruitment advertising

TMP Worldwide $56,068.16 Advertisement for request for tenders

TMP Worldwide $18,578.88 Advertising sale of HMAS FLINDERS

TMP Worldwide $6,414.80 Industry brief advice

TMP Worldwide $37,641.26 Recruitment advertising

=��"��*$��"��"*��"�"

Media Advertising

Advertising Investment Services $3,297.80 Recruitment of graduates

AIS Media $2,862.25 Advertising of request for tender for standingoffer contract

TMP Worldwide $3,967.28 Advertising ADFA open day in conjunctionwith other universities

Trotman O’Brien Australia $3,650.00 Recruitment of graduates

Troyvell $7,100.00 As Above

0�+�"��""�!�2��$��

Market Advertising

Human Resources Monthly $7,000.00 Support the DRSC - community andemployer support program

Indigo Arch $4,300.00 As Above

Inprint $3,754.00 As Above

Jaymac Promotions $2,876.00 As Above

Personnel $379,507.00 Gazette advertising, newspapers

Select Screen Printers $2,255.00 As Above

Showcase Publications $3,500.00 Advertise equity advice lines

Smart Living $3,000.00 Recruiting

356

Part Three

0�+�"��""�!�2��$��6��"�7

Payee Amount PurposeTerry Whetton Signs $3,250.00 As Above

TMP Worldwide $5,404.97 Weekend Australian – recruitment

TMP Worldwide $193,392.08 Recruiting

TMP Worldwide $8,341.84 Advertise medal reviews

TMP Worldwide $1,611.02 Temporary positions

TMP Worldwide $31,150.85 Newspaper - executive appointments

TMP Worldwide $21,839.00 ADV for reserve forces day

Union Offset Printers $2,322.00 Support the DRSC – community and

employer support program

Victorian Employers Chamber ofCommerce Handbook $40,500.00 As Above

Watchham Penrose Associates $2,000.00 Recruiting

Western Aust Municipal Assoc. $1,590.00 Support the DRSC – community andemployer support program

Media Advertising

AAF Company $3,500.00 Service Newspaper

Advertising Investment $3,781.35 Advertise SES positions

AIS Media $32,502.39 Advertise medal reviews

AIS Media $8,010.64 Newspaper - executive appointments

AIS Media $7,035,291.24 Recruiting

AIS Media $13,309.26 Advertising for DOMHS

AIS Media/Various Local $25,639.50 For contract health practitioners, used byNewspapers JHSA

AMSA 40th Annual Convention $5,000.00 Recruiting

Aust Institute of Company Directors $6,000.00 Support the DRSC - community andemployer support program

Aust. Human Resources Inst. $23,608.72 As Above

BOAC Nominee $5,356,244.76 Recruiting

Canberra FM Radio 104.7 $4,682.60 As Above

Doorley Abram Davis and Chapman $569,331.54 Recruiting

Double “C” Jeanery $3,000.00 Support the DRSC - etc

DPSA $23,520.00 Brochures, pamphlets for DCO etc

Executive Media $7,465.00 Support the DRSC - etc

Graduate Career Council of Australia $6,000.00 Recruiting

Grey Advertising $1,502,336.91 As Above

0�+�"��B$��"

