Senator MICHAEL BAUME --Following the questions to the Navy about Albatross, what is the peacetime manning level at the Army Parachute School located at Albatross as against the current manning level?

Major Gen. Hartley --I do not have the figures for the training schools. I have the figures for the land command units. It is a fairly small establishment. Because it has such a high volume of trainees moving through it and because of the nature of parachute training, it would be very close to its established strength.

Senator MICHAEL BAUME --If it is not, I would be grateful if you could let me know. Could you tell me what the establishment level is.

Senator NEWMAN --My question relates to table 4 on the army aviation rate of effort, which is at page 60 of the portfolio estimates. The notes at the bottom of the table refer to the Black Hawks and the Nomads. I am surprised that the Nomads are shown as having had 4,038 planned flying hours and now none. But no other aircraft seem to have been put into a list to replace that capability.

Senator Robert Ray --They are being hired.

Senator NEWMAN --Where does that show up, then?

Senator Robert Ray --We think it is an operating cost somewhere.

Senator NEWMAN --I was trying to get a handle on what it is costing and how many hours you are getting in lieu of those 4,000-odd. That is only a short-term solution. What is planned to replace the Nomad on a long-term basis? That is where I was going with my questions.

Major Gen. Hartley --On the last question, the study will start next year, with the aim of setting up a medium-term lease for the four aircraft that we currently employ, or more if desired. The longer term capability of the Nomad will be looked at as part of a major study into army aviation to upgrade army aviation capabilities. That is known as Air 87. That is going through a process right now. It will be not much before the turn of the century when we start to see the results of that study.

Senator NEWMAN --So we will be leasing in one form or another aircraft from now until the turn of the century?

Major Gen. Hartley --In that order, yes.

Senator NEWMAN --Is that economically sensible, or would you be better to buy something and manage it yourselves for that time?

Major Gen. Hartley --That will be one of the options which will be looked at in the study starting next year.

Senator NEWMAN --Why is it starting next year? You have the problem now. Why is it not immediately being dealt with?

Vice Adm. Walls --Air 87, which the DCGS refers to, has been under way for some time. The context in which I think you are putting your question is whether it is cost effective for Army to be leasing aircraft for a four-year period. As I understand it, the examination that has been done within the aviation area of the force development division and with the army and air force office is that it is cost effective for Army to pursue that course. You would appreciate that the aircraft under hire are general aviation aircraft. The original reason for procuring the Nomad aircraft with some particular capabilities was that the requirements cannot be satisfied by general aviation aircraft. Within the limits of what those aircraft can perform to, it is a cost-effective way of pursuing the option, pending the outcome of what I will call the force development processes of determining what type of aircraft ought to be acquired and brought into inventory.

My expectation from Air 87--I emphasise that this is a very preliminary view--is that we will end up acquiring both fixed wing and rotary wing aircraft to satisfy the requirements of battlefield support and mobility which Army have.

Senator NEWMAN --The review will be going hand in hand with the Caribou replacement?

Vice Adm. Walls --There is yet another one of our studies and reviews under way for the Caribou replacement. That is active at present. We are also doing a study--

Senator NEWMAN --Army aviation seems to be in a pretty sorry state. It looks as though it is a very slow process to do something about it.

Vice Adm. Walls --I would not characterise army aviation as being in a very sorry state.

Senator NEWMAN --Not the operators of it, the future of it.

Vice Adm. Walls --The future of it is excellent. I refer to the minister's comments earlier in relation to another question about submarines. If I have a concern about the future of army aviation, it would be the funding that we will be able to provide for the capability acquisition, which I anticipate will come out of the studies that I have spoken of--the airlift and mobility studies, the Air 87 study, the light tactical air transport study and Army 21, which we have already touched on today. My expectation is that there will be a significant demand of both fixed wing and rotary wing aircraft platforms. The capital requirements for them will also be significant.

Senator NEWMAN --I recognise the demand and the need. It is the funding of it and the likelihood of it moving ahead that I am getting at.

Vice Adm. Walls --We have provision in both the five-year development program and the 10-year defence plan to satisfy all of them. You would appreciate that, until we get the specification of the operational requirement for each role, mission, task and, therefore, the aircraft specification, it is difficult for us to predict precisely what the capital development requirements will be. I expect the actions to take place on these acquisitions within the time frame that I have already given you, which is the five-year defence program and the 10-year defence plan.

Senator NEWMAN --We have known about the need for a Caribou replacement for a very long time. We have also really known in our heart of hearts that the Nomad did not have a very great life expectancy. I feel that all this is dragging the chain.

Senator Robert Ray --I do not think it is with the Nomad replacement.

Senator NEWMAN --We are not as far along with the studies as we should have been and ready to make decisions.

Senator Robert Ray --I could not agree with you more about the Caribou. They were given a touch-up in the white paper process. If they wanted to take their time, they would be last in priority. They have speeded up very considerably under that inducement. That study was taking too long and meandering everywhere. It is now focused. We may even get the results by late this year or early next year. That is all to the good. Otherwise, they will lose their place in the queue. I am expecting it in December so that we can make sensible planning decisions.

Senator NEWMAN --For submarines or something like that?

Senator Robert Ray --Probably not. But think of the various aerospace platforms. The Hercules J lead-in fighter is a Caribou replacement and is an early warning aircraft. There are two helicopter decisions to be made. You would not want to be sixth in the queue. There will be funding. But, in terms of evaluation and everything else, it would be better not to be sixth in the queue. They run that danger if they drag the chain.

Senator NEWMAN --A note here says that a revised estimate is to be confirmed about the Black Hawks. It is subject to the availability to logistically support the 6,000 hours that you have put in as a revised flying hour target. What do you believe will be the likelihood of meeting that 6,000 hours? Is it a stab in the dark, or is it based on an improvement in the supply line?

Vice Adm. Walls --I hope that it is much better than a stab in the dark.

Brig. Mellor --The figure of 6,000 hours has been studied quite extensively by the Air Force-Army logistic management squadron. We believe that that is logistically supportable.

Senator NEWMAN --Has the supply system improved now?

Brig. Mellor --Yes, it has. Certainly a considerable commitment has been made. There is expenditure occurring. The lines of items are now appearing on the shelves in terms of breakdown spares. There has been some increase of about 10 per cent of lines of items on shelves in 5 Aviation Regiment. That is not in quantities within those lines. Repairable items are inducted into contractors at the moment. They have a much longer lead time in terms of the turnaround for repairs.

Senator NEWMAN --Will you still have to wait up to 18 months for some of the items from North America?

Brig. Mellor --For some items, yes, there are very long lead times.

Senator NEWMAN --How many aircraft are able to be kept in the air now?

Brig. Mellor --Today we have 11 serviceable at Townsville and another four serviceable at the School of Army Aviation.

Senator NEWMAN --You are actually flying them; you are not holding them back?

Brig. Mellor --Yes, 5 Aviation Regiment is currently doing a stocktake, so they are not flying a great deal today, as we speak, but they are pursing their training program aggressively.

Senator MacGIBBON --Can the committee be given an overall brief picture of where we are with this billion dollar asset that is just not going anywhere?

Major Gen. Hartley --Of the 38 Black Hawks that we have on inventory, currently 15 are on-line and a further eight could be on-line within seven days. This has been a steady improvement certainly over three months. We believe that by about the middle of next year it will continue to improve, such that by the end of the year we hope to have on-line the full number of aircraft that 38 suggests we should have.

Senator NEWMAN --Do you mean the end of the calendar year or the financial year?

Major Gen. Hartley --The end of the calendar year next year. Of the major problems that we have had, certainly the issue of spare parts has improved considerably. A good deal of money has been put into that to bring that about.

Senator NEWMAN --I could not find where that was.

Major Gen. Hartley --If I can just cite some statistics: in late 1994, when it became obvious that we needed additional financing, an additional $21 million was expended to re-establish an appropriate base of spare parts. This has now improved to the extent where, in the last five months, the incidence of unsatisfied urgent parts has been halved.

