Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
ESTIMATES COMMITTEE B
09/09/1991
DEPARTMENT OF DEFENCE

CHAIRMAN -I declare open this public meeting of Senate Estimates Committee B. Today the Committee will examine the estimates of the Department of Defence. I welcome the Minister, Senator Robert Ray, and officers of the Department.

The Committee will be working directly from the departmental program performance statements. I propose to call on the estimates by program and subprogram in the same order as in the explanatory notes. Minister, would you like to make an opening statement?

SENATOR ROBERT RAY -Yes, Mr Chairman. Very briefly, the Defence program performance statements which have been presented to the Committee detail the Defence organisation's achievements for 1990-91 and its plans for 1991-92. The last year has been a particularly challenging and successful year for Defence with our participation in the Gulf, the force structure review and related initiatives in the first full year of operation of program management budgeting.

The 1991-92 Budget provides for the retention of the current real level of Defence outlays in the Budget and Forward Estimates. This level of funding reflects the Government's determination to move forward with the initiatives which were announced in the context of the force structure review.

Mr Chairman, I propose that the Defence estimates be considered in program order so that witnesses can be released once a program is completed. The Committee will note that the Department has gone to considerable lengths to produce very comprehensive and, hopefully, comprehensible program performance statements. Where you do require further information, I hope we can provide the necessary material today. If necessary, we will take the questions on notice. As in the past, I will draw the line at questions which would require the use of excessive resources to provide the requested information. It may be useful, Mr Chairman, if I ask Mr Jones to make a brief comment on the outline of the estimates document.

MR JONES -Mr Chairman, this year's Defence program performance statements have been developed to make clear the links between program objectives, resources and performance. They reflect a further phase in the development of reporting to Parliament under program management and budgeting, moving away from the old input cost emphasis of previous explanatory notes. The presentation of this year's program performance statements has been upgraded to provide improved summary information at the portfolio and program level, to provide graphical presentation showing trends from the previous year, and to provide improved performance information, including more extensive qualitative and quantitative information covering all of the eight programs and 40 subprograms.

In general, the layout of the document follows the presentation used for the 1990-91 additional estimates explanatory notes. In particular, we have retained the explanations of variation tables, known as table C, in each of the subprograms. These tables present the variation from last year to this year in terms of price and exchange, transfers between programs or subprograms and real variations in activity levels. While these variation tables are no longer required to be included in the program performance statements, we have retained them because they provide a useful means of reporting on Defence performance. This is because the defence portfolio includes both annual and long term programs and considerable ongoing activities. The variation tables allow examination of changes in levels of activity for both long term programs and ongoing functions.

The 1991-92 program performance statements include some changes to the defence program structure at the subprogram levels in program 6 and program 7. To allow comparisons with the 1991-92 figures, the 1990-91 figures, for those programs, have been adjusted to reflect this new program structure. There have also been some transfers of functions between programs and subprograms at lower levels. These are shown as transfers in the variation tables in table C .

Defence was pleased to be able to provide the program performance statements to members of the Committee on Budget day. Taken together with the Defence 1991-1995 corporate plan, which has also been provided to the Committee, I believe that these documents give a comprehensive overview of the Defence portfolio, its activities for 1990-91, and its planned activities for 1991-92.

CHAIRMAN -Before the Committee begins with program 1, are there any general questions on the information provided in the first 30 pages?

SENATOR MACGIBBON -Could I request that those questions that are not answered tonight be made available by Wednesday, in light of the moves we are making- not the written questions, the verbal ones-on the Procedures Committee to try to restrict the committee stage in the Senate. If we could have the answer by Wednesday on those we might save some chamber time.

SENATOR ROBERT RAY -We might. But in all goodwill, if they can be ready they will be ready; they will not be rushed. I have been through a slanging match with Senator Newman in the chamber about a reference to the Privileges Committee, which I was proved to be right on, where if some officer in trying to get an answer to your question makes a minor error, in haste, he is bundled off to the Privileges Committee. I will not be involved in that. Where we can , we will get the answer by Wednesday. However, if we cannot get an accurate answer or there may be some danger of inaccuracy, I would rather let it go through the process and be a bit longer. It is now Monday night so we do have a full working day. So we can turn some of the answers around by 1 o'clock or 2 o'clock Wednesday afternoon but not all, in my experience.

