CHAIR —I welcome to the table Rear Admiral Shalders and officers representing Defence Personnel Executive. The committee prefers all evidence to be given in public but, should you at any stage wish to give any part of your evidence in private, you may ask to do so and the committee will consider your request. You will not be required to comment on reasons for certain policy decisions or the advice that you have tendered in the formulation of policy, or to express a personal opinion on matters of policy. I invite you to make an opening statement and then we will proceed to questions.

Rear Adm. Shalders —Mr Chairman and members of the committee, good morning. It is a pleasure to be here as the head of the Defence Personnel Executive representing the Department of Defence to this inquiry into recruiting and retention. As you may know, I am new to this position, having taken over from Major General Willis on 6 August. You will understand that I am still developing a detailed awareness on the subjects likely to be considered today. I do, however, have in attendance a number of my staff who have the depth of knowledge and experience that I believe the committee requires.

As noted in the white paper, the recruitment and retention of high quality people remain a priority for the ADF. In our submission we addressed the strategies and initiatives that are in place or which are being developed to address areas of concern. My initial observations, after just three weeks in the chair, are that these strategies are starting to take effect, although we still have much to do.

The committee would be aware that the external review of ADF remuneration conducted by General Nunn and his team is to be presented to the minister on Friday, 31 August. Defence is hopeful that many of the recommendations of that review will have specific impacts on both recruitment and retention. In addition, the comprehensive package of initiatives that the Action Plan for People team has been developing will deliver a number of positive outcomes for defence personnel. We may delve into some of those initiatives during questioning this morning.

I do not underestimate the challenges that lie ahead in the personnel area. I also freely acknowledge that many of our problems will not be solved overnight. We require both short-term solutions and an appropriate long-term approach to meet and overcome these challenges. I understand the committee has received valuable feedback from ADF members during its recent visits to the field and from individual submissions made to the inquiry. My team and I stand ready to assist the committee with further information. We invite your questions.

CHAIR —Thank you, Rear Admiral.

Senator LIGHTFOOT —We have heard while travelling around that there is a considerable dissatisfaction with housing. This leads to other feelings that depreciate the job that they have to do. It seems to be a root cause of a lot of other problems too. In other words, if you fixed up housing and they had a pleasant environment to work in, a lot of the other issues—such as outsourcing, which leaves some people with nothing much to do, and being sent to areas where they do not want to be—would be more readily accepted. When families are split, you sometimes have a wife left in Sydney and a husband transferred to Darwin or some other place. We have been able to ascertain that that is a very serious detraction for ADF personnel and their ability to function properly. Are you aware of that?

Rear Adm. Shalders —Yes, we are aware of housing being an issue. As you know, we do conduct fairly extensive surveys. One of the directorates within my remit is responsible for things such as exit surveys, which we have discussed already this morning, attitude surveys and the ADF census. We are now able to develop the data to the point where we have a fairly good feel of the major dissatisfiers. The simple answer to your question is yes, we are conscious of the impact of housing on retention. We have a number of initiatives in train and, as I mentioned, we believe that the Nunn review will recommend others. Without understanding the particular specifics of your question, I can only answer by saying that we are very aware that housing is a big issue to both members with dependants and single members.

Senator LIGHTFOOT —Obviously you are giving priority to rectifying that. That is not just a perception in my view—and I think I speak for my colleagues, but I had better not. That has led me to the other area outside housing that is the root cause of problems. Where do you get your managers from and how do you train them? Are they trained intra-ADF or do you source them from outside?

Rear Adm. Shalders —I will give a general answer to that question and then I will invite one of the career managers to speak on that subject. In general terms we deliver that training internally. Each career management staff member, which now is operating within the services rather than within my umbrella organisation, is required to complete a career management course before taking up a posting. More generally than that, each of the staff colleges at various levels throughout Defence obviously spends a considerable amount of time on human resource management issues. That is general training I accept. With regard to specific training delivered to the career management staff, I will invite one of the career managers to describe how their area delivers that training.

Senator LIGHTFOOT —In terms of career satisfaction, how seriously do you place a decent standard of housing, given that we have entered the third millennium and it is a lot different from when I did national service 45 years ago?

Brig. Evans —I do not own levers in terms of housing, but from my personal perspective I view housing as a very important issue for our officers and our soldiers. Having said that, I must say that over my time I have seen an immense improvement in the housing situation for people.

Senator LIGHTFOOT —What standard do you think it is at now, given that there has been a considerable improvement during your career?

Brig. Evans —I can talk specifically of the Townsville area, having been a brigade commander in that area. If I had to place a rating on it in the Townsville area, I would place it as `good'.

Senator LIGHTFOOT —What does `good' mean, on a scale of one to 10?

Brig. Evans —I would place it at seven to eight.

CHAIR —Are we talking about married quarters or singles?

Brig. Evans —I am talking both married quarters and singles.

CHAIR —I would have to say that, for me, pre the redevelopment of Townsville the accommodation would have been on a scale of between zero and minus 5[half ]. In fairness, though, the redevelopment that has taken place has been excellent.

Brig. Evans —That is my exposure—in that period. I consider the improvement in the last two years for both soldiers who live in—

CHAIR —But there is still a fair amount of substandard accommodation.

Brig. Evans —There is, but my impression is that that is being improved on all the time.

CHAIR —Yes, that is right, with the redevelopment; I concede that.

Senator LIGHTFOOT —Could I put it to you, Brigadier, that you probably have more to do with officers accommodation than do with ORs.

Brig. Evans —No. As a brigade commander, I dealt with both sides of accommodation and in my current job obviously I deal with both soldiers and officers. But I do agree with your statement that housing is an important issue for both our officers and our soldiers.