Media Advertising

Advertising Investment Services $33,167.49 Position advertising

Advertising Investment Services $4,548.36 Recruitment for ASO6 position MLIS

Advertising Investment Services $1,880.86 Recruitment for SOG C position

AIS Media $13,199.85 Advertise tenders

AIS Media $2,183.42 Position advertising

357

Advertising and Market Research

Payee Amount PurposeAIS Media $7,810.83 Advertising of procurement conference

AIS Media $3,558.44 Advertising job vacancies

AusInfo Gazette Office $2,909.50 Amendment to Defence strategic goods list

TMP Worldwide $2,139.98 Recruitment advertising for AP positions

TMP Worldwide $15,727.28 Graduate (GATE/GAT) advertising

TMP Worldwide $5,843.56 Bulk recruiting for software engineers

TMP Worldwide $5,431.04 Advertising RFT

TMP Worldwide $22,537.80 Advertise tenders

TMP Worldwide $17,772.13 Position advertising

TMP Worldwide $1,515.36 Recruitment for Project Parakeet

TMP Worldwide $8,983.01 Vacant positions - newspapers

TMP Worldwide $15,054.20 Advertising job vacancies

TMP Worldwide $5,406.04 Re-staffing of positions

Trotman O’Brien Australia $3,650.00 Graduate (GATE/GAT) advert

Science and TechnologyMedia Advertising

Advertising Investment Services $213,752.85 Civilian recruitment

ASN $1,760.00 Participation in great AUST. Science show

AusInfo – Gazette Advertising $10,945.59 Civilian recruitment

Australian Defence Business $2,700.00 Advertisement promoting DSTO

Career Exhibitions $7,125.00 Graduate careers advertisement

Edward H. O’Brien Enterprises $6,750.00 As Above

IHS Australia $3,500.00 Advertisement promoting DSTO

New Hobsons Press $7,980.00 Graduate careers advertisement

Pinnacle Publications $2,400.00 Advertisement promoting DSTO

Robert Allen Publishing $2,495.00 As Above

Strike Publications $2,255.00 Advertisement promoting DSTO

The Australian $30,335.40 As Above

TMP Worldwide $4,386.20 Graduate careers advertisement

TMP Worldwide $249,259.22 Civilian recruitment

Trotman O’Brien $7,300.00 Graduate careers advertisement

WPA Career Media $10,875.00 As Above

YAFFA Publishing $4,210.00 Advertisement promoting DSTO

Defence Estate

Media Advertising

Advertising Investment Services $24,622.24 Tender or recruitment advertising

AIS Media $12,350.52 As Above

CP Resourcing $1,885.33 Staff selection report

Telstra $6,128.00 Tender information

TMP Worldwide $48,315.59 As Above

Advertising Agencies

Valley Commercial Australia $2,703.00 Auction notice

358

Part Three

Defence Information Systems


Media AdvertisingADFDA Freight Accounts $3,051.00 DCRA – Relocation/ recruitment costs

Advertising Investments $5,252.39 DHR – Civilian recruiting

AIS Media $2,852.25 ASCM - Advertising for tenders for desktopapplications training

0�+�"��3��$��

Media Advertising

Advertising Investment Services $97,648.20 Recruiting

AIS Media $65,627.04 As Above

Ausinfo $205,527.29 As Above

Cooke Collins Advertising $1,795.20 As Above

D-Lin E8 Design $3,365.00 General advertising

Fairfax Community Maxi-Classies $2,660.00 As Above

Greater Cairns Radio $3,586.00 General advertising

Infrastructure Policy $2,500.00 Recruiting

Mega Channel Australia $2,119.00 General advertising

Newcastle Newspapers $2,709.45 As Above

Northern Services Courier $2,750.00 As Above

NSW Tours $2,460.00 As Above

Pinpoint Advertising $1,547.90 As Above

Port Stephens Examiner $4,461.00 As Above

Quest Newspapers $3,000.00 As Above

Radio 4KQ $3,000.00 General advertising

South Coast & TablelandsBroadcast $3,525.00 Recruiting

Stuart Powell & Associates $1,530.00 As Above

Telecasters North Queensland $1,500.00 As Above

Telstra Corporation $2,138.00 Subscription for gazette

The Event Publishing Co $11,795.00 As Above

The McIvor Times $2,328.00 As Above

TMP Worldwide $170,739.84 As Above

Warburton Media Monitoring $3,793.38 As Above

.�"�"��"*��"�� "��!

Media Advertising

TMP Worldwide $22,739.00 Recruitment for several positions of aspecialist nature, financial trainers and auditstaff in particular.

359

��(��0��0��.��(

0.�3�.��3� 6(��37��3��889

�� !��"

The Defence Home Owner Scheme is covered by the Defence Force (Home Loans Assistance)Act 1990. Section 39 of the Act requires that an annual report be prepared for the Minister onthe administration and operation of the Act. The annual report is set out below.

