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Foreign Affairs, Defence and Trade Legislation Committee - 02/06/2014 - Estimates - DEFENCE PORTFOLIO

DEFENCE PORTFOLIO

In Attendance

Senator Johnston, Minister for Defence

Department of Defence

Mr Dennis Richardson AO; Secretary

General David Hurley AC, DSC; Chief of the Defence Force

Program 1.1: Office of the Secretary and Chief of the Defence Force

Mr Brendan Sargeant, Chief Operating Officer

Mr Angus Kirkwood, Acting First Assistant Secretary Strategic Policy

Mr Chris Birrer, Acting First Assistant Secretary International Policy

Mr Mark Cunliffe PSM; Head Defence Legal

Air Commodore Paul Cronan AM, Director General Australian Defence Force Legal Services

Mr Adrian D'Amico; Defence General Counsel

Mr Michael Lysewycz; Assistant Secretary Legal Services

Program 1.2 Navy Capabilities

Vice Admiral Ray Griggs AO, CSC, RAN, Chief of Navy

Mr David Gould, CB; General Manager Submarines

Program 1.3 Army Capabilities

Lieutenant General David Morrison AO; Chief of Army

Major General Paul McLachlan, AM, CSC; Head Land Systems

Program 1.4 Air Force Capabilities

Air Marshal Geoff Brown AO, Chief of Air Force

Air Vice Marshal Kym Osley AM, CSC; Head Capability Transition

Air Vice Marshal Leigh Gordon, CSM; Head Aerospace Systems

Air Commodore Cath Roberts, CSC; Acting Program Manager New Air Combat Capability

Program 1.5 Intelligence Capabilities

Mr Steve Meekin; Deputy Secretary Intelligence and Security

Ms Sandra Ragg; Acting Chief Security Officer, Defence Security Authority

Program 1.6 Chief Operating Officer Defence Support and Reform

Mr Steve Grzeskowiak; Deputy Secretary Defence Support and Reform

Mr Mark Jenkin; Head Defence Support Operations

Mr Michael Healy; Acting Head Infrastructure Division

Commodore Jaimie Hatcher, Director General Bases and Customer Support Services

Program 1.7 Chief Operating Officer Chief Information Officer

Dr Peter Lawrence; Chief Information Officer

Program 1.8 Chief Operating Officer Defence People

Ms Rebecca Skinner; Deputy Secretary Defence People

Mr Richard Oliver; Head People Policy and Culture

Air Vice Marshal Tony Needham; Head People Capability

Mr Neville Tomkins; First Assistant Secretary, Defence People Solutions

Air Commodore Henrik Ehlers; Director General Cultural Reviews Response

Program 1.9 Defen ce Science and Technology

Dr Alex Zelinsky; Chief Defence Scientist

Dr Ian Sare; Deputy Chief Defence Scientist—Strategy and Programs

Program 1.10 Vice Chief of the Defence Force

Rear Admiral Trevor Jones AO, CSC, RAN; Head Military Strategic Commitments

Air Commodore Andrew Elfverson; Director General Strategic Communications

Rear Admiral Clint Thomas AM, CSC, RAN; Commander Joint Logistics

Rear Admiral Robyn Walker AM, RAN; Commander Joint Health Command

Major General Iain Spence CSC, RFD; Head Cadet, Reserve and Employer Support Division

Major General Fergus McLachlan AM; Head Joint Capability Coordination

Major General Simone Wilkie AM Commander Australian Defence College

Air Commodore John McGarry CSC; Director General Military Strategic Commitments

Captain Bryan Parker, RAN; Provost Marshal Australian Defence Force

Air Vice Marshal Neil Hart, Head Force Structure Review, Air Force Co-Head

Dr Alan Ryan, Executive Director Australian Civil-Military Centre

Program 1.11 Joint Operations Command

Rear Admiral Trevor Jones AO, CSC, RAN; Acting Vice Chief of the Defence Force / Head Military Strategic Commitments