Senator MacGIBBON --Why did it take so long, General? We put the order in about 10 years ago. It seems that only last year the crucial matter was not identified, that they were funded to about 25 per cent of the extent that they should have been. It is a pretty slow business to take eight or nine years to find out that you did not have enough money to operate it.

Major Gen. Hartley --What I would like to say is that today we are starting to identify reparable parts and spares that we will need up to 18 months in advance. We have a management system in process which will not allow the same problems that we had before to come again. It has taken a while to achieve that. Those are the long lead times that we have to work to. We have a grip on the spare parts business. Reparable items also have long lead times. In many cases, we have to send reparable items to the States, but that has been addressed. We are now starting to identify reparable items that we will need in 12 to 18 months time. That has been the big breakthrough so far. We will see a steady improvement in the number of on-line aircraft between now and the end of next year. It is gradual, but there is an improving trend.

Senator MacGIBBON --But it has hardly been a brilliant management exercise for Army, has it? I saw a statement from the CGS, and I presume it was accurately recorded, that `we are just on a learning curve'. To me, if it takes 10 years to be on a learning curve, the student ought to be off the curve.

Senator Robert Ray --It is clear that, looking at all the programs, this is the worst managed one of any, probably, in the last decade.

Senator MacGIBBON --The principal thing seems to be the lack of funding and the second thing seems to be the rate of use of the spares.

Senator Robert Ray --It is a little more complex than that. It was either differential usage, the uniqueness of Australian conditions, or the difference in philosophical attitude between the maintainer and the user. I think there are a variety of reasons why they got to that stage. Their critical mistake was not to have it reported earlier so something could be done about it. We are not the only country that has had difficulty managing the Black Hawks. I hear all the rosy stories out of the US until I actually talk to the pilots. I get a similar story but, because of their capacity, they can deal faster with these things in terms of spares and lead times.

Fundamentally, I agree with your statement that it has not been well managed. It was not reported early enough so we could do something about it. It was not reported up the line enough. Those differences between an approach between Army and Air Force were not resolved early enough. What General Hartley is saying now is that they think they have now started to develop a plan to get this back on track and there has been steady improvement in the last three months, but it will not be improved overnight. We have talked to Sikorsky and everyone else. Some of these things cannot be geared up overnight: it is just impossible. But we do see we are at least getting back on track. So no credit for the problem emerging, Senator, but some credit for the fact that they are now getting on top of it.

Senator MacGIBBON --I have no argument with that, but there is another point I want to raise. From my examination of the position, it seems that we have had almost half-life out of our components compared with the US Army. I do not accept your assertion that it is Australian operating conditions, implying that it is the environment. Surely it is the way we are operating or attempting to operate that aeroplane. We are getting half the engine life, half the transmissions, half the hydraulic systems and all the rest of it.

My next question is: what are you doing about the operational mode of that platform? We went all through the business of overload tanks to extend the fuel range. That aeroplane was designed as a short-range battlefield taxi, a section lift. To have overload tanks on means you want to fly it for, whatever the design envelope was, twice as far. That is not its role. It might be within the flight envelope, but it is loading up a Rolls Royce and trying to carry freight on it, which is not what it was designed for. It seems to me that unless you alter and modify your operating requirements and parameters you are going to pay an unnecessarily high bill in spares and you are going to have down time and lack of availability.

Brig. Mellor --We have restricted the use of the ESSS and the external tanks. We have certainly reduced the severity of some of the manoeuvres that were being done and we are treating the aircraft more sympathetically perhaps.

Senator NEWMAN --Does that mean you are restricting the use of the long-range tanks?

Brig. Mellor --We are not fitting the long-range tanks except for particular ferry tasks. We have a couple of aircraft fitted for search and rescue.

Senator NEWMAN --What about operations in the north of Australia? How would we be able to manage there with the distances, et cetera, and the consumption of fuel? They are pretty busy on fuel themselves.

Brig. Mellor --We will ferry them out there with the tanks on and the tanks will be available. But now with the introduction of the Chinook into service, the Chinook will also be used to pre-position fuel for the use of the Black Hawks.

Senator NEWMAN --Will we have enough Chinooks, given down time, et cetera, to be able to do that anywhere in Australia?

Brig. Mellor --Yes, Senator.

Senator MacGIBBON --The fundamental point is that it is a short-range platform. It was designed as such and it ought to be used as that. If you want to go long distances, you go fixed wing. It's as simple as that.

Senator NEWMAN --That was not how we bought it, was it?

Senator MacGIBBON --That was the understanding when the design study went through.

Brig. Mellor --Provided you have a runway at either end. Sometimes that is not possible.

Senator Robert Ray --At least at a very minimum, if you are going to use it for that, you don't use it at all times--only on the specialist occasions you need it.

Senator MacGIBBON --Can someone jog my memory? When we agreed to buy the Black Hawk, wasn't it a condition that the UH1Hs would go?

Brig. Mellor --The original idea was that the Black Hawks would replace the Iroquois. However, the decision not to proceed with Black Hawk gun ships left no choice but to either have no gun ships or retain the Iroquois. So the Iroquois were originally retained to satisfy the gun ship requirement. Subsequent to that decision, more Iroquois were retained in order to extend the life and type of the Kiowa. The attrition fleet within the Kiowa was insufficient for it to reach its planned withdrawal date.

Senator MacGIBBON --Yes, but we have 25 still in inventory. Wasn't the second stage of the proposal that went through to retain only four gun ships--not the 25?

Brig. Mellor --No, it was to retain six gun ships, but that is from memory.

Senator MacGIBBON --That still leaves 19 that stayed in the inventory. That happened later on; that did not happen at the time.

Brig. Mellor --The retention of the gun ships?

Senator MacGIBBON --No. The intention first of all was to get rid of the Iroquois altogether when the Black Hawks were bought. Then someone said to keep the gun ships, so we kept six gun ships. That would have left a surplus of 19 to be disposed of. Later on, somebody said to keep the Iroquois. I suggest to you that, given the lack of funding, the retention of the Iroquois has contributed in a small way to the availability of the Black Hawks, because they had to be supported too.

Brig. Mellor --I do not have the figures on that, Senator, but you may well be correct.

Senator MacGIBBON --How many aircraft engineers do you have in the Army? I do not mean licensed maintenance engineers but qualified aeronautical engineers.

Brig. Mellor --I do not have the exact number, but it is in the order of 40 or 50.

Senator MacGIBBON --Forty or 50 fully qualified aeronautical engineers?

Brig. Mellor --Yes.

Senator MacGIBBON --On page 60 you give these flying hours. Just taking some very crude statistics with the Black Hawk, that works out at about 153 hours per year. Is that correct?

Brig. Mellor --Is that per air frame?

Senator MacGIBBON --Yes. It is about 153 hours per year per air frame, assuming they are all on line. How many pilots who are qualified on the Black Hawk do you have?

Brig. Mellor --Again, I do not have an exact figure right at hand but it is in the order of 50-odd in 5 Aviation Regiment and a further six at the School of Army Aviation.

Senator MacGIBBON --Roughly, you would have two pilots for every aircraft.

Brig. Mellor --Yes.

Senator MacGIBBON --So notionally the best that anyone could fly a Black Hawk would be about 70 hours a year on average?

Major Gen. Hartley --The statistics I have suggest that they are flying about 130 hours per annum.

Senator MacGIBBON --Per pilot?

Senator Robert Ray --Basically you have two on the plane at the one time.

Senator MacGibbon --There is the old trick: the copilot's time counts in his log book the same as the command pilot's does, so actual flying time is something quite different. Do you believe, Brigadier, that you can maintain competence on 70 hours per pilot per year?

Brig. Mellor --On 70 hours per pilot per year?

Senator MacGibbon --Yes. It is not too many hours a week, is it?

Brig. Mellor --That is certainly lower than it would be advisable to have.