Senator LIGHTFOOT —Yes. And you would acknowledge that it can cause other problems that probably would not emerge or would not become serious problems if accommodation was of an acceptable community level or standard throughout that particular community? In Darwin, there is a vast difference between, say, someone in the banking industry and someone doing a comparable job as a writer in the Army. I say the Army because I am familiar with it, but I mean the services generally.

Brig. Evans —Yes, I think that is perhaps true. But all I can say is from my experience in Townsville, and I have seen an immense improvement in accommodation over the years of my experience in Townsville.

Senator LIGHTFOOT —Could you give the committee some idea of those years you talk about?

Brig. Evans —I was first in Townsville in 1983. I think the senator was referring to Vincent Village and those types of places in Townsville. In those years the accommodation was poor. I would have classed a lot of it as poor. I do not change my rating of how Townsville is now.

Senator LIGHTFOOT —Are you satisfied that homes that are being built for ADF personnel are being purpose built and that there is sufficient consideration given to the environment in which those homes are built or have been built?

Brig. Evans —I do not have the expertise to answer that question. The issue would be: what would we strive for? Of course we would strive for where people live to be of good standard and close to their area of work.

Senator LIGHTFOOT —Would you agree, then, that the houses should be not just built to meet community standards today but also built to attract personnel and to keep personnel in the ADF? I do not know what it takes to get someone to the standard of brigadier, but I imagine it takes hundreds of thousands of dollars to get someone to the standard of brigadier. If career training means career training right to the very top—I am not suggesting field marshal; we have only ever had one of those and I do not think there are going to be any more in Australia—that is still a very important part. You would acknowledge that?

Brig. Evans —Yes, I would.

Senator LIGHTFOOT —What other aspects do you think the committee should hear with respect to career training and those aspects that are vital to the retention and advancement of personnel through the ADF?

Brig. Evans —I think it is very important that everybody feels that they are part of the team and that they are given excellence in training at whatever level they work at—that we have a training system that meets each officer's and each soldier's needs. To me, that would be very important. It is obviously very important that people feel that the work they do is of value, and that they are looked after in a number of ways. Housing is one of them. Remuneration is another.

Senator LIGHTFOOT —That goes right through from soldiers to the highest officer ranks?

Brig. Evans —Yes, I believe so.

Rear Adm. Shalders —I was not sure whether you wanted us to delve into what sort of training is delivered to the career management staff.

Senator LIGHTFOOT —Yes.

Rear Adm. Shalders —I might invite Commodore Rago to address that in general terms, which perhaps will cover that issue.

Senator LIGHTFOOT —Commodore, what is the ratio of career managers to defence personnel?

Cdre Rago —In the Navy, for sailors our ratio is 1 to 450 and for officers it is 1 to 200. You could average it out and that comes to around 1 to 370. There are different requirements in each section.

CHAIR —Has that workload gone up or down?

Cdre Rago —It has been steady over some years.

CHAIR —How many years?

Cdre Rago —To my knowledge, for a number of years. The workloads are about the same as in my last time in personnel in 1995-96. They are very high, but we manage those on a day-to-day basis and introduce additional resources as we require them. For example, in times of high intensity operations or activity it requires a much more focused approach than the normal day-to-day activities.

Senator LIGHTFOOT —How do you handle an important issue in the Navy, where personnel have previously undertaken jobs of expertise, jobs that require considerable training, trades jobs, and the jobs that are now outsourced? On what the committee picks up, there seems to be a high level of dissatisfaction among people with respect to their careers—that they are going nowhere, that they are doing the more mundane jobs in the services now, and that more interesting jobs and the ones requiring their expertise and their training are now being outsourced. This is leading to what we have seen: a worrying level of dissatisfaction with respect to their careers.

Cdre Rago —The total number of Navy shore billets or jobs is actually driven by the number of sea billets so that we have an equitable sea to shore ratio and that can be maintained.

Senator LIGHTFOOT —On some evidence we that have heard, that ratio with going to sea has actually increased so there is now a longer time spent on sea duties and lesser time on shore duties, with respect to the Navy.

Cdre Rago —That is correct, and it is because of the shortage of people. We are approved to have 14,000 people in the Navy. We currently have 12,515 as of last payday. That is an increase over the last 12 months of some 300.

CHAIR —So you are gazetted for 14,000 and you have—

Cdre Rago —That is our guidance.

CHAIR —And how many do you have?

Cdre Rago —We have 12,515. That has grown from a low base of 12,100 to 12,200; so we have grown by about 300 over the last 12 or 18 months. The issue there is that the experience levels are not what they should be, but recruiting achievement is helping us to address that.

Senator WEST —How many of those 300 are in holding positions somewhere awaiting their second level of training?

Cdre Rago —I am not sure I understand what you mean by `holding position'—

Senator WEST —They cannot go to sea because they have not done their particular trade or muster training or because they are still doing it.

Cdre Rago —I am not quite sure that I understand the implication of the question or where it is leading to.

CHAIR —The implication of the question is simply that they come in, they do their basic training and then they cannot get posted anywhere because they do not have the next level of training that enables them to proceed to a proper posting. We will use this terminology in respect of all the forces—they will be put into a holding pattern subject to being provided with the appropriate training to enable them to be posted.

Cdre Rago —I understand.

Senator WEST —And, whilst in that holding pattern, they are paid at initial recruit wages.

CHAIR —At training rates.

Cdre Rago —I would like to explain the situation in the Navy. The sailors come out of the recruit school after they have attended a 12-week training period and then they go on to the various category or mustering courses. Some go from six months to 18 months. Some 15 months ago we had a backlog of MTs—marine technicians—on the beach, as we say, working in our fleet intermediate maintenance activity centres. Through some close management with Fleet and other areas of the Navy, we have managed to clear that particular backlog and we do not have any left sitting on the beach in those particular categories.

