1.1
For the Department of Defence (Department), the 2015–16 financial year proved to be a period of significant organisational and cultural change. The Australian Defence Force (ADF) continued to engage in military operations around the world whilst remaining committed to the long-term improvements to structures, processes and materiel of the Department.
1.2
Acknowledging the significant change the Department has undertaken since the most recent Review of the Department of Defence Annual Report 2013-14, where appropriate, this Report references contemporary structures and programs which the Committee has focused on this year.
1.3
Cultural reforms in the areas of gender and personal accountability continued, with early positive effect observed in the Review of the Department of Defence Annual Reports 2012-13 and 2013-14 continuing. The Department is aware cultural reform is not complete and that focused leadership over the next decade is required to institutionalise both the desired behaviours and community wide acceptance that the ADF is an open, respectful and a truly diverse organisation.
1.4
The ADF’s operational commitments in 2015-2016 focused on:
Operation Okra, supporting the US-led coalition to combat Da’esh and affiliate violent extremist organisations in Iraq;
Operation Highroad supporting the North Atlantic Treaty Organisation (NATO) led mission in Afghanistan and the United Nations-led missions throughout the Middle East and North African regions;
Operation Resolute, border protection; increased support to the Australian Antarctic Division; and
Operation Fiji Assist, the rapid deployment of humanitarian and disaster recovery assistance to Fiji after Tropical Cyclone Winston.
Annual Report Review objectives and scope
1.5
The review of the Defence Annual Report is an important task as it provides an opportunity for the Defence Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade (Committee) to inquire into a broad range of Defence issues as part of the process of accountability of Government agencies to the Australian Parliament.
1.6
Portfolio Budget Statements (PBS) 2015-16 – Department of Defence – states:
Government outcomes are the intended results, impacts or consequences of actions by the Government on the Australian community. Commonwealth programmes are the primary vehicle by which government entities achieve the intended results of their outcome statements. Entities are required to identify the programmes which contribute to government outcomes over the Budget and forward years. Each outcome is described below, together with its related programmes, specifying the performance indicators and targets used to assess and monitor the performance of the Department of Defence in achieving government outcomes.
1.7
The PBS 2015-16 Department of Defence outcomes are:
Outcome 1: The protection and advancement of Australia’s national interests through the provision of military capabilities and the promotion of security and stability.
Outcome 2: The advancement of Australia’s strategic interests through the conduct of military operations and other tasks as directed by Government.
Outcome 3: Support for the Australian community and civilian authorities as requested by Government.
1.8
The Department of Defence Corporate Plan 2015-16 describes 10 purposes; however, it does not reference the PBS outputs. The 10 purposes are:
Purpose 1— Provide advice to Government
Purpose 2— Conduct operations
Purpose 3— Manage the capability lifecycle
Purpose 4— Integrate enabling functions to support operations and capability
Purpose 5— Enhance intelligence and security capability
Purpose 6— Understand and shape Australia’s international security environment
Purpose 7— Partner with industry to enhance Defence capability
Purpose 8— Recruit, retain and skill a diverse ADF and Australian Public Service workforce
Purpose 9— Mature enterprise governance and decision making
Purpose 10— Implement First Principles Review and 2016 Defence White Paper.
1.9
The Defence Annual Report 2015-16 details:
The Department of Defence business plan is the internal enterprise management plan that provides all Defence personnel with guidance about the priority activities and intended results Defence must achieve to meet Government policy direction. The business plan aligns with the One Defence business model and requires different parts of Defence to work together to achieve enterprise outcomes. The business plan assigns accountability for delivering whole-of-Defence outcomes to a single accountable officer. The accountable officer is expected to work with relevant responsible officers to deliver the intended results described in the plan.
1.10
The Committee was advised that the Department Business Plan is a restricted document and as such was not made available for analysis as part of this review.
1.11
The Defence Annual Report 2015 -2016, links the PBS 2015–2016 outcomes to Defence Programs as shown in Figure 1.2. The Defence Annual Report 2015-2016 reports against purposes as detailed in the Corporate Plan 2015-2016. Table 1.1 is drawn from the Defence Annual Report 2015 -2016; it maps Defence’s 2015–2016 PBS Outcomes to the Department’s purposes and programs.
Table 1.1: Breakdown of the Department of Defence Outcomes 2015-16
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1,2,3
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1. Provide advice to Government
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1.1, 1.7, 1.9
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1,2,3
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2. Conduct operations
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1.2, 1.3, 1.4, 1.5, 1.7, 2.1, 2.2, 3.1
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1
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3. Manage the capability lifecycle
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1.1*, 1.7**, 1.9, 1.10, 1.13
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1,2,3
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4. Integrate enabling functions to support operations and capability
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1.1, 1.9, 1.10, 1.12
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1,2,3
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5. Enhance intelligence and security capability
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1.6, 1.12
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1,2
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6. Understand and shape Australia’s international security environment
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1.1, 1.7, 1.8
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1,2
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7. Partner with industry to enhance Defence capability
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N/A
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1,2,3
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8. Recruit, retain and skill a diverse Australian Defence Force and Australian Public Service workforce
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1.7, 1.11, 1.12, 1.15, 1.16, 1.17
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1,2,3
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9. Mature enterprise governance and decision-making
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1.7, 1.8, 1.14, 1.18
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1,2,3
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10. Implement First Principles Review and 2016 Defence White Paper
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1.7, 1.8
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Source: Adapted by the Defence Sub-Committee from the Defence Annual Report 2015 -2016, Vol 1, Chapter 3.
