Dan Tehan (Wannon, Liberal Party) Share this | Hansard source

I rise to speak on the Defence Legislation Amendment (First Principles) Bill 2015. I start by making the point that this is an incredibly important piece of proposed legislation. As we now hear far too often—but it needs to be continually repeated—the No. 1 priority of government is to keep its citizens and this nation safe. That is very much at the forefront for the Turnbull government and it is very much at the forefront for all of the members of parliament in this chamber. This bill is very important in this regard.

When it comes to our Department of Defence and to those who protect us and fight for us, there is nothing but admiration from me and my constituents and, I think, across the nation—because our defence forces, along with our intelligence agencies and police forces, do an outstanding job in keeping this nation safe. That does not mean that we do not have to look at ways to continually improve the way that our defence department does things, and that is what this review is all about.

In 2014, the government commissioned the first principles review of Defence. The focus of the broad-ranging review was on ensuring Defence is fit for purpose and able to respond to future challenges and deliver on its mission efficiently, while ensuring the maximisation of the resources which are allocated to our defence forces. The report of the first principles review was released on 1 April 2015, and the government has subsequently agreed to 75 of the 76 recommendations it made. The review, it would have to be said, made some confronting findings. For instance:

The current organisational model and processes are complicated, slow and inefficient in an environment which requires simplicity, greater agility and timely delivery.

The government has, therefore, undertaken a series of steps to help make Defence more efficient, whilst strengthening Defence capabilities to ensure that Australia is kept safe. The review found there was an unnecessary number of management structures and processes. This has produced an organisation with unclear accountabilities, which, in turn, has caused institutionalised waste and hindered important decision-making mechanisms. These are fairly important findings which the government has had to act upon. The complicated management structures have caused unnecessary duplication and over-escalation of issues for decision and restricted engagement amongst some employees in some parts of the organisation. When you think of the threat environment currently, you can see why these issues need to be dealt with.

One of the examples pointed to was that the number of Defence senior leaders has nearly doubled, growing from 201 in 1998 to 374 in 2014—that is an 86 per cent increase. When you compare that with the total number of other staff, which has risen from 73,000 to 78,000—an increase of seven per cent—you really see a contrast with what has happened in the senior levels of Defence. Furthermore, more than 60 per cent of Defence managerial staff supervise fewer than two other staff members. This is far fewer than the five to eight staff recommended by the Australian Public Service Commission and which is more consistent across the rest of the Public Service.

The first principles review proposes substantial changes across Defence to ensure it can deliver on future requirements. This reform is absolutely essential for implementing the requirements and priorities which will be recommended in the government's forthcoming Defence white paper. The government wants to provide the vision, and, obviously, it will be left to Defence to implement that vision. We have to ensure that Defence has the capabilities, the wherewithal and, in particular, the management structures to be able to do this.

The review stated that there were three root causes that have made Defence an organisation that has become risk averse and resistant to change. First, the high operational tempo and increasing national security demands over the past decade have demanded high levels of the senior leadership's time and attention. Understandably, this has hindered natural internal reorganisation within the department. Second, the budget uncertainty under the previous Rudd-Gillard-Rudd government years saw $18.2 billion removed from the Defence budget from 2009-10 onwards. It is worth repeating that: $18.2 billion was removed from the Defence budget from 2009-10 onwards. This has led to reactive planning, deferred military capability and a hollowing out of enablers such as estate, and information and communications, technology. Third, a constant leadership churn from 1998 to the present, resulting in nine defence ministers with an average tenure of two years, six secretaries with an average tenure of 2½ years and five chiefs of the Defence Force with an average tenure of four years, has not been good for Defence. Obviously, a constant senior strategic leadership is vital for any organisation, and, in particular, Defence. This government is committed to fixing these root causes to ensure a stronger and more sustainable Defence Force.

A key recommendation of the review was to 'establish a strong strategic centre to strengthen accountability and top-level decision making' in Defence. The review referred to this as 'one Defence', the idea that the ADF, the defence department and all three services will act as one entity. This will hopefully address the substantial opaqueness around accountability at all levels and obviously create a unity of purpose across the organisations, which will enable everyone to ensure they are moving in the one direction in a very focused and organised way.

