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Thursday, 18 August 2011
Page: 4924

Defence: Reserves and Contractors

(Question No. 509)

Senator Johnston asked the Minister representing the Minister for Defence, upon notice, on 21 March 2011:

For the period 1 July to 31 December 2010:

(a) What savings have been made in reducing the cost of combat capability through the use of Reserves and deployable contractors; and

(b) Have any one-off savings been made; if so, where are these savings to be found.

Senator Chris Evans: The Minister for Defence has provided the following answer to the honourable senator's question:

(a) In general terms, when considering the contribution of Reserves or contractors to "combat capability" Defence will seek to maximise the strengths and capabilities of each particular element in order to meet the demands of operational force generation, sustainment and rotation requirements. Reserves and contractors will be utilised where most appropriate to ensure our combat capability meets national security requirements. Therefore, the immediate cost of combat capability is not necessarily reduced through the use of Reserves or Contractors.

(b) There have been no 'one off' savings in relation to the use of reserves on operations for the period 1 July to 31 Dec 2010. In general terms a Reservist will cost more than a full-time soldier for the period of the deployment because a proportion of Reservists will have employers who are eligible for Employer Support Payments.

For contracted service support, an assessment of a one-off saving can be made based on the following example of contracted aircraft support to Operation ASTUTE.

A C130 is significantly more expensive to operate than a commercial aircraft, and consequently the ADF is using contracted service support to reduce costs for airlift in support of Operation ASTUTE (East Timor). A C130 costs approximately $14,000—$20,000 per hour (direct cost) to operate (depending on the C130 variant) and at any given time, the C130 fleet is heavily utilised within the ADF, with its air hour allocation apportioned across operations, exercises, training and contingency tasking. It takes approximately 17 hours flying time for a return task to Darwin, which includes positioning of the aircraft from RAAF Richmond to Darwin and return. The total cost of this exercise would be approximately $238,000- $340,000 per movement. Conversely, the cost of the current De Havilland Dash 8 contracted aircraft to conduct this task is approximately $29,000 per movement (Darwin to Dili and return). In this circumstance, and while the security situation in Dili allows, it is more cost effective to contract commercial airlift for this aspect of support for Operation ASTUTE.