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Consideration resumed from 31 May

Senators in attendance:

Senator Faulkner, Minister for Defence

Mr Peter Jennings, Deputy Secretary, Strategy

Mr Simeon Gilding, Acting Deputy Secretary, Strategy (Operations)

Mr Brendan Sargeant, Deputy Secretary, Strategic Reform and Governance

Mr Geoff Brown, Chief Audit Executive

Lieutenant General David Hurley AO, DSC, Vice Chief of the Defence Force

Major General Angus Campbell, Head Military Strategic Commitments

Air Vice Marshal Margaret Staib AM, CSC, Commander Joint Logistics

Major General Paul Alexander, Commander Joint Health

Rear Admiral James Goldrick, RAN, Commander Joint Education, Training and Warfare Centre

Mr Geoff Earley, Inspector General, ADF

Major General Steve Day, Head, Joint capability Coordination

Major General Brigadier Greg Melick, Head, Cadet, Reserve and Employer Support Division

Mr Philip Prior, Chief Finance Officer, CFO

Mr Michael Gibson, First Assistant Secretary Resources and Assurance, CFO

Vice Admiral Matt Tripovich AM, CSC, Chief Capability Development Group

Major General Steve Day, Head Joint Capability Coordination

Dr Stephen Gumley AO, Chief Executive Officer, Defence Materiel Organisation

Mr Warren King, Deputy Chief Executive Officer, Defence Materiel Organisation

Mr Steve Wearn, Chief Financial Officer, Defence Materiel Organisation

Mr Harry Dunstall, General Manager Commercial, Defence Materiel Organisation

Ms Shireane McKinnie, Acting General Manager Systems, Defence Materiel Organisation

Mr Graham Eveille, Director General Major Program Control, Defence Materiel Organisation

Rear Admiral Peter Marshall AM, RAN, Head Maritime Systems Division, Defence Materiel Organisation

Major General Grant Cavenagh, Head Land Systems, Defence Materiel Organisation

Brigadier Mike Phelps, Director General Land Manoeuvre Systems, Defence Materiel Organisation

Air Vice Marshal Colin Thorne AM, Head Aerospace Systems Division, Defence Materiel Organisation

Major General Tony Fraser AO, CSC, Head Helicopter Systems Division, Defence Materiel Organisation

Air Vice Marshal John Harvey AM, Project Manager New Air Combat Capability, Defence Materiel Organisation

Air Vice Marshal Chris Deeble AM, CSC, Program Manager Airborne Early Warning and Control, Defence Materiel Organisation

Mr Michael Aylward, Head Electronic Systems Division, Defence Materiel Organisation

Mr Mark Reynolds, Head Industry Division, Defence Materiel Organisation

Mr Peter Lambert, Head Human Resources and Corporate Services Division, Defence Materiel Organisation

Mr Ian Donoghue, Director General Defence Asset and Inventory Management, Defence Materiel Organisation

Mr Anthony Klenthis, Head Explosive Ordnance Division, Defence Materiel Organisation

Mr Tony Hindmarsh, Chief Audit Executive, Defence Materiel Organisation

Brigadier Bill Horrocks, Director-General, Land Combat Systems

Mr Simon Lewis, Deputy Secretary, Defence Support

Major General Elizabeth Cosson, CSC, Head, Defence Support Operations

Mr Kieran Gleeson, Chief Operating Officer, Defence Support Group

Mr John Owens, Head, Infrastructure Division

Mr Mark Cunliffe, Head, Defence Legal

Mr David Lloyd, Defence General Counsel, Defence Legal

Mr Mark Sweeney, Director General, People Services

Mr Michael Callan, Director General, Defence Community Organisation

Mr Simon Lewis, Deputy Secretary, Defence Support

Major General Elizabeth Cosson CSC, Head Defence Support Operations

Mr Kieran Gleeson, Chief Operating Officer Defence Support Group

Mr John Owens, Head Infrastructure Division

Mr Mark Cunliffe, Head Defence Legal

Mr David Lloyd, Defence General Counsel, Defence Legal

Mr Mark Sweeney, Director General, People Services

Mr Phil Minns, Deputy Secretary People Strategies and Policy

Major General Craig Orme, AM, CSC, Head People Capability, PSP

Mr Steve Grzeskowiak, Head People Policy, PSP

Mr Craig Pandy, Head Workforce and Shared Services Reform, PSP

Vice Admiral Russ Crane AO, CSM, Chief of Navy

Lieutenant General Ken Gillespie AO, DSC, CSM, Chief of Army

Air Marshal Mark Binskin AM, Chief of Air Force

Mr Stephen Merchant, Deputy Secretary Intelligence and Security

Professor Robert Clark, Chief Defence Scientist

Mr Greg Farr, Chief Information Officer

Rear Admiral Peter Jones, DSC, AM, RAN, Head ICT Operations, Chief Information Officer

