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Thursday, 11 May 1989
Page: 2327

Senator MacGIBBON(4.21) — In speaking to the response of the Minister for Defence Science and Personnel (Mr Simmons) to the report of the Joint Committee on Foreign Affairs, Defence and Trade entitled Personnel Wastage in the Australian Defence Force-Report and Recommendations, I point out that this is one of a series of major reports by the Defence Committee in recent years. The last three reports have been The Australian Defence Force-its Structure and Capabilities, The Management of Australia's Defence, and Personnel Wastage in the Australian Defence Force-Report and Recommendations. The last two reports have been enormously important in relation to the defence forces. Sadly, the Government has chose to bury completely the report entitled The Management of Australia's Defence which deals with the great and profligate waste in the administration of Australia's defence forces. I will say something about that towards the end of my comments on this report.

I am Deputy Chairman of this Committee. I would like to pay a compliment to all the members of the Committee, particularly the Chairman, for the conscientious way in which they have pursued this report. It is no secret that the Government sought to have the Committee not accept this matter when it was referred to it by the Senate in October 1987. I would like to quote the terms of reference for this report. The Senate requested the Defence Committee:

To investigate and report on:

a. the extent and magnitude of the Australian Defence Force wastage problem;

b. the effects of the present level of wastage on the capability of the Australian Defence Force to fulfil its role in an effective manner; and

c. measures to reduce wastage and an assessment of the relative effectiveness of those proposed measures.

Those are very wide terms of reference. I believe that the Committee conscientiously and constructively addressed all three requirements. I would like to quote from chapter 1 of the report, where the Committee said:

This report is predicated on three fundamental points. The first two are that Australia must have a high-quality defence force, and that people are the Force's most valuable asset and vital resource. It follows from those premises that personnel wastage which exceeds a certain numerical and qualitative level will be inimical to the national defence effort. The third point is that the Australian Defence Force is a unique institution.

Why was it necessary for the Senate to require the Defence Committee to inquire into this matter? What were the facts? The facts were that the Australian defence forces were faced with a quite unprecedented wastage in manpower. Since the Australian Labor Party came to power we have lost over 48,000 men and women from a force structure of about 70,000. In recent years we have had a loss rate of 13 per cent per annum; and that is a compounding loss rate, not a simple loss rate. Of course, the Government is saying now the report is out that the loss rate has slowed up. It certainly has in some areas because there is no more blood in the vascular system to bleed away, particularly with respect to pilots. We have lost most of the pilots who could go. The only ones we have left are those who are still bound by their terms of service and are green and inexperienced.

This unprecedented loss rate has been at a huge cost to the Australian taxpayer because, by definition, the people we have lost are trained people. It is not true to argue, as the Government attempted to argue when we first brought this matter to its attention, that there was no real loss because those trained service personnel went into specialised roles in the civilian field. That is perfectly true. They are not on the unemployment market. But it is also perfectly true that it is most inefficient to train for civil roles pilots, radio technicians and all the other people that the Services train. The demands of and the performance of service technicians and specialists is far higher than in the civilian field.

Let me revert to the case of the pilot. We can train someone to fly a Boeing 747 and be a captain in command at about a quarter of the cost that it takes to train an F111 captain. In real terms, it probably costs us between $4 to $6m to put together the 10 years training of an F111 pilot. We can train someone to fly a Boeing 747 for Qantas Airways Ltd at a fraction of that cost, and he will fly that Boeing 747 just as well. But it is not only the absolute numbers that are a problem to us; the real problem has been the loss of the key professionals-those people in their early to mid-thirties who have undergone 10 to 15 years professional training-the specialists: the ship captains, the company commanders, the battalion commanders in the Army, the pilots, the warrant officers, the senior warrant officers and the senior technical trades people. These people have gone in great numbers, and that high wastage rate has had a crippling effect on the Australian defence forces. We simply cannot replace them. We cannot replace someone with 10 or 15 years training under 10 or 15 years. Everyone needs that sort of experience. We can run all the crash courses in the world but we simply cannot get the judgment and experience that come from 10 or 15 years in a trained role. As a result of this high loss rate the Australian defence forces have lost their capability not for three or four years but for 10 or 15 years. As a consequence, not only will it cost the taxpayer billions of dollars but also there is the threat to national security that out weakened defence forces pose.