CHAIRMAN -Are there any further questions?

SENATOR NEWMAN -Yes. I would just like to have the opportunity to put on the record that I dispute that Senator Ray was found to be right. It was found that his officer had not acted with malice in providing wrong information. He was found to have provided wrong information.

SENATOR ROBERT RAY -Go back and read the Privileges report; he was cleared entirely. That is why you did not bat on with it.

SENATOR NEWMAN -There was nothing you could do because the Senate was, in fact , misinformed. However, there was not any malice proven.

SENATOR ROBERT RAY -That is right.

SENATOR DURACK -I want to ask a question which directly arises out of program evaluation on page 27. I suppose the question could be asked under part of a program, but the actual question I want to ask is highlighted there. Starting on page 27, there is a summary for each of the four major evaluation activities: force structure review; IDC on Wrigley; defence regional support review; and defence logistics redevelopment.

At the end of the first three, there is reference to the reductions in personnel as a result of these reviews that are forecast. Under the heading, ` Force Structure Review', it states that over the decade the force structure review will result in reductions of so many service and so many civilian personnel. At the end of the IDC on Wrigley, it says that combined with contracting out proposals contained in the force structure review, tier 1 of the commercial support program will pursue the contracting out of X services and Y civilian positions. It does not say whether that is over a decade or whatever period. It also says, `combined with', which seems to leave the whole thing in a state of confusion.

Under the heading `Defence Regional Support Review' it says that this review is planned to result in a reduction of so many service and so many civilian positions. Do we have to add up all of those to find out how many positions will go over the decade or over any other period of time? Finally, when we come to defence logistics redevelopment, we are told that it is going to save $450m over 10 years, but there is no mention of the number of positions that are being axed as a result of that. My recollection is that there is in fact quite a large number of civilian jobs going under that scheme. So it seems to me that it would be very helpful, in the light of all these various estimates that have been made and the Minister's statement to the Parliament, if it could be made quite clear how many positions will go under this scheme, that scheme and another scheme, what the total is and over what period of time. I am afraid it has not been achieved by this method here.

SENATOR ROBERT RAY -I will call on Admiral Beaumont who, I might explain, was one of the driving forces of the force structure review, served on the Wrigley IDC and would have also overseen quite a bit of the other two projects mentioned here.

VICE-ADM. BEAUMONT -Probably the best summary available at this stage is in this particular document, the Force Structure Review, at page 43, `Planned Personnel Changes During the 1990s'. It does not put the tables in exactly the format that Senator Durack has proposed, but breaks down into efficiency measures the development of the five-year program, the force structure review, in exchange for commercial support, by service and by the department. However , it does not necessarily summarise them year by year, but it looks at the total efficiency savings that we have had. We do not have a presentation in the year by year format for those at this stage. We show on page 45 of that particular document, the personnel reductions overall in numbers, but once again, not year by year. We would have to take that question on notice to put those all into a total package. We have reflected it in our 10-year development plan, but it is only that. It is a plan, as opposed to a program.

SENATOR DURACK -I take it from that answer that you are saying that on page 43 of the Force Structure Review, the figures there, although not year by year, are the total--

VICE-ADM. BEAUMONT -Yes.

SENATOR DURACK -At the end of 10 years.

VICE-ADM. BEAUMONT -Yes, correct.

SENATOR DURACK -When all is said and done, this is a more up-to-date document that I have got in front of me than the Force Structure Review. Am I to take it that if there is any conflict, that I am to go back to the Force Structure Review and ignore this, or is there some way of reconciling them?

VICE-ADM. BEAUMONT -No, the figures that are in the Force Structure Review are , for the most part, reflected in the Budget estimates year by year. This only reflects the first year of those overall savings.

SENATOR DURACK -Yes, but this is said to be a major evaluation activity and it talks about what is going to happen over different periods of time. In one case, as I have pointed out, it is over 10 years; in another case it is over an unstated period of time; in another case there are no figures at all, and so on. That is what I am complaining about.

VICE-ADM. BEAUMONT -The point is noted.

SENATOR DURACK -Are you going to give me the final written authority?

VICE-ADM. BEAUMONT -That point is noted, Senator. We can provide that information for you on a year by year basis, if you so wish. We have not done so in this case.