Mrs Anne Brown, First Assistant Secretary ICT Development, Chief Information Officer

Mr Matt Yannopoulos, Chief Technology Officer, Chief Information Officer

Mr Clive Lines, First Assistant Secretary ICT Reform, Chief Information Officer

Mr Peter Howman, Chief Operating Officer

Mr Robert Groom, Chief Financial Officer

Mr Ian Campbell, PSM, Secretary

Mr Shane Carmody, Deputy President

Mr Barry Telford, General Manager, Support

Mr Ken Douglas, General Manager, Services

Mr Sean Farrelly, Executive Manager, Executive

Mr, Mark Harrigan, Acting National Manager, Organisational Change Group

Ms Carolyn Spiers, National Manager/Principal Legal Advisor, Business Integrity and Legal Services Group

Ms Narelle Dotta, Acting General Manager, Corporate

Mr Graeme Rochow, National Manager/Chief Finance Officer, Resources Group

Mr Roger Winzenberg, National Manager, People Services Group

Mr Ian Campbell PSM, Secretary

Mr Shane Carmody, Deputy President

Mr Barry Telford, General Manager, Support

Mr Neil Bayles, National Manager, Clarke/MRCA Reviews

Ms Carolyn Spiers, National Manager/Principal Legal Adviser, Business Integrity and Legal Services Group

Mr Ian Campbell PSM, Secretary

Mr Shane Carmody, Deputy President

Mr Ken Douglas, General Manager, Services

Mr Barry Telford, General Manager, Support

Dr Graeme Killer AO, Principal Medical Adviser

Mr Wayne Penniall, National Manager, Veterans and Veterans Families Counselling Service

Ms Judy Daniel, National Manager, Primary Care Policy Group

Mr Ian Campbell PSM, Secretary

Mr Shane Carmody, Deputy President

Mr Sean Farrelly, Executive Manager, Executive

Mr Tim Evans, National Manager, Commemorations Group

Major General Paul Stevens AO (Rtd), Director, Office of Australian War Graves

Ms Nola Anderson, Acting Director

Ms Helen Withnell, Assistant Director, Branch Head, Public Programs

Ms Leanne Patterson, Chief Finance Officer

CHAIR (Senator Mark Bishop) —I declare open this budget estimates meeting of the Senate Foreign Affairs, Defence and Trade Legislation Committee. I understand a number of persons at the witness table have statements they wish to make. At first instance I will go to CDF.

Air Chief Marshal Houston —Last night I was asked in regard to the HMAS Success COI: was the inquiry officer inquiry into events on HMAS Success in 2009 set aside due to bias? My response is as follows. A legal review as part of the redress of grievance process identified that this inquiry was void for bias. Subsequent advice by Head of Defence Legal, Mr Mark Cunliffe, in relation into the consequences of the legal review confirmed the view that the manner in which certain questions were asked during the inquiry could lead a fair-minded lay observer to conclude that the inquiry officer did not bring an open mind to the process—this is not actual bias but a perception of bias—and that no part of the inquiry officer report should be treated as reliable or relied upon.

The second question was whether the bias associated with the inquiry officer inquiry is an issue within the HMAS Success commission of inquiry terms of reference. My response is as follows. The terms of reference for the HMAS Success commission of inquiry, which are posted on the internet on the Defence website, provide that the inquiry is:

… to inquire into the alleged incidents of unacceptable behaviour, as defined in applicable Defence Instructions, or other behaviour which could compromise the safety and effectiveness of the crew onboard HMAS Success that were brought to the attention of command between March and May 2009, and issues associated with the subsequent management of such allegations and of personnel allegedly involved.

The terms of reference include an annex providing additional context. Subparagraphs 5(b) and 5(d) state:

The Commission is, so far as is practicable, to:

…            …            …

b.     obtain and consider investigation and inquiry reports relating to matters before the Commission (unless to do so would be considered prejudicial to the conduct and integrity of this inquiry);

…            …            …

d.     identify any substantial weaknesses or deficiencies (isolated or systemic) in applicable systems, policies, practices, procedures and training which have arisen in connection with matters before the Commission.