1.12
The Defence Annual Report 2015-16 states:
Overall, Defence performed well in 2015–16, delivering its stated business outputs. Defence continues to conduct operations in support of achieving the Government’s national strategic objectives, while transforming the organisation through implementation of the First Principles Review.
1.13
The Defence Annual Report 2015-16 reported 15 areas of partial achievement against the 10 purposes described in the Department of Defence Corporate Plan 2015-16. The partial achievement is detailed in Appendix A. The Committee notes that eight of the fifteen partial achievements contain an element of the personnel Fundamental Input to Capability (FIC). Personnel matters are covered in detail, under the Enabler Capability Stream, in Chapter Four of this report.
Committee Comment
1.14
Without a complete document set which shows a clear breakdown of PBS outcomes, the Committee is unable to determine whether the Department has achieved all aspects of its business plan.
1.15
The Committee notes 15 areas of partial achievement are reported in the Department of Defence Annual Report 2015-2016, however the Committee, on the basis of information provided by the Department, is unable to determine if this the totality of under achievement.
1.16
The Committee recommends that in future years, the Department of Defence make available to the Committee all documentation that demonstrates the breakdown of Portfolio Budget Statement outcomes to internal programs to enable the Parliament and other agencies to analyse Defence performance.
1.17
The Committee recommends that future Department of Defence Annual Reports should clearly report performance against the Portfolio Budget Statement outcomes and detail the level of achievement against all program sub elements. If purposes are used for external communication, the linkages between Portfolio Budget Statement outcomes, Departmental programs and the purposes should also be made clear.
Review Focus areas
1.18
The Committee resolved to focus on six key areas consistent with its new approach to longitudinal review of Department of Defence performance for its Review of the Department of Defence Annual Report 2015–2016. These area and their chapters are:
Operations – Chapter Two;
Implementation of strategic programs – Chapter Three;
Individual Service Overviews (Navy, Army, Air Force) – Chapter Four;
Integrated investment – Chapter Four;
Personnel Matters, including the rates of self-harm of veterans and the assistance provided to service personnel when transiting from the Department – Chapter Four; and
Other Matters – Chapter Five.
1.19
Other matters considered are:
The effect of disrupted electricity supply on ADF operations;
New methodology to review future Department of Defence Annual Reports.
1.20
To align this review with contemporary Departmental structures, Chapter Four reports on individual service overviews, capability development, and personnel matters under the relevant capability stream. Chapter Four, comprises:
Intelligence, Surveillance and Reconnaissance, Electronic Warfare, Space and Cyber;
Maritime Surface and Sub-Surface Warfare;
Land Combat and Amphibious Warfare;
Strike and Air Combat; and
Estate and Infrastructure.
1.21
It should be noted that all Key Enablers are not specifically addressed in this Report as they did not fall within the published scope of the Inquiry. The Associate Secretary and Chief of Joint Capability co-lead this capability stream with the Associate Secretary responsible for:
Strategic Policy and Intelligence Group;
Capability Acquisition and Sustainment Group;
Estate and Infrastructure Group;
Defence Science and Technology Group; and
Chief Financial Officer Group.
1.22
Raised, in July 2017, as part of the new ADF Headquarters (ADFHQ) the Joint Capability Group (JCG) is responsible to the Chief of Defence Force for the provision of Joint Health, Logistics, Education and Training, and Information Warfare through:
The Australian Defence College; and
Information Warfare Division (embedded in HQJCC).
1.23
JCG is led by the Chief of Joint Capabilities (CJC), Air Vice Marshal Warren MacDonald, AM, CSC. CJC also manages agreed Joint projects, and their sustainment to support joint capability requirements.
1.24
The current ADFHQ structure is shown in Figure 1.3.
Conduct of the Review
1.25
The Review was announced via media release on 30 November 2016.
1.26
Submissions were received from the Australian Strategic Policy Institute (ASPI), the Defence Force Reserves Association, the Defence Force Welfare Association and Air Commodore Ted Bushell (Retired). These submissions are published on the Inquiry’s website, and listed at Appendix B.
1.27
A public hearing was held on 17 February 2017 and received evidence from the following witnesses:
Representatives from the Australian Strategic Policy Institute (ASPI) in a private capacity; and
Senior officials from the Department of Defence.
1.28
The proceedings of these hearings were broadcast through the Parliament’s website, providing interested parties with access to the proceedings as they occurred. The Hansard transcript is published on the Sub-Committee’s website.