�<>��

The objectives of the Defence Home Owner Scheme are:

• to attract and retain Defence Force personnel;

• to encourage home ownership during service as a cost effective alternative to rentalassistance; and

• to assist in the reintegration of Defence Force personnel into the community on returnto civilian employment.

0��"

Defence Home Owner is a Commonwealth scheme which provides a subsidy on the interestpayable on a home loan for members of the Australian Defence Force. The Scheme is open topermanent force members who enlisted on or after 15 May 1985 and to those permanent forcemembers who elected to revoke their entitlement under the Defence Service Homes Schemein favour of a Defence Home Owner entitlement. Reserve and Emergency Force personnelwho provide part-time efficient service are also eligible for assistance.

The Defence Housing Authority administers the Scheme for the Department of Defence. Thebenefits are provided under an Agreement between the National (formerly the NationalAustralia) Bank and the Commonwealth. Under the Scheme the Commonwealth assesseseligibility and entitlement, and pays monthly interest subsidies on loans provided by the NationalBank. Interest subsidy is paid on loans between $10,000 and $80,000. Spouses who are bothmembers of the Defence Force can apply for a combined interest subsidy on a maximum loanof $160,000. The subsidy amount is calculated at 40 per cent of the average monthly interestto be paid over the life of a 25-year loan.

Providing a person has a period of entitlement, the subsidised loans can be used from onehome to another during service as often as is required and once within two years of the date ofseparation from the Defence Force.

�$<��*,�"��!�%�"�

Generally, the subsidy entitlement period is calculated on the number of completed years ofeffective full-time service after completion of a five-year qualifying period. The qualifyingperiod for Active Reservists is eight continuous years of efficient service.

For members with Operational or Warlike Service the five-year qualifying period is waivedand the maximum period of the subsidy may be extended from 20 to 25 years.

There are special considerations for rejoining members, widows/widowers of deceased eligiblepersons and members discharged as a result of a compensatable disability.

360

Part Three

�� %��!$��"�� "��<>��

The objectives of the Home Owner Scheme are achieved through:

• the provision of a subsidised home loan for a period which is directly related to themember’s length of service with the permanent or reserve forces;

• bringing home ownership within the reach of more members; and

• the provision of a subsidised loan once within two years of separation from the DefenceForce.

After eight years of operation indications are that the number of new loan applications isreducing. The number of entitled persons who have paid out their loans or exhausted theirsubsidy period has risen. This has had the effect of reducing the net total annual subsidies.

Attract and Retain Defence Force Personnel: The scheme is one of a number of Defenceinitiatives designed to influence the attraction and retention rate of Defence Force personnel.Against a background of personnel reductions being achieved through implementation of theForce Structure Review, this objective may need to be measured in terms of attraction/retentionof the right categories of personnel. This is not quantifiable at this time.

Encourage Home Ownership as a Cost Effective Alternative to Rental Assistance: Eighty percent of the new subsidy approvals are for serving members who must live in the home tocommence the subsidy, thus reducing the need for the Defence Organisation to provide rentalassistance.

Assist in the Reintegration of Defence Force Personnel into the Community on Return toCivilian Employment: Performance against this objective is not measurable for the ADF as awhole however 20 per cent of new applications for entitlement are from members takingdischarge from the Defence Force. This significant percentage demonstrates the Scheme ismeeting this objective for those personnel who satisfy the loan criteria.

��" ��,

In 1998/99 2,516 applications for Certificate of Entitlement and loan subsidy were processedbringing the total number of approved loans to 3,519 at 30 June 1999.

• ninety-three per cent of the applications for Entitlement Certificates were processedwithin 24 hours, the remainder within three days, and

• eighty six per cent of applications for subsidy are processed within 24 hours, theremainder within five days.

Comparison of the activity, by year, is provided in the tables below.

��+��%�"��!$��"��+��)��*%�"��"

Defence continues to be satisfied with the administration of the Scheme by the Defence HousingAuthority. During the reporting period there were no appeals lodged with the AdministrativeAppeals Tribunal against decisions made by the delegate.

