CHAIR —Welcome, Mr Downey. I must advise you that the proceedings here today are legal proceedings of the parliament and warrant the same respect as proceedings in the respective houses of parliament demand. Although the subcommittee does not require you to give evidence on oath, you should be aware that this does not alter the importance of the occasion and the deliberate misleading of the subcommittee may be regarded as a contempt. The subcommittee prefers that all evidence be given in public, but should you at any stage wish to give evidence in private, you may ask the committee and it will give consideration to your request. We have received your submission and it has been authorised for publication. Would you like to make any additions or corrections?

Mr Downey —No.

CHAIR —Would you like to make an opening statement before we proceed to questions.

Mr Downey —Yes, I would. Thank you very much for inviting me to make this presentation today and for allowing me the opportunity to place my earlier submission. By way of introducing myself, I am a private citizen, and I am deeply concerned about the security of Australia. I have been a regular soldier in the Australian Army, with active service in Korea, a senior executive in industry, a consultant and a very senior public servant in both the Victorian and Queensland governments. I am now retired.

In the light of the recent deployment in East Timor, I can say without fear of contradiction that the Australian Army is not capable of committing a full battalion to any type of operation. When 2RAR arrived in Dili on 20 September 1999 it was made up of a mixed bag of soldiers from other units. The effective strength of 2RAR in August 1999, when I was there, was 80 per cent of 650 members. Given that there were members unfit or, for a variety of reasons, unable to deploy with the battalion, the figure of battalion members would have been less than 500. This is about the strength of four rifle companies, making the added strength of administration, support and battalion headquarters to be made up, in terms of numbers, by someone else. What will likely happen in the future, if the Australian commitment is even of one battalion, is that those who have already been deployed will be required to undertake further deployment, so bleeding the ready deployment force further.

These comments are made by way of introduction to my presentation, as are the figures of reserve recruiting which, in 1998-99, failed to meet its target by 2,184, while at the same time 5,056 soldiers of the Army Reserve left for various reasons. I raise another point, which saw light in previous presentations, in relation to the recruitment into the ADF. In 1997-98, some 18,500 persons applied to enlist, 1,265 were rejected on medical grounds and 3,400 were actually enlisted. The cost was $31 million—about $9,000 per person enlisted. In my days as a consultant, if I had cost $9,000 in recruiting one person at the senior executive level I would have felt that that would have been very much against me in working with industry.

I read that the private sector is in the process of undertaking the first stage of ADF recruiting and it will be interesting to see if these costs are contained. It is quite one thing to carry on a normal recruitment drive, but quite another to make up for the 4,862 resignations and other terminations from the regular element of the Army in the 18-month period from July 1997 to December 1998—and that figure does not include normal retirements. All does not seem well with the morale of the Australian Army, nor does it augur well for the upgrading of the present integrated battalions to regular status.

In essence, my earlier submission was that the Australian Army is unable to meet its objectives, and this takes nothing away from the palpable dedication and professionalism of the officers and men serving in the combat units of the Army. I still hold that view.

In my submission I paid some emphasis to the lack of suitable equipment for the Army. Some of the equipment that is lacking includes: a better assault rifle, with a 40-millimetre grenade launcher; hand-held missile launchers; SP guns; attack helicopters; transport and heavy lift helicopters; ground attack aircraft; and unmanned aerial vehicles for reconnaissance and surveillance. These are but a minimum must for the Australian Army.

In my submission I have highlighted the closed shop mentality of the staff corps, the elitism of the ADFA and the Royal Military College, the adherence to British and US doctrine, and our reliance on the US and the UN as the big brother who will come to our aid if and when we get into trouble. I have covered the reliance in overseas design of our weaponry and equipment and the lack of an industrial base in Australia to be mobilised for war. I now add that with the so-called blurring of borders in the push to globalisation, the sort of war Australia might be committed to, in addition to conventional warfare, will involve commercial, psychological, biotechnical, intelligence, networking, diplomatic and media warfare.

I have stressed the chasm between the regular and the reserve elements of the Army and the lack of interesting training for the reserves. I have painted a pen picture of an alternative in being. I am not suggesting this is necessarily right for Australia, but there are lessons to be learnt. The Swiss can mobilise 565,000 soldiers in 24 hours and their regular force consists of 1,800.

I have given a personal review of the strategic situation as I see it in Australia. Every country to our north has increased its funds as a percentage of GDP. For instance, China has increased its defence budget by 12.9 per cent, India has increased its defence budget by 28.9 per cent and every other country in the region has made similar increases. The ASEAN bloc will have the full support of Japan, which has the second largest maritime force in the Pacific and will be patrolling its supply routes for its own economic survival. The changes to their constitution and defence legislation are a foregone conclusion, so they will no longer be a self-defence force. This leaves Australia very much in no man's land and unwanted by all. China has also entered the calculation for Australia by projecting its Navy into the Indian Ocean with shore facilities in Myanmar and by undertaking naval manoeuvres 250 kilometres from its shores—not quite a blue water navy, but one with fast and well-equipped vessels with anti-submarine missiles, anti-aircraft missiles and ship-to-ship missiles.

