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Speech to the Australian Defence Magazine Congress



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Minister for Defence - Speech - Australian Defence Magazine Congress

12 February 2013

Paper presented by Stephen Smith MP Minister for Defence to the Australian

Defence Magazine Congress

*CHECK AGAINST DELIVERY*

Introduction

Thank you Katherine Ziesing, Editor, Australian Defence Magazine, for your warm welcome.

I acknowledge and thank the sponsors of this event, BAE Systems and the State Government

of Victoria.

I acknowledge my Ministerial colleague Dr Mike Kelly, the Minister for Defence Materiel.

I also acknowledge the Secretary of the Department of Defence, Dennis Richardson, the Chief

of the Defence Force General David Hurley and the Chief Executive Officer of the Defence

Materiel Organisation, Warren King.

Representatives of Defence Industry, Australian Defence Force personnel, Defence and

Defence Materiel Organisation officials, ladies and gentlemen.

This is my third address to the Australian Defence Magazine Congress.

In my previous two addresses I have remarked on the important role the Australian Defence

Magazine plays in fostering commentary and analysis on defence policy, major projects and

equipment acquisitions.

The Australian Defence Magazine Congress itself continues to provide an important forum for

exchanging information and ideas about Defence and the Australian Defence Force.

Humanitarian assistance and disaster relief

It has once again been a busy period for members of the Australian Defence Force over the

holiday or these days so called disaster season, providing humanitarian assistance and

disaster relief in Australia and overseas.

I again compliment and thank all ADF members for their efforts in this respect.

In Fiji and Samoa, in December 2012 the Australian Defence Force delivered essential

emergency supplies after Cyclone Evan destroyed houses and food crops. There was severe

flooding and roads, bridges and tourist areas were damaged.

In Fiji, two Royal Australian Air Force C-17A Globemaster aircraft delivered approximately 40

tonnes of emergency supplies including tarpaulins, shelter kits, blankets, water containers

and hygiene kits to support the shelter and sanitation needs for around 720 families.

In Samoa, Air Force C-17A Globemaster and C-130J Hercules aircraft delivered approximately

70 tonnes of emergency supplies including tarpaulins for 430 families, blankets for 600

people and water containers and purification tablets for 4000 families.

Following its flight to Samoa, the C-130J then relocated to Fiji and flew shuttles between Nadi

and the outlying village of Labasa carrying passengers and relief supplies.

Just last week the ADF deployed an Air Force C-130J Hercules aircraft to the South West

Pacific for Operation Solomon Island Assist. The aircraft conducted aerial reconnaissance to

assist with damage assessments of the earthquake and tsunami affected Santa Cruz Island.

In Australia, the Australian Defence Force has again been hard at work supporting local

communities in the wake of natural disasters in Tasmania, New South Wales, Victoria,

Queensland and Western Australia.

In Tasmania, Regular and Reserve, Army and Air Force personnel assisted the Tasmanian

emergency services during the bushfire events in January.

On 11 January, the Air Force provided C-17A airlift of power generators from RAAF Base

Amberley to Hobart.

This equipment supported the restoration of electricity to Tasmanian residents in fire affected

areas.

Defence bases also hosted civilian aircraft associated with bushfire events and provided

accommodation and meals, including at HMAS Albatross, Nowra, RAAF Base Wagga and

Anglesea Barracks, Hobart.

During the recent floods in Queensland, the Australian Defence Force established Joint Task

Force 637 Operation Queensland Flood Assist II, under the Command of Brigadier Greg

Bilton.

At the core of the Joint Task Force was an Emergency Support Force including specialist

construction trades, combat engineers and a preventative health team.

In Bundaberg, scene of significant flooding, the total Defence commitment to the flood relief

effort was approximately 350 personnel.

Defence personnel assisted the local authorities in search and rescue, the initial restoration of

utilities and essential services, route clearance, initial recovery support and health

assessments.

Defence also provided an environmental health team to analyse the condition of local water

supplies.

Australian Army engineers constructed a temporary span over a damaged section of the Don

Tallon Bridge in Bundaberg. The bridge was significantly damaged during the floods impacting

a vital route for community and heavy vehicle movement.

Two Air Force bulk fuel tankers, with 30,000 litres and 15,000 litres capacity, and personnel,

worked with an Army Petroleum Operations Platoon to refuel aircraft supporting the flood

relief effort at Bundaberg.

The Air Force also deployed C-130J and C-17A aircraft in support of flood assistance

activities.

The Air Force flew 19 sorties in support of Operation Queensland Flood Assist II carrying

approximately 77 tonnes of support equipment.

The C-130Js and C-17A aircraft transported emergency stores and equipment (including

aviation fuel) into Bundaberg to support the wider relief effort.

Two Air Force C130J Hercules aircraft assisted in the evacuation of 91 patients from the

Bundaberg Hospital to Brisbane.

King Air aircraft from the Air Force also provided logistics support transporting personnel and

equipment in support of the Joint Task Force.

Four Army Black Hawk helicopters from 16th Aviation Brigade in Townsville operated from

Bundaberg supporting the flood relief efforts providing evacuation assistance, damage

assessment and emergency recovery efforts in the Bundaberg and Maryborough area.

The Blackhawk helicopters conducted 25 winch rescues, extracted around 260 people from

flood affected areas, inserted recovery teams and provided logistics support delivering water,

food, medical supplies and cooking equipment throughout the flood affected areas.

As the emergency abated the Blackhawks were replaced by four Army Kiowa helicopters.

The Kiowas provided assistance in the resupply of food to isolated rural locations, and

conducted reconnaissance missions to assess road conditions and support to the

Environmental Protection Agency in its assessment of livestock losses and locations.

As the flood emergency moved from search and rescue and immediate response to a

recovery phase, the Joint Task Force continued to support requests for flood assistance in the

Bundaberg region and surrounding areas with personnel, specialised equipment and aviation

support.

As flood-affected Queensland communities move from emergency relief to the rebuilding

phase, Defence has commenced draw down its forces to allow local government and

contractors to begin the task of long term recovery.

Naval, Army and Air Force Bases and establishments were also placed on standby to support

State and Commonwealth requests for assistance during bushfire emergency.

