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Monday, 26 June 2000
Page: 18277

Mr LAURIE FERGUSON (10:08 PM) —It is a rare event and a rare pleasure to speak in this House on government legislation relating to our defence forces. Over the past two years, the only defence legislative effort that we have debated has been a series of private member's bills introduced by the opposition relating to employment protection and defence leave as an allowable matter, both of which obviously concern the reserves. That said, the Defence Legislation Amendment (Flexible Career Practices) Bill 2000 proposes three separate changes to the personnel provisions of current legislation governing Army and Navy personnel. The government has indicated that parallel changes impacting on the RAAF will be made through changes to the relevant Air Force regulations. The bill is described as helping to achieve more flexible career practices in the Defence Force. In his second reading speech the Minister for Veterans' Affairs indicated that this move had its origins in the 1995 strategic review of defence personnel policy, better known as the Glenn report.

The former Labor government commissioned that report. It arose out of the 1994 defence white paper that emphasised the ongoing challenge to attract and retain highly skilled personnel in the face of demographic, social, technological, industrial, legal and cultural changes. The review had extensive terms of reference, which could be summarised as being principally to examine and to report on the adequacy, applicability and implementation across the three services of the ADF's then personnel policies and to identify the key principles which should form the basis of the ADF's future personnel policy strategy. On page 55 of that report, it is stated:

Those principles would be to achieve a versatile and flexible fighting force, attract and retain the right people and lead and manage people for organisational change.

The resulting report is officially entitled Serving Australia: the Australian Defence Force in the 21st Century. It contains a host of findings and recommendations to do with employment and work practices, industrial relations, reward, recognition and entitlements, and support for members and their families. I would note on that front a very significant broad series of suggestions to essentially help to understand the relationship of retention and the degree of happiness and interest of families. The reserves were also covered: skilled deployment and the need to adopt a new management style. While aspects of the environment in which the Defence Force operates have since changed, these fundamental issues remain relevant to the development of a comprehensive personnel recruitment and retention strategy that is essential if the Defence Force is to be able to fulfil the requirements set for it by the government.

Since 1996, the coalition has found itself unable to properly come to terms with these issues. Under the previous minister we were simply assured that greater efficiencies, massive outsourcing and job cuts would automatically, ipso facto, solve all the problems of the portfolio. We now know, of course, that many of the coalition's so-called cures have actually left the patient in a worse state, as evidenced by the disastrous state of the reserves, the parlous position acknowledged by the Secretary to the Department, Dr Hawke, and a series of damning reports by the Auditor-General. The opposition will be closely examining the government's discussion paper on the future of the Defence Force, being released tomorrow, to see whether it is finally beginning to face up to these fundamental issues.

I turn now to the specific provisions of the bill. In doing so, I indicate that two of the three measures in the bill are quite straightforward and do not cause any problems for the opposition or for the various interest groups that we have consulted. It has been necessary for us to seek clarification from the government on the remaining measure, and we do have some reservations about it that I will mention later. The first aspect of the bill seeks to extend the reach of the limited tenure promotion scheme. This scheme was introduced by the former Labor government to give the ADF greater flexibility in managing its senior officer work force. Under rules that took effect from June 1995, service chiefs can promote such officers to a specific appointment for a set period. At present this applies to the level of colonel and above in the Army and to the equivalent ranks in the Navy and the Air Force. The bill seeks to extend this provision to the next lower officer rank in each service—to lieutenant-colonels in the Army, to commanders in the Navy and, by regulation, to wing commanders in the Air Force. The Glenn report actually proposed a more radical recommendation that limited tenure promotions be extended to a much wider category of personnel, not just to middle ranking and senior officers, to give more flexibility to defence management. That was their suggestion. On the other hand, that report indicated that such an expanded provision should be used only very sparingly.

The cautious approach that the government has taken to the issue in this bill is, I believe, appropriate. The current arrangement, where such a mechanism is only applicable to senior officer positions, does not appear to have generated many problems. As identified in the Glenn report, there are of course situations where it is sensible for Defence to use a person's skills and experience for a set time to carry out a specific task on fixed term promotion, recognising that they would not otherwise have received a permanent promotion. The person concerned understands that at the end of such a posting they will either return to their previous rank or they will retire from the service. Extending the concept of limited tenure too widely, or using the provision too frequently, could cause problems. For this reason, I am comfortable with the approach taken in the bill.

The next aspect of the bill that I want to refer to is the two amendments—one for the Army, the other for the Navy—enabling a serving member to convert an open-ended enlistment or appointment to a fixed term one. Currently, personnel who complete an initial period of enlistment, or appointment in the case of officers, can volunteer to serve further, either on an open-ended basis, theoretically until retirement, or for a fixed term. I note in passing that an open-ended enlistment is often only theoretically until retirement, as the context of such service has been changing because of other government policy changes. The most obvious changes have been the coalition's individual readiness requirements regarding fitness and proficiency and its staff cuts due to massive outsourcing of various support and logistic functions. These mean that `open-ended' enlistments decreasingly end up being `permanent' in actual practice, as the number of redundancies and discharges has grown enormously. There has been speculation in the last day or so about further decreases with regard to the number of people in the armed forces.