CHAIR —How many others are beached?

Cdre Rago —I would have to take it on notice to find out those exact figures.

CHAIR —Before we proceed, can I ask a general question? How many people at this table today have actually read any of the Hansard of this inquiry?

Rear Adm. Shalders —I certainly have, and I believe that all of my staff have.

CHAIR —All the staff have read it? It is most interesting reading. I was curious as to how many people had read it.

Senator LIGHTFOOT —Commodore, can I come back to the extended sea time ratio as opposed to the shore ratio? One of those areas of concern is the ratio of qualified cooks or chefs—I am not sure whether you call them cooks or chefs. What is the terminology?

Cdre Rago —Their official title is cook.

Senator LIGHTFOOT —Outsourcing of land based messes has been undertaken at a majority of ADF establishments and that means that, where you have a cook on sea duty, he cannot spell, in effect, at the land base because outsourced private enterprise is doing it now—it is contracted out. That causes some problems. On land base, some of the ORs, being younger than some of the officers, used to raid—and that might be too strong a word—the refrigerator or help themselves to fruit or whatever, but they cannot do it now because it is all padlocked up. That is causing some problems. You cannot get a midnight snack or go at 9 o'clock and get a cup of tea or coffee. My personal view is that that is not good for the ADF and also that, more importantly, the ratio of sea time is increasing for cooks because they cannot spell them on a shore based activity as they used to do. Are you aware of that?

Cdre Rago —I will answer the question in two parts. The sea to shore ratios have reduced over the last two to three years because of the shortages of people overall throughout the Navy. That means that we have fewer people available to send to sea. We have a policy of manning our ships to 100 per cent to meet operational requirements. The current figure for our shore positions overall for the Navy is 32 to 34 per cent undermanned—so we have a shortage ashore.

Senator LIGHTFOOT —You have a shortage of personnel for the shipping numbers?

Cdre Rago —It is quite an interesting system because we have to keep the ships at sea manned to 100 per cent. They require their shore respite, and we bring them ashore. But because our overall numbers are short by some 1,500 people of what we should have based on the manpower required in uniform model, it means that we have actually fewer people to cycle through the sea to shore ratio. As we build up the numbers, that should then stabilise. As of 1 July this year, the Chief of Navy gave the direction that the people rules will be applied strictly, unless it can be negotiated in normal career management discussions with the sailor, the divisional officer and the command to work ways around addressing any operational implications.

To date, that system seems to be working but we have to look at the issue in two parts. One is the number of billets. The MRU, which was done in 1995-96, worked out the number of people and the number of jobs that Navy needed to do its job under strategic guidance. At the same time, that was mandated by reductions to overall manpower and work force structure reforms under DRP and CSP. They have had a significant bearing on the numbers in the distribution of the shore billets and, indeed, the issues of types of employment that are required ashore. Concomitant with that is that, because we have lost a lot of people over the last few years and we are now in a rebuilding phase, we have what we call an advanced training requirement, so we have to balance it very carefully.

As the new sailors and new officers have joined and reached their level of, say, basic primary qualification, we then have to give them the experience and bring them back into the training environment to give them the advanced training requirement—for example, to upskill a petty officer to an advanced trade level. So it is quite a complex dynamic situation that we are in, and we are trying to work it through. Fortunately, separation rates over the last year have dropped by one per cent, and recruiting for Navy is hitting around 96 per cent, so that buys us some time to actually factor in those people who are upskilling as we go through. We have to be careful, of course, that we make sure that we do not cut on the training and that we still deliver to the rest of the Navy and the ADF what we require.

CHAIR —Your 100 per cent manning level—and this is not a pick on the Navy session, I hope—

Senator WEST —We will get to the Air Force and the Army later.

CHAIR —We heard about minimal manning levels, which are not necessarily optimal manning levels. If you are planning to minimal manning levels, you are maybe, from the evidence that we have heard, just scraping through. In some of the instances we have heard that you are not reaching the 100 per cent. In some instances we have heard evidence—and the Hansard shows it—that there is less than 100 per cent. So whilst you say you are 30 to 34 per cent undermanned ashore and that you are 100 per cent manned at sea—

Cdre Rago —If I may correct that: that is our objective.

CHAIR —That is your objective.

Cdre Rago —The policy guidance from the Chief of Navy is for us to man our ships to 100 per cent, unless we get a direction otherwise. That allows flexibility.

CHAIR —That is what I am saying. That is the misleading part—and I am not saying you are deliberately misleading the Senate. The misleading part is the difference between a minimal, as opposed to an optimal, manning level and manning capability. Obviously there is a difference and even that difference is quite marked in some areas. Can you tell us the difference then between what might be the minimal manning levels and what might be the optimal manning levels?

Rear Adm. Shalders —I might comment on that before we go back to Commodore Rago. It comes down to the fact that in Navy, once you cast off all lines and proceed, that is it—that is what you have got.

CHAIR —That is what we are worried about.

Rear Adm. Shalders —Navy therefore attempts to man our ships such that we can do the job wherever we happen to be once the lines are cast off. All ships are billeted on minimum manning standards. This is something that has changed over the last 20 years. For example, in an Anzac class frigate you have got 163 people on board; the equivalent ship 10 years ago had 330 people on board. Already we have what is known as a minimum manning scheme of complement. But that complement must be able to deal with anything that that ship might have to do once the lines are cast off.

CHAIR —That is right, but we had evidence that something could go astray whilst at sea and there is no-one left to do the job. The only alternative is to turn the ship around and go back to port.

Rear Adm. Shalders —There will be situations when we have what is known as a personnel urgent defect in a minimum manned ship. If you have only got one of one trade, for example, and that person becomes ill or is injured and is unable to look after his particular sort of equipment, then that becomes a personnel urgent defect.

