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Thursday, 27 November 1986
Page: 2917


Senator VIGOR(8.00) —I would like to concentrate on the stores side of the Department of Defence. This seems to be a major problem. (Quorum formed) I believe that there are major savings to be made if we develop a sensible `buy Australian' policy. I would like here to refer to Senator MacGibbon, who regularly provides us with useful examples in this area. The Department of Defence was only second to the Department of the Prime Minister and Cabinet in terms of its performance of bringing large numbers of people to the Estimates Committee hearings and then answering so many questions only on notice. I bring that to the attention of the Committee. During the hearings in April of the Supplementary Estimates I asked a number of questions and I received the answers to those only about two days before the September Estimates committee hearings.


Senator Robert Ray —You asked about 2,000 questions. You cannot expect them all to be answered.


Senator VIGOR —They were only answered two days before the September Estimates hearings, Senator Ray. This is really quite unsatisfactory and it is the same type of problem that Senator Newman was talking about. I note with some interest that the Minister at the table, the Minister for Community Services (Senator Grimes), has taken up this point, and I hope he will pass it on to the members of the Department of Defence. I am seeking pretty full answers to some of the questions which I originally asked during the April Supplementary Estimates hearings. As a result of one of my questions on a small arms tender the Department succeeded in providing a chronology, without any dates, and the answer was completely void of any content. I subsequently had to try to get some information during the September Estimates meetings, but I did not manage to obtain any useful information as to what was happening with the project concerned. In fact at that time I referred to the previous unsatisfactory answer. I note for the public record that I intend to pursue the matter. I now ask whether I can get satisfactory answers to the questions which, by now, have been asked twice. I have given the officers from the Department notice of this. It seems odd for the Department to be afraid to give basic information on matters where Australian companies are involved. In fact there was an attempt by both Senator MacGibbon and me to get more information on this subject.

Another area in which I did not get answers that made any sense related to the Army computer system. An officer told me that the Army computer system had identified 62,076 usage based items as inactive. Apparently none of these items had been issued for 36 months or more; that is, the items had been marked down in the inventory as not having been moved for 36 months or more. The explanation given was that many of these items are useful only in times of war. I am not suggesting that we should try to remedy that by making them useful in a war, but there was no answer to the question of how many items had not been issued in the past 12 months. Coupled with the earlier information, this figure would give us an idea to what extent there is a problem with equipment turnover and obsolescence. I believe we have to look very closely at the supply margins, which do not appear to have been adjusted since the computer system was introduced in May 1981, but inventory levels have apparently dropped in this period.

The stock control usage based Army system, or the SCUBA system, was designed to provide greater access to information and to cut the cost of inventory. Such reduced costs have not been quantified-I have tried to get them-and that makes me wonder whether there has been any type of internal or Australian Audit Office audit of this system. I would like the Minister or the Department to tell me whether this is the case. I also wonder whether there is a plain English description for all the items in the inventory or whether we are dealing with an abstract coding system. I have been told that items for other wings of Defence can be notoriously difficult to find at times because the people in stores do not know what is being sought. This problem was brought to my attention by a constituent. There may not be a problem in the Army, but it would be useful to know whether this is the case anywhere else.

In the answers supplied to the Committee we were also told that no information is kept on the purchase value of equipment disposed of as surplus. If we think about the amount of money that is involved in Army surplus, we start to wonder about the system. The Department of Local Government and Administrative Services arranges disposal and returns the money which it gets from such sales to the Department of Defence. DOLGAS has no information either on the purchase cost of the materials it disposes of. According to the latest report of the Auditor-General on financial statements for 1985-86 nearly $52m is written off by Defence as:

. . . lost, deficient, condemned, unserviceable or obsolete stores.

The write-off for these stores during 1984-85 was just over $49m. These are fairly substantial sums. They should be subjected to some kind of scrutiny within our committee system at some stage.


Senator Watson —They are.