While the current legislation allows serving personnel to later seek to convert a fixed term enlistment or appointment into a permanent one, the reverse is not the case. This means there is no provision for them to seek to convert an open-ended enlistment or appointment into a fixed term one. This is an anomaly that the bill seeks to rectify. I note that the Glenn report actually recommended that all defence personnel be engaged on a fixed term of employment—FTE—basis, accompanied by completion incentives and resettlement assistance. That report argued that the ADF should move away from offering lifetime careers and from managing wastage through recruitment. It argued that the ADF should have full discretion about whether to offer personnel further periods of employment. It saw this as the only way that separations, either too many or too few, could be dealt with. In mentioning this argument I make it clear that Labor reject the model of across-the-board fixed term employment. We see the model as being too loaded in favour of the employer. We believe the Defence Force can and should offer long-term careers to as many personnel as possible. While recognising that the prevalence of lifelong service has been declining and will probably continue to do so, our vision of the Defence Force involves its offering more than just fixed term or temporary jobs. That reality is obviously going to undermine the whole morale of the force. We do not see flexible career practices as just giving all choices to the employer and removing the rights of serving personnel. The bill adopts the cautious approach of enabling serving personnel to convert their permanent enlistment or appointment into a fixed term one where they volunteer to do so—and I stress that point. It is on this basis that we support the change proposed by the government.

The final aspect of the bill clarifies the circumstances in which a service chief can, without reference to the Governor-General, reject the resignation of an officer. The Defence Act and the Naval Defence Act currently set out narrowly defined grounds on which an officer's resignation can be rejected. These grounds include the existence of a war or defence emergency, the possibility that the resignation would seriously prejudice Defence's ability to carry out military operations, that the resignation occurred within 12 months of an officer's promotion to the position of colonel or above or the Navy equivalent, where an officer in the reserves seeks to resign during a period in which they are required to provide continuous full-time service under the call-out provisions or, finally, that the officer had not completed his or her required minimum period of service after undertaking training, a period of special duties or employment outside Australia or after being transferred to Australia. This requirement is known as the return of service obligation or ROSO.

It is to do with the last mentioned circumstance—regarding a so-called minimum period of initial service by an officer—that this bill seeks to make a change in the legislation. It has taken some effort on the part of the opposition to establish the true import of the change. The explanatory memorandum circulated by the minister when he introduced the bill on 7 June was of little help. It essentially avoided the issue—the reality of what the government is trying to do. After partly summarising the current legislative situation, that memorandum indicated that:

In order to require officers to serve for an initial period of service ... The provisions provide that the officer's initial period of service will be determined by instrument in writing by the relevant Service Chief.

It also noted that this section of the bill would apply only to officers who were appointed after the amending act commences. All this begged the questions as to what the proposed initial period of service for an officer would be, how this relates to their existing return of service obligation and whether the new requirements would be the same for all officers. The best I could establish, after quite a number of phone calls, was that the real purpose of the amendment appears to be to resolve doubts about the enforceability of a change that Defence actually made in 1998—two years ago. The ROSO system was put in place to ensure that Defence gets an adequate return for the extensive and expensive training that it provides to serving members. It operates on the basis that personnel have to serve one year for each year of defence training plus one year. Thus an officer cadet who completes four years of training—three years at ADFA plus a year of military training—is in turn required to serve for a further five years, or nine years in total. During the period, a service chief can refuse such an officer's resignation or, at the ADF's discretion, accept financial payment in lieu thereof or waive the obligation. These arrangements are legally enforceable.

Concurrent with but separate from the ROSO period is a new concept of fixed periods of service that Defence introduced on 1 July 1998. All new entrants from that date have been required to enlist for a fixed period that has varied from situation to situation. For officer cadets, their fixed period of service is generally nine years, as with their ROSO. Doctors, dentists and chaplains can be appointed with a more lenient fixed term of service. While these requirements are detailed in a Defence instruction, they appear not to be legally enforceable without legislative backing. It appears it is this that the bill seeks to ensure by, in effect, equating the fixed period of service concept with the proposed initial period of service for officers that each service chief will determine should the bill be carried. I seek the assistance of the minister in clarifying at last—finally, after many attempts to get the clarification—what the expected initial period of service for officers will be. I note that the minister's office kindly provided me with a written answer on this matter earlier today. I believe it would be appropriate for this answer to be shared with the parliament. I do so because, in the absence of such details, the Senate may well decide that any determinations by service chiefs should become disallowable instruments. I also seek the minister's assurance that serving personnel have been advised of the proposal and have been consulted about the details. I have received some indications to this effect. I would not like changes to occur that come as a surprise to serving personnel or that cause any difficulty with future recruitment and retention.

In his second reading speech, the minister indicated that the bill removed what he described as `legislative encumbrances' to some personnel policy changes that have already been made. To that extent, the bill is less than revolutionary: it is a case of the legislation catching up with current practice in the Defence Force. The opposition does not seek to obstruct passage of the bill. This does not mean we are happy with the coalition's approach to Defence personnel issues—we are not. We have constantly highlighted the state of the reserves and asked: where is the government's call-out legislation or its employment protection measures? It was because of our efforts that the government was forced to announce two separate sets of concessions on the issue of reporting fringe benefits on the group certificates of serving personnel. We have highlighted the government's failure to respond to the major report on the military justice system by the Joint Standing Committee on Foreign Affairs, Defence and Trade. We have noted the Auditor-General's scathing reports on the redress of grievance system, on the retention of military personnel, on tactical fighter operations and on the Army individual readiness system, amongst other indictments against the government.

Debate (on motion by Fran Bailey) adjourned.