In Western Australian on the weekend, RAAF Base Pearce provided access to its airfield for

civil aircraft to conduct fire operations and supplied water to civilian fixed and rotary wing

firebombers.

Over the holiday period, Defence was also ready, willing and able to respond to greater

contingencies if necessary.

The heavy amphibious lift ship HMAS Tobruk and the Australian Defence Vessel Ocean Shield

were at 48 hours notice to move to be able to respond to emergencies both domestically and

regionally.

These efforts demonstrate the Australian Defence Force’s skills and capabilities in

humanitarian assistance and disaster relief operations.

These humanitarian assistance and disaster relief activities stand with the great work Defence

does in peacekeeping and in combat and warlike operations.

Challenges for Defence in the year ahead

Today I outline some of the challenges that the Australian Defence Force and Defence more

generally will face in the year ahead.

These include:

 Transition in Afghanistan and the Solomons following the draw down from East Timor - in other words, our troops coming home after more than a decade of overseas operations;

 Caring for our Iraq and Afghanistan veterans - looking after our people in the aftermath of these operations;  Delivering the 2013 Defence White Paper in the second quarter of this year;

 Implementation of our ongoing reform program, including cultural reform and reform in procurement and capability; and  Progression of a number of major new capabilities, including future submarines, air combat capability and a range of significant shipbuilding projects.

Afghanistan

Australia has suffered 39 fatalities in Afghanistan, with seven fatalities during 2012. The last

fatality was Corporal Scott Smith on 21 October 2012.

Overall, Australia has suffered 249 wounded in Afghanistan since 2001, with 33 wounded in

2012. Three ADF personnel have been wounded in 2013.

Transition in Afghanistan

There were a number of significant developments in Afghanistan over our summer.

Across Afghanistan, progress on the transition to Afghan-led security responsibility continues.

On 31 December 2012, President Karzai announced the fourth tranche of Districts and

Provinces to undergo transition.

This will see Afghan security forces take lead responsibility for security for 87 per cent of the

Afghan population and for 23 of the 34 Afghan Provinces.

During President Karzai’s visit to Washington in early January this year, President Obama

welcomed President Karzai’s desire to bring forward from mid-2013 to the northern spring

the Chicago Summit milestone when the ANSF assume the operational lead across all of

Afghanistan and ISAF moves into an advisor-support role.

This milestone will see the announcement of the fifth and final tranche of transition, which

would commence implementation in the northern summer, subject to final Afghan and

NATO/ISAF approval.

In his Annual Report for 2012 published on 31 January this year, NATO Secretary General

Rasmussen made a number of important observations about the continuing development of

the capability and capacity of the Afghan security forces.

As transition proceeds, Afghanistan will remain difficult and dangerous.

There will be challenges and setbacks ahead. The Taliban will target Afghan security forces as

they take responsibility for the security of their country.

The IED roadside bomb threat will continue.

The Taliban will continue to focus on high profile propaganda motivated attacks, together

with claiming responsibility for any insider attacks on ISAF forces. It is essential that Defence

and Industry continue working together to develop innovative methods to counter this threat

both in and after Afghanistan.

I acknowledge the hard work, commitment and achievements of the Commander of ISAF

forces, General John Allen.

General Allen has been a steadfast ally and supporter of Australian forces in Afghanistan.

Australia looks forward to continuing our close working relationship with him in his proposed

new role as Supreme Allied Commander Europe.

Australia now looks forward to working closely with General Joseph Dunford as the new

Commander of ISAF.

Reconciliation

Australia supports an Afghan-led reconciliation process, recognising that conflict in

Afghanistan will not be ended by military force alone.

Australia welcomes Afghanistan and Pakistan’s recent efforts to work together to progress

reconciliation.

In particular, I welcome the recent trilateral meeting held in the United Kingdom earlier this

week between Afghanistan President Karzai, Pakistan President Zardari, and British Prime

Minister Cameron to discuss the Afghan-led peace and reconciliation process. The Chair of the

Afghan High Peace Council Rabbani also attended the meeting.

All three leaders committed to take all necessary measures to achieve a peace settlement

over the next six months. They affirmed their support for opening an office in Doha for the

purpose of negotiations between the Taliban and the High Peace Council of Afghanistan as

part of an Afghan-led peace process.

These talks will necessarily be long, complex and inevitably subject to setbacks, but efforts at

such talks must continue.

Uruzgan

In October last year, I advised that the ADF had officially assumed the leadership of

Combined Team - Uruzgan (CT-U) and responsibility for ISAF operations in Uruzgan Province.

CT-U was established, following the withdrawal of the Dutch in August 2010, under United

States command and consisting of Australian, Singaporean, Slovakian and US personnel. The

United States had the leadership of CT-U from August 2010 to October 2012.

Leadership of the CT-U is part of the transition process through which security responsibility

will be transferred from ISAF to the ANSF and will help ensure that transition in Uruzgan is

effected in a seamless way.

Australia has been working on transition with our CT-U partners - the United States,

Singapore and Slovakia.

The ADF assumed responsibility from former CT-U member Slovakia for the security at Multi-National Base Tarin Kot (MNB-TK) in October last year.

I thank Slovakia for its commitment and cooperation with Australia in Uruzgan.

On 8 February, Singapore Minister for Defence Dr Ng announced that the Singapore Armed

Forces will conclude its deployment in Afghanistan by June this year in line with the transition

of security to the ANA 4th Brigade.

Since 2007, Singapore has deployed over 470 servicemen and women to Afghanistan to

support the multinational reconstruction and stabilisation efforts in the region as part of the

International Security Assistance Force (ISAF).

Singapore was an original member of the CT-U when it assumed command of Uruzgan in

2010.

In CT-U, Singaporean personnel have contributed to the force protection of Australian

personnel through their contributions to intelligence, surveillance and reconnaissance,

imagery analysis and counter indirect fire.

They have also provided medical and surgical teams and military institutional trainers both in

Uruzgan and Kabul.

I thank Singapore for its commitment and for its partnership in Afghanistan.

In November last year, I advised that all four Infantry Kandaks of the Afghan National Army

(ANA) 4th Brigade are now operating independently without advisers in Uruzgan Province.

The commencement of independent operations by the 4th Brigade Infantry Kandaks is a

significant step in the process of transition to Afghan-led security responsibility in Uruzgan

and confirms that transition is on track in Uruzgan Province.