Program 1.12 Capability Development

Vice Admiral Peter Jones AO, DSC, RAN; Chief Capability Development Group

Program 1.13 Chief Finance Officer

Mr Phillip Prior; Chief Finance Officer

Mr Mike Gibson; First Assistant Secretary Resource and Assurance

Mr Patrick Hetherington, Assistant Secretary Financial Coordination

Program 1.14 Defence Force Superannuation Benefits

Ms Rebecca Skinner; Deputy Secretary Defence People

Mr Richard Oliver; Head People Policy and Culture

Air Vice Marshal Tony Needham; Head People Capability

Mr Neville Tomkins; First Assistant Secretary, Defence People Solutions

Air Commodore Henrik Ehlers; Director General Cultural Reviews Response

Mr Phillip Prior, Chief Finance Officer

Mr Mike Gibson; First Assistant Secretary Resource and Assurance

Mr Patrick Hetherington, Assistant Secretary Financial Coordination

Program 1.15 Defence Force Superannuation Nominal Interest

Ms Rebecca Skinner, Deputy Secretary Defence People

Mr Phillip Prior; Chief Finance Officer

Mr Richard Oliver; Head People Policy and Culture

Air Vice Marshal Tony Needham; Head People Capability

Mr Neville Tomkins; First Assistant Secretary, Defence People Solutions

Air Commodore Henrik Ehlers; Director General Cultural Reviews Response

Mr Mike Gibson; First Assistant Secretary Resource and Assurance

Mr Patrick Hetherington, Assistant Secretary Financial Coordination

Program 1.16 Housing Assistance

Mr Steve Grzeskowiak; Deputy Secretary Defence Support and Reform

Mr Mark Jenkin; Head Defence Support Operations

Program 1.17 Other Administered

Program 2.1 Operations contributing to the Security of the immediate neighbourhood

General David Hurley AC, DSC, Chief of the Defence Force

Vice Admiral Ray Griggs AO CSC, RAN, Chief of Navy

Lieutenant General David Morrison AO, Chief of Army

Air Marshal Geoff Brown AO, Chief of Air Force

Rear Admiral Trevor Jones AO, CSC, RAN; Acting Vice Chief of the Defence Force / Head Military Strategic Commitments

Program 2.2 Operations supporting wider interests

General David Hurley AC, DSC, Chief of the Defence Force

Vice Admiral Ray Griggs AO, CSC, RAN, Chief of Navy

Lieutenant General David Morrison AO, Chief of Army

Air Marshal Geoff Brown AO, Chief of Air Force

Rear Admiral Trevor Jones AO, CSC, RAN; Acting Vice Chief of the Defence Force / Head Military Strategic Commitments

Program 3.1 Contribution to National Support Tasks in Australia

General David Hurley AC, DSC, Chief of the Defence Force

Vice Admiral Ray Griggs AO CSC, RAN, Chief of Navy

Lieutenant General David Morrison AO; Chief of Army

Air Marshal Geoff Brown AO, Chief of Air Force

Rear Admiral Trevor Jones AO, CSC, RAN; Acting Vice Chief of the Defence Force / Head Military Strategic Commitments

Department of Defence Defence Materiel Organisation

Mr Warren King; Chief Executive Officer, Defence Materiel Organisation

Mr Harry Dunstall; Deputy Chief Executive Officer / General Manager Commercial

Ms Shireane McKinnie PSM; General Manager Joint, Systems and Air

Mr Colin Thorne, AM; General Manager Land and Maritime

Mr David Gould, CB; General Manager Submarines

Air Commodore Cath Roberts; Acting Program Manager New Air Combat Capability

Rear Admiral Greg Sammut, CSC, RAN; Head Future Submarine Program

Air Vice Marshal Leigh Gordon, CSM; Head Aerospace Systems

Mr Michael Aylward, Head Electronic Systems

Rear Admiral Tony Dalton, RAN; Head Helicopter Systems

Rear Admiral Mark Purcell, RAN; Head Maritime Systems

Major General Paul McLachlan, AM, CSC; Head Land Systems

Mr Steve Wearn; Chief Finance Officer, Defence Materiel Organisation

Air Vice Marshal Chris Deeble, Program Manager, Joint Strike Fighter

Outcome 1 Contributing to the preparedness of the Australian Defence Organisation through acquisition and through-life support of military equipment and supplies.