SENATOR DURACK -I am not so concerned about whether it is a year by year basis . I want to know what the total plan is over 10 years.

VICE-ADM. BEAUMONT -We can provide that information. The total plan over the 10 years is that figure on page 43. They are the total savings over 10 years. Do you want on a year by year--

SENATOR ROBERT RAY -It is page 43 of the Force Structure Review, Senator, not the estimates.

VICE-ADM. BEAUMONT -Not the estimates.

SENATOR DURACK -I can ignore this page in the estimates, can I? I ignore this completely?

SENATOR ROBERT RAY -No.

SENATOR DURACK -Well, I found this very confusing.

SENATOR ROBERT RAY -What do you find confusing, Senator?

SENATOR DURACK -You now say the solution relies on page 43 of the Force Structure Review. What I want to know is if I cannot reconcile that with this, then I ignore this?

SENATOR ROBERT RAY -Have you tried to reconcile them?

Senator DURACK-I got stuck in reconciling them by the statement that it was combined with.

SENATOR ROBERT RAY -I see.

SENATOR DURACK -I do not know whether I am supposed to add that up or whether that is in some way to be discounted, or what.

VICE-ADM. BEAUMONT -Table 2 of this particular document, Senator, at the bottom of page 43, for example, shows the force structure review has a saving of service personnel of 4,860 which is the same figure as that force structure review bottom line on page 27 of the plan, and 1,390 in those figures I think you will recognise. On the next page, on page 28, under the report of the Wrigley IDC, it shows 3,920 service and 1,080 civilian positions. Once again that is reflected on Table 2 of page 43 of the Force Structure Review. Again, it is over a 10-year period. The defence regional support review would be shown under defence efficiency measures generally at the top of Table 2 and similarly the top of Table 1, once again on page 43 of this document. There are, for the most part, 10-year figures.

SENATOR DURACK -What about the logistics development?

VICE-ADM. BEAUMONT -That would be shown under defence efficiency measures.

SENATOR DURACK -In the force structure review table, is it?

VICE-ADM. BEAUMONT -Yes.

CHAIRMAN -Senator Newman, you wanted to go back to page 16.

SENATOR NEWMAN -On page 16, in the budget summary, it says that the Government has set defence planning guidance at zero per cent real growth over the 1992- 1995 Forward Estimates period. If that is the planning base, was the Ready Reserve essentially an exercise in economy?

SENATOR ROBERT RAY -The change to guidance and Forward Estimates followed the force structure review rather than precede it, but I must say from the moment I became Defence Minister and looked at the amount of guidance in the Forward Estimates, that need never transpired. I believe it inhibits defence planning not to be realistic and I sought very much to put realistic guidelines in there which are simply that. I mean they can always be altered by Government but are far more realistic. The rationale for the Ready Reserve can attribute several reasons to it. On the cost point, we believe it will cost 40 per cent of the regular for Ready Reserve so that is obviously a saving. It means that two regular battalions can be replaced by three Ready Reserves-fully staffed rather than part staffed. We are also-as you probably know-making available another $50m of equipment to Ready Reserve to make sure they have got sufficient means to come up to par. So when you ask, is it just an economy measure, it is only part of it I believe. But it is part of it. Quite clearly, reserves are cheaper than regulars.

SENATOR NEWMAN -But it is essentially, or substantially, an economy measure?

SENATOR ROBERT RAY -No. I would not say substantially but it is hard to put a percentage on it.

SENATOR NEWMAN -I assume if it was not, you would have maintained the regular battalions?

SENATOR ROBERT RAY -Not necessarily. I think the critical argument in this case is one that we will not be able to resolve for a year or two, and that is whether three Ready Reserve battalions are better than two under-staffed regular battalions. That is essentially what we are comparing with at the moment.

SENATOR NEWMAN -Are we comparing like readiness with like readiness?

SENATOR ROBERT RAY -Essentially we are, yes. It is not too bad but I mean a lot of these things will be determined by experience. One of the reasons why the Australian Defence Force, and myself, press for the Ready Reserve option, rather than say the Wrigley option, was a far less high risk. If faults come out in the Ready Reserve, they would be far more repairable than say under the Wrigley model. So we try to progress these matters in a rather medium to low risk way. So if any faults do come out in the system-what we anticipate as standards that are not met-then we will have plenty of flexibility to either improve them or return to something else.