What is the Government's reaction to this? Initially, the government pretended that it was not happening. The civil component of the Department of Defence, the service component, pretended that it was not happening. Eventually it could not be concealed. It is interesting that, in the evidence the Committee initially received from the Department of Defence, there was a high level of dissembling, of fudging of statistics, of proving that there was not a problem at all by comparing it to skewed long term loss rates statistics. The Department of Defence was soon disabused by the Committee of this tendency to dissemble. We lost years when the Government should have known that the loss rate was going on and it took no action. It is now far too late to repair the damage. We have to try to improve conditions of service within the Australian Defence Force so that we retain the few dedicated people that we have left.

What are the consequences of this in real terms? I would like to give just one example. Last week in the other place my colleague the shadow Minister for defence, the honourable member for McPherson, Mr Peter White, sought to obtain some figures on pilot strengths from the Minister for Defence (Mr Beazley). He found it impossible to get those figures. I do not know why, because the same sort of information has been available over the years to Senate Estimates committees. Since Mr Beazley was not prepared to make those figures available on the grounds of national security-which is a quite specious argument-I will outline by way of example the state of our fighter squadrons. We have only three fighter squadrons to defend the whole of our air space and to guarantee the air superiority of Australia. I will give the manning strengths of just one squadron as it represents what goes on in the others. It has nine pilots and 18 aircraft. The minimum manning strength should be two, and preferably three, pilots an aircraft, which gives us a minimum of 36 pilots. We have nine in that squadron. We have a commanding officer who is very experienced. The particular squadron I am thinking of has not had an Executive officer for a very long time. In recent years it has not had one of two flight commanders who are absolutely essential if the squadron is ever to be used on operations. It does not have a fighter combat instructor. Combat instructors are the equivalent of the people in the movie Top Gun, who live in squadrons and maintain guidance and instruction on a day to day basis in air fighting techniques.

What are the standards of these nine pilots in the squadron? The Royal Australian Air Force (RAAF) grades its pilots as A, B, C and D. This squadron has two B-rated pilots, one of whom is the commanding officer. I might mention in passing that A rating is very rare. The other pilots in this squadron are all C or D rating. They are very young and inexperienced pilots who simply cannot be used on operations. They cannot be used on difficult operations at night, in bad weather and in circumstances where we have to use the defence forces. Yet the Minister for Defence and the Chief of the Air Staff tell the Australian community that there has been no diminiution in the operational capability of the RAAF. That is simply untrue. The squadron I have outlined is quite representative of the other two squadrons, which are squadrons 75 and 77. The standards of experience in the pilots is all at a minimal level.

Let me deal briefly with some of the findings of the report. I make the point that, in general, the Government has picked up all the easy points. At the same time it has picked up the cheap points, the things that will not cost much either in money or effort. Because other senators on this side of the chamber have gone through the report seriatim, I do not want to waste the time of the Senate beyond commenting on a few points. First I shall comment on the good points. It is a good idea that the Australian Defence Force remuneration benefits are being reviewed. I take the point made by Senator Newman that there is an enormous fear in the Services that, in the process, if the defence force retirement and death benefits scheme (DFRDB) is opened up, the service people will be losers. Well they might have that fear because every time this Government has looked at something like the DFRDB, it has ripped off the service people. It is quite understandable that they are terrified about the Government getting its sticky little hands on the scheme in some way or other and disadvantaging them. There is a real need to review that scheme because it is no longer as appropriate as it was when it was introduced. The mortgage rebate proposal also is of some value.

Let me now outline some of the things that were not done because they are the key things that move to the heart of the failings of the Government's administration of the defence forces at present. The first one is the ratio of equipment to actual manpower expenditure. The rather specious argument was used that it was the chief of staff and the Secretary of the Department of Defence who approved it. The recommendations that come from the chief of staff and the Secretary of the Department of Defence are as a consequence of ministerial directives. So it is rather dishonest to say that the Government is following the advice sent back to it when it has already sent it out to the chiefs of staff because it tells the chiefs of staff that that is how much money they can have, that the Government has contractual obligations for equipment and the chiefs of staff can take up the slack.

The comment made on recommendation No. 6-that the equipment position is being cleaned up-is simply not tenable. We are getting the old platitudes again that boots will be provided and the equipment will be fixed but the Government is putting no effort into doing it. It is absolutely nonsensical that, in this day and age, 1989, the Australian Army cannot fit everyone with boots of the right size. I know that it is a trivial issue but a person can go into any civilian store and buy shoes to fit him. In the Army that is not possible. Why? The Army has been told about it for years. It is absolutely nonsensical.

