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Tuesday, 8 May 2012
Page: 2823

Defence: Strategic Reform Program

(Question No. 1624)

Senator Johnston asked the Minister representing the Minister for Defence, upon notice, on 5 March 2012:

With reference to the Strategic Reform Program (SRP):

(1) For the period 1 July to 31 December 2011:

(a) where specifically have the provisional savings of the forecasted total been made under the SRP; (b) can a detailed explanation be provided of where these savings have been realised; and

(c) what one off savings been made.

(2) For the period 1 July 2008 to 31 December 2011, what workforce savings, both in personnel reductions and dollar savings, per area as specified in the Budget Audit Review, have resulted where the gaps to average performance have been:

(a) improved and realized; and

(b) reduced to zero.

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

(1) (a) Cost reductions under the Strategic Reform Program (SRP) are based on a reduction of annual budgets. The rate and timing of the achievement of cost reductions over the reporting cycle varies from stream to stream depending on the initiatives they are measuring. Providing information on their achievement on a 6 month basis does not give a meaningful picture of stream performance. SRP governance closely monitors stream activities to ensure that planned activities remain on schedule.

Cost reductions under the SRP are based on annual budgets. In 2011-12 the cost reduction target under the SRP was $1,283.9 million. The work streams delivering these cost reductions are detailed in Table 1.

Table 1: SRP cost reduction targets

SRP Stream




Information and Communications Technology


Smart Sustainment & Inventory




Non-Equipment Procurement




Workforce & Shared Services




Total Cost Reduction Target


*Summation variances are due to rounding

(1) (b) and (1) (c) SRP savings are tracked, reported and managed on a stream-by-stream basis. They are not broken up by sub-categories of productivity, one-offs or other descriptors. The annual budgets for activities targeted through streams have been reduced by amounts that reflect cost reductions agreed by Government.

The Department will publish the stream cost reductions achieved under SRP in the Defence Annual Report which is expected to be released in late 2012.

(2) (a) and (b) Outcomes of the Budget Audit Review are being achieved across three specific areas covering Workforce Reform, Business Process Improvements and Shared Services.

Through Workforce Reform 360 military, known as Average Funded Strength (AFS), and 604 contractor positions have been reduced and replaced with Australian Public Service (APS) employees. Combined with Efficiency and Effectiveness reductions of 292 APS the reforms have delivered $198.6 million in savings.

Twenty four AFS and 266 APS reductions generating $43 million in savings have been achieved through Business Process Improvements primarily as a result of Consolidation of regions, reduction in administration support to Senior Officers, amalgamation of Australian Defence Force Intelligence System and pooling of paralegals and rationalisation of help lines.

Improvements to Shared Services have seen reductions of 114 AFS and 132 APS generating $47.6 million in savings. This has been achieved largely through reforms in Education & Training, Career Management and Payroll and Personnel Administration.

Reforms are being implemented across the department in a wide range of areas. Many of these areas are integrating and implementing multiple reforms. The effort and attendant cost of monitoring and reporting changes in performance, and attributing the changes to specific reform initiatives is prohibitive.

Consequently there are no performance metrics (beyond efficiency metrics) defined that are able to indicate the performance impact attributable to specific SRP reforms.