In July 2012, transition to Afghan security lead in Uruzgan for the four infantry Kandaks and

the two combat support Kandaks of the 4th Brigade of the 205 Hero Corps of the Afghan

National Army (ANA) commenced.

In early October 2012, the 3rd Infantry Kandak of the 4th Brigade commenced operations

independently without advisers.

The 1st and 6th Infantry Kandaks commenced independent operations early in November and

the final 2nd Infantry Kandak commenced independent operations on 15 November 2012.

With the commencement of independent operations by the four Infantry Kandaks, the ADF

transferred control of joint Forward Operating Bases and Patrol Bases in Uruzgan Province to

the 4th Brigade.

Australian troops no longer operate from Forward Operating Bases or Patrol Bases in Uruzgan

Province and have consolidated their presence at the Multi-National Base Tarin Kot.

The ADF Task Group has shifted emphasis from partnering and mentoring at Kandak level to

advising at Headquarters 4th Brigade level and at the Afghan Operational Coordination

Centre - Provincial in Uruzgan.

Independent operations for the 4th Brigade Infantry Kandaks do not mean the end of a role

for the ADF in Uruzgan.

The ADF will continue to advise the two combat support and combat service support

(logistics) Kandaks of the 4th Brigade.The ADF task group will remain combat ready to assist

Afghan Forces should the need arise and the Special Operations Task Group continues to

conduct partnered combat operations to disrupt the insurgency.

Only weeks after the end of joint patrols, the 4th Brigade launched a major three-week

operation in Uruzgan Province targeting insurgents and capturing weapons caches.

This operation was the final 205 Corp operation designed to prepare Afghan security forces to

operate independently before the 2012 winter.

Based on the most recent advice and assessment, Uruzgan is now expected to fully transition

to Afghan-led security responsibility by the end of this year.

I also take this opportunity to note the appointment of Colonel Rasoul Khan Kandahari as the

new 4/205th Brigade Commander and Sher Bahadur Shah (known as ‘Sher Padshah’) as the

new Deputy Governor of Uruzgan.

Transition - Redeployment

As transition proceeds, there will be changes in the composition of the ADF commitment in

Afghanistan.

Over the past few years, Australia has had approximately 1550 personnel in Afghanistan.

With the shift in focus from training and mentoring to advising and supporting, the 680

strong 3RAR Task Group was replaced by the 330 strong 7RAR Task Group in November last

year.

Similarly, with the commencement of independent operations by the Infantry Kandaks of the

ANA 4th Brigade, the 16 ASLAV vehicles which were used to provide firepower and fire

support to patrols conducted by ADF personnel are no longer required. These vehicles are

now in the process of being returned to Australia.

The overall number of ADF personnel will not substantially decrease until towards the end of

2013, as additional personnel are deployed temporarily to support the transition and

redeployment effort.

In October last year, 65 ADF personnel deployed to Uruzgan to assume responsibility for

security at Multinational Base - Tarin Kot (MNB-TK) following the departure of the Slovak

Force Protection Platoon which had provided security at MNB-TK since the formation of CT-U

in August 2010.

An initial ADF Transition Redeployment Planning Team (TRPT) of around 20 personnel

deployed to the Middle East last year to assist with planning for the redeployment of ADF

troops and equipment, and the disposal of ADF infrastructure.

Additional redeployment personnel were deployed in December 2012 to support the task with

the bulk of the redeployment personnel scheduled to be deployed in March and June of this

year.

Transition - Infrastructure

The ADF has developed an extensive infrastructure footprint within Afghanistan to support its

mission over the last 10 years ranging from accommodation buildings to utilities such as

water treatment plants.

Much of the ADF’s infrastructure is relocatable and work is underway to assess the options for

return to Australia or remaining within Afghanistan to support the ANSF or Australia’s post

2014 posture.

All ADF sites are to be remediated to ensure the safety of the site for future Afghan use and

its environmental cleanliness. A specialist environmental officer will be deployed to ensure all

disposal and infrastructure remediation work does not create an environmental hazard for

Afghanistan.

As required by formal ISAF directions, any infrastructure gifted to the ANSF must be

sustainable by the ANSF. Australia is ensuring in its case that this direction is followed.

There have been a number of Patrol Bases gifted to the ANA, most recently Patrol Base Wali

and Patrol Base Sorkh Bed. In achieving this, the ADF followed the ISAF requirements for

sustainable equipment and environmental standards as well as Australian Government and

ADF guidelines for the gifting of public property.

Where the ANSF determine they do not require a Patrol Base or Combat Outpost and it is

closed, the site is remediated and all infrastructure and equipment removed. The robust

environmental plan is being used to ensure all sites are remediated to a high standard and

that all demolished infrastructure is removed and disposed of appropriately.

One Forward Operating Base - FOB Hadrian - is being dismantled. Australian Mentoring

Teams worked out of FOB Hadrian from 2010 training and patrolling with the 1st Kandak of

the 4th Brigade, until it achieved operational independence in November 2012. As Afghan

forces already operate from nearby Patrol Base Tycz, FOB Hadrian is no longer required.

The task of dismantling the base is the responsibility of CT-U, which includes Australian

engineers from the 7th Battalion Royal Australian Regiment Task Group (7 RAR TG).

Deconstruction commenced in December 2012 and is expected to be complete by mid 2013.

Transition - Equipment

Within Afghanistan, the ADF has equipment located in Uruzgan, Kandahar and Kabul. It also

has equipment at its logistics hub in the United Arab Emirates (UAE). In Uruzgan, ADF

equipment includes: 1,300 armoured accommodation modules, 600 shipping containers, and

275 vehicles.

A variety of options for the redeployment of equipment, including return to Australia, are

being considered. Equipment may also be disposed of through a number of methods such as

gifting, sale or destruction.

Significant work is being undertaken to ensure that the disposal options meet all Australian

Government and ISAF requirements. Gifting to the ANSF will occur only for items that the

ANSF has the capability and the funding to sustain into the future.

Regard for environmental concerns is high in planning considerations. The ADF will work

closely with Biosecurity Australia to ensure all quarantine requirements are met before

material is returned to Australia.

Equipment will be returned to Australia as it becomes available within theatre and

opportunities for transportation arise. Material that is damaged, cannot be cleaned

satisfactorily or has reached its life of type, will be appropriately disposed of.