The National has met its obligations to the Commonwealth under the Act and has generallyprovided support to the Scheme. The National and the Defence Housing Authority have madea considerable effort to streamline the administration process of obtaining the subsidy.

361

Home Loans Assistance

��!��"��+��"��!�%�"��3��+��<,��,��+��"��

Activity 1994-95 1995-96 1996-97 1997-98 1998-99

Buy a home 553 542 1,094 1,157 1,011

Re-finance a loan 237 181 800 492 333

Enlarge a home 4 2 16 12 12

Build a home 130 106 223 250 193

Renovate a home 7 16 25 28 26

3�%��"��+��

Activity 1994-95 1995-96 1996-97 1997-98 1998-99

Applications for EntitlementCertificate received 931 847 2,158 1,938 1,575

Entitlement Certificate issued(1) 784 765 1,928 1,809 1,474

Applications for EntitlementCertificate declined/withdrawn 140 93 177 155 106

Applications for Payment ofSubsidy received 528 424 1,328 1,415 941

Applications for Payment ofSubsidy approved 520 417 1,274 1,390 938

Applications for Payment ofSubsidy declined 10 7 26 17 13

Amount of CommonwealthSubsidy paid $1,330,758 $1,820,066 $2,062,627 $2,970,289 $3,692,630

Number of Subsidy payees asat 30 June 1,524 1,828 2,280 3,132 3,519

Note:1. Entitlement Certificates are valid for 12 months.

��"�!�3��A��885?88

The Department of Defence paid an annual management fee of $390,975 to the Defence HousingAuthority. The Authority was also paid a fee in respect of each Application for EntitlementCertificate lodged. These fees totalled $94,615.95.

The total cost of the Scheme is $4,178,221.48.

PART FOUR

GLOSSARYand

INDEX

364

Part Four

� ��

Appropriation: is an authorisation by Parliament to spend moneys from the ConsolidatedRevenue Fund.

Accrual Accounting: recognises the change in value of assets, liabilities, income andexpenditure at the time that transactions and/or events occur, not at the time cash is paid orreceived, as is the case in cash accounting.

Combined Exercise: an exercise/activity involving one or more Services of the ADF with theforces of other countries.

Defence Assistance to the Civil Community: is a program which provides Defence resources,in exceptional circumstances, for the performance of emergency or non-emergency tasks whichare primarily the responsibility of the civil community. While a high priority is given to civilemergencies and natural disasters where lives or property are at risk, other tasks include flyoversand displays at significant public events and various support tasks for local authorities andcharitable organisations around Australia.

Force Element: a component of a unit, a unit or an association of units having common primeobjectives and activities.

Force Element Group: a grouping of force elements with an appropriate command andcontrol structure for a specified role or roles.

Force Structure: see Preparedness Concepts and Planning.

Group: is an identifiable grouping of functions and activities. Groups form the basis uponwhich Defence is structured and resources are allocated. Defence Groups are subdivided intosub-Groups, components, sub-components and elements.

Interoperability: the ability of systems, units or forces to provide the services to and acceptservices from other systems, units or forces and to use the services so exchanged to enablethem to operate effectively together.

Joint Exercise: an exercise/activity involving two or more Services of the ADF.

Military Capability: see Preparedness Concepts and Planning.

Preparedness Concepts and Planning: To achieve its outcome, Defence develops militarycapabilities that enable the Government to apply military power when required. Militarycapability is achieved by developing a force structure appropriately prepared for operations.Preparedness is therefore of fundamental importance to Defence, which must be able to manageit effectively and communicate its status to the Government.

Military Capability - The two levels of military capability specified for forces within the ADFare derived from the concept of maintaining forces at an appropriate minimum level of capability(or MLOC) in peacetime and ensuring that those forces are ready to work up to an appropriatehigher level of task-specific capability (or operational level of capability - OLOC), within agiven time, in order to conduct operations effectively.

However, the maintenance of a force at a higher level of preparedness or at an operationallevel of capability for a prolonged period is resource intensive. A clear understanding of theimplications is required before a force is raised to that level of capability in peacetime. During

365

Glossary

a time of economic constraint, Defence balances the mix of capabilities, or outputs, from withinits budget to meet Government tasking priorities.