Program 1.1 Management of Capability Acquisition

Mr Warren King; Chief Executive Officer, Defence Materiel Organisation

Vice Admiral Peter Jones AO, DSC, RAN; Chief Capability Development Group

Program 1.2 Management of Capability Sustainment

Mr Warren King; Chief Executive Officer, Defence Materiel Organisation

Vice Admiral Peter Jones AO, DSC, RAN; Chief Capability Development Group

Program 1.3 Provision of Policy Advice and Management Services

Mr Warren King; Chief Executive Officer, Defence Materiel Organisation

Vice Admiral Peter Jones AO, DSC, RAN; Chief Capability Development Group

Committee met at 09:12

CHAIR ( Senator Eggleston ): I welcome the witnesses and senators here. I formally declare open the meeting of the Foreign Affairs, Defence and Trade Legislation Committee. The Senate has referred to the committee the particulars of proposed expenditure for the 2014-15 budget and certain other documents for the portfolio of Defence. The committee may also examine the annual reports of the departments and agencies appearing before it. The committee is due to report to the Senate on 24 June 2014 and has fixed Friday, 25 July as the date for the return of answers to questions taken on notice. Senators should provide their written questions on notice to the secretariat by Thursday, 12 June.

Under standing order 26, the committee must take all evidence in public session. This includes answers to questions on notice. I remind all witnesses that, in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to the committee.

The Senate, by resolution in 1999, endorsed the following test of relevance of questions at estimates hearings: that any questions going to the operations or financial positions of the departments and agencies which are seeking funds in the estimates are relevant questions for the purposes of estimates hearings. I remind officers that the Senate has resolved that there are no areas in connection with the expenditure of public funds where any person has a discretion to withhold details or explanations from the parliament or its committees, unless the parliament has expressed provided otherwise. The Senate has provided also that an officer of a department of the Commonwealth should not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted.

I particularly draw to the attention of witnesses an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised. Witnesses are specifically reminded that a statement, information or a document that is confidential or consists of advice to government is not a statement that meets the requirements of the 2009 order. Instead, witnesses are required to provide some specific indication of the harm to the public interest that could result from the disclosure of the information or the document.

The extract read as follows—

Public interest immunity claims

That the Senate—

(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate;

(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

(c) orders that the following operate as an order of continuing effect:

(1) If:

   (a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

   (b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document.

(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister.

(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document.

(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence.

(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate.

(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate.

(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (1) or (4).

(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3).

(d) requires the Procedure Committee to review the operation of this order and report to the Senate by 20 August 2009.

(13 May 2009 J.1941)

(Extract, Senate Standing Orders, pp 124-125)

CHAIR: I welcome the minister, the Hon. Senator David Johnston, Minister for Defence. Senator Johnston has just made a rushed trip back from Singapore and we are very pleased that he is here, as we thought that he might not have been. We welcome also General David Hurley, Chief of the Defence Force; Mr Dennis Richardson, Secretary of the Defence Department; Mr Warren King, CEO of the Defence Materiel Organisation; and other officers from Defence. Minister, do you or an officer wish to make an opening statement?

Senator Johnston: I do wish to make a very brief opening statement, with your indulgence. I wish to note a very important matter for the committee and for Defence, and that is that this is the last Senate estimates hearing for our CDF, General David Hurley AC, DSC, who completes his tenure as Chief of the Defence Force on 3 July this year. If I might say, General Hurley is an exceptional officer who has earned the greatest respect from all of those he has worked with in Australia and particularly overseas. And can I say that he was mentioned very favourably to me on a number of occasions at the Shangri-La Dialogue. He also served as exchange officer with the First Battalion Irish Guards in the British Army and he had attendance at the United States Army War College. He has guided me, as Minister for Defence, through the transition to government and made the job, may I say, a lot easier than it might otherwise have been.

