Senate Foreign Affairs, Defence and Trade Legislation Committee

Senate Foreign Affairs, Defence and Trade Legislation Committee

Report to the Senate

Introduction

1.1        On 9 May 2012, the Senate referred to the committee for examination and report the following documents:

1.2        The committee conducted public hearings with the Defence portfolio on
28 and 29 May 2012 and the Foreign Affairs and Trade portfolio on 30 and 31 May 2012. The committee received evidence from the Parliamentary Secretary for Defence, Senator the Hon David Feeney, representing the Minister for Defence and the Minister for Veterans' Affairs, and from officers from the relevant departments and agencies. It also received evidence from Senator the Hon Bob Carr, the Minister for Foreign Affairs, also representing the Minister for Trade, and from officers from the portfolio departments and agencies.

1.3        Links to the transcripts of these public hearings and to answers and additional information are available on the committee's internet site at:

http://www.aph.gov.au/Parliamentary_Business/Senate_Estimates/fadtctte/estimates/bud1213/index

Questions on notice

1.4        In accordance with Standing Order 26(9) (a), the committee agreed that the date for the return of written answers and additional information in response to questions placed on notice would be Friday 27 July 2012.

Defence portfolio

Department of Defence

1.5        The committee acknowledged the attendance of General David Hurley, AC, DSC, Chief of the Defence Force, and Mr Duncan Lewis, AO, DSC, CSC, Secretary of the Department of Defence, and officers of the Defence organisation.[2]

Chief of the Defence Force's initial statement to the committee

1.6        The Chief of the Defence Force (CDF) made two opening statements. His first statement dealt with serious allegations appearing that morning in the newspapers about the repatriation of remains of Australian soldiers killed in Afghanistan. He said:

The articles this morning did not prompt the serious investigations, as the articles suggest. The issue of the orientation of caskets was raised in mid-2011 and is the subject of an Inspector-General of the Australian Defence Force [ADF] inquiry initiated in January 2012. However, I felt so strongly about the allegations being made and the potential to cause undue distress to the soldiers' families and members of the ADF that I ensured that the department's responses to the journalist's questions last week were drawn from the inquiry outcomes to date, and they were quite detailed. I spoke to the journalist at length on two occasions and I also spoke to the paper's editor yesterday in an effort to ensure that the facts were accurately reflected in the story.[3]

1.7        In his first statement, the CDF also dealt with other allegations raised in media reports relating to the death of a local Afghan insurgent who was wounded in action, treated, transported to a health facility but subsequently died. His body was then transported to his home—via taxi. In response to this allegation the CDF stated that:

The vehicle used to transport the man's body may have also been used as a taxi, and, while the practicalities of handling local national human remains in Afghanistan may not accord with Australian norms, the handling of the remains in this instance was in accordance with the ISAF Role 2 practice at the time.[4]

1.8        The CDF then referred to a third allegation involving the son of the dead Afghan insurgent who was detained as a suspected insurgent. He was 16 years old and was not mistreated.

1.9        The CDF spoke of the complex circumstances in war and expressed deep disappointment with the articles. The CDF stated:

The Australian Defence Force is fighting a war in a complex operating environment. Australian forces are highly trained and very professional. However, in the complexity of these operations, there may be instances where some conduct may be alleged to be unlawful or inappropriate. Any attempts to compare these claims to events at Abu Ghraib in 2006 in my view are vexatious and a gross misrepresentation of the facts.[5]

1.10      In his second statement, the CDF reported on Defence's contribution to the government's overall budget savings and the consequent effects on current capability. The CDF also reported on Australia's operations in Afghanistan, including the transition to Afghan led security responsibility in mid-2013, and the Prime Minister's statement regarding the role of Australian Special Forces in Afghanistan after 2014. The CDF also reported on Defence activities in East Timor, the Solomon Islands and Papua New Guinea.[6]

Secretary's opening statement

1.11      Mr Duncan Lewis made a statement to the committee, which focused on the effects of the 2012-13 Defence budget, including Defence's contributions across the forward estimates to support the government's fiscal policy. Mr Lewis explained that this would result in:

...a defence contribution of $5.454 billion back to government across the forward estimates, starting with $971 million in 2012-13. In addition, the committee would be aware that we have had to reprioritise and reallocate approximately $2.9 billion across the portfolio to offset internal cost pressures in areas of concern, including the Collins class sustainment activity, information technology remediation activity and improved housing for ADF personnel. These savings have been found from the Defence Capability Plan, from the approved major capital investment program, the Major Capital Facilities program and from our operating budget.[7]