Most equipment will be returned to Australia using a combination of air and sea assets.

Brisbane is the agreed point of re-entry to Australia and from there equipment will either be

sent to contractors for maintenance and reconstitution or returned directly to Defence

inventory.

Post-2014 Transition Period

In his farewell call to me on Friday 8 February, outgoing US Secretary of Defense Leon

Panetta said that he looked forward to Australia and the United States continuing to work

closely together in Afghanistan during transition and in the post-2014 period.

Secretary Panetta also looked forward to the ongoing strength of the Australia-United States

Alliance and our continued enhanced close practical cooperation particularly in the context of

the new fiscal reality of tight budgets and fiscal constraints.

Secretary Panetta is retiring after a distinguished public service career spanning almost 50

years.

He particularly thanked Australia for our contribution in Afghanistan.

As transition and redeployment proceeds, we will need in conjunction with our NATO/IASF

colleagues to give careful thought to our role in 2014 and the post 2014 period.

We are about to start the conversation with NATO, with ISAF, and importantly with the

United States about our role in 2014 and the post transition 2014 period.

It is no secret, as NATO Secretary General Rasmussen has himself said, in the first instance,

we need to get precision from the United States about what the United States sees as the

scale of its transition draw down, and its post-2014 transition proposals.

What the United States and Afghanistan agree about the United States presence in

Afghanistan post 2014 transition, and what role any United States forces left behind will play,

is the starting point.

Once that is clearer, then Australia and other NATO/ISAF countries will be able to make a

judgement about what role, if any, others, including Australia, might play.

President Obama may well make some remarks about the proposed United States post 2014

transition role in his State of the Union speech on Tuesday night, Washington time,

Wednesday afternoon Canberra time.

Australia’s Post-2014 mission

Australia is committed to support Afghanistan through to transition in December 2014 and

beyond.

Australia demonstrated this commitment to the people of Afghanistan and the international

community at the Chicago Summit, with the signing of the Long-Term Comprehensive

Partnership between Australia and Afghanistan.

The Comprehensive Long-Term Partnership demonstrates that Australia is committed to

supporting Afghanistan beyond 2014, through cooperation in the areas of security, trade and

development, and building the capacity of Afghanistan’s national institutions.

Australia is not alone in its long-term commitment to Afghanistan.

The United States has signed a long term Strategic Partnership Agreement with Afghanistan.

A number of our ISAF partners, including the United Kingdom, France and Italy, as well as

India and NATO itself have also signed similar Agreements.

Beyond the completion of Afghanistan-wide transition at the end of 2014, Australia is

prepared to maintain an ADF presence in Afghanistan, in recognition that Australia has a vital

national interest in supporting Afghanistan’s stability and security after transition.

In the post-2014 transition period, Australia is prepared to see the ADF continue to support

the development of the ANSF through the provision of training and advisory support,

including at the Afghan National Army (ANA) Officer Academy in Kabul with our British and

New Zealand colleagues.

We will also consider a Special Forces contribution, under an appropriate mandate.

As well, Australia will contribute US$100 million annually for three years from 2015 as part of

international efforts to sustain and support the ANSF beyond transition. Our commitment to

ANSF funding reflects our enduring interest in Afghanistan’s long term security and stability.

These commitments send a strong signal to the people of Afghanistan, the Taliban and the

region that the international community will not walk away from Afghanistan at the end of

2014.

Post Transition: our troops coming home

The 2013 White Paper will address the strategic and practical implications of the Australian

Defence Force’s operational drawdown from Afghanistan, East Timor and Solomon Islands.

This includes the implications for our strategic environment and posture and also for Defence

itself.

We do not want to repeat the mistakes of the post Vietnam era, which saw the absence of

strategic planning about the impact the withdrawal from Vietnam would have on the ADF, a

reduction in military numbers and the shunning of and the failure to care for our returning

Vietnam veterans.

As well, in the context of these drawdowns, we will need to pay particular attention to

recruitment and retention rates.

There has been a recent claim that the Special Forces and Commandos are currently

experiencing high separation rates.

This is not the case.

The Chief of Army and the Commander Special Forces Australia advise that the separation of

members from Special Forces and Commandos is at an historical low.

The White Paper will address how the Australian Defence Force adjusts from a high

operational posture to a focus on our own force posture and our own backyard.

Support to our Iraq and Afghanistan Veterans

With the challenge of transition will come the challenge of making sure we look after our

returning service men and women.

The care of wounded, injured and ill veterans should rightly be a high priority for the

Government and the Australian community.

Veteran care will become an increasingly important focus of our time in Afghanistan.

As the Prime Minister said in her 31 October Statement to the House on Afghanistan: “The

next decade will see more young Australian combat veterans live in our community than

since the 1970s.”

At the time the Prime Minister said that this will “demand changes in the way the Department

of Defence and the Department of Veterans’ Affairs care for service personnel and veterans”.

I am pleased to say that these changes are being made.

On Tuesday last week, the Minister for Veterans’ Affairs and Defence Science and Personnel

and I attended the signing by the Departments of Defence and Veterans’ Affairs of a

Memorandum of Understanding for the Cooperative Delivery of Care and Support to Eligible

Persons.

The MOU is aimed at better coordinating the delivery of care and support services between

Defence and Veterans’ Affairs.

The MOU sets out the key principles which will govern the cooperative delivery of care and

support and establishes governance arrangements designed to ensure that these support

arrangements remain effective in an ongoing way.

The MOU also introduces the concept of the ‘Support Continuum’, the structure of systems

that extends across both Defence and Veterans’ Affairs to deliver the seamless care and

support our servicemen and women, and their dependants, deserve.

Put simply, it is to stop our wounded, injured and ill veterans from falling between the cracks

in the system.

All Australian Defence Force personnel will benefit from stronger ties between Defence and

the Department of Veteran’s Affairs, with services and support tailored to better meet the

needs of members at any point during or after their Defence career.

The new MOU builds on the Support for Wounded, Injured or Ill program, also designed to

make sure that veterans do not fall through gaps between Defence and Veterans’ Affairs.

The Simpson Assistance Program provides services to support the needs of severely

wounded, injured or ill individuals and their families.