CHAIR —We are told that this problem is getting worse now because of the DRP and the outsourcing that is taking place at shore. People are getting frustrated. There are no positions left for them when they come ashore. They are leaving. The stretch is on at the minimal manning levels when you get to sea. It really causes concern, at least in my mind—and I am sure I speak on behalf of my colleagues—that that elasticity is going to be stretched so far that it will break and we will lose the capacity to send our ships to sea at all in some instances.

Rear Adm. Shalders —And I am sure that same concern is shared by the Chief of Navy. The desire and objective is to reach 100 per cent manning of all ships at all times. The hurt is therefore taken in the shore establishments. But the issue that you have raised is of great concern to Navy and certainly to Defence.

Senator LIGHTFOOT —You have just made the very important statement that the objective is all ships at all times. The second most desirable achievement would be for most of the ships to be fully manned. Are there any ships that are tied up—surface or submarine?

Rear Adm. Shalders —Not at this stage. By way of example, an upgrade program is about to commence on the guided missile frigates. One of those ships, which will be the first ship through the program, will be going into a period of reduced activity leading up to that upgrade program. That particular ship is being tied up as a direct result of the shortage of manpower.

Senator LIGHTFOOT —How long will that be tied up for outside its normal—

Rear Adm. Shalders —I believe it will be about six months prior to the actual start of the upgrade program.

Senator LIGHTFOOT —It is a long time.

Rear Adm. Shalders —Regrettably, it is.

Senator LIGHTFOOT —Is that going to repeat itself with other ships?

Rear Adm. Shalders —Hopefully not. As Commodore Rago has indicated, Navy recruiting is improving. There is a training pipeline issue. You can't just recruit and then put to sea. Recruiting is improving. Wastage rates are declining. We hope over the course of that upgrade program for the guided missile frigates that we will not have to do that again.

CHAIR —Whilst you say that wastage rates are declining, I think the evidence we have on the Hansard record clearly shows the level of dissatisfaction that is there from personnel who are long serving and very experienced in Navy. These were people whom you would not just label as whingers; these were people with a real love of serving in the Australian Defence Force but, not because of one single factor but because of a thousand cuts, so to speak, they were reaching the period where they were absolutely frustrated with the system and had had it.

Whilst I understand, and it is commendable, that recruitment is up and that wastage is being reduced, the evidence presented to the committee, where these people were on the Hansard record without any fear as to what they might say, was quite disturbing to the committee in that sense, even to the extent that one senior naval personnel told us that they have senior naval people coming into their office and breaking down.

Rear Adm. Shalders —I cannot and will not dispute anything that you have said there. It is clearly a challenge for us. If we can drive retention up and, therefore, wastage down that is obviously the way to go. That is what we want to do. Many of the initiatives that are now in train and are being progressed aim to do exactly that. I accept what you have said but, as you have also said, there is no silver bullet to solve this problem. There are many things that we need to do, and we are looking at all of those things.

Senator WEST —You said that naval personnel were gainfully employed when they were on shore postings. We certainly had some complaints over in the west and examples given to us on the public record that whilst at sea the techs had a full range of work to undertake and to do, and machines and engines to keep running but, when they came ashore, between the FIMA workshops and the vessels alongside were a row of demountables at which all of the deep and more in-depth work, repairs and maintenance was being done and that all that they were basically doing was changing cards for microchips in the FIMA offices. They were feeling very frustrated and underutilised. They felt that there was a lot of de-skilling taking place because their skills that they were required to use when they were at sea were not being utilised. You tell me that they are being occupied when they are on land, but are they being occupied doing the same sorts of jobs that they would be required to do when they are at sea?

Cdre Rago —Some of those issues that you have raised have been recognised and the concern may be quite an amount.

Senator WEST —It concerned the committee a big-time amount too.

Cdre Rago —Recently the Chief of Navy commissioned a study called `Meaningful employment ashore', which is to be presented to CNSAC, Chief Naval Staff Advisory Committee, in November. That does indicate some hot spots, as I would like to call them, that we need to attack and address proactively. Much of it has eventuated for a few reasons. There was the distribution of billets post the DRP process, certain changes to the maintenance philosophies and processes involved in our ships and, indeed, a readjustment to the training construct that we are reviewing at the moment. Pulling all of those together, we hope to be able to become more proactively engaged in sorting out those problems in Western Australia.

Senator WEST —I suggest that it is not just Western Australia. When was that decision made? When was that report commissioned?

Cdre Rago —It was part of our HRM plan, which Chief of Navy published at the beginning of this year. He has brought it forward for us to complete and deliver to CNSAC in November. We got some people in to commence specifically pulling together a few tasks in June. It is a national issue.

Senator WEST —Was it in June that you had the HRM discussions, or was it in June when Chief of Navy asked for this meaningful employment—

Cdre Rago —The HRM plan was issued by Chief of Navy in February of this year. The issues associated with meaningful employment ashore cover about seven initiatives, and I can get those for you. The issues that were coming to light through other activities that Chief of Navy and various maritime commanders were doing meant that we had to pull those together and deliver the answers to the problems or recommendations in a shorter time frame, so we pulled together a whole bunch of initiatives, as opposed to taking them one by one, and packaged them up to address.

Rear Adm. Shalders —As probably the oldest person, on the front table at least—

CHAIR —We never discriminate, Admiral, so please don't hesitate.

Rear Adm. Shalders —Perhaps I could put that question in a more long-term context. In my early days in the service, we did actually have people painting white rocks.

Senator WEST —Yes, and that was not good.

Rear Adm. Shalders —It was not good. I can assure you that throughout the services now we do not have people painting white rocks.

CHAIR —They are painting them blue—that is the problem.