SENATOR NEWMAN -So, this is really what you were saying to the RSL Congress the other day, that if down the track it does not seem to work out, you will go back.

SENATOR ROBERT RAY -That is right. I am not being pessimistic there. I am just saying that the sort of strategy we have adopted does not bind future governments and does not bind defence planning totally, whereas some of the more radical solutions put forward, either by Alan Wrigley or others, would have meant committing ourselves to a course that was irreversible. I am not being pessimistic about the Ready Reserve. It gives every indication of being very successful and I have no reason to doubt the judgment of the people that are giving me that advice.

SENATOR NEWMAN -But I question the judgment that says, `Okay, if we make a mistake we can go back'. Do you not recognise that you are doing more than just simply taking a battalion off the order of battle. There is an awful lot that you lose with that, that you are not going to quickly gain by just putting it back again.

SENATOR ROBERT RAY -What I am saying is that if the Ready Reserve for some reason was to fail-and I do not think it will, but if it was-it is not totally impossible to go back to another situation. It is not easy either-there would be some pain and other problems involved, but it is possible. However, if you had gone for the Wrigley solution of cutting the regulars in half, and having 40,000 reservists and some sort of militia, none of that would have been reversible. Once you had committed to that, it would have been irreversible.

SENATOR NEWMAN -What was the role of strategic guidance in that decision?

SENATOR ROBERT RAY -Readiness was the key factor we had in mind.

SENATOR NEWMAN -Meaning?

SENATOR ROBERT RAY -How quickly those battalions would be in a position to do what we ask them to do.

SENATOR NEWMAN -You mean that strategic guidance was that you would be able to still have the same capability by replacing two regulars with three reserves, despite the--

SENATOR ROBERT RAY -What the chiefs assert on what has to be tested, and I have no reason to doubt their judgment, is that four regular battalions and three Ready Reserve battalions will give us the same combat capability and infantry area as would six regular battalions, six regular groups.

SENATOR NEWMAN -Well, I hope you are right.

SENATOR ROBERT RAY -Of course we hope we are right, and I would not be surprised if we were.

SENATOR NEWMAN -I hope you are. With the DRSR group savings, the Defence Regional Support Review savings, could you tell me what the extent is in 1991- 92, because I could not find it-I may have missed it-in the FYDP?

SENATOR ROBERT RAY -I do not know if we have expressed it anywhere in the documents.

VICE-ADM. BEAUMONT -They have been reflected generally as financial savings rather than specifically in this document. We programmed some financial savings from a wide range of efficiency improvements as well as some reductions. It is not reflected directly in there because we are right in the implementation phase at the moment. There are very few savings actually reflected in 1991-92, very few indeed. In fact, there are some up-front costs.

SENATOR NEWMAN -At what sort of a level?

VICE-ADM. BEAUMONT -To be precise, I do not know.

SENATOR NEWMAN -Has that not been estimated?

VICE-ADM. BEAUMONT -We have not programmed at savings specifically in 1991-92 on a large scale. We have programmed some up-front costs. And there is about $ 300,000 for up-front costs on the Defence Regional Support Review for a range of issues, computer support and so on.

SENATOR NEWMAN -In this financial year?

VICE-ADM. BEAUMONT -Yes, and they are reflected in the force's executive program. We start to, we hope, realise the savings from the Defence Regional Support Review in 1992-93.

SENATOR NEWMAN -At what level?

VICE-ADM. BEAUMONT -I do not know.

SENATOR NEWMAN -Has that not been calculated ahead of time?

VICE-ADM. BEAUMONT -Yes, it has, but I do not have the figures available.

SENATOR NEWMAN -Could I have the FYDP figures please, and could I also ask--

SENATOR ROBERT RAY -Senator, if you just follow on, I will look around the back and see if I can find those figures.

SENATOR NEWMAN -All right. Did you want me to keep on going on the same subject?

SENATOR ROBERT RAY -If you like, and we will see if we can get the figures for those years.

SENATOR NEWMAN -My third question on that review was: what is the extent of the savings, excluding the logistic command savings, made independent of DRSR? There is nowhere that that seems to be spelt out independently that I could find.

VICE-ADM. BEAUMONT -I am sorry, I do not understand.