Recommendation No. 22 is that the remuneration fixing system is not accepted. We recommended that the Minister for Defence Science and Personnel take action to amend the legislation to allow the Defence Force advocate to appeal independently against the Defence Force Remuneration Tribunal determinations. We had the terrible situation where a salary rise was knocked back and the Chief of the Defence Force (CDF) refused to intervene at a time when all the Services were seething at the injustice of it. We recommended that the Defence Force advocate, who is a very responsible person, should have the power to appeal directly without having his hands tied by the CDF who, in effect, have his hands tied by the Minister-in the interests of natural justice-but that has been knocked out.

Recommendation No. 37 is the Medicare principle. We have the situation where the Services do not require service personnel to pay the Medicare levy but they do require them to pay half of it for their spouses. The Committee recommended that married service members whose spouses work and have no children receive full exemption from the Medicare levy. The response is not to agree with it. In effect what is being said is that it would set a bad precedent and that it is everyone's duty, as Australian citizens, to pay the Medicare levy. That is a typical piece of bureaucratic stupidity and it recognises and demonstrates the impracticality of this Government. The amount of money received by levying half the Medicare charge against the spouses of Australian service men and women is absolutely minuscule but it is an enormous irritant to Service personnel. They hate it, they loathe it, and they loathe the Government because it is such a nit-picking, pettifogging, bureaucratic exercise. Here is the Government accepting from a bunch of bureaucrats, inflexibly bound to enforcing government policy and demanding this levy. I do not know how much it brings in. It is possibly half a million dollars or a million dollars at best-I doubt whether it would be that much-out of a budget of $7,000m.

Where do we go from here? The central recommendation of the Committee did not deal with boots and equipment or rates of pay. The central point we made was that the Australian defence forces suffered from a lack of leadership by this Government. That has the most debilitating effect on the morale and the welfare of the Australian defence forces. Leadership is the most important of all human qualities. It is different in Parliament from what it is in the university. It is different in the university from what it is in a football team and in business. It is different in the Services. But it is a quality that is essential in all human operations. This Government is not providing leadership in any way at all to the Australian defence forces. It is the ethos of the Australian defence forces that they will serve and obey the government of the day without question. The reverse of that service and obedience by the defence forces is that they get strong and positive leadership from the government of the day, so they know their purpose in life. The Australian defence forces have always been at their best when they have had strong political leadership, people in whom they can believe, people whose judgment they can trust, who they know look after their welfare and are concerned about it.

It is particularly important in the Labor Party because the Labor Party has an aura about it, a belief in the community, that it does not care about defence. There is a feeling in the Australian community that the spiritual home of the Labor Party is out there somewhere in left field with Jo Vallentine and the nuclear disarmers. That has characterised the whole history of the Labor Party since Federation. It is rightly or wrongly seen as a pacifist group which is not interested in looking after the defence forces and by extension, the welfare of the defence forces. The Committee on which all parties were represented made the point unanimously that there was a failure of leadership and guidance. That matter is not addressed at all in the response from the Minister. Yet it is the central, fundamental and crucial part of our report. We must have strong leadership so that the men and women know why they are wearing that uniform and making the sacrifices that they are.

The next important point that the Government needs to deal with is the substitution of new capital funding for other expenditures. The money is inadequate for the defence forces. We need new equipment. That is undeniable despite what Senator Vallentine says. It was foreseen by the Department of Defence in the early part of this decade that there would be a massive re-equipment program which would run at least until the mid 1990s. It may well run longer. But it was seen by the Department of Defence that, if we were going to buy this new equipment, the votes have to go up because it would cost a lot of money. The minimal increase a year was set at 3 per cent in real growth. What have we seen from this Government? We have seen not only an abolition of growth but also a diminution in real terms.

The other problem we have with this Government financially is its lack of commercial sense and skill. When the Liberal-National Party Government signed the contract in 1981 for the F18 it exercised a far higher level of commercial skill than this Government has demonstrated with the submarine program or the frigate program. We signed the F18 contract on an FMS scale. The system we operated under enabled us to benefit by a reduction of one-third in the real price of the F18s as the contractor came down the learning curve and was subjected to pressures by the US Government. The problem of the F18 contract came about through the way this Labor Government handled our economy. It gave us an Australian dollar that is worth roughly 50c of what it was worth at the time when the F18 contract was signed. The F18 contract has cost us about one and half times as much as it should have.