Force Structure - Force structure relates to the type of force required - personnel, equipment,facilities and military doctrine - to achieve the operational level of capability necessary toconduct operations effectively. In the medium to long term, military capability will vary dueto changes in force structure generated by the capability development process. In the shortterm, force structure is the more constant component of military capability and the level ofcapability available for operations is determined by Defence’s management of preparednessof the current force.

Changes to force structure usually impact on the preparedness of the associated forces. Forexample, the introduction of a new capability, retirement of an old capability or capabilityenhancement will have a direct impact on the resource, training and facility requirements ofthe forces involved.

Preparedness - Preparedness is a measurement of how ready (readiness) and how sustainable(sustainability) the whole or part of the ADF is to undertake military operations. The readinessof forces to be committed to operations within a specified time is dependent on the availabilityand proficiency of personnel, equipment, facilities and consumables. Sustainability is measuredin terms of the ability to provide personnel, equipment, facilities and consumables to enable aforce to complete its period of operations.

Preparedness Planning - The preparedness planning process begins with a strategic appreciationinvolving an analysis of the national security objectives which are specified in Governmentguidance. These objectives are considered against current strategic circumstances and defencepolicy. In the light of this appreciation, military strategies are developed or refined to achievethe objectives. Military strategic objectives and military response options are then derivedfrom the military strategies and are used to provide preparedness planning guidance.

The Chief of the Defence Force’s Preparedness Directive - This principal strategic-level directivecontains strategic planning guidance, lists military response options and sets preparednessrequirements. It informs all subordinate preparedness directives at the operational level whichset specified levels of preparedness and contain the capability standards against which forceunits measure and report.

The implementation of preparedness involves the allocation of resources to the current forceto ensure that preparedness objectives can be met and managed properly. The evaluation andreporting of preparedness ensure that there is regular feedback in the process and that objectivesand resource allocations are refined as necessary.

Readiness: see Preparedness Concepts and Planning.

Running Costs: are the full recurrent and minor capital costs consumed by an agency. Includedare salaries and related employment costs, superannuation, administrative items, minor capitalitems, property operating expenses and consultancy services.

Sustainability: see Preparedness Concepts and Planning.

Theatre: is the area in which military operations/activities take place.

366

Part Four

��.��3��

ADF Australian Defence Force

ADFA Australian Defence Force Academy

AFS Average Funded Strength

ALG Air Lift Group

APS Australian Public Service

ARA Australian Regular Army

ASEAN Association of South East Asian Nations

ASLAV Australian Light Armoured Vehicle

ASTA AeroSpace Technologies Australia

ATSIC Aboriginal and Torres Strait Islander Commission

AUSMIN Australia/United States Ministerial Talks

C3I Command, Control, Communications and Intelligence

CDF Chief of the Defence Force

COMAST Commander Australian Theatre

CSP Commercial Support Program

DETYA Department of Education, Training and Youth Affairs

DFRDB Defence Force Retirement and Death Benefits

DHA Defence Housing Authority

DoFA Department of Finance and Administration

DRP Defence Reform Program

DSTO Defence Science and Technology Organisation

EEO Equal Employment Opportunity

FEG Force Element Group

FPDA Five Power Defence Arrangements

FYDP Five Year Defence Program

HMAS Her Majesty’s Australian Ship

HQAST Headquarters Australian Theatre

HQNORCOM Headquarters Northern Command

JORN Jindalee Operational Radar Network

367

List of Acronyms

MPG Maritime Patrol Group

MSA(L) Minesweeper Auxiliary (Large)

MSA(S) Minesweeper Auxiliary (Small)

MSBS Military Superannuation and Benefits Scheme

NORCOM Northern Command

NUSHIP Ship yet to be commissioned.