The Chief of Army’s Wounded, Injured or Ill Digger Forum provides an important opportunity

for Defence and Veterans’ Affairs to understand the needs and requirements of wounded

veterans and their families.

Defence’s general health services also support care for our Australian Defence Force

personnel.

Today, my colleague the Minister for Defence Science and Personnel, Warren Snowdon and I

announce the successful transfer of all Defence health services from Defence to Medibank

Health Solutions.

The Government, in conjunction with Defence and Medibank Health Solutions, is committed

to providing Australian Defence Force members with a world class and high quality health

system.

In June 2012, Defence signed a $1.3 billion contract with Medibank Health Solutions to

provide health care services to the Australian Defence Force.

This contract will deliver a comprehensive suite of five health services to Australian Defence

Force personnel.

Four of these services were transferred to Medibank Health Solutions late last year:

 On base services, delivered through a national contracted health professional workforce, which was transitioned in November last year;  Pathology services, via a national provider network, which was transitioned in September last year;  Imaging and Radiology services, also through a national provider network, which was

transitioned in September last year; and  A Health Hotline Service, delivered through Medibank Health Solutions’ world class tele-health hotline service, which was transitioned in October last year.

Today, the successful transfer of the fifth service, off base services provided through a

national network of specialist and allied health care providers, sees the full suite of off-base

specialist, allied and diagnostic health services available.

In addition to Government health care, private organisations have an important role to play

as well.

Everyone will be familiar with the work of the RSL and Legacy, which have been supporting

veterans for almost a century.

New organisations such as “Soldier On” are also playing a role.

“Soldier On” is a private foundation set up by two young former soldiers to provide support to

Australian service men and women who have suffered either physical or psychological

wounds in the recent conflicts in Iraq and Afghanistan.

The SAS Trust, Commando Welfare Trust, and the Australian Defence Force Assistance Trust

are helping provide for the families and children of those who have made the ultimate

sacrifice.

These trusts have a particular focus on the education of the children of our fallen.

The SAS Resources Trust was established in 1996 to provide relief to current and former

members of the SAS Regiment and their dependants, who have died or become disabled as a

result of operational service or in training.

In 2009, the Government provided a grant of $10 million to the Trust to enable it to continue

its work in assisting the families of the deceased or disabled members of the SAS Regiment.

The Commando Welfare Trust was established in 2011.

In November 2011, the Trust benefited from an $8 million grant from the Government to

support initial emergency funding and long term financial requirements of families of

Commandos and supporting Special Operations Command members in times of hardship.

In April 2012 the Government announced a $14 million grant to establish the Legacy Services

Trust, now called the Australian Defence Force Assistance Trust to be administered by Legacy

Australia, for the benefit of the families of those killed or wounded while serving their

country, with a priority in the first instance on service in Afghanistan.

The establishment of the Australian Defence Force Assistance Trust means that enhanced

support will now be available for the families of all ADF members who are killed or

incapacitated on operations.

Defence also continues to enhance its comprehensive approach to screening, assessment and

treatment of mental health concerns, including Post Traumatic Stress Disorder.

Australian Defence Force members dealing with Post Traumatic Stress Disorder have access

to the full range of mental health services and rehabilitation services.

Significant improvements have been made to the provision of mental health care across the

Australian Defence Force as part of a more than $90 million investment into Defence and

Veteran’s Affairs by Government.

These include establishing eight Regional Mental Health teams supporting the delivery of

mental health care.

Defence is also working hard together with organisations like ‘Soldier On’ to de-stigmatise

mental health issues.

One of the most important factors in treating mental disorders, including Post Traumatic

Stress Disorder (PTSD) is to seek support and treatment as soon as possible.

Early identification of those at risk of developing mental health issues is a pathway to better

health outcomes.

These arrangements result in a high return to work rate for rehabilitated members and

provide good support for veterans.

But it is essential that we continue to take steps to make the support system even better.

Awareness and education in relation to mental health issues is a key factor in preventing

future problems.

That is why seeking assistance for mental health concerns was the theme of the inaugural

Australian Defence Force Mental Health Day held on 10 October 2012.

Today I announce that I have asked my colleague, the Minister for Veterans’ Affairs and the

Defence Science and Personnel, Warren Snowdon, in conjunction with the CDF, Secretary and

with organisations like ‘Soldier On’, to look closely to see what further comprehensive

education and support might be offered across all levels of the Australian Defence Force and

at all stages of an Australian Defence Force career - from pre-recruitment and recruitment to

completion of service.

This initiative will help ensure all members of the Australian Defence Force are aware of the

risks associated with mental health issues including PTSD and know how to address this risk.

2013 Defence White Paper

In May last year the Prime Minister and I announced that the Government would deliver a

new Defence White Paper in the first half of 2013.

Work on the White Paper is progressing well.

The Government is committed to ensuring that the White Paper takes full account of the

Defence Industry’s views, including on strategic Defence industry issues.

I therefore again extend to you the opportunity to provide a submission to the 2013 Defence

White Paper.

The public submissions process runs until 28 February.

Last week I received from the Secretary of the Department of Defence what I regard as the

first working draft of the White Paper.

I’ll obviously study that carefully. There’ll be changes made to that and in the not too distant

future we’ll be in a position to start consulting other relevant national security agencies,

whether it’s the Department of Foreign Affairs and Trade or our intelligence community.

You may have seen earlier references in the media to an alleged leaked ‘draft’ of the White

Paper.

That was an internal Defence document that did not come to me. Indeed it did not even go to

the Secretary of the Department of Defence.

It had not been through the Defence departmental processes, let alone Ministerial or any of

the usual Interdepartmental processes.

In any event, the only document that matters and the one that needs to be judged on its

merits is the 2013 Defence White Paper to be released by the Government in the second

quarter of this year.

The White Paper will address the significant developments internationally and domestically

since the 2009 White Paper which are influencing Australia’s Defence posture, future force

structure and Defence budget, including:

 The ongoing strategic shift to our region, the Indo-Pacific and Asia Pacific, particularly the shift of economic weight to our region;  The ADF’s operational drawdown from Afghanistan, East Timor and Solomon Islands;  The United States’ (US) re-balance to the Asia Pacific and Australia’s enhanced

practical cooperation with the US pursuant to our Alliance relationship;  Australia’s own Force Posture Review - the first in a quarter of a century;  Bearing in mind the 2009 White Paper judgment that the Global Financial Crisis (GFC)

was the most fundamental economic challenge facing Australia, the ongoing adverse effects of this crisis, which have continued to have a significant deleterious impact on the global economy and Defence funding, seeing what United States Secretary of State for Defense Leon Panetta calls the new fiscal reality.

