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Wednesday, 28 February 2001
Page: 24735


Mr LAURIE FERGUSON (12:35 PM) —I am pleased to have the opportunity to speak on the government's white paper of 6 December last year, officially known as Defence 2000—our future Defence Force. As both the Leader of the Opposition and the shadow minister for defence have indicated, the opposition essentially endorse many aspects of the white paper. We do so because, to a very large extent, the underlying military strategy outlined by the government has shifted considerably towards Labor policy. It thus represents a repudiation of some of the earlier, rather muddled thinking of coalition spokesmen.

I will cite the two most blatant examples of earlier coalition thinking. Firstly, we all recall the severe embarrassment caused by the Prime Minister's ill-considered interview with the Bulletin magazine in which he happily accepted the unfortunate characterisation of Australia as the United States' military deputy in this part of the world. We also had the former and now long-gone Minister for Defence Mr McLachlan openly advocating a return to the discredited notion of forward defence and canvassing the possibility of a future deployment of Australian ground forces on the Korean peninsula. We are pleased that the white paper very dramatically rejects the confused thinking that the government previously upheld.

The white paper stresses that the primary priority for the Defence Force is to maintain the capability to defend Australian territory from any credible attack without relying on help from other forces. It says that the second priority is to enable us to make a major contribution to the security of our immediate neighbourhood. I emphasise the words `our immediate neighbourhood'. The third priority is to be able to contribute effectively to international coalitions beyond our immediate neighbourhood, including relevant United Nations missions. The opposition is comfortable with this statement of priorities, which reflects the approach that was adopted by Labor in government. I note that, when the Prime Minister tabled the white paper in the House, he went out of his way to emphasise the quote:

We will not develop capabilities specifically to undertake operations beyond our immediate region.

Again, this is consistent with Labor's thinking and is obviously a total repudiation of the previous minister's comments. I also welcome the broad thrust of the capability plan that is included in the white paper. There is no disputing that, to maintain a small but credible Defence Force, we need to plan for the replacement of various aircraft and ships when they become obsolete and to invest in new equipment and in communications and intelligence gathering systems. Rigorous priorities have to be set in this regard, and the acquisition process has to be managed effectively and efficiently by both the government and the bureaucracy.

Given my shadow portfolio responsibilities, I would like to spend the rest of the time available to me in this debate considering the personnel aspects of the white paper. Labor's starting point is that our key military capability is the skills and experience of our service personnel—men and women, regulars and reservists. They are a vital asset and not just a cost to the budget as many in the government seem to constantly bemoan. On the personnel side, it has to be said that the government's white paper has left unanswered virtually all the hard questions. Take, for example, the decision to expand the full-time force to 54,000. I welcome that announcement but point out that it is a clear admission that former Minister McLachlan's Defence Reform Program was seriously flawed. The fact is that the coalition inherited from Labor a full-time Defence Force of 58,000 personnel.

The 1997 report of the Defence Efficiency Review actually advocated reducing this number to 42,500—a cut of 15,500 positions, which means retrenchment and disappearance for 15,500 Australians. In response, cabinet then set a target size of 50,000—still a cut of 8,000. Quite frankly, when the government now takes a totally different position, it is worth us recalling that none of the people on the backbench of this coalition voiced any criticisms of or mounted any attack on the attitude that the defence forces should be so significantly cut. The East Timor deployment from September 1999 onwards clearly revealed that the coalition's earlier cuts to personnel numbers had gone too far and threatened our ability to sustain substantial deployments. Indeed, we were really only able to maintain our East Timor force at the size we did because a considerable number of reservists voluntarily agreed to serve on a temporary full-time basis to fill significant staffing gaps that were evident in the Regular Army.

In the white paper, the coalition is admitting that we need a full-time force of 54,000 for the ADF to perform its agreed functions. There is no explanation of why a figure of 42,500 could be considered a few years ago. In other words, it is now giving back half of the full-time positions that it deliberately abolished over the past five years. We will remember that when people are parading around in uniforms and marching around on Anzac Day. That is the history, and that is the performance of the government up to this point. A U-turn will not negate that previous activity. This is hardly indicative of competent management at ministerial level or deserving of the self-congratulation that we have been hearing from the government in the intervening period.

There is considerable doubt about the government's ability to recruit and retain a force of the size that it has now announced as its aim. Under this government, a serious problem has emerged in relation to both recruitment and retention—and this is a matter that I have referred to on several occasions. Despite slick and expensive advertising campaigns, we have worrying shortages of doctors, fast-jet pilots and seagoing personnel, to name but three examples. It will take more than platitudes from Minister Reith and Minister Scott to turn around this deplorable situation.

I note that the white paper, at page 63, claims that the retention of valuable personnel `is a priority concern of the government'. The new Minister for Defence, Mr Reith, said much the same thing in question time on 6 February. Given that the annual personnel separation rate is almost 13 per cent at present, compared with nine per cent a decade ago, there is no doubt that the issue should be a priority. In fact, the white paper is forced to acknowledge that if current separation recruitment rates continue then the ADF would be 12,000 people below strength by 2010; it would be 12,000 short. The white paper promises `firm action' from the government to ensure that this does not happen. To date, neither minister has been able to articulate just what this firm action might be.

Equally, the level of funding available for the task is nowhere quantified. All we are told is that the government has initiated a review of Defence Force remuneration arrangements to develop `options that improve the attractiveness of the total remuneration package within overall defence budget constraints'. These are mere words. Given Minister Reith's track record, I suggest that few serving personnel would feel comfortable and relaxed about the fact that he is now supposed to be looking after their interests as far as pay and conditions are concerned.