NZ New Zealand

NZDF New Zealand Defence Force

OH&S Occupational Health and Safety

PAES Portfolio Additional Estimates Statements

PBS Portfolio Budget Statements

PMKEYS Personnel Management Key Solution

PNG Papua New Guinea

PNGDF Papua New Guinea Defence Force

PPB Pacific Patrol Boat

RAAF Royal Australian Air Force

RAN Royal Australian Navy

RNZAF Royal New Zealand Air Force

RNZN Royal New Zealand Navy

RSAF Republic of Singapore Air Force

RSN Republic of Singapore Navy

SAS Special Air Services

SRG Strike Reconnaissance Group

TFG Tactical Fighter Group

UK United Kingdom

UN United Nations

UNSW University of New South Wales

US United States

USAF United States Air Force

USN United States Navy

368

Part Four

3��3��0F

��B$��%�"��

Contact Officer ................................................................................................................... ii

Letter of Transmission ....................................................................................................... iii

Table of Contents ........................................................................................................... v-vi

User Guide ........................................................................................................................ vii

Corporate Overview ...................................................................................................... 3-38

Organisational Structure .............................................................................................. 38-41

Staffing Overview ............................................................................................. 26, 160-166

Social Justice and Equity ................................................................................... 26, 167-169

Internal and External Scrutiny ..................................................................... 28-32, 174-175

Defence Service Charter .................................................................................... 33, 170-173

Financial Statements (including Auditor-General’s Report) ..................................... 77-148

Program Performance Reporting ............................................................................. 179-328

Participative Work Practices .......................................................................................... 331

Legislation/Regulations Impacting on Business ............................................................ 331

Occupational Health and Safety .............................................................................. 332-334

Freedom of Information .......................................................................................... 335-342

Discretionary Grants ....................................................................................................... 343

External Consultants ................................................................................................ 344-353

Advertising and Market Research ........................................................................... 354-358

Administration and Operation of the Defence Force (Home Loans Assistance) Act 1990 .............................................................................. 359

Glossary ................................................................................................................... 364-365

Compliance Index........................................................................................................... 368

Alphabetical Index .................................................................................................. 369-372

369

��(�&��3��0F

�

Aboriginal and Torres Strait Islanders ..................................................................... 169, 205Accrual-based output management ....................................................... 10, 25, 183, 250-251Active missile decoy................................................................................................. 264, 267Air-to-surface weapon system ..................................................................................... 15,271Airborne early warning and control system ......................................................... 6, 156, 281Amphibious transport ............................................................................................. 5, 50, 192Anzac helicopter capability ............................................................................ 5, 17, 263, 267Anzac ships ................................... 7, 15, 17, 40, 50, 154, 156, 190, 192, 262, 267, 271, 275Army ATSIC community assistance project .................................................................... 205Army Reserve (see Reserves)Asian economic crisis ........................................................................................................... 7Auditor-General’s Reports (see Australian National Audit Office)Australian College of Defence and Strategic Studies ...................................................... 242Australian Defence College .......................................................................... 8, 9, 13, 40, 239Australian Defence Force Academy....................................................... 9, 40, 240, 242, 333Australian Defence Force Home Loans Assistance Scheme ............................................ 256Australian Defence Force Units and Establishments .................................................... 40-49Australian Defence Industries ................................................ 6, 7, 9, 22, 153, 266, 268, 185Australian Light Armoured Vehicle ....................................................................... 6, 15, 265Australian National Audit Office ............................................................. 28, 30, 31, 32, 322Australia’s Strategic Policy ............................................................................ 7, 30, 182, 284Australian Strategic Policy Institute .................................................................................. 10

&

Bougainville ................................... 4, 7, 24, 55, 57, 174, 190, 204, 205, 209, 218, 229, 334Bushmaster infantry mobility vehicles ................................................................................. 6

3

C-130 aircraft ............ 6, 48, 53, 55, 59, 61, 68, 156, 215-216, 218-219, 231, 263, 276, 280Canberra region information system project ..................................................... 303-306, 309Capability Development Process ............................................... 4,5, 8-11, 179-181, 184-185Catamaran, HMAS Jervis Bay .............................................................................. 5, 411 190Chief of Defence Force’s Preparedness Directive ............................. 10, 181, 190, 213, 214Chiefs of Staff Committee .......................................................................................... 10, 179China ...................................................................................................................... 8, 66, 182Civilian Performance Management Scheme .................................................. 9, 26, 241, 252Combat capability ....................................................................................................... 4, 8, 15Commercial Support Program ............................................................................... 9, 31, 326Compensation ............................................................................. 10, 21, 24, 25, 32, 247, 337Collins class submarine ............................... 5, 15, 17, 19, 40, 156, 178, 179, 184, 189-190,