The White Paper will also address the ongoing need for reform in Defence, another great

challenge for the Defence Organisation.

Ongoing Defence Reform Program

An effectively functioning Defence organisation, including the Australian Defence Force is a

critical part of protecting and defending Australia’s national security interests.

This Government is committed to ensuring that the ADF has the equipment and culture it

needs to effectively serve Australia’s national security interests.

This is why the Government has commenced a significant and wide ranging reform program

to addressing a range of significant challenges in Defence, including:

 Accountability reform to strengthen personal and institutional accountability;  Defence Budget reforms to take into account all budget processes, estimation methods and underlying budget assumptions;  Personnel reforms, including the removal of gender restrictions from Australian

Defence Force combat roles (now effectively followed by the United States);  Culture reforms which build on the Australian Defence Force and Defence’s existing cultural strengths to develop an organisation which excels in preparing for and

conducting operations in support of Australia and its national interests, while reflecting modern community standards and attitudes; and  Procurement and capability reforms to enhance the delivery of Defence capability projects, strengthen Australian Defence industry and improve accountability;

These reforms, their implementation and oversight arrangements for their implementation

will be incorporated in the 2013 Defence White Paper.

To ensure that ongoing implementation of these essential reforms receives the highest levels

of oversight I propose to on an annual basis provide a report to the Parliament on Defence’s

implementation of the reform program.

Accountability reform

Failures in accountability arrangements damage Defence, weaken Defence’s performance and

make both Defence and Industry less efficient and effective.

We must continue the process of instilling much greater rigour and individual and institutional

accountability to our consideration, management and delivery of major projects, procurement

and capabilities.

In August 2011 I released the “Review of the Defence Accountability Framework”, the Black

Review, the first comprehensive review of personal and institutional accountability in Defence

as a whole.

The Black Review confirmed significant problems with performance in many parts of Defence.

To address these problems, Defence has commenced implementing a range of accountability

reforms to strengthen personal and institutional accountability, particularly in the areas of

capability development and acquisition.

Implementation of the Black Review will improve Defence management and improve delivery

of ADF capability.

Defence Budget Reforms

The Defence Budget is a significant element of the Government’s overall Budget and its fiscal

strategy.

As a consequence we have a responsibility to, and we must ensure that, the Defence dollar is

spent on priority items, and that it is seen to be spent wisely.

We must ensure that Defence’s budgeting system, including all budget processes, estimation

methods and underlying budget assumptions support effective and efficient Defence planning.

In this time of fiscal restraint, it is essential that we prioritise our investments in capability,

reduce administration costs to the most efficient levels and spend our funds wisely.

Some reaction to the 2012-13 Defence Budget has failed to take account of the new fiscal

reality we, the United States, the United Kingdom, Canada, New Zealand, Europe and others

face.

Claims that this year’s budget was “the worst day for Australia’s Defence since the fall of

Saigon in 1975”, that “the best time to invade Australia will be around 2028-30” and that the

ADF is in “terminal decline” are overblown and misplaced rhetoric.

As well, analysis of Defence funding based on Gross Domestic Product data is not the only

reference point.

There has, for example, been no fundamental change to our Defence Budget from a strategic

perspective:

 In the 2009-10 Budget, the Government, for the first time, budgeted over $100 billion for Defence across the Forward Estimates.  Last year in the 2011-12 Portfolio Additional Estimates Statements, Defence’s Budget across the Forward Estimates was $103 billion.  In this year’s Budget, the Government has again budgeted $103 billion for Defence

across the Forward Estimates.  This level of funding will maintain Australia’s status in the top 15 nations in terms of world Defence expenditure, along with Canada either 13th or 14th in that list.  Australia continues to be 2nd on the list of military expenditure per capita basis

compared to the G7 countries and China, with only the United States spending more per capita.  In real dollar terms, we spend far greater than any of our immediate regional neighbours, including Indonesia and Malaysia.

Notably we have ring fenced key priorities from any cuts:

 There will be no adverse impact on operations.  There will be no adverse impact on military numbers.  There will be no adverse implications for kit for forces about to be deployed or on deployment.

A recent report asserted a ‘$1 billion shortfall’ in the 2012-13 Financial year Defence Budget.

There is no such ‘$1 billion shortfall’.

This follows a balanced Defence budget in 2011-12 and a $1.8 billion underspend in 2010-11.

Advice from Defence continues to: forecast a balanced budget for the 2012-13 Financial year,

that Defence’s contribution to the Budget bottom line continues to be manageable and that

Defence is able to carry out the operational tasks Government currently requires of it.

Much of what we do in Defence and National Security is, fortunately, bipartisan.

I am now pleased to see a bipartisanship approach to Defence spending.

As the Leader of the Opposition said in his formal address on 31 January, one of the

Coalition’s “big policy commitments” was that: “There will be no further reductions in Defence

spending”.

No commitment to increase, no commitment to reinstate and we saw precisely that same

response from Senator Johnston on Thursday last week.

When asked whether the Opposition would commit to increase Defence spending, Senator

Johnston replied “… I won’t do it.”

This home truth from the Leader of the Opposition and the Shadow Minister for Defence

formally adopts the Government’s 2012-13 fiscal position for Defence funding over the four

year Forward Estimates period.

Senator Johnston asserts that Australia is ranked 65th in the world for Defence spending as a

percentage of GDP.

As a percentage of GDP (at 1.6 per cent in 2012-13), Australia is comparable to Canada, Italy

and Germany.

And as I have said before, of course I would prefer to see spending closer to 2% of GDP than

1.59%.

As outlined in the Government’s 2012-13 Budget Overview, in a G7 (United States, United

Kingdom, France, Canada, Italy, Germany and Japan) plus China comparison, Australia

continues to rank second on a military expenditure per capita basis, with only the United

States spending more per capita.

In real dollar terms we spend far greater than any of our neighbours in the immediate region.