Therefore, issues related to processes and decision making in the aftermath of events on HMAS Success between March and May 2009 are potentially matters the commission of inquiry could choose to consider within the terms of reference. Just to complete the package, I table the Chief of the Defence Force commission of inquiry instrument of appointment, which I signed on 9 March, and the attached terms of reference for your consideration.

CHAIR —Documents referred to by CDF are accepted for tabling.

Air Chief Marshal Houston —Secondly, I would like to go to Senator Trood’s questioning of, I suppose, the incident involving the scientists who were involved in surveys in Timor. I was asked: what were these surveys about in Timor and was there a political aspect to them? I think that is broadly it, Senator.

My response to that is that Defence civilian researchers have conducted surveys in a number of communities around Timor, seeking local views and attitudes on a range of issues affecting peace and stability in East Timor. Questions have addressed community perceptions on issues such as violence, justice, governance and social infrastructure. The results of the research conducted by Defence civilian scientists have contributed to the ISF’s awareness of the security needs of the people and government of East Timor. Around 90 of these voluntary community surveys have taken place over the past two years. The program ceased on 18 March 2010.

The surveys were led by Defence civilian scientists. Australian soldiers accompanying the researchers were only present to provide logistical and security support. Engagement with the communities was established through the local chief, who set up the meetings and issued invitations to the village. At the start of a discussion, participants were reminded their presence was voluntary. They were also provided with information on the intended use of the survey and the limitations on the sharing of data. Local interpreters were used to facilitate consultation during community forums.

To ask questions about political affiliations would have undermined the purpose of the community forums. At no point during the community forum at Suco of Lore village—and I stress this—was a question posed by the researchers about political alignment. Participants in the forum were not asked to indicate political alignment by raising their hands. It is possible the translation process across three languages—English, Tetum and the local dialect—could have caused the confusion at the community forum at Suco of Lore village on 23 February this year. It is also possible internal discussions between community members had local political relevance. However, such comments were not translated back to the researchers. These voluntary community surveys met the guidelines outlined in the National Statement on Ethical Conduct in Human Research, published in 2007. Obviously we ceased those surveys when this matter came up. My judgment was that continuing the study was not operationally essential and the decision to cease the study was the most appropriate course of action.

With regard to consultation, ISF and Australian government officials met with La’o Hamutuk representatives on 12 March to discuss claims appearing in one of their media releases on 11 March. The ISF has encouraged La’o Hamutuk to seek dialogue and communicate directly should they have any further questions about ISF efforts in Timor Leste. Of course, as I mentioned to you, I discussed the matter with the Deputy Prime Minster, Mr Guterres, on my visit, which took place subsequent to all of this happening. That is all I have to say at this stage. I believe the Chief of Air Force will now like to add a couple of things to his remarks of last night.

Senator TROOD —I thank the CDF for his comprehensive response to that question.

Air Chief Marshal Houston —My pleasure.

Air Marshal Binskin —I would like to close out again something that happened right at the end of last night to ensure that we have all the facts on the table. In response to Senator Brandis’s question last evening, the flight that he was referring to was a flight on 27 January 2009. It departed Port Moresby at 7.42 pm and arrived in Canberra at 11.24 pm. The names of the passengers on have already been tabled in the Parliament on 29 November 2009 in the schedule of special purpose flights.

As the minister advised yesterday, he will review whether we reveal the names of the crew on board, and that is mainly down to privacy reasons. However, I can say that the crew attendant that was referred to is still a member of 34 Squadron. The cabin supervisor on the flight is still a member of 34 Squadron. The staff officer referred to in the media is still posted as VIP operations to 34 Squadron. None of these members have taken any leave for mental health issues since the flight referred to.

We talked about the logging process for any incidents or safety occurrences on the flight. There are two types that I mentioned yesterday. One is an aviation safety occurrence report and the other would be a hot issues brief. There were no air safety occurrence reports from that flight. There was one hot issues brief to me referring to a breakdown in the level of 34 Squadron service on the flight and why it was not up to the normal high standard they normally deliver. That was the topic. It was provided to the journalists that were mentioned last night under FOI in October last year. I tabled that hot issues brief last night. I want to confirm that it does not support the allegation put forward by Senator Brandis or the two journalists. As far as I am aware, there were no follow-up articles after that FOI request.

CHAIR —Thank you. Senator Faulkner, I think you had a contribution to make as well.