261-263, 267, 275, 278, 284

0

Defence Audit and Program Evaluation Committee ........................................... 28, 322-323Defence Cooperation .............. 4, 7, 14, 15, 22, 23, 24, 70-75, 150, 152, 153, 186, 187, 205

370

Part Four

Defence Efficiency Review .......................................................................................... 15, 34Defence Employees Industrial Agreement ............................................................... 331, 339Defence Executive .............................................4, 9, 10, 12, 28, 29, 167, 180, 183-184, 332Defence Force Ombudsman ............................................................................................... 32Defence Force Remuneration Tribunal ............................................................................ 331Defence Force Retirement and Death Benefits Scheme (also see Superannuation) ......................................................................................... 22, 340Defence Housing Authority .................................................................................. 22, 24, 291Defence Information Environment Board ................................................... 11, 277, 303-307Defence our People .............................................................................................. 9, 250, 332Defence our Priorities .......................................................................................... 4, 183, 332Defence Reform Program ............ 4, 9, 11, 12-18, 19, 30, 157,186-188, 193, 190, 195-197,

201,207-209, 214, 216-217, 220-223, 226, 227, 234-237, 239, 243-244,254-258, 262, 268-272, 284-286, 299-301, 309-310, 316-317, 326-327, 333

Defence Service Charter ................................................................................ 33, 39, 170-173Discrimination .................................................................................................... 26, 167, 169

East Timor ............................................................................ 4, 7, 56, 57, 174, 182, 218, 229Emergency management ...................................................................... 21, 36, 229, 232, 340Ethics and Fraud ........................................................................................................ 320-324Equity ................................................................................................ 167-169, 191, 242, 250Evaluation ..................................................... 6, 12, 28, 29, 52, 204, 278, 313, 321-323, 235Exercises .................................................................................... 8, 50, 55-69, 70, 74, 76, 192

.

F-111 aircraft .......................................................... 6, 52, 184, 213, 216, 231, 275, 276, 280Family support, ADF ................................................................................................ 337, 343Family Support Funding grants ........................................................................................ 343F/A-18 aircraft ............................................................... 6, 51, 156, 184, 213, 237, 265, 275Five Power Defence Arrangements ........................................................ 8, 65, 182, 192, 215Five Year Defence Program ............................................................ 183, 193, 283, 293, 306,Freedom of Information ............................................................................................ 335-342

Group structure changes ..................................................................................................... 34Gulf deployment ..................................................................................................... 4, 56, 182

(

Harpoon Missiles ........................................................................................ 15, 267, 271, 279Hornet (see F/A-18 aircraft)Hydrographic ships ............................................................................................. 17, 194, 271

�

India ............................................................................................................................ 76, 182Indonesia ........................................... 7, 24, 57, 60-65, 67, 70, 75, 182, 216, 218, 282, 283Industry (Defence and Industry – Strategic Policy Statement) ............. 8, 30, 184, 261, 266,Information systems ..............................................21, 34, 194, 230-232, 240, 292, 307, 324Irian Jaya ...................................................................................................................... 56, 57

371

Alphabetical Index

=

Jindalee Operational Radar Network ................................... 6, 156, 183, 219, 261, 264, 277Joint Deployment Facility (formerly Australian Presence in the North) ......... 291, 293, 298Joint exercises (see exercises)Joint Services Staff College .............................................................................. 241, 242, 295

;

Kosovo (see Operation Safe Haven) ..................................... 4, 24, 202, 206, 218, 291, 315

�

Land Force Operations ......................................................................................................... 7Lead-In Fighter ............................................................................................... 6, 17, 156, 263Life-Cycle Costing ..................................................................................... 32, 175, 229, 292Logistics ..................................... 7, 12-18, 48, 50, 56, 69, 75, 157, 158, 183, 217, 229, 230Long-term planning .................................................................................... 12, 179, 180, 183