I have made some suggestions for an alternative for Australia. All it takes is the will of the government and the opposition to think in terms of the future of this great nation as a fulcrum for peace in our region. To achieve that requires that Australia is prepared with a standing army of two brigade groups; with a cadre of instructors; with a trained militia of 15,000 each year—I am working with the ADF in this sense; with a Navy which has some 100 patrol vessels, some 15 frigates/destroyers, adequate dry dock facilities and heavy lift capability, and 5,000 trained militia each year; with an Air Force with some many more fighter/ground attack squadrons, more surveillance aircraft, 60 major lift transport aircraft, 50 helicopter squadrons of attack and heavy lift capability, and 2,000 trained militia each year.

I have undertaken some rough costings on these suggestions, and as far as I can see the overall cost would be less than the current budget of Defence. Among my hidden recommendations is the elimination of the diarchy of the Department of Defence. As a start, Australia desperately needs such a security and insurance policy, and it also needs to have a regular capability and resource audit throughout the ADF beyond that provided so well by the Australian National Audit Office.

CHAIR —Thank you, Mr Downey. Maybe I could start on your strategic analysis. I am curious as to why you are so confident that what you call the ASEAN bloc will have the full support of Japan and, secondly, that it is a foregone conclusion that Japan will move from a purely defensive defence force.

Mr Downey —Analysis suggests that that will be the case.

CHAIR —Whose analysis?

Mr Downey —Various analyses—Jane's for one.

CHAIR —On which point?

Mr Downey —On both points. But the ASEAN bloc will require Japan as the economic base and possibly a single currency—not a dollarisation.

Mr HOLLIS —It is interesting that we look at Asia as one bloc. I am the first to admit that Timor is going to be used like the Falklands War: whatever you want to argue with regard to defence or whatever point you want to make, you can use the Timor experience to either prove or disprove it—often the same thing. The Timor exercise was quite interesting in that Asian countries were among the first four to come in there and that they were quite widely spread. For instance, the Koreans made a deliberate decision to bring 400 people in there, the Thais came in there with a deputy commander and even the Malaysians were in there.

Mr Downey —A very minor commitment.

Mr HOLLIS —Yes, I know it was a minor commitment, but a minor commitment against a very strong ally. Imagine Malaysia: who would have thought Malaysia, even with a minor commitment, would have gone in there against Indonesia? The 400 Koreans obviously went in there for a deliberate purpose—to make a statement, I believe. So I am not sure that we can just regard Asia as a coherent bloc. Some of the conflicts that we have had over recent years have been Asians against Asians. For example, the confrontation in Malaysia.

Mr Downey —I am not suggesting that we have a threat in Australia; we do not necessarily have a threat at the moment. I am not suggesting the Swiss have a threat either, but they have an army of 565,000 men that they can put in the field tomorrow. They do not have a threat.

Senator GIBBS —Which is quite amazing because that would be half their population.

Mr Downey —It costs almost a third of what it costs Australia.

CHAIR —Switzerland is a country without sea.

Mr Downey —I agree. It has a very small navy.

Senator GIBBS —In another committee—yesterday, I think it was—the committee members were talking to a brigadier or a general from Israel, and he was saying that most of the Israeli troops are actually reserves. They have the Regular Army. Of course, they are at it all the time—defending, fighting and whatever. He said that most of them are just regular people who go to work but are constantly called up. Most Israeli soldiers are reserves. The problems we have been hearing a lot about are that the reservists are underequipped; the reservists are not given enough equipment, enough training; they become bored; they cannot get away from work and all this sort of thing. If we are going to have an increased army—and it does seem that we do need a larger army and a larger reserve force—what is the answer here? I know money is a huge factor, the big factor, but what else do we do, bearing in mind that maybe we can glean a little bit more money for the services?

Mr Downey —My suggestion in my submission was that our Regular Army should be about 15,000. That is two brigade groups. These are fairly rough figures but fair enough. I think it is currently about 23,000, so I am not suggesting a bigger army; I am suggesting a smaller Regular Army. That includes a two battalion strength of instructors. I am suggesting also that, with the opposition and the government in cohoots, there could be some form of national renewal where there is a universal six months at age 20 for everybody to do something for Australia, out of which some 10 per cent might volunteer to go into the Navy, the Army or the Air Force for that six months. That is three months of learning how to look after yourself, learning fire and movement, because the basis of the whole thing as far the Army is concerned is march and shoot, march and shoot. It is as simple as that. As far as the Air Force is concerned, the 2,500 who might go into the Air Force could be trained in the first three months in how to fly helicopters and light fixed-wing aircraft in intensive training. How much fun is that? It is all fun. And everybody in the Regular Army at some stage of their career will have a chance of being a commander of those troops coming in.