1.12      In his statement, Mr Lewis emphasised that:

These savings will not impact on current operations in Afghanistan, East Timor or the Solomon Islands. They will not impact upon the equipment that our men and women need to do their jobs on these operations. It has been a challenging exercise to find these savings. We are still working through the detail, particularly when it comes to deferred, altered or cancelled projects. We will answer all of your questions to the extent that we can today and tomorrow, but there may be some aspects that we will have to take on notice. We are, as you can imagine, still undertaking discussions with the affected contractors and companies involved and there are obviously some sensitivities that we have to consider in protecting the Commonwealth's position.

Another area where we have undertaken to make further savings is in our civilian workforce. We will be reducing the number of Australian Public Servants in Defence by another 1,000 over the forward estimates, beginning with a target of 666 in the new financial year and 334 in the financial year 2013-14. This comes in addition to the reductions we have made to the civilian workforce through shared services reform under the Strategic Reform Program in the current financial year. We aim to achieve these reductions largely through natural attrition, recruiting adjustments and the cessation of non-ongoing employee arrangements.[8]

1.13      Mr Lewis reported on the new Defence White paper to be delivered in the first half of 2013:

The new white paper will allow us to factor in a number of significant developments domestically and internationally that affect our defence posture, our force structure and our budget. Within the department, the development of the white paper is being led by Mr Brendan Sargent, the Deputy Secretary Strategy. The Minister for Defence has appointed a ministerial advisory group, consisting of Allan Hawke, Paul Rizzo and Ric Smith, and he may add others. This group will provide advice both during the white paper drafting process and independently to the minister.

We have been asked to deliver this new white paper in the first half of 2013. We will not be setting up a separate white paper team. This white paper is going to be prepared in a way that is a core daily business for Defence. We will also be seeking direct involvement from other agencies, such as the Department of Foreign Affairs and Trade, the Department of Finance and Deregulation and the Department of the Prime Minister and Cabinet. While the white paper is a Defence product, prepared by the department for the Ministry of Defence, it will very much be a whole-of-government product. We will also be drawing on the recently completed force posture review report, overseen by Dr Hawke and Ric Smith, the defence capability plan review, which was completed as part of the budget process, and the force structure review that is currently underway. The white paper will be built from all of this work.[9]

1.14      With respect to the review of Defence culture, Mr Lewis reported:

The Minister for Defence took possession on 17 April of the final report of phase 1 of the review of allegations of sexual and other abuse in Defence which was conducted by the law firm DLA Piper. Phase 1 consisted of two volumes—volume 1, which contained general findings and recommendations, and volume 2, which contained individual allegations. The phase 1 report has provided an initial assessment of 1,095 allegations from 775 people, as the minister, the CDF and I announced on 7 March. I wish to emphasise to the committee that volume 2 has not been provided to Defence and so we have an incomplete understanding of the allegations at this stage. Much of the information in volume 2 contains highly sensitive personal information which was provided to the review on the strict condition of confidentiality.

All of the allegations made will need to be tested and examined. Phase 2 of this review will consider how to deal with the allegations, including appropriate mechanisms for further assessment. This will not be quick and it will require a further investigative and legal process to address each of the allegations. The bulk of this work will need to be carried out through arrangements outside and beyond the Defence department. On 7 March the Chief of the Defence Force and I jointly announced the release of Pathway to change: evolving defence culture. This document is Defence's response to the recent cultural reviews and it outlines the actions that we must take to ensure that our working environment is safe, equitable and inclusive for all. It marks the start of a five-year program of integrated and far-reaching effort to tackle our cultural challenges at their source. We have had identified six areas which will serve as our reform streams and we have assigned senior officers who will lead the implementation of each of these streams. The streams are leadership and accountability; values and behaviours; right from the start, which means starting at the point of induction; corrective processes; practical measures; and structural and support.[10]

In his opening statement, Mr Lewis also advised the committee of new appointments in the Defence senior leadership group since additional estimates in February 2012, including Dr Alex Zelinsky as Chief Defence Scientist, Ms Carmel McGregor as Deputy Secretary People Strategies and Policy, Mr Steve Meekin as Deputy Secretary Intelligence and Security and Mr David Gould as the General Manager of Submarines. Mr Lewis noted that the new Defence Collective agreement became operational on 19 April 2012. He also advised the committee that for the first time in 13 years, there were no Category A findings for its financial statements from the Australian National Audit Office.[11]