�

McIntosh and Prescott Collins Class Submarine Report ........................................ 5, 19, 262Major Capital Equipment ............................................... 11, 16, 23, 261, 262, 266, 180, 203Malaysia ................................................................................... 8, 24, 74, 182, 216, 218, 283Management Audit ............................................................................................. 28, 321, 325Military satellite communications .............................................................................. 15, 264Military Superannuation and Benefits Scheme (also see Superannuation) ................. 22, 23Minehunter coastal project ............................................................. 5, 17, 190, 192, 263, 279

�

National Support ....................................................................................... 8, 9, 180, 184, 185Native Title ....................................................................................................................... 294New Zealand ..................................................... 182, 183, 194, 202, 216, 218, 253, 276, 282Ninox night-fighting equipment ......................................................................... 15, 203, 265

�

Occupational Health and Safety ............................................................................... 241, 272Office of the Revolution in Military Affairs .................................................................... 180Ombudsman (see Defence Force Ombudsman)Operation Safe Haven ................................................ 4, 24, 56, 57, 218, 291, 301, 315, 318Operations ................................................................................. 4- 7, 17, 24, 55-69, 154, 190Outputs (see accrual-based output management)

Pacific Patrol Boat .......................................................................................................... 7, 24Papua New Guinea ................................................... 4, 7, 24, 66, 70, 57, 194, 206, 216, 218Parliamentary committees ............................................................................................. 30-31Peacekeeping (also see United Nations) ............................... 4, 24, 30, 55-59, 209, 210, 214Performance Management ........................................ 9, 26, 28, 193, 217, 229, 232, 241, 252Personnel ...................................................................................... 4, 9, 21, 23, 26, 29, 30, 34Personnel Management Key Solution (PMKEYS) .. 9, 13, 29, 247, 249, 252, 304, 306, 349Portfolio Evaluation Strategy ..................................................................................... 28, 322Preparedness ....................... 4, 10, 16, 30, 181, 183, 190, 192, 203, 207, 213-215, 219, 321P3C ............................................................................................. 52, 215, 216, 264, 267, 271

372

Part Four

�

Quality assurance........................................................................................................ 13, 268

�

Recruiting ....................................................................... 5, 22, 189, 219, 247, 248, 251, 327Ready Deployment Force .............................................................................. 5, 201-203, 207Reserves .............................................................................. 10, 20, 21, 26, 217, 248, 25, 252Resource Management Framework .................................................................................. 324Restructuring the Army..................................................................... 6, 17, 30, 201, 204, 279Russell Offices redevelopment ......................................................... 291, 292, 295, 298, 318

�

Seasparrow missile ........................................................................................................... 263Senior Executive Service .................................................. 160, 161, 163, 165, 166, 252, 335Sexual harassment ............................................................................................................ 249Singapore ............................ 8, 24, 58, 59, 61, 63, 65, 74, 182, 183, 191, 215, 216, 283, 296Single-Service staff colleges ............................................................................ 290, 295, 239Social justice ................................................................................ 26, 167-169, 191, 250-251Solomon Islands ....................................................................................................... 7, 24, 71Strategic airlift capability ................................................................................. 263, 267, 271Superannuation .................................................................. 14, 15, 22-25, 150-153, 157, 337

�

Tactical air-defence radar systems ......................................................................... 6, 35, 265

�

United Nations ................................................................. 3, 4, 24, 55-57, 182, 218, 229, 282United States ......................... 8, 56, 58, 59, 61, 63-67, 69, 181-183, 202, 203, 216, 263, 264,

276-278, 280, 282

:

Vanuatu .................................................................................................................... 7, 71, 72Vietnam ........................................................................................................ 16, 76, 182, 253

�

Wagtail tactical radios .............................................................................. 203, 265, 267, 271Women ....................................................................................................................... 26, 169

�

Year 2000 (Y2K) .......................... 6, 8, 37, 56, 175, 194, 201, 231, 293, 303-305, 307, 308

373

Alphabetical Index