General Hurley saw active service in Somalia, commanding the First Battalion Royal Australian Regiment in 1993 during Operation Solace, for which he was awarded the Distinguished Service Cross. As Chief of the Defence Force, he has led the Australian Defence Force to the end of operations in Uruzgan Province in Afghanistan, Timor-Leste and the Solomon Islands. Additionally, he has overseen significant capability development in our Defence Force. General Hurley's efforts to drive cultural reform in the Australian Defence Force, accepting the responsibility to address past mistreatments and addressing continued challenges through his pathways to change strategy, will leave a lasting legacy for which he should be justifiably proud. His leadership and dedication, including his tenure as Vice Chief and then as Chief of the Defence Force, have been fundamental in shaping the Australian Defence Force of today. Chief, can I thank you personally not only for your efforts as Chief of the Defence Force but, indeed, for your more than 40 years service as a member of our military and your career commitment to our country. Thank you very much.

CHAIR: Hear, hear!

Senator CONROY: With indulgence, Chair?

CHAIR: Yes, of course.

Senator CONROY: Could I, on behalf of the opposition, also thank the Chief of the Defence Force. This is the first estimates we have had since the announcement and I am sure there will be a number of opportunities more formally to recognise and thank you but, on behalf of Labor, let me express our deep gratitude for your service to our country. You have served Australia with distinction and have provided outstanding leadership to the ADF and the wider Defence community, and we wish you all the best for your retirement.

CHAIR: The committee, of course, endorses the views that have been expressed, General Hurley, and we certainly wish you a happy future in whatever other endeavours you follow. So thank you.

Gen. Hurley : Chair, thank you very much. I thank the minister and Senator Conroy for their kind comments. May I have indulgence to make an opening statement now?

CHAIR: Yes.

Gen. Hurley : Thank you. Last month, I travelled to the Middle East area of operations for my final time as Chief of the Defence Force. During my visit, I spoke with many of the 400 Australians currently deployed in Afghanistan as part of our training and advisory support mission. I also met with the Commander of ISAF, General Joe Dunford, to discuss the state of the operation and the international community's ongoing contribution to Afghanistan. When I consider the situation on my first visit to Afghanistan in 2007, the progress to date is evident. It is evident in the infrastructure—schools, hospitals and roads—that Australian military and civilian personnel have helped to build, it is evident in the Afghan national security forces and their ability to support the 5 April presidential elections and it is evident in the significant increase in the number of Afghans who embrace the democratic process and voted in the first round of the presidential elections. While we remain cautious about the second round run-off next weekend, I am immensely proud of the Defence personnel who have contributed to Australia's mission in Afghanistan since 2002. Together with our civilian partners, their service and sacrifice have made a difference.

Apart from our commitments in Afghanistan, Australian Defence Force personnel assisted the Solomon Islands community in April, following severe flooding in Honiara and Guadalcanal. An engineering reconnaissance team provided a vital engineering solution that enabled Honiara's main bridge to reopen to heavy vehicle traffic, while a planning assistance team conducted rapid damage assessments and specialist planning support to assist the thousands of affected residents in and around Honiara.

Much of our operational focus since the last estimates hearing has centred on the tragedy of MH370 in the Southern Indian Ocean. I would like to acknowledge formally the extraordinary multinational effort undertaken in search of flight MH370. The Australian Defence Force contribution began on 9 March, the day after the flight disappeared, when we deployed two AP3C Orion aircraft to search an area west of Malaysia; and it concluded last week, when the Australian Defence vessel Ocean Shield conducted her final subsurface search. A multinational search and rescue operation of this size and scale is unprecedented in our region. Existing relationships, such as the five-power Defence arrangement, allowed signatory nations, already familiar with each other's command and control structures and capability, to rapidly establish themselves as part of the joint task force. For others, like China, Japan, and the Republic of Korea, this operation provided an opportunity to build on the progress in these relationships in recent years and to further refine cooperative practices and procedures.