Senator GIBBS —But if we have an army that small—for example, the people who were sent to Timor—if it had been a different situation and had exacerbated, the entire army would still be there. The problem was relieving people. You send people in; they have to come out. They cannot be at it all the time—they will go nuts. They have to come out and have a bit of R&R. But you have to have people to go in and relieve them. That would be rather inadequate if we were actually in a war situation, wouldn't it?

Mr Downey —Take Albert Jacka, for instance, a VC winner of World War I. He arrived in Egypt in late 1914 and he came home in 1919. He had been through every battle that Australia fought.

Mr HOLLIS —We are not in 1914 now.

Mr Downey —In 1952-53 I was in Korea for 12 months. I had five days R&R in Japan. Now we expect—for instance, in Somalia—17 weeks; in Rwanda, about the same time.

Senator GIBBS —But isn't it a different type of war?

Mr Downey —There is no war.

Senator GIBBS —No, what I was saying is: is it a different type of situation? I know of people who went to war in the First World War and the Second World War—like my father, who was there for the entire time—and were there the whole time. But isn't it a different situation?

Mr Downey —Maybe social amelioration, for instance, has made us a bit soft.

Senator GIBBS —Probably.

Mr LAURIE FERGUSON —Two points: could you give us an overall summary of the level of Swiss training? You talk about there being half a million people under arms, et cetera.

Mr Downey —Yes. Their initial training is, I think, 18 weeks. Every year or so they go out for two weeks. It is a burden. They have had a number of referendums on whether or not they should dispense with that, and they have always come out in favour of maintaining the status quo.

Mr LAURIE FERGUSON —Let us imagine that we do not go towards your concept. You speak about departures, retirements, resignations, morale problems. Could you give us a summary of what you see as the major morale problems there at the moment?

Mr Downey —I do not think there is a major morale problem so much with the ordinary digger, except that it is a pretty boring life, training all the time. I am talking about the infantryman carrying around 48 kilos of gear and water—most of it is water. As far as officers are concerned—my recent experience is with the battalion in Townsville in August 1999—you cannot get a command unless you have got a second degree—a masters degree! Why the hell is that necessary to be a good soldier, to be a good commander?

Mr LAURIE FERGUSON —So that is the total picture of why you think people are leaving? That is the main point?

Mr Downey —No, I do not think it is. I think that of the young officers, for instance, who go to ADFA, the majority seem to choose logistics. Gosh, if I had my way, I would make Lindsay Fox a major-general and put him in charge of logistics, and I would make the supply manager of Coles Myer a major-general and put him in charge of supply-purchasing. They could run teams, because that is proper outsourcing. You cannot expect an infantry major or half colonel to become an expert in logistics or purchasing. They want things on time when they need it.

Mr HOLLIS —Can we talk a little about your national renewal program. You say that every 20-year-old—and I guess that would be male and female—should serve for a period of six months, and you would expect that only 10 per cent of those would volunteer to become defence personnel.

Mr Downey —Yes.

Mr HOLLIS —As a member of parliament, every so often we get suggestions about national service being reintroduced. It is a very expensive program.

Mr Downey —$1.4 billion.

Mr HOLLIS —Those are your figures. It would be an expensive program. Also, having been through national service myself—I had a couple of years in the CMF—the permanent forces were very resentful because all they were doing was training us.

Mr Downey —A cadre battalion would have roughly two to three majors, eight to 10 lieutenants and 325 corporals. A corporal would be in charge of 10 men for six months. Three months would be spent learning to use their weapons, become mobile and look after themselves, and three months would be spent patrolling Australia wherever Australia needed to be patrolled—the northern coastline, for instance. I am talking about Army now.

Mr HOLLIS —What about the other 90 per cent? What would they be doing?

Mr Downey —Flood mitigation, reafforestation, foreshore regeneration.

Mr HOLLIS —We have got Work for the Dole to do that already—reafforestation, et cetera.

Mr Downey —With 250,000 people a year?

Mr HOLLIS —What I mean is that is what they do. That is Work for the Dole.

Mr Downey —I am talking about large projects with 250,000 people every year who turn 20. I am excluding from that 10 per cent who are sole supporters of families, or intellectually or physically unable to undertake that program.

Mr HOLLIS —How would you persuade the population of Australia to accept this scheme?