Senator MacGibbon --Also, in relation to utilisation I saw in one of the reports--it must have been the annual report--that the Kiowa figures are down from a planned operational level of 10,500 to 7,400. Given the fact that there is no spares shortage with the Kiowas, what was the reason for the drop in flying hours?

Senator Robert Ray --What page is this on?

Senator MacGibbon --It is on page 88 of the Defence annual report.

Senator Robert Ray --I have different figures in this document. I am looking at this year's figures; you are looking at last year's.

Senator MacGibbon --Yes; that is right--1994-95. It is the first opportunity we have had to see those figures.

Major Gen. Hartley --I am unable to give you that answer.

Senator MacGibbon --Again, if we do a very crude mathematical extrapolation we find that it is only 168 hours per air frame per year, Brigadier. I presume you had more Kiowa pilots than Black Hawk pilots. What sorts of hours are your pilots getting?

Brig. Mellor --Senator, if I could just go to your maths, the maths really should be worked out on the basis of the number of aircraft on-line, not on the total fleet, because that is the number of aircraft that you actually fly.

Senator MacGibbon --Yes, but the aggregate hours flown are the only hours a pilot can fly. So whether it is one or 200 aircraft it does not matter.

Senator Robert Ray --What you are saying, Senator, is the figure is the number of pilots divided into the total hours flown. That is right, is it not?

Brig. Mellor --If you take the 6,000 across the air crews--say, if we have 25 air crews, which we have in 5 Aviation Regiment--you come out at around about 240 hours per individual, which is certainly satisfactory.

Senator MacGibbon --That is because of your duplication of pilot and copilot.

Brig. Mellor --Yes.

Senator MacGibbon --Do you ever fly that Black Hawk on a single pilot operation?

Brig. Mellor --Very rarely. Only for ferry flights. You certainly would not do an operational mission single pilot.

Senator MacGibbon --It is cleared for single pilot operation? I thought it was a dual pilot operation.

Brig. Mellor --It can be flown and it is authorised in the flight manual to be single crewed, but it would have to be a very simple mission.

Senator MARGETTS --Has the United States had any greater success with Black Hawk helicopters in similar operating conditions?

Brig. Mellor --I really cannot speak on behalf of the United States military. I am not sure of their figures. They generally do not operate the Black Hawks in the same conditions as we do. Comparing their rates of availability with our rates of availability is a bit like comparing apples and oranges. They have different standards and measures.

Senator MARGETTS --What aircraft did they have in Kangaroo 95?

Senator Robert Ray --Black Hawks.

Senator MARGETTS --So, under similar operating conditions to Australian operating conditions, what was their success rate in keeping the Black Hawks in the air during Kangaroo 95?

Senator Robert Ray --Do you want the official version or what I found out? That is the problem. I was briefed that they were going very well. When I got to Tindal I found out they could make only concrete take-offs and landings. They were down to their last engine. So the official version and the actuality vary a bit. I tell you what I suspect, Senator: they have had a better availability rate than us, although conditions are not always similar.

Senator MARGETTS --How many did they have there?

Senator Robert Ray --I am not sure. I think they had about eight.

Major Gen. Hartley --At Tindal they had eight.

Senator Robert Ray --I think they found it hard operating in those conditions. But, then again, even our Black Hawks do not always operate in such adverse conditions as you get around Tindal. That is about as bad as you can get for a helicopter.

Senator MARGETTS --ASTA used to be responsible for Black Hawk maintenance. With the sale of ASTA, has the contract for that maintenance gone to Rockwell?

Senator Robert Ray --ASTA still exists as a fully owned subsidiary of Rockwell, so it would have. In relation to any of the three areas that Rockwell picked up--which is components, ASTA military or ASTA engineering--Rockwell would have taken up the contract. I assume that was the case at Townsville.

Brig. Mellor --The contract has changed from ASTA prior to the sale to Rockwell and Hunter Aviation now has a contract in Townsville for that. ASTA is still responsible for some aspects of repair and overhaul.

Senator MARGETTS --As was mentioned by Senator MacGibbon, the Kiowa, Chinook and other aircraft, in the annual report, fell well short of their in-air targets, which were last year's targets. How confident can you be that the problems that existed last year will not be revisited this year?

Major Gen. Hartley --As to the Black Hawk, I am quite confident because we have worked out what the problem is and we are taking active steps to address that problem. I am not sure that I can really speak for the Kiowa.

Brig. Mellor --I believe the more intense management that has been put in effect, both within Army and Air Force on army aviation, will bear fruit and we will, if not right on our allocated hours this year, be very close.

Senator MARGETTS --You mentioned that the Nomads were part of the force development process. Is that looking at whether or not they will be or can be sold at some future date?

Senator Robert Ray --It is not really a matter for Army. Nomads are no longer required either in Army or Air Force. The method of their disposal is yet to be determined, although I think from the date of announcement I have had eight immediate inquiries saying they desperately wanted to be the agents to sell them. We will not have any difficulty selling them.

Senator MARGETTS --Is there mention anywhere of the effect of the withdrawal of the Nomads from service on the value of them as assets?

Senator Robert Ray --I do not think we quite understand your question.

Senator MARGETTS --How does withdrawing the Nomads from service affect their value as assets? Is that reflected anywhere in the report that we may have missed?

Mr Tonkin --The time it would be affected is when the assets are sold and comparisons made between the current valuation of those assets and the achieved value. If there is a shortfall, that will be displayed in the annual accounts as a loss. Unless my staff will correct me, I believe that will be the process. At the moment they will be sitting as having a book value.

Senator MARGETTS --It does not affect the level of depreciation, which you have calculated on their book value?

Mr Tonkin --It depends whether the decision that we no longer require the Nomads affects their sale price and whether that sale price is lower than the current valuation.

Senator MARGETTS --When was the current valuation made?

Mr Tonkin --The equipment would have been valued during this financial year as part of the preparation of the 1994-95 financial statements.

Senator MARGETTS --Is that valuation available to the committee?

Mr Tonkin --I would have to take advice on whether we can give the precise evaluation of an individual equipment item. We would not have it here today.

Senator MARGETTS --Do you have any idea of how much was invested in each of those Nomads?

Mr Tonkin --Can I ask you to define `invested'? Do you mean the initial cost?

Senator MARGETTS --It includes initial cost, maintenance and so on, but also perhaps how much specific investment was involved in training those currently in service to fly the Nomads. Is that ever included in the figure on specific investment in training and keeping people able to fly those particular aircraft?

Mr Tonkin --I do not believe that the cost of training pilots on a type would necessarily be linked to the investment cost of that particular platform, as there is a distinction between the basic training of the pilots and training them to fly a particular type of aircraft. It is a delta on the basic cost. I would doubt that those figures would be readily available, especially over the life of the aircraft, which has been in operation for a considerable period.

Senator MARGETTS --In a business, though, that would be counted as a loss because people consider it an investment in training if what people have been invested to train in is no longer applicable. In normal business, surely that would be considered to be a loss of investment.

Mr Tonkin --I am not quite sure whether we would regard that as an actual loss because the pilots are retrainable. It is a question of when they were trained on a type, how much flying they have accrued against that type and the depreciating value of the initial training.

Senator MARGETTS --In the annual report there was mention of a variety of training that occurred in commercial aircraft in lieu of the Nomad training, but there was no mention of this in the additional estimates. Do you have any idea what variation was involved there?

Mr Tonkin --Unless there has been a change, it will not appear in the additional estimates. If that was the cost in the budget, that remains the cost unless we have identified any variation to it.

Senator MARGETTS --So any training that would have occurred in relation to the Nomad is absorbed into whatever training costs are involved with the fixed wing replacement?

Mr Tonkin --That would be my understanding.

Senator MARGETTS --How was it expected to affect forward projections of expenditure on training?

Mr Lush --In terms of the current year, as it has been explained, the costs are just offset against other training needs or go to other training years. In turning to future years, similarly, we would look at our training demand, depending on type of training, and budget to that accordingly.