Senator WEST —And they are just changing chips, and they find just changing chips—being chip jockeys, as they call it—most unsatisfactory.

Rear Adm. Shalders —I accept what you said, but I would perhaps try and put a little bit of a historical positive spin on it: it is much better than it used to be. There are pockets where these issues occur, and I accept that. It is not good. We will do something about it.

Senator WEST —Admiral, some of the people we were hearing from were old enough to remember rock painting, but most of them were not and therefore thought that they had been gainfully employed. On another thing, we had evidence that one of the vessels had something go US and she had to pull up alongside in Hong Kong or Hawaii—one of those Pacific ports. The crew was not allowed to maintain it. They had to get in the contractors. Three or four contractors flew from Perth or Sydney to this particular place. It took six days to do it. I suppose that they flew on business class fares. I suppose they did not stay at one of the one-star hotels. That was another source of frustration for these particular people. How often have vessels pulled alongside the US component that has required the flying in of maintenance contractors from Australia?

Rear Adm. Shalders —Over what period?

Senator WEST —Let us try the last 12 to 18 months.

Rear Adm. Shalders —Were these civilian contractors or FIMA contractors?

Senator WEST —They were civilian contractors.

Rear Adm. Shalders —I would need to know the specifics of that particular instance, and perhaps I could get that from you later.

Senator WEST —I am interested to know, generally, how many times in the last 18 months civilian contractors had to be transported to vessels in ports other than their home port, particularly overseas, to do repairs on essential equipment that was needed when previously some of the repairs could have been done by in-house FIMA crews?

Rear Adm. Shalders —I would have to take that question on notice.

Senator WEST —That is fine.

CHAIR —Are we still on career management?

Senator HUTCHINS —In our excursion around the country, the area that struck me as having the greatest difficulty and disenchantment was the Navy, not the other two services. As Senator West outlined, there was another instance given where the civilian contractors had been brought into HMAS Stirling so that the naval technicians were able to deal with this work whilst it was at sea—this was my impression—but once it came into the shore then they were not allowed to do that work. That was done by the contractors, Tennex. There was a lot of disenchantment going on there.

One of the things—and this goes across all the services—we heard was that, particularly in the technical areas, the skills they acquire while with the Army, Navy or the Air Force are not recognised when they terminate their services with the ADF. That came through on a number of occasions. They were able to do it at sea or at bases, but once they completed their career with the ADF they had to go out and do a number of refresher courses. One of the difficulties is that, when they finally leave the forces, they do not have the satisfaction or comfort of knowing that they have somewhere to go. That issue has kept a bit of the tension. Maybe you could comment on that. In the short period you have been here, have you had an opportunity to at least see where you might go, in terms of having your ADF technical skills recognised in civilian life, rather than having to do these other courses?

Rear Adm. Shalders —I will make a brief comment and then ask Mr Sargeant to give you a bit more detail. Issues of accreditation of education and training conducted in the Defence Force and then translated to the civilian environment are conducted within my branch. To put it in an historical context, I think we have made great strides in that area in recent years. There is a very robust program of accreditation for all the courses and training conducted in the Defence Force. We are very conscience that it is an issue for our people, but Mr Sargeant can give you more detail should you need it.

Senator HUTCHINS —Before Mr Sargeant comments, could I say that I got the impression that the men and women were not getting full accreditation and that they were being denied these final steps so that they were not able to leave the Army, Navy or Air Force at the end of their enlistment. They were being, to a degree, press-ganged into staying. That was my impression.

Rear Adm. Shalders —I would hope that is not the case. We might invite Navy, Army and Air Force to comment on particular issues there.

Senator HUTCHINS —I chose that word `press-ganged' for you to comment on.

Rear Adm. Shalders —Okay.

CHAIR —Can I ask the question again that I asked DHA? I asked you whether you had read the Hansard and you indicated that you had. Have you been through the Hansard to give the committee your appraisal of the evidence that has been put down in significant areas? I am not looking for a typical defence submission that might hold a door for the next 200 years to stop it from banging. I am looking for something that is precise and is answering the range of issues. I know that is partly what this forum is meant for, but you can take that on notice and answer it at your will throughout the rest of the proceedings this morning.

Mr Sargeant —In regard to education and training policy, we consider that one of the elements of the physchological contract we have with our work force, both military and civilian, is to train and develop them to support their future employability. One of the means by which we do that is to try and integrate our training systems with the national training framework as much as possible. Our policy is that all defence training, unless there is a really compelling operational reason otherwise, ought to be accredited in the national system, and we have a work program that is designed to ensure that integration. Our policy aim is that when people undertake training in Defence the qualifications and recognition that they get is portable nationally, so that when they leave the defence work force they are employable.

CHAIR —When is this applicable from and to?

Mr Sargeant —This policy was initiated straight after the Defence Efficiency Review. That was the big shift that we made.

CHAIR —So this is roughly 1998 onwards?

Mr Sargeant —Yes. It had been a trend in the services before then but, essentially, we made it policy that the defence education and training system would integrate with the national system. We did that for a whole range of reasons. What is happening is that that policy has been made and the services are moving towards it, but it represents a big fundamental and strategic shift in our policy direction. There is obviously some variation in both the speed and the extent to which it is being implemented, but it is a clear strategic direction. The problems that we have had in the past in terms of people acquiring qualifications which were not recognised are now much less than they were.

CHAIR —You mentioned psychological contract, which is something that we are very much aware of in this inquiry. Could I just put to you the general issue of the inquiry. It says:

[sect ]The essence of the recruiting and retention problem is:

[sect ]In an effort to achieve efficiencies, the Department has failed to maintain the `psychological contract' with its personnel. The Department has established a personnel model that neither appeals to the real reasons for enlistment, nurtures service beyond initial engagement, nor provides the unique conditions of employment a person expects in consideration for providing service to nation.