SENATOR NEWMAN -In that the Logistic Command review or reforms were in train before the DRSR program review, I was trying to get a calculation of what the savings were, both in manpower and in money terms, for the Logistic Command reforms independently of the DRSR reforms.

VICE-ADM. BEAUMONT -Is that the DLRP savings?

SENATOR NEWMAN -Yes, the ones previously under way, which were announced a year or a couple of years ago.

VICE-ADM. BEAUMONT -May we come back with that? I think we have the figures available for both but I do not have them readily available at the table.

SENATOR MACGIBBON -I return to page 9, to the paragraph headed `Budget Price Basis'. It includes an acronym `CLAE'. Would someone tell me what that means?

MR JONES -The acronym is for cash limited administrative funds.

SENATOR MACGIBBON -The next thing of difficulty is the word `outturn', which I have never seen before. Does that mean the settlement price?

MR JONES -Yes. The Defence budget is not in the same dollars. Some parts of the Defence budget-the so-called CLAE and facilities and things like that-are in so-called outturn dollars, which is all the money we get for the year and estimated in December 1991 prices. What you see in the Budget Papers is all we get for the year, no matter what happens to price increases. Other elements- major capital equipment, equipment in stores and things like that-is in Budget or April 1991 prices and exchange. As you would probably remember from the Additional Estimates, they get updated to reflect price movements during the year, in both price and exchange. That figure you see at the bottom line for Defence is actually made up of two sorts of numbers, one part that will not vary during the year and a part that will.

SENATOR MACGIBBON -If you worked to December 1991 prices, what sort of exchange rate were you planning on? What was the advice you got from finance on that?

MR JONES -All the figures in the paper are at the socalled Budget exchange rates or the April prices.

SENATOR MACGIBBON -April 1991?

MR JONES -April 1991 prices. They will be adjusted as the exchange transpires throughout the year. As far as the defence portfolio is concerned, we are allowed whichever way it falls in terms of exchange throughout the year, right up to 30 June.

SENATOR NEWMAN -I refer to page 23. I would simply like to ask: how will naval basing in the west affect the forward outlays?

SENATOR ROBERT RAY -That is too simple a question, I think. What do you mean by it?

SENATOR NEWMAN -We have a table at page 23 which shows the outlay by category as a percentage of the defence outlays total. One of those lines is the investment, both in equipment and in facilities, for the next couple of years. I am looking forward to finding out what is going to be the trend in the future from the decision taken to increase the naval basing in the west.

VICE-ADM. BEAUMONT -We had not broken anything out specifically for basing in the west. We broke out a figure for basing in the north and the west. I think- I am dredging my memory at the moment and I would have to look at my notes- that we expect an increase in operating costs later in this decade by about $ 48m a year as a consequence of that northern basing. I will verify that figure as we go through, if I may.

SENATOR NEWMAN -Thank you. You will see further down the same pages that there are increased operating costs associated with the move of defence units to northern and western Australia. So in both the facilities area and the operations area there are going to be increases of substantial size. I would like to see just how the forward outlays are going to be affected by that.

VICE-ADM. BEAUMONT -Yes, we have got those figures, but it will take me a little while to find them. It is over a wide range of activities-removals, training courses, travel-in just about every area.

SENATOR MACGIBBON -Is it not a fact that the current operating costs of having Navy in Western Australia is about $50m a year and that there is an added cost of $1m to RAAF operations?

VICE-ADM. BEAUMONT -I do not know what that figure is. I would be surprised if it was $50m a year added cost at this stage. I do not believe that is an accurate figure and I will check with Navy, but it is certainly costing us more money to have ships and aircraft and operations in Western Australia and it will cost us more money in the north. That is inevitable. It is a straight tyranny of distance problem when most of our facilities are in the east. The force structure review allowed for such an increase in operating costs by that northern and western basing. It was one of the reasons that we sought efficiency savings to pay for that increased cost.

SENATOR NEWMAN -On page 27, regarding the major evaluation activities, there are three key principles spelt out on that page which are supposed to underpin the proposed restructuring of the Defence Force over the next decade. How would you evaluate, firstly, what underpins the strategic focus on the north; secondly, reducing the numbers in headquarters and base support functions; and , thirdly, enforcement of the Ready Reserve? How will you evaluate your activities?