Senator NEWMAN --I turn to the performance outcomes at page 87 of the annual report. The low levels of availability of Black Hawk and Nomad are referred to as having impacted on the preparedness of some force elements. It says that in particular this has limited the ability of the RDF to conduct training for air mobile operations. Could I have more detail about that? What have been the other effects on preparedness?

Major Gen. Hartley --The impact of not having the full complement of Black Hawk, in particular, has resulted in RDF, basically 3 Brigade units, not necessarily achieving the full standard of air mobile operations that they would otherwise hope to achieve. It is mainly in the business of air mobility and the rifle companies not getting that full level of training.

Senator NEWMAN --Has that impacted on exercises that have been held? Have any been cancelled or had to be rewritten to accommodate that lack of air mobility?

Major Gen. Hartley --I do not have a definitive statement, but I suspect all the above.

Senator NEWMAN --Perhaps you could take it on notice that we could get a report of what it has actually meant rather than that limited statement there. I would also like to refer to another item in the performance outcomes. The annual report states:

Significant personnel deficiencies in the majority of the General Reserve force elements have prevented them achieving the CDF's preparedness requirements.

On page 82 of the annual report there is an item on variations between the 1994-95 revised estimates and the 1994-95 actual. It says that there was a decreased requirement in training days and allowances as a result of strength variations in the General Reserve. That was $5 million. Why did the General Reserve have to give up that $5 million for training days, given that the training days for the General Reserve are not overgenerous now? Why could that $5 million not have been kept and redistributed amongst those who were effectives? If we are talking about the combat force, which we are in this section, and guidance requires that we have to achieve 60 per cent of our combat force out of the Reserves, why are we not putting as much money as we can find, including $5 million that was actually allocated to it, towards increasing the training levels of the Reserves?

Major Gen. Hartley --I think the short answer is that the underachievement was due to the decreased requirement for general reservist training days and allowances, because there were fewer people.

Senator NEWMAN --So, given that there were fewer people, why did you not redistribute the training days between those who were there and were able to take on board more training?

Major Gen. Hartley --I suspect that there is a limit to the number of training days that can be used by existing general reservists. In other words, there is a finite number of training days that we can use. It may well be that we had got to that limit.

Senator NEWMAN --If I were a reservist, reading that in Hansard, I do not think I would agree with you. I do not think there are many who would. Are you sure you would not like to revise your answer? I just do not think that what you have said is right.

Major Gen. Hartley --If any general reservist told me that he did not have enough training days, I would ask his unit what was happening about it. Invariably there is the opportunity to redistribute training days within units, brigades and the entire element of land command, for instance.

Senator NEWMAN --But that did not happen. Some $5 million went somewhere else, and we do not know where.

Major Gen. Hartley --My judgment would be that it would not have been possible in the time available to absorb and reuse those training days.

Senator NEWMAN --Are you saying that we do not have a flexibility to be able to redistribute something of the order of $5 million? That would surely have had our General Reserves being much more ready.

Major Gen. Hartley --Yes, we do have that ability and we are constantly redistributing training days, but in this instance the numbers involved and the low number of general reservists simply did not allow that to occur.

Senator BURNS --Am I to believe that you would have to plan for training days for the whole of the Defence Force at some predetermined time?

Major Gen. Hartley --Yes.

Senator BURNS --So, if you were to suddenly find that you had $5 million available, would that not indicate that you had not planned properly in the first place?

Major Gen. Hartley --The initial planning was certainly based upon a certain set of figures, but we were well below that set of figures later in the training year--

Senator BURNS --Can I put it another way. You were saying that the other people it might have been transferred to were properly and adequately trained in terms of days available?

Major Gen. Hartley --Yes.

Senator NEWMAN --Even though they might be in units that were not going to require them to be ready for 360 days or whatever? Were the people in units with a 90-day limit assessed by the CDF as being ready to fulfil that?

Major Gen. Hartley --No, not entirely. I cannot give you a definitive figure--

Senator NEWMAN --I am not asking for classified information. The answer is, `No, not entirely.' Would it not therefore have been appropriate for the training days to have been offered to them?

Major Gen. Hartley --Assuming there were people in the unit who could have used them, the answer is yes.

Senator NEWMAN --Were they offered?

Major Gen. Hartley --The judgment was made that, because we did not offer the training days, there were not people available to use them.

Senator NEWMAN --How do we monitor the usage? As the year progresses you see that you have too few people to make use of them and you start to get into a pattern. Surely you do not wait until the end of the financial year and say, `Look, we have $5 million that we have to hand over or give up.' If you are monitoring it as the year goes by, you must know about it.

Major Gen. Hartley --That is right. Adjustments occurred throughout the year.

Senator NEWMAN --Yet we still have units at least at the 90-day requirement which were not up to the CDF's readiness.

Major Gen. Hartley --The units on that sort of level were there because they had not received or achieved their full strength which would have allowed them to use these additional days.

Senator MacGIBBON --Is that statement true? Significant personnel deficiencies in the majority of the General Reserve force elements have prevented their achieving the CDF's preparedness requirements. Do you honestly mean that? What about the shortages of equipment and the shortages of the training cadre coming from the regular force? Weren't they contributing factors in your failure to attain a standard?

There is no doubt that all those factors contribute, but the bottom line is that we received fewer recruits and retained more poorly than we had anticipated at the beginning of the year. Couldn't the $5 million have been reallocated to equipment that is needed by the General Reserve?

Major Gen. Hartley --That may well have been possible, although equipment does not come quickly. This amount of money was essentially there for General Reserve salaries. But that could be considered.

Senator NEWMAN --You have studies into these problems, yet we all know that the General Reserve is struggling to retain manpower and cope with a lack of equipment. Yet we have $5 million that the General Reserve had been allocated, and we could not make good use of it in the last financial year. I find that extraordinary.

Major Gen. Hartley --That could well be right. But there is a time delay between finding out that we had this surplus and then being able to convert that money into equipment.

Senator NEWMAN --That is why I asked about monitoring as the year progressed, not finding it out at the end.

Mr Lush --The $5 million that you have identified came about as a result of a shortfall of utilisation of the training days for the reservists. That $5 million--and I could not say that it went to this, that or the other precisely--was then applied to such things as minor capital projects, to supplies for the logistics area of the Army which, in effect, leads to greater equipment availability for reserves and regulars. So the money certainly was not wasted in any fashion. It was not applied, as it initially started to be, to reserves training days because the demand for those training days did not materialise fully through the year.

Senator MacGIBBON --In relation to readiness, 90 days, 180 days and 360 days are mentioned. Surely the readiness requirements for a 180-day unit must be pretty lax to start with. For the 360-day unit it must be almost non-existent. How can you fail a 360-day requirement, other than on personnel numbers?

Vice Adm. Walls --Perhaps I could respond to that. I suspect there is a good deal of sense, particularly in the latter point of your question. You are probably aware that the preparedness directive and those sorts of factors that you are addressing are currently under review for reasons of their achievability, sensibility and cost.

Senator MacGIBBON --There just does not seem to be any sense in having a unit on 360 days.

Vice Adm. Walls --We are reviewing it.

Senator MacGIBBON --There is another statement in relation to reserves and the ready reserves about how the training days of the full-time members were diminished and those of the part-time ready reserves were diminished considerably. Given the fact that you are dealing with a fixed number of reservists, why was there a change of plan? Somewhere in the documents is an entry that the training days for full-time ready reservists had been revised downwards and the training days for part-time ready reservists had been revised downwards, but in the latter case there was really quite a large reduction. Given the rigidity of the whole of the ready reserve program, how come that was not foreseen?

Major Gen. Hartley --I think there were a number of factors. Ready reserve retention had improved.

Senator MacGIBBON --What does it run at?

Major Gen. Hartley --We lose about 20 per cent a year. So, for every year, 20 per cent falls over.

Senator MacGIBBON --So that is higher than the regular wastage rate?