According to the same source which Senator Johnston has used, the Stockholm International

Peace Research Institute, Australia was in the top 15 countries with the highest military

expenditure in 2011 - at number 13. In 2012-13, Australia will remain in this relative

position.

The problem for Senator Johnston is that whatever his analysis about Australian Defence

funding, it is the same outcome for his Leader’s policy as it is for the Government’s policy:

they are both based on the same level of Defence funding over the four year Forward

Estimates period.

The Government also remains committed to providing funding for protection against IEDs,

which is one of the highest priorities for this Government.

Any suggestion to the contrary is incorrect. Counter IED operations and equipment in

Afghanistan will continue to be funded.

Protection against IEDs for our troops in Afghanistan is being progressed as part of the $1.6

billion Force Protection Review.

In addition to these Force Protection Review measures, the Government has implemented

additional measures to protect our troops from IEDs including an additional $70 million for

new route clearance systems to detect and clear explosive hazards.

The Budget did see deferral by two years of later elements of Project JP 154 Phase 2, which

were not due to be operationally available until the period 2014-15 to 2015-16. This will not

impact on operations in Afghanistan, but the project will help ensure the Australian Defence

Force’s long term capability against IEDs remains effective after Afghanistan.

Personnel reforms

In April 2011, the Government announced that Defence would bring forward for

implementation the opening up of all roles in the ADF to women, including combat roles, on

the basis that determination for suitability for roles in the ADF is to be based on physical and

intellectual ability, not gender.

In September 2011 the Government approved the Implementation Plan for the removal of

gender restrictions on Australian Defence Force combat role employment opportunities.

The plan details the steps Defence will take to enable women to meet the demands of the

role, to pursue careers as Navy Clearance Divers and Mine Clearance Diver Officers; Air Force

Airfield Defence Guards and Ground Defence Officers; and Army Infantry, Armoured Corps

and some Artillery roles.

The implementation plan is well underway.

In-service applicants are now entitled to apply for a career in a combat role, provided they

meet all requirements and subject to course availability and vacancies.

On 24 January, outgoing United States Defense Secretary Panetta and Chairman of the Joint

Chiefs of Staff, General Martin Dempsey, announced plans by the United States Department

of Defense to also remove gender-based barriers to service.

Cultural reforms

In April 2011, in the aftermath of the so-called ‘ADFA Skype incident’, I announced a range of

Reviews into aspects of the culture within both the Australian Defence Force Academy and

the Australian Defence Force to address ongoing concern in relation to failure to meet

appropriate standards of conduct.

The Reviews included the Use of Alcohol in the ADF, Personal Conduct of ADF Personnel, the

Use of Social Media in Defence, Australian Public Service Women’s Leadership Pathways in

Defence and the Management of Incidents and Complaints in Defence.

The Reviews assessed the good work that had been done to date in these areas and

examined what further improvements would be made.

In addition to the Reviews into aspects of Defence culture, I also announced at that time two

significant reviews into the treatment of women at ADFA and in the ADF more generally to be

conducted by the Federal Sex Discrimination Commissioner, Ms Elizabeth Broderick, on behalf

of the Australian Human Rights Commission.

Phase One of the Broderick Review, into the Treatment of Women at ADFA, was tabled in

Parliament in November 2011.

Phase Two, which considered the treatment of women in the ADF generally, and pathways for

women into leadership roles in the ADF, was tabled in Parliament in August 2012.

Defence’s comprehensive response to these cultural Reviews, the Pathway to Change:

Evolving Defence Culture outlines how the recommendations of the reviews will be

implemented consistent with the wider Defence reform programme.

In November 2012, the Government announced its Response to the DLA Piper review of

allegations of sexual and other abuse in Defence.

The Response includes:

 an Apology, delivered in Parliament on 26 November, to members of the Australian Defence Force or Defence employees who have suffered sexual or other forms of abuse in the course of their employment;

 the establishment of an independent Taskforce to assess individual complaints, headed by the Hon Len Roberts-Smith RFD, QC;  a capped compensation scheme; and  counselling services for complainants.

The Defence Abuse Task Force will liaise with those who have made allegations of abuse to

determine an appropriate response, which can include:

 restorative justice/conciliation processes where a victim and alleged perpetrator are brought together;  referral to counselling;  compensation, to a maximum of $50,000;  referral of appropriate matters to police for formal criminal investigation; and  referral of appropriate matters to the military justice system or other Defence process

(such as considered under the Public Service Act).

The Taskforce will also consider whether a Royal Commission would be merited into any

categories of allegation raised with the DLA Piper Review or the Taskforce, in particular the so

called ADFA 24 cases noted by DLA Piper and the cases of abuse identified at HMAS Leeuwin.

The Taskforce will deliver progress reports to the Attorney-General and me.

The Attorney-General and I will report to Parliament, as appropriate.

It is important that the Minister of the day make these ongoing implementation reports.

It is also important that there be some form of Parliamentary oversight so far as

implementation of those recommendations from those various reports are concerned.

Some of you may be aware that the Senate References Committee for Foreign Affairs,

Defence and Trade has a reference before it on military justice matters.

I propose to have a discussion with my Parliamentary colleagues to see what is the best

mechanism for Parliamentary oversight of the implementation of the various

recommendations arising from these reviews, including any which come from the Task Force.

Procurement reform

Over the past 18 months, the Government has announced a series of reforms to strengthen

procurement processes within Defence.

These reforms are essential to address ongoing concerns in relation to accountability and

reporting.

These include:

 Reforms to Project management accountability (announced in May 2011);  Reforms to strengthen the Projects of Concern process (announced in June 2011);  Reforms to Support Ship Repair and Management Practices - the Rizzo Report (announced in July 2011);

 Reforms in the Sustainment of Australia’s Collins Class submarines - the Coles Review (announced in August 2011);  Reforms to the Defence Capability Plan (announced July 2012).

Implementation of all these reforms is well underway, with the majority already

implemented.

There is always a lag effect in procurement and capability. The adverse consequence of

failed, stalled or mismanaged projects lasts for a long time.

Sometimes it helps to look beyond the lag effect and focus on actual reform and the benefits

of a reform program.

And we are now starting to see the benefits of this reform program.

The Projects of Concern process was established by the Government in 2008 to focus the

attention of the highest levels of Government, Defence and Industry on remediating problem

projects.