VICE-ADM. BEAUMONT -I am not sure that one evaluates principles. What we sought to do in the force structure review I thought was quite clear: that we want to improve our ability to operate in the north of Australia and we can do so by basing more people there. In an overall package we were looking for maintaining, and preferably enhancing, the combat capability. We believe we have done that by enhancing the numbers in the combat force, by improving Army mobility, in particular by finishing off the Weipa airfield. And one has to do that in an overall sense by reducing the number of people in support functions to provide those people for the combat force and that was an underpinning principle. Regarding the evaluation, I guess we would have to say it is whether we achieved what we intended to do, that is, enhance Army mobility, increase the size of the combat force and our ability to deploy to the north, and we believe we have achieved that in the force structure review.

SENATOR NEWMAN -Thank you for that, but I have asked you that question because it is under this whole area of program evaluation-evaluation planning, major evaluation activities. It is not just that you are going to do those things. I am wanting to know how you are going to know whether you have done them and done them well and how you will measure them. Those three points on that page are a bit long to keep reading but you can see them in front of you.

SENATOR ROBERT RAY -I appreciated you reading them in full this time and not only half quoting them. I would regard it basically as the job of COSC to regularly review the progress of these things, to take in reports on the progress and to make its evaluations. On the financial side, whilst it would do that as well, I think it is also the role of government and the Expenditure Review Committee. One of the things we are committed to, in at least an expenditure sense in an evaluation of the force structure review and these other three aspects which are considered here, is to report once a year to government in the ERC process as to their progress. That is, they will measure our promised economic performance in these areas by what we have delivered.

It is a process that will put a lot of pressure on the Australian defence forces to meet those economic targets but the strategic targets, I would have thought, would have been evaluated from month to month, year to year, by the cost.

VICE-ADM. BEAUMONT -What we did in this process, if I might add, Senator, was translate this force structure review into a 10-year plan where we have got a year by year achievement and we will be testing it against what we plan. A plan being a plan is obviously subject to change from time to time, but we will be assessing what we intended to achieve against that plan.

SENATOR NEWMAN -So each year you will be coming back here and saying that this last year we intended to do this and this and this in those three areas and this is how near or how far we got to it.

VICE-ADM. BEAUMONT -That is correct.

SENATOR NEWMAN -And you will identify the people or the bodies that were used to evaluate that.

VICE-ADM. BEAUMONT -We will be able to do that.

SENATOR NEWMAN -It really will be specific measurements, will it, as much as possible?

VICE-ADM. BEAUMONT -And as we get better at our performance indicators it should be--

SENATOR NEWMAN -That is it. We are all trying to struggle through program budgeting and evaluation. It is just that sometimes it looks like mere words. I was trying to find out how we were going to operate in the future.

On page 30 there is a question I would like to ask. It is the `social justice ' segment. What is the percentage of women in combat related areas in the regular force?

SENATOR ROBERT RAY -It might be more appropriate, Senator, if we cannot get the figure, to ask each of the Services for their individual figures when they come up.

SENATOR NEWMAN -Perhaps the individual Services could take note of the question I have asked so we do come back to it.

VICE-ADM. BEAUMONT -The total number of women in the force is 12 per cent currently with 14 per cent in the training force but I do not have a breakdown of combat related areas.

SENATOR NEWMAN -No, it is the combat related aspect I am particularly interested in. I also want to know the percentage of women in combat related areas in the reserve forces. Can you tell me what `CREWET' is and what its purpose is?

SENATOR ROBERT RAY -Where does that appear, Senator?

SENATOR NEWMAN -I think it is to do with combat related employment of women and an evaluation. I do not think the words are in there.

SENATOR ROBERT RAY -I understand it is an Army term but we will see if anyone knows anything about it. Major-General Grey, do you know anything about it?

MAJOR-GEN. GREY -Minister, I think I have a response here.

SENATOR ROBERT RAY -Where did you see the term appear, Senator?

SENATOR NEWMAN -I cannot remember now but I asked it when I saw you had a ` social justice' section, because it seemed as good a place as any.

SENATOR ROBERT RAY -CREWET-how do you spell it?

SENATOR NEWMAN -C-R-E-W-E-T.

MAJOR-GEN. GREY -Basically, it is a study that is being performed in Army to look at the combat related employment of women. It is designed to look at the specific areas of opportunity in which women may serve. It is an extensive study which is still under way within Army.