Major Gen. Hartley --Yes, it is.

Senator MacGIBBON --I thought this committee was told that it was running at the same level as the regular wastage rate.

Major Gen. Hartley --Yes, I am talking about ready reservists from the moment they are recruited. I think that is probably where the difference is. Including the wastage through the recruit training process, it is running at about 20 per cent.

Senator Robert Ray --If you compare the attrition rates, you have to take out the initial year's training, to give you a proper comparison.

Major Gen. Hartley --If you take out the first year's training, it is running at about 14 per cent. The better than perceived retention rates and higher successes through the recruiting process were, I think, the two reasons why we were able to reduce the numbers.

Senator MacGIBBON --I was just correcting what I saw was a large decrease in running costs, not training days, for full-time ready reserves.

Senator NEWMAN --On page 62 of the estimates statements the budget for the ready reserve part time for staffing was shown at 2,756. The revised 1995-96 staffing estimate is 2,007. Where have those 750 people gone?

Major Gen. Hartley --I can give you two factors immediately. One hundred and seventy ready reservists were transferred to the Regular Army. There were also recruitment difficulties which also lowered the figures.

Senator NEWMAN --That cannot be right; these are part-timers.

Major Gen. Hartley --You are looking at the part-time 1994-95 actual figure of 1,852?

Senator NEWMAN --No, I am looking at the 1995-96 budget figure of 2,756 and that has been revised to 2,007 which is 749 short.

Major Gen. Hartley --We will take that on notice.

Senator NEWMAN --Thank you. I was also wondering how many ready reservists have gone into the smoke and the Army does not know where they are. Is that what has happened to those people?

Major Gen. Hartley --We have not lost any ready reservists. We can account for them. A number have not continued their second or third year training and some have sought to defer by a year.

Senator NEWMAN --But you know where they all are, do you?

Major Gen. Hartley --I believe we do.

Senator NEWMAN --Well, you seem to have lost 40 Tasmanians. If you have lost 40 Tasmanians, I thought you must have lost a heck of a lot more mainlanders.

Major Gen. Hartley --We have not lost 40 Tasmanians. In Tasmania there are six ready reservists who are pending discharge; in other words, a decision has been made to discharge them and they are waiting for that administrative process to occur. A further eight Tasmanians have deferred service by at least a year--for job opportunities or for civil schooling requirements they have asked to have a year's deferment in terms of their service.

Senator NEWMAN --You are not looking for anybody else? The information I had was that Army simply does not know where a number are. It may not be just the Army, but across the board.

Major Gen. Hartley --I am restricting it to Tasmanians to answer your question. In Tasmania there are 14 ready reserve soldiers who are either awaiting discharge or who have deferred their service by a year.

Senator NEWMAN --So you know where everybody is in Tasmania?

Major Gen. Hartley --I believe so.

Senator NEWMAN --What about for the rest of the country? Do you think those 749, less the 170 who have gone to the regulars, might be absent without leave?

Major Gen. Hartley --No, I do not believe so. I have the statistics for only one of the battalions here which, if you add the number of people pending discharge and those who deferred service, of a total of 356 only 49 are in those categories.

Senator NEWMAN --Is that 356 around Australia?

Major Gen. Hartley --This is for one of the battalions, 89 RAR. Of that a total of 30 are awaiting discharge and a further 19 have deferred their service.

Senator NEWMAN --Why are they awaiting discharge?

Major Gen. Hartley --Because they have not continued with their obligation or have given unsatisfactory service.

Senator NEWMAN --They have cost us a lot, haven't they? We have not got much out of them. At what level is this? Is this in their second or third year of part-time service?

Major Gen. Hartley --Yes.

Senator NEWMAN --Do we have an ability to immediately cut off their entitlements if they do not perform their side of the bargain?

Major Gen. Hartley --We certainly do not pay them for service they do not do, nor do they get an efficiency entitlement. Those going to university are paid an education allowance in advance.

Senator NEWMAN --An advance for the whole year?

Major Gen. Hartley --Yes.

Senator NEWMAN --What about term by term?

Major Gen. Hartley --No, they are paid by the whole year.

Senator NEWMAN --So you are losing 30 in one battalion. You are losing six in Tasmania alone. How many are you losing around Australia?

Major Gen. Hartley --I am sorry. I cannot give you that figure.

Senator NEWMAN --Please take that on notice. I would like a break-up of these figures Australia-wide and by state of how many are awaiting discharge and how many have deferred their service. Of those who are awaiting discharge and who are deferring service, can I have a breakdown as to whether they are tertiary students or not and whether they have had a year's education benefit? I am trying to get a handle on how much they have contributed in exchange. Can we be confident that at the end of the academic year the allowance will be cut off and will not apply for the following year. Are you confident that the administrative arrangements are such that they will not suddenly find that next year's allowance is paid as well?

Major Gen. Hartley --For every soldier who is not deemed qualified for one year's service and who has been already paid an education allowance, a decision process is entered into. If the soldier has no intention or gives no indication of wanting to continue an education allowance, it is certainly cut off. In a small number of cases an individual ready reservist gives a good reason for being unable to continue that year's service but has made alternative arrangements that suggest to the commanding officer of the unit that he or she will do the next year. In that case that soldier is given the benefit of the doubt. But that happens in only a very small number of cases.

Senator NEWMAN --Have you had many cases of fraud against the Army through the ready reserve scheme?

Major Gen. Hartley --I am not aware of any.

Senator NEWMAN --I am aware of one; that is why I asked. It was somebody who gave a totally false address on leaving and had a removal and then changed the address of where the goods were to be received.

Major Gen. Hartley --I am sorry. I do not know about that.

Senator MacGIBBON --On the ready reserve, what is the regular component numerically now of 6 Brigade? How many regulars are supporting it?

Major Gen. Hartley --I can give you specific units, but not the entire brigade.

Senator MacGIBBON --You can take that on notice; it is not crucial for today. The committee has heard before about difficulties with category 1, 2 and 3 officers and NCOs. Have they been overcome? There were also problems with 8, 9 and 6, and I presume 49 as well.

Major Gen. Hartley --I think the categories you are talking about--

Senator MacGIBBON --It might have been A, B and C. It was junior platoon commanders and so on.

Major Gen. Hartley --Yes. To the best of my knowledge, the problem has been overcome.

Senator MacGIBBON --We have been talking about separation rates. For the Navy in August they were 14.7. What is the current separation rate for the Army?

Major Gen. Hartley --It is 13.99 per cent.

Senator MacGIBBON --That is very high too, is it not? Is it occurring in any definite mustering or is it across the board?

Major Gen. Hartley --It is pretty much across the board. There are some categories where quite clearly we are more deficient than others--certain specialist categories. Probably the worst mustering is that of medical officers. In relation to other musterings, Black Hawk pilots, air traffic controllers and riflemen are probably the most significant musterings against the establishment number.

Senator MacGIBBON --In the annual review, on page 83, there is a note that the payment for the deployments in Cambodia, Somalia and Rwanda are deferred. Is that because the UN is not paying?

Mr Lush --What page is that?

Senator MacGIBBON --Page 83, at the top, where it refers to variation in time of anticipated receipts for UN deployments in Cambodia, Somalia and Rwanda.

Mr Lush --That is an injection of money. It is a double negative. It is a receipt and it relates to early receipt of funds from the UN for Rwanda, which were expected in 1995-96 but received in 1994-95, et cetera.

Senator MacGIBBON --As I understand it, the Rwanda deployment was the first time we complied with the requirement to cost every piece of equipment that went in. It seemed to be an enormously time-consuming exercise. What did it cost the ADF to do that?

Mr Lush --I am not aware of there being a figure for doing that. It was a process that was required to be followed.

Senator MacGIBBON --Literally every piece of equipment was valued.

Mr Lush --Essentially each piece of equipment was listed going in and then ticked off coming out, and funding calculations as to the bill to the UN were made such that we achieved an earlier payment than we might otherwise have expected.