What is your response?

Mr Sargeant —This is a very big issue but, at the risk of not doing it justice, one of the things that the white paper did—which we had never done before—was basically say that people are the key to our capability. The big agenda, the big shift that we are trying to make across the entire personnel system, is really to say, `Okay, if people really are the key to our capability, what do we need to do and how do we need to manage them differently?' We are moving from a situation where people were an abundant resource—so the system did not worry about them as much as it needs to now—to a situation where people are a scarce resource. That requires a shift in the way we think about them and the way we develop and implement policies designed to support people in Defence—

CHAIR —Whilst I do not disbelieve anything that you have said there, the evidence that we were given was in no way anything other than spontaneous evidence. It was not evidence that we in any way led them down the path of. In some instances, we would walk into a room and sit there, and we would look at them and they would look at us and we would say, `Everything is fine in terms of retention and recruitment.' If you read the Hansard you will see that they would say, `Well, now we're going,' and next thing, up they would get. It did not matter what their rank was or how long they had been there; there was a genuine spontaneity. As I say, I do not disbelieve the integrity and the fervour with which you say what you are saying to us, but the problem is there now and it is ongoing. The credentials by which you will convince people that anything other than what they have seen happening is not going to continue to happen are the real problem that you are confronted with. I am sorry to interrupt you.

Rear Adm. Shalders —Could I just make a couple of comments on what you have just said? Those things come back to defence leadership, in the sense that we need to establish a culture whereby we should not have to rely on a contract—psychological or otherwise—between ourselves and our work force. If we have to walk back to the clauses of that contract, whatever it might be, then the relationship is not working. The way that the relationship can work best, of course, is through good leadership. I hope that in the committee's travels you have seen some examples of good leadership in some of the units that you visited.

CHAIR —Let me just say for the record that everything was not negative. We deliberately tried not to encourage only negative views to be expressed. We asked for the positives and the negatives. In some instances, the Hansard record will show that I deliberately tried to urge people to come out with the positives.

Let me say that we met some very fine people right across the board, whether they are in senior or in junior ranks, with a real commitment to the ADF, something that they loved with a passion. In spite of what you might say about the psychological contract, they have an affinity and an association with the organisation that one could only praise. But they feel that they have been dudded—dudded, as I said earlier, not by one single issue but by specific principal issues that stand out, like the Defence Reform Program. Criticism was levelled at that in terms of cutting off people's career opportunities, frustrating them in terms of promotion and so on.

There were other issues, such as the management of their careers, pay and remote locality leave. You can read the Hansard and find that out for yourself. We could explore all of these, issue by issue, but then there is the problem that Mr Sargeant rightly raises of, even if you have identified these problems and even if you are trying to move on, how are you going to convince people that what you are undertaking will correct the apprehension that they have about remaining in the Defence Force. I do not think the credibility is too high at this stage. People were not contacting each other to say, `The Senate committee is going to be there tomorrow or next week, and this is what you should be saying.' The spontaneity that existed was one of the frightening things, if I can put it that way.

Brig. Evans —I just would like to say that there are a lot of positives out there. Some of the issues that we are facing are that we have an asset-liability gap and a high operational tempo and work tempo and that these have impacts on all of these individuals that you talk about out there. What are we trying to do? Obviously, the pillars for us are that we make it attractive to people outside to come in, that we can recruit people and that we retain them. Our key pillar right now is retention. It is important that we retain these people. I acknowledge that there are some issues out there, but I think everybody here is absolutely committed to making sure that we retain our people. That is from the service chiefs down. It might not happen overnight, but we are seeing some positive signs in terms of, firstly, the recruiting and, secondly, the retention—albeit that the retention is not as good as I would like it to be. But I do note some of these issues.

CHAIR —People are change weary. There is a real credibility gap, no matter how well intentioned or how positive you people may well be in your presentation to the people out there. They have undergone so much change, and they are just saying now, `Enough is enough.' There are other issues that I know my colleagues want to get on to, like the change from DFRDB to MSBS. You can read that as something that has come out almost in a predictable pattern right across Australia.

Postings turbulence is clearly an issue. We had one person who told us that in six years they had had seven postings, and of those seven postings they were in four different states. There are education problems and family problems. Family problems loom very high. It was interesting when we were in Kapooka on Friday to see that the problems that emerged there were, in some ways, no different from the problems that are emerging in other places—they are education, family, career promotion opportunities or the tempo at which they are working at a place like Kapooka. They are all predictable.

Brig. Evans —That is why I argue that we are special and unique. We ask these people to go to remote places, to do this work and to work long hours. We have to make sure that our community identifies that service life is special and unique.

CHAIR —That is the theme that many of them think is now lacking. That special identification and that uniqueness that is attached to serving in any arm of the Australian Defence Force has, in some ways, been downgraded.

Senator HUTCHINS —You might want to get back to commenting on what I mentioned earlier. Mr Sargeant, I do not know whether you wound up the point you were making in relation to the accreditation and transfer of trades. It did not appear to us that they were all that aware that this action had been undertaken. Maybe there is a problem in letting them know about getting from A to B. We also found in a number of areas there was a log jam in promotion availability for flight sergeants and warrant officers. That was certainly coming through. If you had an opportunity to read the Hansard, you would have seen that pop its head up on a few occasions. That was causing some dissatisfaction and disenchantment. You may wish to comment on that.

Rear Adm. Shalders —In the sense that you have talked about Air Force ranks there, we might ask Air Commodore Cole to start off with an answer to that.

Air Cdre Cole —We do have categories and musterings which have varying promotion rates. That happens for a significant number of different reasons. When we identify that there is a category or a mustering which does have a slower promotion rate, which is one of the trips for the MSBS retention benefit, we will often discuss with the individual to see if they would like to do a transfer of mustering so that they can move into a different area, providing they have the base skills to move over. In the vast majority of cases, if they do not have those skills then we will try to work with them to find some way whereby they can gain the skills to move across so they can move into a faster moving mustering.