Senator VIGOR —Well, it should be in a lot of detail. I am also interested in following up PISCES-principal item stock control and entitlement system-in the Army, which seems to have something fishy about it. An efficiency audit report was conducted into it and tabled last week. The report revealed severe developmental weaknesses--


The TEMPORARY CHAIRMAN (Senator Townley) —Order! We are trying to discuss the Estimates line by line. The honourable senator should not make a second reading stage speech. I would be grateful if he would ask questions rather than make speeches.


Senator Aulich —I take a point of order, Mr Temporary Chairman. I just indicate that the honourable senator appears to be reading directly from notes. The honourable senator has done this on a number of occasions. I for one take umbrage at the fact that over and over again I am forced to listen to a read speech, possibly written by a research officer. We are all prepared to come in here and listen but not to a prepared speech read directly to us. I ask you to rule on that matter.


The TEMPORARY CHAIRMAN —I find there is no point of order, which the honourable senator might be surprised to hear. If he would like me to, I will make that ruling in regard to everybody else who comes into this chamber. I think he would be quite shocked at the result. I remind Senator Vigor that this is not the time for a second reading stage speech.


Senator VIGOR —I am quite happy to go through this at length and not read a speech at all and spend some time--


The TEMPORARY CHAIRMAN —Order! I did not say that the honourable senator was reading his speech. I would be grateful if he would get on with what he was saying.


Senator VIGOR —I was trying to get through it as quickly as possible. There were major inaccuracies in the data. In August 1985 the accuracy of the depot asset data produced by PISCES was estimated by the Army to be 80 per cent. It also revealed that quite important things had been overlooked. This created ongoing problems with the computer and an inclination on the ground to get around the whole system by various unofficial means. That is the sign of a system that is failing. Discrepancies created by inaccurate loading time data were being sorted out 18 months later. I ask the Minister what exactly is being done with these types of systems. Has the Department examined what it has to do to improve its store management programs? I also point out at this stage that there have been a number of retrenchments and other rearrangements at Garden Island and Williamstown dockyards. The Committee was provided with a comparison of staffing profiles in the last two years. I seek leave to have the comparison incorporated in Hansard.

Leave granted.

The document read as follows:

A broad profile of staff reductions made at Garden Island and Williamstown Dockyards is as follows:

1985-86

1986-87

Variation

SES

Level 3 ...

1

1.75

+ .75

Level 2 ...

1

2

+ 1

Level 1 ...

3

3

-

SES Sub-total ...

5

6.75

+ 1.75

Class 9-11 ...

90

119

+ 29

All others ...

5,205.6

4,791.25

-414.35

Paid Inoperatives ...

176

176

-

Total ...

5,476.6

5,093

-383.6


Senator VIGOR —I thank the Committee. What we notice is growth in the class 9 to class 11 area from 90 to 119, while over 400 jobs were lost. In fact, the Department told us in September that 385 people had gone from Williamstown and 446 from Garden Island, so there will be an interesting update for the end of the financial year. The impression was given in the oral evidence to the Committee that up-to-date production control systems were now in place at Garden Island and that improvements were happening all the time. I would be interested if the Minister could give me some details of how these developments are operating in light of the figures given here on staffing levels and in light of the major criticisms made of management in the Peat Marwick Mitchell Services review of program management performance last year. Indeed, it claimed that productivity was low, that work place communications and industrial relations mechanisms were unwieldy--


The TEMPORARY CHAIRMAN —Order! The honourable senator is starting to transgress into a second reading speech.


Senator VIGOR —Basically, I want to point out to the Minister that the problem in those dockyards is a management problem. I would like to know what the Government and the Department are planning to do about it.

I have one further point. I would also like to know from the Minister what is happening with the planned extensions to the Port Wakefield range in my home State of South Australia. Will we have the same sorts of problems as happened in the Cobar region with the Army land grab where false information, or at least information that may be misleading about what is actually happening to the range, is given? I would like to know because a number of people in my State are concerned about this matter.