Senator MacGIBBON --I am told that Canada did not follow that system. Is that true?

Mr Lush --Offhand, I do not know precisely whether they did. I can check that, but I am not aware of whether they did or not. What Australia did was follow the UN requirements.

Senator MacGIBBON --We usually are law abiding and we find that other countries do not do it. They come out ahead of the game.

Mr Lush --I am not sure whether Canada has been paid.

Senator MacGIBBON --There was a sporting event, perhaps the world games, held in the main Canadian headquarters once. The centre was full of Canadian vehicles that had never been used. When they came to go home they just packed them up and shipped them back out on C5s. But we seemed to be very short of equipment. In Somalia we had no helicopters; in Rwanda we had no helicopters of our own. Why are we constrained in putting a force into the field with what we would regard as the basics?

Major Gen. Hartley --I can only make a general statement and suggest that the force structure that was determined did not require those additional assets.

Senator MacGIBBON --But some sort of helicopter capability is almost essential in those sorts of places.

Vice Adm. Walls --The information I have available is that the UN made some fairly specific requests. The option that was presented to cabinet for consideration was for a medical support force of approximately 300 people for a fixed deployment for six months, and that was agreed. You are aware of the details from your visit. The notion of providing additional forces or capabilities was excluded.

Senator MacGIBBON --The heart of my point is that if we conform to the letter of the law all the way along the line and other countries do not, there are cost penalties to us.

Senator Robert Ray --I do not think we did. What the UN wanted was to send a medical team with no security. We do not conform all the time. They were a little annoyed that we sent 120 infantry with this detachment, but I was not going to send them unguarded.

Senator MacGIBBON --That is fair enough.

Senator Robert Ray --I am just contesting your point that we always do exactly what they ask. You try to be a reasonable citizen in these things, but both in that deployment and future ones we have to think of the protection and the general resources that we give to people going into one of these operations. If anything, we are going to have to go more on the side you are suggesting, I think, to give them sufficient mobility and protection. I think it is going that way. I do not think it is quite as conservative as you think, but, again, it has not quite reached the point you might like it to be at.

Senator MARGETTS --I still have some questions on the ready reserve. Do you want to finish those first?

CHAIR --Fine.

Senator MARGETTS --In relation to the tables on pages 62 and 63, there is a problem in making sense of the figures. I wonder if there has been a transposition or if someone can explain the oddity in the figures. The full-time ready reserves in the 1995-96 budget are given as 371, with the full-time ready reserve salary given on page 62 as about three-quarters of the cost of the permanent force, whereas for the reserves we have the figure of 13,137 for 1995-96, much less. Is there a transposition or an explanation for those odd figures--the fact that the full-time ready reserves seem to have very a large salary package and very tiny staffing levels.

Mr Lush --The tables you are referring to are table 8 on page 62, where there is a ready reserve figure of 371, and table A at the top of page 63, which shows an average salary cost for the ready reserve within the various subprograms of the Army.

Senator MARGETTS --In relation to the policy for ready reserves in the Army, how much time do they spend actively training with the armed force units?

Major Gen. Hartley --The first year is full-time service; in the second and subsequent years it is 50 days full-time service a year.

Senator MARGETTS --With the cost of training, is their salary a major proportion of that cost or is it their equipment or what?

Mr Lush --The salary would be a major cost.

Senator MARGETTS --How long after that training is that training considered sufficient to render them fit for active duty without continual use of that training as an active soldier?

Major Gen. Hartley --The ready reserve brigade, 6 Brigade, and the other two units that absorb ready reservists are on 90-days notice. They would need to be ready to enter combat in 90-days time.

Senator MARGETTS --How much time is spent subsequent to training in postings in which that training is actively used?

Major Gen. Hartley --The ready reservists are all in combat units. They are trained according to the role of that unit.

Senator MARGETTS --What would be the kind of range that you would be looking at?

Major Gen. Hartley --I am sorry, what sort of range?

Senator MARGETTS --Of time spent subsequent to training in postings in which that training is actively used.

Major Gen. Hartley --All their training prepares them for their combat role. There is no other training apart from that.

Sitting suspended from 4.02 p.m. to 4.15 p.m.

CHAIR --Prior to the recess, we were dealing with subprogram 3.1 on combat forces. Senator Margetts was asking the questions.

Senator MARGETTS --Given the shorter periods of duty and the high levels of salary for ready reserves relative to permanent forces, would it be better to employ someone full time and get the benefit of their presence, if only to reduce the costs of civilians performing many duties such as security?

Senator Robert Ray --They get paid what you regard as a high salary level for only one year's full-time service. For the four years after that, they get paid for 50 days a year or whatever other benefits accrue. So it falls off a cliff once you get past your first year of service. The answer is no, it would not be better.

Senator MARGETTS --Have you done a cost benefit analysis of ready reserves as opposed to full-time staff?

Senator Robert Ray --Ready reserve or reserves?

Senator MARGETTS --Reserves.

Senator Robert Ray --So we are off ready reserves?

Senator MARGETTS --Ready reserves as opposed to full time.

Vice Adm. Walls --The answer is yes. We have done those studies.

Senator Robert Ray --I draw your attention to the Coates review too which we put out. It looked at all the comparisons and made recommendations for some changes and adjustments. I think that was in mid or late August. It has all that material in it. Would you like a copy sent to you?

Senator MARGETTS --I think we have got one. Are you moving in the major direction that the Coates review has suggested?

Senator Robert Ray --It has gone to the Chiefs of Staff Committee for its consideration. The recommendations have not finally come to me. On a first overview, I would accept virtually all its recommendations.

Vice Adm. Walls --There is still the matter of staffing, with a view to making recommendations to the minister. One recommendation that comes to mind is that we should stop the geographic based approach to recruiting in some service cases--for example, in the Army, where it is practical for employment to go to a national basis. But there are practical difficulties and sensibilities associated with that. So I would expect that there would be separate Army, Navy and Air Force approaches to some of the recommendations. Because of the ADF approach, either some of them will be modified or the odd one or two will not be accepted. But in the main the report's recommendations will be accepted.

Senator MacGIBBON --On pages 91 and 92 of the annual review there is a list of Army exercises performed through the year. I want to enter an editorial plea here. Nearly all of them use the phrase `intraoperability was further developed'. That tells the reader nothing at all. Could we have a little bit of amplification on that in the future?

Senator Robert Ray --You know how combative I am on editorials, but I will not be this time because these sorts of phrases slip into the lexicon. As a politician, you should know that we are the worst users of them. But the point is taken.

Senator MacGIBBON --Absolutely. But it was used for exercise after exercise.

Senator NEWMAN --There was different wording from one service to another. I thought that maybe they differentiated between one sort of exercise and another. Some were very successful and some had a less enthusiastic endorsement. We need to get a feel for how well these are going in a comparative sense. I would also like to know whether the reserves were used as well as the regulars in any of these exercises. Could that be taken on notice, please. If they were used, in what capacity was it?

Senator Robert Ray --That is an entirely separate question, which I will take on notice. But your editorial is noted on buzz words.

Senator MacGIBBON --At the bottom of page 90, there is a note that an aerial mapping survey was carried out on the Solomon Islands and Vanuatu. What capability has Army got for aerial mapping or is that subcontracted out to a private contractor?

Major Gen. Hartley --Certainly at the time that this was done, I suspect we had our own integral capability. That, of course, as you know, is changing with the commercial support program and the changes that are occurring to the Army Survey Regiment.

Senator MacGIBBON --Would that have been done with Nomads?

Major Gen. Hartley --I am sorry, I do not know.

Senator Robert Ray --Does anyone else here know before we take it on notice?

Air Vice Marshal Rogers --Some years ago the ADF did have a mapping capability with its Canberra aircraft. They were retired and since that date any of the aerial mapping capabilities have been contracted out to a company. They come under the Army Survey Regiment. The Air Force does not have any more to do with it, but I can assure you that they were contracted out.