CHAIR —The problem with that, with all due respect, is that these people may well and truly be happy where they are. When they first joined they had the expectation that there was the opportunity for promotion there. The circumstances have now changed and the opportunities have been shut off. They have become frustrated and say they are going to pull the pin.

Air Cdre Cole —Were you talking about that in the context of the MSBS benefit?

CHAIR —In any context.

Air Cdre Cole —For the MSBS benefit, every year we identify the categories which are not moving quickly—that is, where the promotion is not particularly quick—and a special dispensation is made for that so that the individuals are not disadvantaged. So, even if they do not make the rank cut off, they will still be eligible for that MSBS benefit, and that happens each year.

CHAIR —We had a case on Friday of a woman who took maternity leave, came back and found that she was back at the starting point again in terms of her MSBS retention benefit. Any service she had was virtually null and void. She could have bought back into it, but that would have cost her a fair bit of money.

Air Cdre Cole —If it was Air Force, I would be happy to have a look at it and get back to you.

CHAIR —I suggest that you read the Hansard from Friday. I am not trying to be unfair to you, but that was an example we were given on Friday. Please take that on notice.

Senator HUTCHINS —Are you going to comment on warrant officers as well? I think your admiral flicked it to you first.

Rear Adm. Shalders —The same issue? On flight sergeants and warrant officers, I believe, Air Commodore Cole probably cast his response in terms of both.

Air Cdre Cole —Yes, we did. One of the things which we are trying to encourage is for a lot of flight sergeants, and particularly warrant officers, to go for commissioning. Particularly in the technical trades, we have got an engineer sustainability project which is actually looking at ways in which we can progress the non-tertiary qualified engineers through so that they can gain extra qualifications and also so they can progress up the promotions ladder.

The other thing which is turning out to be very successful is the airmen entry to the academy scheme, which is for the Defence Academy, where we will generally not take warrant officers—although there is nothing to disbar them doing it—but we will take other ranks. We will commission them and then get them through the academy—at this stage primarily a four-year engineering degree—and qualify them that way. So we are actually encouraging people to progress through their careers through to commissioning, if possible.

CHAIR —Again, with the greatest of respect, the evidence that we have heard is that people cannot get the time off from the mustering that they are in because they cannot be relieved, and they cannot get out to do the courses that they need to get promotion. They cannot get away from the jobs. How do you respond to those people? We are not having a shot at you people as individuals—you have to understand that that is not on. But this is the frustration that has been presented to the committee. People say, `I want to get to the next rank. I cannot get to the next rank because, when the courses are on, I am told that I cannot go, that there is no-one to relieve me and, if I do go, then there will be a gap left in my place.' How do you cope with those people?

Air Cdre Cole —The concern that you raise is a very valid one. For example, it was identified as a major problem within engineering and the Chief of Air Force has actually created a number of training positions where we can pull people out and we can give them additional training.

CHAIR —Sorry, Air Commodore, but the secretary just reminded me that we have heard from people who cannot even get their annual leave for the same reason. Whilst I am not doubting the sincerity that you are putting to the committee, there is a gap between what your desire is and what your approach is and the reality of what is out there on the ground. That seems to me to be the difference that we are dealing with in our discussion here today—and that is not a criticism of yourselves. We have had some pretty open and pretty frank sorts of discussions with people. They might be telling us a pack of porkies.

Brig. Evans —I think the truth might be somewhere in between. I refer back to this asset liability gap and critical skills gap in some areas. Notwithstanding that, you might have noted in the Army newspaper recently that the Chief of Army has directed that course attendance for careers take priority over work and operational commitments.

CHAIR —I can again go to the Hansard record. There was one young woman, in Darwin I think, who had attempted on five occasions to get on courses. She could not get released because she was just absolutely so important to the maintenance of that particular area where the work was being done. And because of the availability of the courses—and that is another issue in itself—each time there might have been an opportunity my understanding was that should could not get off. So she kept slipping behind all the time. This a not just a problem isolated to that one woman that we met; it is a problem that is across the board.

Rear Adm. Shalders —I can only talk on the Navy experience here. Within Navy there is a mechanism to provide some protection for people in that situation. It is called `provisional protection for promotion'. If you are unable to be released to do an appropriate promotion course, for example, you get what is known as provisional protection such that your promotion opportunities are not in any way adversely affected. So there are mechanisms, and I am sure those same mechanisms apply in the other two services.

CHAIR —I will just go back to the issue of civilian recognised qualifications. For those people in that period up to 1998 when they did not have civilian recognised qualifications and were just short of the mark, what is going to be done to provide them with the opportunity to bring themselves up to the mark of those qualifications? Many said to us that they need to leave the ADF early to get qualifications so that they can have a career outside. If they stay in they will never get to the equivalent trade qualification or career qualification that is recognised out in civvy street. However, it seems that the fear in the mind of Defence is that, if you lifted them to the equivalent of the career or trade qualification out in civvy street, those people will up and leave. How do you overcome that problem? Are you going to overcome the problem for those people?

Mr Sargeant —Our policy is clear in the sense that we want to encourage qualifications that are nationally recognised. You can break qualifications down into competencies and so on, and we have basically moved to a competency based training system. You will get situations where people will train to do a particular job which means that they will acquire a set of skills which are nationally recognised, but they may not train for the full range so that they can then pick up a certificate.