In June 2011, the Government announced a number of reforms to strengthen the Projects of

Concern process, including:

 the establishment of a more formal process for adding projects to the list;  the establishment of a more formal process for removing projects from the list;  the development of agreed remediation plans, including formal milestones for the removal of a project from the list;

 increased Ministerial involvement and oversight of the process; and  incentives for companies to fix projects on the list by taking into account the performance of companies in addressing Projects of Concern when evaluating their tenders for other projects.

All of these reforms have now been implemented and we are seeing improvement in the

projects included in the process.

Since the Projects of Concern process was established, 21 projects have been put on the list.

Fifteen have since been removed - 13 due to remediation and two due to cancellation.

The total value of projects that have been remediated is around $13.6 billion. That’s $13.6

billion dollars of defence capability now serving our nation that might have been lost or still

stalled without intervention through the Projects of Concern process.

The delivery of projects overall has also improved.

In June 2012, the DMO engaged Independent Project Analysis to benchmark DMO’s

performance in managing projects against similar private sector projects.

The report, delivered in September 2012, found that there has been a statistically significant

improvement in the schedule benchmarks following implementation of the Kinnaird Review.

The Report’s findings support DMO’s own analysis which shows that it has doubled the

number of projects delivered on or ahead of schedule since 2000. The average schedule delay

experienced in projects has been almost halved since DMO was formed in 2000 - from 50 per

cent for pre Kinnaird Projects to approx 30 per cent for post Kinnaird Projects.

It found that schedule performance in the DMO is now comparable with international

commercial industry and is better than Australian industry undertaking large industrial

projects.

The Report also found that, while DMO projects were more difficult than the average

industrial project, few of the projects completed by DMO over-ran their cost budgets. This is

despite the Report’s finding that even projects based on a military off the shelf capability are

more difficult than average industrial project.

The Report also found that on average, the DMO delivers projects under budget - on

average, using 98 per cent of their approved budget.

The Report also found that, based on an analysis of 73 projects delivered since 2008, the

projects delivered 95 per cent of the planned capability.

DMO’s own analysis also shows that it is getting into contract for the acquisition of capability

faster following second pass than it was prior to the Kinnaird reforms.

These improved outcomes demonstrate the benefits to Defence and to industry of the range

of reforms underway in Defence procurement.

But it is essential to continue to improve project capability procurement in Defence.

Schedule performance remains an area where we can do more to improve performance.

Major Defence projects continue to experience an average 32 month delay, as the recent

Australian National Audit Office report into the top 29 projects found, including:

 Collins Class Collins Reliability and Sustainability (99 months);  Tiger Helicopters (79 months);  Collins Class Replacement Combat System (72 months);  ANZAC Class antiship missile upgrade (72 months);  Wedgetail (58 months)

Poor project management in the past has also seen the failure on a number of occasions to

keep Government fully informed about changes to a project’s approved scope, cost or

schedule.

It is not appropriate for Defence to vary from the approved scope, cost or schedule, without

approval from the original decision maker or delegated approval authority.

In 2012, at Government direction, Defence conducted an acquisition baseline review audit of

all approved projects within the DMO to ensure they were being progressed within approved

scope, cost and schedule.

This audit found that while all projects were within approved budget, two projects reported

variation against the approved scope and around 20 percent of projects were late against the

approved schedule.

This audit identified a number of projects which had not met the reporting standards

expected by Government, with substantial delays in reporting - or more advisedly not

reporting - of schedule delays and scope variations. Such projects included:

 Joint Project 1 - Harpoon Missile Capability, which experienced an unapproved change in the scope of the project;  AIR 5418 Phase 1 - JASSM, which experienced an unapproved change in the scope of the project;  Joint Project 2059 Phase 2 - Bulk Liquid Distribution, which was delayed but

Government was not informed; and  Land 40 Phase 2 - Direct Fire Support Weapon - Lightweight Automatic Grenade Launcher, which experienced an unapproved change in the scope of the project.

In response to this audit, the Government has directed that Defence implement a new regime

of reporting on variations to original project approvals.

Project approval submissions will include clear thresholds for reporting to Government and

the original approval authority for variations to cost, scope and schedule.

Variations that exceed these thresholds must be referred for consideration to the original

decision maker, whether that is the Minister, the Minister and the Minister for Finance and

Deregulation or the National Security Committee of the Cabinet.

This important further reform will be made explicit in the White Paper so that it is embedded

in Defence culture.

All of these reforms will be essential to effective and efficient delivery of the significant

capabilities to be included in the 2013 Defence White Paper.

2013 Capability Priorities

The 2009 Defence White Paper outlined a number of core capabilities for the ADF.

In total, there were some 180 capability projects in the 2009 Defence Capability Plan

associated with the 2009 Defence White Paper.

The vast majority of those remain in the DCP today, with about ten removed, largely as a

result of being overtaken by other projects.

Since the 2009 White Paper, Government has approved over 100 first pass, second pass and

other approvals with a total value of over $16 billion.

And since the 2012 May Budget, the Government has continued to acquire core capability

projects, including 10 C-27J Battlefield Airlifters, the EA-18G Growler Electronic Attack

capability and additional Bushmasters.

The Government will progress a number of core capabilities in 2013, including:

 A significant maritime construction program including twelve future submarines, three Air Warfare Destroyers, two Landing Helicopter Dock amphibious ships and replacements for our supply ships HMAS Sirius and HMAS Success.

 Australia’s air combat capability based on an assessment of whether alternative options need to be implemented to ensure continuity in Australia’s Air Combat Capability in light of Joint Strike Fighter project delays and the ageing of Australia’s Classic F/A-18 Hornet fleet.

Conclusion

National security and economic security are the two highest priorities of any Commonwealth

Government.

Protecting and defending our national security interests involves making complex strategic

judgments about short-term and long-term risks and opportunities in relation to the

international strategic environment.

It means taking action to address the significant challenges we have before us.

This includes judgments about Defence posture and operations, Defence capability and

Defence funding.

It also includes judgments about the reforms necessary to ensure that Defence can

effectively and efficiently play its role in protecting and defending our national security

interests.

All of these challenges will be addressed in the course of this year, and in particular through

the 2013 Defence White Paper.