Senator MacGIBBON --There is an entry in one of the lines here about reserve officer training. We have been through this before, but what is the current view on reserve officer training with the use of RMC and the retention with the training groups in the various states?

Major Gen. Hartley --RMC certainly provides an element of the initial employment training of officers. It probably accounts for about a third of what was certainly previously the initial reserve officer training syllabus. About two-thirds or something of that order is conducted through the various training groups or through the university regiments which are part of the training groups.

Senator MacGIBBON --That will have some degree of permanence in the next two to five years; there will not be another significant change to that?

Major Gen. Hartley --Yes.

Senator MacGIBBON --Under combat forces I would like to bring up Project Mulgara which I read about. What are the expectations of Army in the involvement of Australian industry in that program?

Major Gen. Crews --Mulgara is the project to acquire light reconnaissance vehicles principally for General Reserve reconnaissance squadrons. The expectation is that Australian industry will certainly be able to construct the vehicle, possibly based on an overseas design. In relation to other vehicle projects, we are looking at about 75 per cent of Australian industry involvement.

Senator MacGIBBON --Will there be one Mulgara squadron to every brigade or every battalion?

Major Gen. Crews --One per brigade.

Senator MacGIBBON --How many vehicles per squadron?

Major Gen. Crews --At this stage the total buy is 300 to 500 vehicles. We are only in the project definition stage; we are not yet working towards a contract for actual trial or manufacture. I cannot give you an exact figure; it is between 20 and 30 per squadron.

Senator MacGIBBON --Is it part of the Bushranger program?

Major Gen. Crews --It is a separate project.

Senator MacGIBBON --Can we put the Bushranger thing into perspective, because it seems to change the whole time. Is the ASLAV program part of the Bushranger program?

Major Gen. Crews --The ASLAV project, Australian light armoured vehicle project, is again a separate project. But the three of them--Mulgara, Bushranger and ASLAV--are all working towards the strategic requirement of enhanced ground mobility for land forces in Northern Australia. Bushranger provides infantry mobility at a level greater than the general service vehicle in protection but not to the level of protection of light armoured vehicles. I might also add that it is not to the same cost.

The light armoured vehicle being acquired under the ASLAV project is exclusively for the use of 2nd Cavalry Regiment for reconnaissance and surveillance operations in Northern Australia. The Mulgara vehicle, which is further down track, is to substitute for the M113 vehicles currently used by the reserve for light reconnaissance tasks.

Senator MacGIBBON --How many phases are there to Bushranger? Is there an initial equipment issue to be made and then a more developed vehicle to come along or what?

Major Gen. Crews --There are three phases to Bushranger. The first phase is currently in contract and is to provide 268 Land Rover type vehicles to provide interim mobility to 6 Brigade in Brisbane. That contract is part way through; the first vehicles were delivered in August this year and the balance should be delivered in the early part of next year.

Concurrently, we are now at tender for phase 3 vehicles, the phase 2 being the preparation of the tender and the conduct of evaluation. Five companies were invited to tender and those tenders close towards the end of November. The tenders will be assessed. Three of those companies, maximum, will be invited to provide up to four vehicles each for evaluation, conducted during 1997 with a view to going for budget approval for the final phase 3 quantity procurement in 1998-99.

Senator MacGIBBON --Will they be relatively large vehicles based on a Unimog chassis?

Major Gen. Crews --We have not prescribed a Unimog chassis, but some tenderers have offered the Unimog chassis.

Senator MacGIBBON --Yes, but they are at that end of the spectrum and not at the Land Rover end of the spectrum.

Major Gen. Crews --That is correct.

Senator MacGIBBON --How many vehicles ultimately will be involved, and what sort of budget are you looking at?

Major Gen. Crews --We have indicated up to 500 vehicles. We have not been precise at this stage, but the requirement is to fully equip a further three battalions with mobility.

Senator NEWMAN --Why have we not gone for a more substantial upgrade of the M113 instead of some of these projects?

Senator MacGIBBON --While you are at it, you might tell us why we are going into a new vehicle design rather than using the M113s that we have in inventory?

Major Gen. Crews --If I could refer to the M113 fleet, we have about 550 vehicles, only 360-odd of which will be upgraded. The program was deliberately to minimise the extent of upgrade for cost reasons. The M113 has been a good vehicle; its life of type is now about 2010. It will not really be supportable much beyond that time. It will still serve the function of providing highly protected mobility for infantry in the combat role. It will also be used for mechanised infantry as in 5/7 RAR at Holsworthy. The limitation on upgrade was really for cost considerations and because that vehicle will not meet the extended distances required of the Bushranger vehicle. It is a track vehicle. We require for Bushranger a minimum of 600 kilometres distance and the track vehicle will not meet that need.

Senator NEWMAN --We have 15 years of protection for infantrymen in the M113, especially if it is properly upgraded. You talked about the limitation in the upgrade, so that is a minor upgrade essentially. But you are putting a lot of money into these new projects. For the 15 years that you have in the life of the M113, was it not a good investment to put that sort of money into our existing vehicles?

Major Gen. Crews --It is a balance of what will give us the best capability for the dollar.

Senator NEWMAN --You have a lot of protection with the M113, which is pretty important.

Major Gen. Crews --Yes, we do. It is probably that the endurance and the distance requirement and also the capacity requirements have led us more towards an infantry mobility vehicle of the type that Bushranger seeks.

Senator MacGIBBON --Why not use the Land Rovers or the Unimogs for that?

Major Gen. Crews --The Land Rover does not have either the capacity, unless modified extensively as we are doing under phase one, or the endurance and the load carrying capacity that the Bushranger will have.

Senator MacGIBBON --Why not go to a Unimog or a conventional 4-wheel-drive truck?

Major Gen. Crews --It does not offer the protection that we would require.

Senator MacGIBBON --But you are offering no protection, as I understand it, with this vehicle. Rain is about the only thing you can stop with it.

Major Gen. Crews --If I could clarify it: phase one is an interim vehicle. It is an interim solution, to provide 268 vehicles that basically do not offer any more protection than the Land Rover vehicle. The final phase of Bushranger, which we are seeking to introduce towards the end of this decade, is a protected vehicle and has better capacity, better endurance and better potential cross-country mobility than even the Land Rover.

Senator MacGIBBON --What will it protect against?

Major Gen. Crews --The minimum essential requirement is protection against small arms ball ammunition.

Senator MacGIBBON --It will protect against slap arms?

Major Gen. Crews --That is a desirable requirement.

Senator MacGIBBON --It is not an essential one?

Major Gen. Crews --It has not been prescribed as essential. I expect that some of the tenderers will offer more than the essential requirement. Our requirement for protection against mines, armoured ammunition and mortar fragments could be achieved even if described presently as `desirable' only.

Senator MacGIBBON --There would be no protection against nothing other than anti-personnel mines, which you would get from a conventional vehicle?

Major Gen. Crews --The conventional vehicle will not ensure protection against small arms fire.

Senator MacGIBBON --It gets back to this business of slap rounds and armour piercing small calibre rounds that will go right through what you are talking about. You have no protection against RPGs or anything like that. It seems to me you are spending a lot of money buying something that has no cross-country capability. Could you ever use this vehicle on the battlefield?

Major Gen. Crews --The vehicle is intended to move infantry over long distances, offering them a level of protection commensurate with the likely threat they will face. It is not meant as a battle vehicle, in the same sense as the M113 would be used by a mechanised unit for engaging in combat, mounted.

Senator NEWMAN --If something turns nasty, do you drop them out of these vehicles and then try to find an M113 to get them to the next stage? That seems silly.

Major Gen. Crews --If the level of threat was such that these vehicles did not provide the level of protection needed within the vehicle, the troops should dismount and should conduct themselves as they would in combat, dismounted.

Senator MacGIBBON --Are you preparing against the Northern Ireland situation or the South African situation? You have admitted that you could not use it on the battlefield because it has no real protective capability. You could not use it on the battlefield because it is not a tracked vehicle. What are you protecting against?