1.15      Other topics examined during the hearing on 28 May 2012 included:

Questions arising from opening statements, Portfolio overview and budget summary

1.16      Other topics examined during the hearing on 28 May 2012 included:

Program 1.1 Office of the Secretary and the Chief of the Defence Force
Program 1.2 Navy capabilities
Program 1.3 Army capabilities

1.17      The committee continued hearings on areas under outcome 1 on
29 May 2012. Topics examined included:

Program 1.2 Navy capabilities
Program 1.3 Army capabilities
Program 1.3 Air Force capabilities
Program 1.6 Defence Support
Program 1.7 Defence Science and Technology
Program 1.8 Chief Information Officer
Program 1.9 Vice-Chief of the Defence Force
Program 1.11 Capability development
Program 1.13 People Strategies and Policy
Outcome 2

Defence Materiel Organisation

1.18      Topics examined on 29 May 2012 included:

Defence Housing Australia

1.19      The committee acknowledged the attendance of Mr Peter Howman, Chief Operating Officer, Mr Jon Brocklehurst, Chief Financial Officer, and Mr Brett Jorgensen, General Manager from Defence Housing Australia (DHA).[12]

1.20      Matters raised by the committee on 29 May 2012 included:

Department of Veterans' Affairs

1.21      The committee acknowledged the attendance of Mr Ian Campbell PSM, Secretary, and officers of the Department of Veterans' Affairs (DVA).[13]

1.22      Matters raised by the committee during the hearing on 29 May 2012 included:

Australian War Memorial 

1.23         The committee acknowledged the officers of the Australian War Memorial (AWM).[14] On behalf of the committee, Senator Ronaldson, noted that this would have been Major General Steve Gower's last Senate estimates prior to retirement and acknowledged his '16 years of very significant service to the War Memorial'.[15] The committee thanked the representatives of the Australian War Memorial for their time, but as there were no questions they were excused.[16]

Foreign Affairs and Trade portfolio

Department of Foreign Affairs and Trade

1.24      On 30 May 2012 the committee took evidence from the Department of Foreign Affairs and Trade (DFAT). The committee acknowledged the attendance at the hearings of Mr Dennis Richardson, Secretary, and officers of the DFAT and welcomed the Hon Bob Carr to his 'very first estimates in the Senate, as Minister for Foreign Affairs'.[17]

1.25      Matters raised by the committee during the day's hearings included:

Portfolio overview

1.26             The committee then moved on to the geographical areas under outcome 1.

Outcome 1
North Asia
Americas
Africa
Europe
South and West Asia and the Middle East
Pacific

1.27      The committee then examined International organisations and legal issues.

International organisation and legal issues
National security, nuclear disarmament and non-proliferation
Services to diplomatic /consular representatives
Program 1.2 Payments to international organisations
Program 1.3 Public information services and public diplomacy
Program 2.1 Consular services
Program 2.2 Passport services
Outcome 3 Foreign Affairs and Trade operates and properties

Australian Agency for International Development

1.28      The committee acknowledged the attendance of Mr Peter Baxter, Director General, and officials representing Australian Agency for International Development (AusAID).[18]

1.29      Matters raised by the committee at the hearing on 31 May 2012 included:

Outcome 1 Overview
Program 1.1 Official development assistance—PNG and Pacific
Program 1.2 Official development assistance—East Asia
Program 1.3 Official development assistance—Africa, South and Central Asia, Middle East and other
Outcome 2

Australian Centre for International Agricultural Research

1.30      The committee welcomed Dr Nick Austin and Mr Dave Shearer from the Australian Centre for International Agricultural Research (ACIAR).[19] The matters raised by the committee at the hearing on 31 May 2012  included:

Trade portfolio

DFAT trade programs and Australian Trade Commission

1.31      The committee welcomed officers of the Australian Trade Commission (Austrade), Export Finance and Insurance Corporation (EFIC) and the DFAT and welcomed back Mr Richardson.[20]

1.32      Matters raised by the committee at the hearing on 31 May 2012 included:

Acknowledgements

1.33      For their assistance during its hearings, the committee thanks Senator the Hon David Feeney, and Senator the Hon Bob Carr. The committee also acknowledges the attendance and cooperation of the many departmental and agency officers and the services of various parliamentary staff involved in the estimates process.

Senator the Hon Ursula Stephens
Chair

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