This lack of commercial judgment shows up in the way it has written too many contracts too quickly for big capital equipment. The submarine contract was written before it was necessary. It could have been deferred another five or 10 years. More importantly, we should have bought submarines that the tender documents required so that they were built as designed. The Labor Government prides itself on the fact that it was a fixed contract. It is stuck with this fixed contract on the submarines so that the contract cannot blow out beyond escalations for inflation. What the Government did in its naivety was sign on the dotted line without getting its hands on the goods. Today, years after that contract was signed, we still do not have the detailed design drawings. We do not have them because the Swedes cannot do it. The Swedes actually approached the Germans to see whether they could design the sections of the submarine that are now proving impossible for the Swedes to design. We are spending hundreds of millions of dollars on pouring concrete and building structures to build these submarines and the drawings are not yet available in the country.

Let me now turn to the frigate problem. We will get a very fine platform out of that if we buy the Dutch ship. If we buy the German ship, we will get a Third World platform which will have much lesser capability. But, again, we are proposing to buy something for the Navy which has not really been thought through. If we do, we will buy a very slow ship. We will buy something which will have a fine hull and propulsion system but it will not be armed properly. It will be fitted for, but not with, essential protective and offensive equipment. It means we will face precisely the same fate in an emergency as the British faced in the Falklands when Britain sent off its ships which were designed for, but not fitted with, essential protective and offensive defence equipment.

The two FFGs are an example of the Whitlam years revisited. The ships built in the Barnard years were the worst ships ever built. Labor signed us up for another two, which are taking a tortuous glacial path towards construction at vast expense. The essentials of defence have not been met. I do not want to dwell on boots but the Defence Force still cannot get boots that fit. It cannot get webbing that is comfortable and appropriate. We have no APCs that are able to protect our troops in a modern environment. We have no air control systems. We have F111s fitted with Pave-Tack but with no precision guided munitions such as GBU 15s with which to train, let alone test their skills. Above all, the human resource-the heart and soul of the defence forces-has been neglected. That is what led us to write this report.

There is no vision of the future in what this Government is doing. We live in an unpredictable and unstable region. We have very poor intelligence of that region, as the Fiji coup showed. We have no ability to project our power to help anyone we wish to aid in the region. We have no amphibious capability. We have no air fuelling for the F111s. We are not doing the essentials at home such as reorganising the defence forces as we must.

One of the consequences of the huge resignation rate is that the reserves in the Australian Defence Force must have a far greater place. We can no longer have the luxury of hundreds of highly trained pilots flying for Qantas Airways Ltd, Ansett Airlines of Australia and Australian Airlines and not using these pilots in flying operations from the Royal Australian Air Force (RAAF) reserve squadrons. The pilots are out there; they are trained and their skills are current. They could be used immediately in transport squadrons. They could be used quite clearly in the QFI role as flying instructors and, in the short term, to maintain currency in the fighter world. But there is no sign that the Government is moving towards picking out these requirements which are binding on them as a consequence of the Government's maladministration. The way the management of the Australian Defence Force has been buried is a national scandal. It is a gross profligate waste. We do not have enough money going to defence be we are also not getting value for the $7 billion that we spend. We are getting about 50c in every dollar.

We have 44 two-star generals and above-that is, major-general equivalents and above-which is enough to flesh out a huge defence force, let alone the minuscule force that we have. There are 32,000 men and women in the Army and 26,000 in the Reserve. We have a capability of maintaining a battalion in the field on continuous operations out of a total of nearly 50,000 men and women. In the Air Force it is even worse. The whole resources of the RAAF today can provide only two aircraft on readiness around the clock. In other words, if we have and emergency and we want to maintain air superiority the maximum rate of effort for use is to keep two aircraft on the runway, not in the air, ready to go. That is absolutely scandalous from a management point of view.

We also have inappropriate roles. No-one has developed a modern Army structure the way we should have in this country. We have people doing all sorts of odd jobs in the belief that they form a core force which could be expanded over four or five years. We have a force structure that equates the Army to a police force with the low level contingency concept. We have a brown water navy. These are not the elements that we need.

The incoming Government in a few months will cut the fat right out of the Department of Defence and give the Australian people value for the dollar that we spend in defence. We will get rid of that huge parasite drag over at Russell Hill. We will get rid of all the non-essentials not only at Russell Hill but also right through the Department of Defence. We will improve the organisational pattern of all three defence forces to give it a much more effective teeth to tail ratio. We will clean out those inefficiencies. By so doing, we will give the men and women in the Australian Defence Force a purpose in life, because we will show them the leadership they need. They are a unique force. They loathe being compared with other members of the Australian community with respect to the terms and conditions under which they work. They see themselves as quintessential Australians but they see themselves as different. Indeed, they are different. They are under orders the whole time. They have duties and responsibilities that none of the rest of us share. They deserve the special care of this Parliament.

Debate (on motion by Senator Reid) adjourned.