The search exemplifies a truly multinational response and demonstrates the strength of cooperation among the participating nations. At its peak, Operation Southern Indian Ocean involved eight nations, 21 military aircraft and 19 ships, covering a search area of more than 4.5 million square kilometres, that is, an area approximately 1.3 times the size of India. Over 42 days, participating nations flew 345 military missions, totalling more than 3,000 hours, with Australian aircraft alone accounting for more than one-third of these flying hours. Conventional capabilities were adapted and supplemented with emerging capabilities specifically designed to address the unique complexities of the operation. The Royal Australian Air Force and the Defence Science and Technology Organisation rapidly developed a specialist acoustic processor to assist in the subsurface search. In what is believed to be a world first, the Australian designed and tested passive hydrophones were fitted to sonobuoys deployed by AP3C Orion aircraft in the search area.

While our thoughts remain with all those affected by this incident, I would like to thank the 1,200 Australian Defence Force personnel who were directly involved in the search and the hundreds of others who supported them. Although the search continues, we have an opportunity to build on what we have learned from MH370 while the momentum exists and the lessons are still fresh.

Given that this is my final appearance before this committee, I would like to provide a brief update on the cultural reform program which began quite early in my tenure as CDF. As you are aware, the ADF has worked closely with the Sex Discrimination Commissioner, Elizabeth Broderick, since 2011. Ms Broderick and her team have provided independent and at all times very frank advice and assessments about our culture and our change program. Her fourth and final audit report, tabled in parliament in March, cited evidence of real progress and a momentum for change accelerating across all three services. Ms Broderick applauded the newly established sexual misconduct, prevention and response office and the implementation of a restricted or confidential disclosure system. An example of our progress is that the Royal Australian Navy has very recently achieved full white-ribbon accreditation as an institution, the first organisation of this size to do so in Australia. Ms Broderick also acknowledged the shift in our senior leadership selection to extend beyond the previously accepted combat or operational pathways to further expand the talent pool. Her report also noted that new and innovative recruitment models aimed at increasing the number of women in the ADF are already producing promising results and forecast continued growth in line with our work to improve access to flexible work arrangements for all ADF members.

I also recently appointed Ms Julie McKay from UN Women Australia as the first gender adviser to the Chief of the Defence Force. Ms McKay is a well-known advocate for women and is assisting us as we continue to work towards a more inclusive organisation.

As I have said on numerous occasions, Australians rate their Defence Force as the most trusted organisation in the country. We are proud to accept this trust and proud of our international reputation for excellence. But no organisation can maintain such a place of respect if it fails to maintain its standards and behaviours as high as humanly possible. In acknowledging the strong progress we have made, we must also accept that it will take continued vigilance to ensure that we do not regress. I know Air Marshal Binskin and his new command team will continue to vigorously pursue the outcomes we desire.

That leads me to another priority area that I know the new command team is also committed to addressing. Mental health is one of the most important issues facing the Australian Defence Force today, and I can assure you that we are not shying away from our duty to care for our veterans. One of the biggest obstacles we face is the perceived stigma associated with seeking help. In that regard, I believe the ADF theatre project has been an important catalyst for change. The Long WayHome played across the nation to sell-out crowds over a nine-week season and more than 30,000 people saw the production. That is 30,000 people who, I am confident, have now had a conversation about mental health or post-traumatic stress. Thanks to the extraordinary cast of serving members and their courage, I hope the Australian community also has a better understanding of the personal battles many of our veterans face when they return from deployment.

Finally, I will be absent from the hearing for a short period this afternoon. Vice Admiral Ray Griggs, Chief of Navy and Vice Chief of the Defence Force Designate, will represent at that time. The secretary and I will also be absent from 6.30 this evening. Thank you.