Senator SCHACHT(4.40 p.m.) —I rise on behalf of the opposition to speak on the defence statement put down by the Minister for Defence (Mr McLachlan). I, as a senator, was on the Foreign Affairs, Defence and Trade Legislation Committee which has examined the estimates of the Department of Defence over the last 12 months. During that time, we have had opportunities to ask the minister's representative, Senator Newman, and the senior defence officials—both civilian and service—about the process of the defence reform program that came out of the defence efficiency review and, I have to say, it is a very muddled process judging by what we have seen exposed at the estimates hearing.

Having had a quick look at the minister's statement, the best way you might describe it is as some sort of a report on progress being made. This again highlights the problems we have had as an estimates committee in trying to get reasonable information out of the government about just what they are up to with this defence reform program coming out of the efficiency review.

For example, the estimates committee has had long discussions about the difference between a finding and a recommendation in the documents. I think we got down to trying to work out what these documents meant. We have got a thin document—that was the best way we could describe it because it obviously is—The future directions of the management of Australia's defence and an addendum to the report, which is a much thicker document. Both have mixtures of recommendations and findings. We could never get a satisfactory answer to the nature and the standing of a finding versus a recommendation.

I notice that the minister says in his statement on page 9 under the heading `70 Findings and Recommendations':

. . . I can report that there were seventy findings and recommendations in the original Defence Efficiency Review:

I cannot argue with that because they are actually listed one to 70, and then he says:

. . . of the 18 findings, 16 have been studied in detail and will be used to direct future planning.

When you asked, `Does that mean you accept the finding, Minister, or do you amend it or reject it?', it all became very clouded indeed.

As you will note from the minister's own statement, of the 18 findings he says:

16 have been studied in detail and will be used to direct future planning.

Two have gone missing in action, you might well say, using a defence analogy—

. . . of the 49 recommendations, action is complete on 14 and well underway on a further 31.

By my simple mathematics, that comes up to 45 recommendations—four recommendations seem, again, to have gone missing in action from the minister's own statement today, which just reinforces the difficulties the opposition members have had at the defence estimates committee as they went on for interminable hour after hour trying to find out the real status of many of these recommendations. Again, it reflects the muddled attitude of this government to handling the defence arrangements.

This statement by the minister has to be just nothing more than PR spin. For example, to say on page nine:

Contrary to some ill-informed speculation, the effect of the reform Program has been to boost morale in the Defence Force.

I do not know where he has been and what he has been doing but according to all the evidence we received at the estimates hearing and all the anecdotal information around, the absolute opposite has occurred.

The downgrading of the various headquarters of the three services has created great upset amongst the officers in each of the services. Although the minister tried to put some gobbledygook before us at the estimates hearing, and in this sort of statement, that the service chiefs now have a more direct role in policy formulation, all the evidence that we got at estimates was that the exact opposite was occurring.  There has been a further centralisation of advice and policy development to the ADF headquarters. That may be a good thing as far as the restructuring of the defence forces is concerned, but don't get up and tell us that the service chiefs in the three services believe it is a good idea. It was pretty clear from the body language at the estimates hearing that a lot of people are very unhappy about that.

It has got to be pointed out to this minister that it is not just a matter of saying in the efficiency review that we have improved the administration, have made it more efficient, by implying that bureaucrats have been moved out of Russell or something. What this minister has done is to reduce the fighting force of the Australian Defence Force to its lowest levels in numbers since the early 1960s. We now have the least full-time soldiers since the early 1960s. Under this plan, in addition to the 5,000 troops who go under the DRP, the defence reform program, the government has cut more than 2,000 full-time military positions in its two budgets.

The statement follows 18 months of uncoordinated decisions that have rocked morale, which I have already referred to. It is an effort to turn decisions into a plan. The actual goal, the strategic review, will be released later this year. I would have thought you would do it around the other way. You would have the strategic review first and, based on the strategic review, you would work out the restructuring to meet the objectives of the strategic review. Not this minister: he has gone about it the other way. It is just like in my own portfolio area, where Senator Alston cut $55 million from the ABC and said, `Let us have a review of the operations and functions of the ABC.' This government always does it round that way: cut the administration, cut the capability first, then have a strategic review to justify what you have done in the cuts. That is why this minister has really got it back to front.

Without wanting to be too parochial about this, taking my own state of South Australia, we have already announced as an opposition that on re-election to government we will commit to build a further two Collins class submarines, Nos 7 and 8.

Senator MacGibbon —You are pork-barrelling.

Senator SCHACHT —Senator MacGibbon interjects. I will arrange to send to you a copy of Mr Beazley's speech in Adelaide at the end of last year outlining the strategic need for Australia to have an extra two submarines. It was a very thoughtful statement, justified in strategic terms, Senator MacGibbon, not pork-barrelling. Only the Liberal Party and the National Party recognise and get into pork-barrelling.

There has been no response from the government at all about the opposition's promise, on a strategic basis, to build two extra Collins class submarines. I must say that in his 18 months in the job the only interest the minister seems to have shown in South Australia in relation to the defence forces is to provide his wife with a helicopter to get from the golf course to the Edinburgh air show. That seems to be about the biggest effort we have had in South Australia.

Recently, of course, he was there opening the new DSTO buildings—a $50 million project. He forgot to mention that that was a decision committed by the previous Labor government by the then Defence Minister, Senator Robert Ray. It seemed to have completely escaped the attention of the minister that this was a commitment the former Labor government gave because we in government recognised the importance of the defence infrastructure on the industry side to the South Australian economy and to developing a self-reliant defence force in Australia.

Our 13 years in defence were about making a self-reliant defence force, not something we would always buy off the shelf. We have improved the capacity. We have not got a word from the minister that I am aware of, nor any public promotion of the idea that a defence capability in Australia should be based on doing it in Australia—not in every area but in areas where we have the capacity. Submarines are one area and the frigates are another where we not only build top quality defence equipment but also lay the groundwork for further capability for the defence of this country.

I reiterate that this statement is nothing more than a propaganda spin to overcome what is a chaotic situation that this minister has let loose on the defence forces of Australia, and he should be ashamed of the gall that he has got to issue this statement today.