Senator Faulkner —As we discussed yesterday, we thought this would be an appropriate time to come back to the issue of force protection, which I know is a matter of great interest and concern to committee members. I have a document that I provided to the committee secretariat that I have asked to be tabled. I have a couple of preliminary points before senators might care to question me or any officials about any of the individual provisions in the document that has been tabled. I should make the point that protection of our soldiers in Afghanistan is the highest priority. That is something that I have said consistently. It is something that is continuously reviewed by defence. The government and defence are working to ensure that our troops have the full range of force protection measures they need to undertake their difficult mission.

The background to this is that, in July of last year, shortly after I became the Minister for Defence and after I had the opportunity to visit Afghanistan for the first time, I asked CDF to carry out a review of the force protection measures that were available for our deployed troops. That review was conducted by the Chief of Joint Operations. It included direct discussions with our troops in theatre about their force protection needs and included an assessment of the effectiveness of previous and ongoing force protection measures as well. That CJOPS report was reviewed by CDF.

He then tasked the Vice-Chief of the Defence Force to design a decision-making framework around these issues for consideration by the government. The outcome of that work was 48 recommendations for enhancement to our force protection measures, particularly—as I mentioned yesterday—reflecting the escalating improvised explosive device concerns and concerns about rocket attacks in Oruzgan. I believe it ensured a coherent, comprehensive and complete approach to force protection. The force protection improvements recommended from the review cover a variety of what might be described as active and passive measures. They range from personal protective equipment to our soldiers right through to unmanned surveillance systems.

I can assure the committee that Defence has been working very hard to progress and implement the outcomes of the force protection review. Some measures have certainly already been implemented, including improving counter-IED measures and improving IED detection equipment. I can also say that progressing other recommendations is well underway, including enhancing medical support and upgrading and hardening living and working accommodation in Tarin Kowt as well as other capability enhancements. Other measures required additional budget funding, which was provided in the budget.

I mentioned yesterday that a key initiative of the package was the acquisition of a counter-rocket artillery and mortar system for use in Afghanistan to provide advanced warning of rocket attacks. I think this is a timely and very important protective measure that will increase the security for troops in Tarin Kowt and elsewhere. I am confident the approved force protection budget measures, costing a total of $1.1 billion will minimise the vulnerability of personnel facilities and our equipment so that our deployed forces enjoy more freedom of action in their critically important role in support of the Afghan National Security Forces.

Tabled for the committee’s benefit is a document indicating that, in addition to the $1.1 billion in the specific force protection budget measure, Defence has also received $485 million for force protection through Operation Slipper supplementation, which traditionally funds ongoing aspects of operations, including force protection. Further ongoing operating costs for force protection initiatives of the $485 million will be sought in the context of future budgets.

The table, which is attached to the document that you have, sets out the initiatives included in the force protection package and indicates their funding sources, including budget measures, funding from prior and current year operational supplementation and future operating costs for which Defence will seek supplementation through the usual process in future budgets. The committee may be interested in asking questions about the documentation that has been provided. I would like to say to the committee that I am satisfied that we are doing all we can to protect our troops. Nevertheless, it is important to acknowledge that, even though I believe that is the case, as the threats to our soldiers and personnel on the ground evolve in Afghanistan, so too must our force protection arrangements adapt. With those few remarks, that document has now been provided to the committee. I am happy to answer questions and so are my officers.

CHAIR —Thank you, Minister. The document entitled Force Protection Initiatives is accepted for tabling purposes by the committee. Are there questions arising out of the document or the comments made by the minister? There are no questions.

Senator Faulkner —I might have said that the ongoing operating costs for force protection initiatives were $485 million; I should have said $48 million.

CHAIR —$48.4 million.

Senator Faulkner —If you look at the table headed ‘Force Protection Review Funding Summary’, you will see $48.4 million, in the fifth column, under the heading ‘Total being sought in later budgets’. So, if I said $485 million, I should have said $48.4 million.

CHAIR —There being no questions arising out of the material that was tabled, we will start deliberations as per the agenda. I turn firstly to outcome 1. I have been advised by the opposition that there are no questions there. Senator Ludlam has advised the secretariat that he has some questions on submarines. Whether it is Collins class or future subs, I do not know. If there are no other questions on outcome 1 we will return to the issue of submarines, foreshadowed by Senator Ludlam, at a later time.

Senator Faulkner —Thank you for flagging that with us.

CHAIR —Now we will go to outcome 1, Defence Materiel Organisation. Senator Johnston will lead the questions there.