As part of the idea to form one Defence, the review highlighted the need to update legislation to formally acknowledge the key role played by the Chief of the Defence Force, the CDF, and the Vice Chief of the Defence Force, the VCDF, in the modern Australian Defence Force. This is the key purpose of this bill: to formally recognise the authority of the CDF and the VCDF. It will give full command of the Australian Defence Force to the CDF by removing all legislative limitations in the Defence Act 1903. It will also recognise the VCDF as the deputy of the CDF and it will recognise the service chiefs—Chief of Army, Chief of Navy and Chief of Air Force—as subject to the direction of the CDF.

This works through an unusual leadership construct that includes the joint management of Defence with the department secretary and the CDF. The construct does not necessarily align with the first principles review recommendations of clear authorities and accountabilities and simplicity. However, given the dual nature of the Defence organisation, which requires both military and public sector expertise, the government will retain this management structure. However, by clarifying and formally documenting the roles of secretary and Chief of the Defence Force, the bill will increase effectiveness, minimise duplication and simplify reporting lines. The bill will, of course, continue to retain the Governor-General's role in appointing the CDF and continue to acknowledge the Governor-General's titular role under section 68 of the Constitution. Strengthening the key military leadership roles of the CDF and VCDF will enable improved coherence and effectiveness in Defence command and decision making.

Currently the Defence Act provides that, subject to the powers of the minister, the CDF commands the ADF, and the service chief of an arm of the ADF 'shall, under the CDF, command the arm of the ADF of which he or she is Service Chief'. This presents a lot of accountability ambiguity. In fact, this lack of clarity in the accountability structure has been confirmed by legal advice to be legally ambiguous. The CDF's powers may be interpreted as being subject to—and potentially constrained by—the authority of the service chiefs to command their respective services. This uncertainty is compounded by other provisions of the existing Defence Act.

The review recommended three key legislative changes to formally recognise the command authority of the CDF and the VCDF: the CDF have full command of the ADF by removing the legislative limitations on the CDF's command power; the VCDF be recognised explicitly as the 'deputy' of the CDF, including the clarification that the VCDF has both command and administrative responsibilities in relation to the ADF, as directed by the CDF; and the service chiefs be explicitly subject to the direction of the CDF. This includes the removal of their statutory authority to ensure absolute clarity of the CDF's command and authority.

This bill also makes some other changes to streamline the legislative foundation of the ADF. The Defence Act does not recognise the ADF as an entity in its own right; rather, it encourages a view that the ADF is no more than a 'federation' of the three services. This outdated view is not compatible in the modern era, where military operations involve all aspects of the three services. The bill provides the foundation for a more unified and integrated Australian Defence Force.

  The bill streamlines the major components of the defence legislation. This means that the bill will repeal the Naval Defence Act and the Air Force Act. All substantive provisions of these acts will be incorporated in the Defence Act. These provisions include the acknowledgment of the Regular Army, the Air Force and the permanent Navy. It will also acknowledge the Reserve components of each of the services and the capacity for the Governor-General to call out the ADF Reserves under certain circumstances.

It must be stressed that the role of the service chiefs will continue to be a vital element of Defence capability. This bill does not seek to change their role, nor does it seek to lessen the chiefs' importance. Rather, the bill seeks to clearly define the management structures of the ADF and the Department of Defence.

The bill also amends the Navigation Act 2012 to ensure that all geospatial-intelligence functions are consolidated under the Australia Geospatial-Intelligence Organisation. According to the Defence first principles review, Australia currently does not have a unified geospatial information enterprise. It has a series of stand-alone organisations that collect, analyse, maintain and distribute single domain foundation geospatial information. They have separate systems, business models, workforce planning, internal governance and capability development processes, all operating with little reference to each other or to a coherent plan for collective action. This is inefficient and wasteful, especially in an organisation that has limited resources.

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