Last time I looked at this, each of the services had different policies on this. Some of them `gap' the training: if it was a relatively small amount they gave them the extra. Others took the approach that they were training to do a particular job and that was the extent to which their obligations extended. You would have to look at what the actual trade was and what the circumstances were. From a general policy perspective, we would be saying that we think that when people leave the ADF they ought to be capable of having their qualifications recognised and that our transition arrangements ought to provide them with the capacity to get recognition against civilian qualifications, either through recognition of prior learning or other processes.

In terms of fear that people will leave if they get qualifications that make them highly marketable, I think that that has certainly been an attitude that has been out there in previous years and may be out there in certain parts of Defence at that moment. But from a policy perspective Defence wants to be an employer of choice. That means providing people with professional and personal development opportunities, and that means taking some risk that people will leave. You mitigate that risk by providing an environment where people want to stay and where they want work. I agree with Admiral Shalders: a lot of this comes back to leadership and the quality of first-line supervision and management. If you look at the literature, that is where people tend to make their decisions about staying or going.

Rear Adm. Shalders —Navy might have some more to add to that, from a particular service perspective.

Cdre Rago —Navy has recently been awarded status as a quality endorsed training organisation under the ANTA scheme. Navy has over 300 accredited courses, ranging from certificate level to graduate diploma level, many of them going back many years. The first ones started off in 1975. Post a 1998 time frame—I would have to check that date—128 of those courses have been accepted onto the national register. If I may use the engineering case, the training progression goes all the way through up to certificate level IV, and indeed higher should the senior sailor or sailor be awarded the opportunity to undergo tertiary training either at university or a college like the Australian Maritime College.

Over the last 25 years, we have had three different apprenticeship schemes and the problem has occurred as to where we align with the national requirements. There were the original old-fashioned apprenticeships in the 1970s. That moved to what was called the modified one, a sailor struck one, which was halfway through the competency based training to the current regime. It would depend on where each of the sailors entered that particular process as to what gap there was in the training.

CHAIR —Could I just stop you there. Has an analysis been made of existing personnel as to what the exact gaps are?

Cdre Rago —With respect to what we award, if they wished to do the examination to become an electrician in a particular state, for example, we could not comment one way or another whether they would pass that exam or not. We suggest that they could do, but if, for example, a sailor wished to get out and become an electrician registered in Queensland, that would be a separate issue.

CHAIR —I accept that; but has any study been made of the gaps that exist for Defence personnel between the training that they received and the now perceived qualification that they need, and what are you doing to overcome those?

Cdre Rago —That is an ongoing analysis which we do. I have a special team that does that. That is their prime job: to ensure that those qualifications are mapped. In fact, we are connecting up with some work that DTEC is doing which has actually enhanced that mapping process. As a sailor comes up to six months before they retire, or chooses to depart if they have done their 20 years or whatever it is, we provide them with the specific booklet which articulates every one of their courses. That is for officers as well. That is at the very end. Hopefully we will have sorted out any little errors before that so that there is little error during that negotiation process when we get to the final stage of the person's last six months.

CHAIR —Have you got statistics on that?

Cdre Rago —I could get some for you.

CHAIR —That would be helpful indeed. It would be helpful to have them for the other two services as well, if they are doing the same thing. One of the big issues that loomed in our inquiry thus far has been the handling of peoples' careers—the career management issue. I do not think it matters which element of the Defence Force one looks at, if one used the words `scathing criticism' one would be being polite about the way in which career management took place. By that I mean that people perceived that there was either no career management at all or it was almost nonexistent. Again, I think you should read the Hansard to take that on.

It seems to me that there is a lack of personnel in career management able to cope successfully across the board with all the operations needed in a person managing someone's career. What is being done in that area to beef up the personnel numbers? It seems to me that unless you can address that issue you might as well not do anything else. You might as well go and play tiddlywinks somewhere. What is being done? I am trying to get you more staff now!

Rear Adm. Shalders —The question is: do we have sufficient people to provide adequate career management? My perception of that is we are now much better than we used to be in the past. There are obviously shortages. We would like more.

CHAIR —This goes to the issue of promotion. It goes to the issue of postings—your next career posting and so on.

Rear Adm. Shalders —It is now done back in the services; it is not done in the Defence Personnel Executive. All of those issues are managed by the three career managers represented at the table here today.

Brig. Evans —We have a career management ratio slightly different from that of the other services. About 332 officers are managed by one career manager. I go back to what you hear on the ridges and then what is perceived here. We certainly strive for excellence in career management and to ensure people are correctly managed in terms of their promotion and their postings. It is not always easy when you have an asset-liability gap. At this stage we are not intending to increase the size of the career management area within the personnel branch of Army, although we are looking at increasing the numbers in terms of policy management.

CHAIR —What about in terms of the other ranks?

Brig. Evans —In terms of the other ranks it is much the same. The ratio for other ranks is about 1 to 400 soldiers. I would ask for care in that analysis because in fact there are more people than just those career managers that assist in the management of individuals.

CHAIR —Yes, and that is another issue in itself. It may well be that the process is flawed and therein lie some of the difficulties. But we will not have time to pursue that today.

Air Cdre Cole —Our ratios are, for officers, 1 to 275 and, for airmen, 1 to 475. We are changing fairly quickly at the moment. We are moving away from the old dictate which said that the career management people sitting in Canberra dictated to the people in the field what was going to occur. Now, at least once a year and generally more than that, we actually go out to the field and sit down with the commanders in the field at all levels, including engineering officers and warrant officers. We talk to them about the individuals that they work for to find out what they want. So, although we have those career management numbers, they are the people in Canberra. For our airmen we actually have some warrant officers on the bases who do career streaming there. We are involving the command chain, as well, to get that feedback.

CHAIR —It has been a very useful morning for the committee. I hope it has been equally as useful for you. We will be meeting with you again on a further date to be advised. If you would you take into consideration the comments that I have made and come back to us, we would appreciate that.