Major Gen. Crews --We are providing protection against small arms fire when in transit. Moving around from place to place there is likely to be sporadic fire. It is not meant as an armoured vehicle in the true sense. It will not be used by infantry when engaged in direct combat.

Senator NEWMAN --It is a low level contingency vehicle only. It is not flexible enough to deal with other contingencies.

Major Gen. Crews --It could still provide long distance mobility.

Senator MacGIBBON --So can a truck.

Senator NEWMAN --Buy one; do not get one specially made.

Senator MacGIBBON --Do you believe that soldiers will be driving around somewhere or other and will be shot at by enemy units around the place with small arms fire, and you will do nothing to get rid of these people who are firing at the soldiers? You will not have scouts surveying the area before you go in?

Major Gen. Crews --We will undertake all those operations. There is no suggestion these vehicles will be the only capability that is present on the battlefield.

Senator MacGIBBON --You have not convinced me.

Senator NEWMAN --There will be a spares problem, with all these types. You are adding to your logistics problems.

Major Gen. Crews --There is a significant logistic tail that is comprehended in the capability that we are trying to provide.

Senator MacGIBBON --What happened to the old doctrine that you train in peace for wartime? You are training for a minimal conflict situation. You are putting hundreds of millions of dollars into equipment which, at the end of the day, is absolutely useless to you on the battlefield.

Major Gen. Crews --I would suggest that this is one of a range of capabilities that we provide to meet what we perceive to be the nature of conflict in northern Australia. It includes the use of armoured vehicles, that is, the Leopard tank presently; the light armoured vehicle, which is a wheeled vehicle; and the M113 tracked vehicle. Moving further down the range of levels of protection, there will be the Bushranger vehicle. Below that will be the lighter vehicles such as the Unimog trucks, Mack trucks and Land Rover vehicles. There is a range of capabilities. Each will be used according to the level of threat, the need to move troops around and the task that those troops are to perform.

Senator MacGIBBON --We do not have the luxury of coping for every theoretical situation. The ADF must have some priorities to cope with a serious situation, not a mythical bunch of people running around the north of Australia with a few shanghais. It is a pretty serious business.

Major Gen. Crews --I do not dispute that at all. I am suggesting that we have an affordable range of capabilities that will meet the needs of the force structure for quite some years to come. None of them is the ultimate on its own. Each works with another to ensure that we have the capability required at the right place at the right time. That is the assessment that has been made and that has led to these projects.

Senator MacGIBBON --Did this go before FDA and the plethora of committees?

Major Gen. Crews --It most certainly has.

Senator MacGIBBON --It does not say much for them.

Major Gen. Crews --I believe that they saw the wisdom of the proposal that we put forward.

CHAIR --It appears that Major General Crews has a different point of view to Senator MacGibbon. The two will not mix.

Senator NEWMAN --How many M113s do we currently have? How many are being upgraded?

Major Gen. Crews --The total asset, I believe, is of the order of 540 vehicles. I do not have a precise figure with me.

Senator NEWMAN --The upgrade is only of how many?

Major Gen. Crews --The upgrade is of 364 vehicles; 230 are armoured personnel carriers and 134 are other variants.

Senator NEWMAN --What are we going to do with the balance?

Major Gen. Crews --The balance at this stage are in a not yet approved subsequent phase should there be a requirement to upgrade those vehicles also. In the meantime, they will operate at their current level of capability.

Senator NEWMAN --I thought they were effectively mothballed.

Major Gen. Crews --A good number of those other vehicles are currently in storage.

Senator NEWMAN --Which units will the 364 that will have a minor upgrade be going to?

Major Gen. Crews --Principally ARA units, Regular Army units, and the Ready Reserve units.

Senator NEWMAN --Are they specified as to which ones?

Major Gen. Crews --I do not have the detail of the units with me.

Senator NEWMAN --I would ask you to take that on notice. I am particularly interested to know who will get them.

Major Gen. Crews --Certainly.

Senator NEWMAN --I know it is early days yet. When is it estimated that those units will have the benefit of these upgraded M113s?

Major Gen. Crews --We expect to be in contract by May 1996. Delivery should be late 1996 to begin with, through to 1998.

Senator NEWMAN --How long do you expect to use the upgraded M113s? What life will they have? Is that to 2010?

Major Gen. Crews --Yes.

Senator NEWMAN --Without the upgrading?

Major Gen. Crews --Without the upgrade there should still be life to 2010, but clearly the capability degrades with time.

Senator MacGIBBON --I have a question about the Occupational Health and Safety Act. Army had a display some while ago. Page 223 of the annual report states:

In 1991, under Section 7(2) of the Occupational Health and Safety (Commonwealth Employment) Act 1991 (the OHS Act) the Chief of the Defence Force (CDF) declared members of the ADF exempt from the workplace arrangements of the OHS Act. On 10 April 1995 the CDF further declared that the requirements of Section 68 of the OHS Act, related to notification and reporting of certain instances to Comcare Australia, do not apply in relation to those members of the ADF who are involved in operational deployments, deployments in support of the United Nations, or organised sporting activities.

It looks as if the CDF has granted some waiver to members of the ADF from the requirements of the Occupational Health and Safety Act. Yet at the display I attended about a month or two ago here on the north side of town the Army showed vehicles with rollover bars and all the rest of it. The colonel who demonstrated that claimed it was a necessary requirement because of the Occupational Health and Safety Act. Is that true? If so, why was the waiver of the CDF not applied?

Major Gen. Crews --Army recognises its duty of care and endeavours to ensure that our troops are given the maximum degree of protection, particularly in respect of administrative movement. A large number of our vehicles are used for administrative movement. The rollover protection was seen as being one of the essential requirements to protect people carried in the back of general service vehicles. We have chosen to progress that project as far as we can and as far as is affordable to ensure maximum safety for our troops being carried around for training purposes.

Senator MacGIBBON --This was a vehicle that was designed for operational use, not for general administration. Apparently, the modifications were such that it took the vehicle very close to its maximum designed all-up weight, leaving great limitations on the payload. That hardly seems a sensible way to go.

Major Gen. Crews --I believe that in selecting the material for the rollover bar we would have been conscious of the all-up weight so as not to reduce the total capacity of the vehicle. Most vehicles do not carry their all-up weight. In this case a balance was obviously made between the rollover protection and the residual carrying capacity of the vehicle. I do not know the specifics of the particular case.

Senator MacGIBBON --Can you quantify the cost of complying with the OH&S Act on Army?

Major Gen. Crews --I do not have figures for the quantification of that cost.

Senator MacGIBBON --From what I saw, it must be quite considerable in aggregate.

Major Gen. Crews --I do not have a figure for the project.

Senator MacGIBBON --My question to you is: where do you draw the line between complying with the act and giving someone a reasonable chance on the battlefield?

Major Gen. Crews --That is always a balanced judgment. I will not attempt to make it here.

Senator MacGIBBON --It seemed to me that the consequence of this act on equipment meant the price of it was being doubled or trebled and its capability would be considerably reduced as a consequence. In any sort of battlefield situation numbers count for a great deal. If you have only got three or four vehicles instead of 10 or 12, as you might have had for the same amount of money, it limits your capability.

It seems to me there is a question of balance here. We certainly have a duty of care. We want to do the best we can for the welfare and continued good health of employees. With things like the range practice area, the shooting gallery at the SAS, where you have got the possibility of inhalation of all sorts of noxious things, it is fair enough to go to the limits of technology to provide a good and healthy environment there. But being in the Army, the Navy or the Air Force is not a terribly safe occupation. We ought to be directing our activities towards giving people the best chance to survive on the battlefield, not in civilian life at the expense of a capability they might need later.

Major Gen. Crews --I have no difficulty with that argument. We are trying to ensure that, with minimum compromise to the operational performance, we can provide reasonable safety in the training environment. That has always been the case.

CHAIR --There being no further questions, that completes subprogram 3.1.