When one looks at chapter 11 of the white paper, which deals with the key issue of funding, one is immediately struck by a major paradox: on page 120 it is revealed that over the last decade per capita personnel costs rose by an average of 4.9 per cent per year. What, then, is the future increase that the government is budgeting for as part of its firm action on recruitment and retention? Amazingly, the answer at page 120 is:

The government has factored into the projected defence funding increases provided for in this white paper an allowance for 2 per cent per annum growth in defence per capita personnel costs.

In other words, over the next decade, the government is proposing to provide only 40 per cent of the increase in annual per capita personnel funding that successive governments provided during the 1990s. The firm action to remedy the crisis is to reduce the amount of money allocated to the problem. How this will enable an improvement in the current personnel situation is something that neither minister has even attempted to explain to date.

Up until recently, the coalition has seen retention bonuses for personnel in key positions—such as pilots, air traffic controllers, medical and dental officers, flight engineers and submariners—as one of its key retention measures, but in at least two separate audit reports the Auditor-General has been critical of these schemes. So in August last year I asked Minister Scott a detailed question on notice about Defence's retention bonuses. The minister's answer of 1 November clearly indicated that every one of the eight listed retention bonuses had already closed or was about to close. I note that at no stage then or since has the minister bothered to make a public announcement to this effect. It is on the paper but it does not exist. The minister's answer admitted that the medical and dental officers' completion bonus `has not been effective in retaining the services of medical and dental officers', and that the pilot retention bonus `was of only limited success in retaining pilots'. It also revealed that Defence had accrued liabilities of more than $40 million by the time the schemes were closed and that these liabilities extended for several financial years in the future and will have to be met by future governments.

When an article on the retention bonus appeared in the Sunday Telegraph based entirely on the minister's answer to parliament, he got one of his public servants to issue a media release describing the article as `incorrect'. As I said at the time, instead of hiding behind his public servants, Minister Scott should come clean. If the government has a plan to retain skilled military personnel linked to specific budget allocations, he should tell us the details straightaway.

Similarly, the government continues to run away from other key issues of concern to serving personnel. What is its response, for example, to findings of the community consultation panel, appointed by this government, that outsourcing of defence functions was the biggest influence on poor morale at present? We know that hundreds of staff at Defence warehouses, including those at the massive distribution centre at Moorebank, Sydney, in the electorate of Hughes, have been waiting anxiously for the government to make a decision on the outcome of the tender process for the Defence Integrated Distribution System. They were originally promised an answer by last June and have now been told that the department is waiting for the minister to make a decision on the recommendation of the tender assessment panel. I understand that the tender assessment panel completed its report in September last year; yet when the matter was raised in question time earlier this week, the minister appeared not to even know what DIDS referred to and made no commitment about when the staff involved would have their future clarified. He has got to think about the personal situation of those people and their families. The government made a commitment last June that it would get somewhere on this issue and knew, or had some idea, of where it was going, and still today it has been postponed.

Equally, there has been no adequate response from the government on the changed offset arrangements for remote locality leave travel, which have caused massive discontent amongst the personnel in northern Australia. This was another personnel problem that was publicly highlighted to the government by the community consultation panel, chaired by none other than Andrew Peacock, and it has consistently been put to the parliament by the member for the Northern Territory and other opposition members. Yet Minister Scott simply defends his bureaucrats in the matter despite the very real suffering and loss of benefits to members of the defence personnel, in the Northern Territory in particular. Similarly, we all know that the fringe benefits reporting system continues to cause angst in the ADF as further anomalies continue to emerge.

Finally, I would like to refer to the position of the defence reserves, men and women who voluntarily serve at the same time as they hold down a civilian job or undertake higher education. This is yet another policy area in which the coalition is engaged in a belated and inadequate catch-up effort. It is well understood by every informed commentator that decisions taken by the coalition in its first term of government seriously harmed the reserves. These decisions include the abolition of Labor's Ready Reserves scheme and the removal of defence leave as an allowable award matter, a decision driven by the award stripping agenda of the new defence minister in his previous role. It is a decision that has been roundly repudiated by people who have been in the defence reserves, by those who are interested in their future and, amongst others, by the Victorian State Council of the Liberal Party. They also repudiated this policy as a total waste of time and a failure.

The introduction of common induction training for the Army was another bright idea. It required new reservists to undertake a full-time induction course away from home. As a result of these measures and the government's procrastination on issues such as legislative protection, morale in the reserves reached rock bottom. Recruitment numbers fell to the lowest level in living memory. This, combined with retention problems, saw the number of active reservists shrink—at the same time as the government's rhetoric said that the reserves would have to shoulder a larger share of our national defence effort.

I have frequently referred to this issue over the past three years. I have been in close contact with bodies such as the Defence Reserves Association and members of the Defence Reserves Support Council, and I know they share the opposition's very serious concerns. As a result of our combined efforts, the government was forced to announce a number of welcome, if overdue, measures last August. These measures are still awaiting implementation despite the opposition's offer of bipartisan support for the necessary legislation. I acknowledge that the white paper does foreshadow a greater role for the reserves. That is consistent with the approach taken by the United States, for example, which has increasingly deployed reserves in recent years. It is not an issue on which there is partisan disputation.

However, I caution the government that it is insufficient to simply include some suitably positive paragraphs about the reserves in the white paper; that would be counterproductive and would lead to further demoralisation. In particular, the role of the Army Reserve within the overall force structure of the Army needs to be properly thought through. In appropriate circumstances, consideration needs to be given to the deployment of designated reserve units rather than individual reservists. (Time expired)