Mr Downey —A number of surveys have been undertaken which suggest that the youth of Australia are looking for some sort of vision so that they can be proud of Australia and achieve something for Australia.

Mr HOLLIS —I am not disputing that but I am still suggesting that, firstly, the expense of it and, secondly, the public acceptance of it would be very difficult to gain. That is my view; I could well be wrong.

Mr Downey —The public take a 0.5 per cent increase in their Medicare levy and nobody says anything.

Mr HOLLIS —But that was taken on the promise that, firstly, it was short term and, secondly, it was for a specific purpose.

Mr LAURIE FERGUSON —Why do you think it is that, at the time you are suggesting this concept, Europe is essentially abandoning it? If you go through the European nations, France is moving away. A number of others have moved away. Italy has essentially had to let everyone go off and do a whole lot of private sector things because people just will not go in.

Mr Downey —For too long we have followed what Britain and Europe have done. We need to do something for ourselves. Australia is a very vital and resourceful country which needs to be protected. We cannot protect it now, nor can we take it as given that anybody else will help.

Mr LAURIE FERGUSON —No-one is denying that but you have obviously taken some interest in Switzerland; therefore I assume that you have some interest in European developments in terms of—

Mr Downey —Not at all. I am not interested in European developments one iota. I would be interested in a situation where Australia was a neutral nation, yes.

CHAIR —Mr Downey, you seem to be rather critical of the use of new technology. When you talked about the Army, `march and shoot' was the description I think you used in relation to training. But, if you look at what has happened in recent times with training, the modern soldier is highly skilled. One of the things that certainly proved very significant in the Timor operation was technical skills—for example, the use of night vision—which gave the Army the edge to be able to achieve such an outcome with no battle causalities.

Mr Downey —I accept that, but that depends on the supply of AA batteries.

CHAIR —But do you really think Australians are going to accept large scale casualties because we have an underequipped army?

Mr Downey —I am not suggesting that. I make a point that what we need are things like a better assault rifle with a 40-millimetre grenade launcher attached. I am suggesting that we need hand-held missiles for defence against air attack. I am suggesting that we use SPs, self-propelled guns, of 105- and 155-millimetre calibre. I am suggesting we need attack helicopters in bulk. I am suggesting we need transport and heavy lift helicopters in bulk. We need ground attack aircraft and we need unmanned aerial vehicles. This is all high technology. We have got an assault rifle which some soldiers say is good and some soldiers say is not. I do not think it is very good. It is an Austrian design and it is designed for temperate to cold climates. It is not designed for the sort of purpose that we need.

CHAIR —It is a lot lighter to carry than its predecessor.

Mr Downey —Yes, but we are now carrying 12 litres of water.

CHAIR —It is probably better to be able to carry the water and—

Mr Downey —We are talking of a kilo or so.

Senator GIBBS —Basically what you are saying is that if you have a smaller army—say, 15,000 max—and if you had all of this you-beaut equipment and high technology, and lots of it, then we really would not need the manpower.

Mr Downey —We will always need manpower.

Senator GIBBS —No, I mean that you would not need as much because you would have sufficient equipment. We have heard that at the moment it is inadequate and all that sort of thing. Are you saying that if we had all of these technological aspects, all of these weapons and whatever, you could basically have an army of 15,000 max and that is it?

Mr Downey —With 15,000 coming in every year and being on call for the next 10 years, that makes a fair sort of number on the ground.

Senator GIBBS —Do you mean 15,000 actually going into the Army each year?

Mr Downey —Yes, for six months.

Senator GIBBS —Okay.

Mr HOLLIS —Mr Downey, we live in a part of the world that is quite turbulent every so often and many suggest will become even more turbulent. Our neighbours watch what we are doing. What do you think our neighbours' response would be if we went into this fairly large recruitment and training program? Do you think that would be viewed by our neighbours as a friendly act or an unfriendly act?

Mr Downey —I still think that, for instance, Indonesia thinks that our buying F111s years and years ago, yonks ago, was a very unfriendly act.

Mr HOLLIS —And publicly stated that it was, too.

Mr Downey —Yes. I would not be too worried, to be honest, if we say that they are for the defence of Australia and would never be used outside of Australia or its territories.

Mr HOLLIS —The trouble is, though, that people might well not believe that.

Mr Downey —We need Foreign Affairs to have the great calibre to put that point across. That would be my basis, that they would never be used beyond the shores of Australia or beyond the territory of Australia.

Mr HOLLIS —I might suggest that, if there is going to be this massive change and upheaval in our defence forces, it might also require an equally massive change in reorientation of thinking within our diplomatic service as well to sell what we are doing.

CHAIR —Thank you very much for coming along and for your submission.

[10.28 a.m.]