Dr Nathan Church
Proposed efficiencies
As part of the Government’s budget measures, almost $70
million in savings is projected during 2017–18. These savings are based on the
Department of Defence reducing its use of contractors, consultants and business
travel. Across the four-year forward estimates, this spending reduction program
is envisaged to save slightly over $300 million.[1]
This measure was partially foreshadowed by the Secretary of
Defence’s reported comments in February 2017, in which he indicated his
displeasure at the growth in the Department’s use of contractors and
consultants.[2]
Although no specific details have been released regarding
the composition of these savings, previously reported statements and related
commentary provide some context. For example, in response to a question from
the March 2017 Senate Estimates committee hearing, the Secretary noted the
Department’s program to reduce its consultancy budget by ten per cent in
2017–18. However, based on a total of $36 million allocated for
consultancy in the previous budget, this would only save approximately $3.6 million.[3]
The Australian Strategic Policy Institute’s (ASPI) 2016–17 Cost
of Defence publication also provided some analysis on contractors. ASPI
assessed that although the reported levels of contractors employed by Defence
have substantially reduced since the early 2000s, this does not include the unspecified
‘capability partners’ Defence has increasingly employed to fulfil similar roles
to contractors.[4]
Since the publication of this ASPI report, Defence has
changed its definition of ‘contractors’ to align with the Department of
Finance’s terminology. This simple change has created a significant rise in
Defence’s reported contractor workforce from approximately 800 in March 2017 to
2,087 as at May 2017.[5] This points to greater
potential to reduce the number of contractors but it is unclear what the
potential savings would be, or even if Defence will prioritise this, given the
assertion made in the First Principles Review that ‘a proportion of Australian
Defence Force personnel are carrying out tasks that could be more cost
effectively assigned to a public servant or contractor’.[6]
Accordingly, it is likely that Defence anticipates that a
large proportion of the proposed savings will come from reductions in business
travel. Media reporting from early May 2017 revealed that Defence spent $155
million in air travel during 2015–16, significantly more than any other
government department.[7] However, further
reductions in air travel costs are likely to be ambitious given Defence has
already cut its travel budget from a reported $478 million in 2010–11 to $320
million in 2013–14.[8]
Personnel statistics
With the number of Australian Defence Force (ADF) personnel
steadily increasing, the rate of projected growth will probably see the 62,400
personnel target (as stated in the 2016 Defence White Paper) reached in 2025—a
year earlier than anticipated.[9] However, this growth will
be uneven across the three services, with the Army outpacing both the Navy and
Air Force.
Having reduced every year since 2011–12, the number of
Australian Public Service (APS) employees is expected to reach its low-point for
staffing levels in 2016–17, dropping to 17,350 personnel. This would represent
a 20 per cent reduction over the previous five years, before an anticipated
‘stabilising’ at 18,200 personnel from 2018–19.
Table 1: Defence workforce data
2012–13 to 2020–21 (average workforce full-time equivalents (FTE))
| |
2012–13
(actual) |
2013–14
(actual) |
2014–15
(actual) |
2015–16
(actual) |
2016–17
(estimated
actual) |
2017–18
(budget
estimate) |
2018–19
(forward
estimate) |
2019–20
(forward
estimate) |
2020–21
(forward
estimate) |
| Navy |
13 760 |
13 862 |
14 070 |
14 232 |
14 219 |
14 123 |
14 683 |
14 718 |
14 763 |
| Army |
28 928 |
28 568 |
29 366 |
29 635 |
30 352 |
30 672 |
30 874 |
30 936 |
31 115 |
| Air
Force |
13 919 |
13 934 |
14 076 |
14 194 |
14 305 |
14 399 |
14 237 |
14 436 |
14 707 |
| Total
ADF |
56 607 |
56 364 |
57 512 |
58 061 |
58 876 |
59 194 |
59 794 |
60 090 |
60 585 |
Change
from
prev. year |
|
–243 |
1 148 |
549 |
815 |
318 |
600 |
296 |
495 |
| APS |
21 534 |
20 496 |
19 342 |
18 071 |
17 350 |
17 970 |
18 200 |
18 200 |
18 200 |
Change
from
prev. year |
|
–1 038 |
–1 154 |
–1 271 |
–721 |
620 |
230 |
0 |
0 |
Total
Defence |
79 812 |
78 141 |
76 854 |
76 132 |
76 226 |
77 164 |
77 994 |
78 290 |
78 785 |
Change
from
prev. year |
|
–1 281 |
–6 |
–722 |
94 |
938 |
830 |
296 |
495 |
Source: Parliamentary Library
estimate based on data derived from Department of Defence, Annual
reports; Australian Government, Portfolio budget statements 2017–18: budget related
paper no. 1.4A Defence Portfolio,
p. 26.
[1].
The budget figures in this brief have been taken from the following
document unless otherwise sourced: Australian Government, Portfolio
budget statements 2017–18: budget related paper 1.4A: Defence Portfolio,
p. 20.
[2].
N Towell, ’Defence
boss on attack’, The Canberra Times, 20 February 2017.
[3].
Senate Foreign Affairs, Defence and Trade (FADT) Legislation
Committee, Official
committee Hansard, 30 March 2017, p. 52.
[4].
Australian Strategic Policy Institute, The
cost of Defence: ASPI Defence budget brief 2016–17, May 2016, pp. 73–4.
[5].
Official committee Hansard, 30 March 2017, p. 51.
[6].
Department of Defence (DoD), First
principles review: creating one Defence, 1 April 2015, p. 58.
[7].
T McIlroy, ‘Defence
tops government travel spend at $155 million’, The Canberra Times, 8
May 2017.
[8].
J Massola, ‘Defence
to cut hundreds of millions from travel costs’, The Sydney Morning
Herald, 24 June 2014.
[9].
DoD, 2016
Defence white paper, 25 February 2016, p. 146.
All online articles accessed May 2017.
For copyright reasons some linked items are only available to members of Parliament.
© Commonwealth of Australia
Creative Commons
With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.
In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.
To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.
Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.
This work has been prepared to support the work of the Australian Parliament using information available at the time of production. The views expressed do not reflect an official position of the Parliamentary Library, nor do they constitute professional legal opinion.
Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Enquiry Point for referral.