SENATOR NEWMAN -Is it being affected by the civilianisation process?

MAJOR-GEN. GREY -At the moment it is difficult to answer that, Senator, in that it may be affected by a civilianisation process if the number of job opportunities decrease and that would reduce the number of positions available for our combat women. But it is not designed to look at any reduction. It is designed to increase the opportunity for women to serve in those combat related areas.

SENATOR NEWMAN -Are not those two things going in opposite directions, though, General: increased civilianisation where women are substantially in logistics or support areas and your CREWET going in the opposite way again? Are they not diverging paths?

MAJOR-GEN. GREY -To an extent they are, but the women would be worse off if we were not doing the CREWET study and trying to increase within the military population that was left after civilianisation.

SENATOR NEWMAN -Is there really going to be much career development opportunity for women after civilianisation?

SENATOR ROBERT RAY -We are determined that within Army, there will be good career opportunities for women and that those opportunities should be compatible with male career opportunities.

SENATOR NEWMAN -Is this being looked at across the board rather than just simply asking Army? As I see it, women are substantially in those areas and affected by civilianisation in all three Services.

SENATOR ROBERT RAY -I think it is still a question better asked of the individual Services when they come. I do not necessarily know of anyone here that can answer with all three Services at the one time.

SENATOR NEWMAN -I thought there might have been a policy on employment of women in the Defence Force. The Government did announce that a year or so ago, and the new decision-the announcement you made in May, Minister-seems to cut across that previous announcement. I do not mean to say that it was designed to, but in effect it will.

SENATOR ROBERT RAY -It is quite clear that some of those announcements in May will fall more heavily on the female support areas, because they were more concentrated in those areas.

SENATOR NEWMAN -I was trying to see whether there was being an assessment made of the implications and any action taken to deal with career opportunities. We are still recruiting a lot of women. Is there somebody who can answer from a defence point of view?

SENATOR ROBERT RAY -Covering the three Services?

SENATOR NEWMAN -It is surely a defence policy rather than an individual Service policy.

SENATOR ROBERT RAY -Yes, but I would expect that Service to carry out the general policy.

SENATOR NEWMAN -Once there is one decided, yes.

SENATOR ROBERT RAY -Well, there has been one decided, to as much as possible encourage women to fully participate in the Australian Defence Force.

SENATOR NEWMAN -Despite the fact we get rid of their jobs?

SENATOR ROBERT RAY -You see, I am not going to keep jobs simply to help out with a balance of the sexes.

SENATOR NEWMAN -Minister, I have asked whether this has been considered and, if so--

SENATOR ROBERT RAY -Yes, it was considered at the time.

SENATOR NEWMAN -What is the decision taken and what action is going to follow? That is all I have asked, on a defence basis, not on an Army basis.

SENATOR ROBERT RAY -In terms of the defence basis, yes, it was realised that some of the changes we made would impact more on female force members as a percentage than male members, because of the traditional roles played. What we are trying to do, and I think Navy broke a lot of ground last year, is to break out of some of these cliched areas and let women fully participate in the Australian Defence Force. We have not gone all the way on that because there is still reluctance at the extreme combat end, as you would know. If indeed the force structure review and the other reviews impact on female membership, it should be more than counteracted by the opening of opportunities in other areas, if they are taken up.

SENATOR NEWMAN -In combat areas?

SENATOR NEWMAN -Whatever areas.

SENATOR ROBERT RAY -So are you contemplating opening up combat areas to women?

SENATOR ROBERT RAY -I think the best way of describing that is that the jury is basically out on it. But certainly women in the Navy are going into combat related roles, that is, they will serve in a combat sense in the training area . Now, this is a halfway measure. It also means that when they go back to other support areas they will much more fully realise what is involved at the other end of the Defence Force. There will be much more understanding of it.

SENATOR NEWMAN -I understand the difficulties, Minister, and I do not want to prolong this at this stage of the night, but I do point out that we have got a lot of very capable women in the Defence Force who are going to be more heavily hit by your changes to the Defence Force than the males in the Force. You have also announced not long ago a policy of giving women career development opportunities and yet in the next breath you seem to be removing them to a substantial extent. And I would have hoped that by now the implications of that would be clearly seen by Defence and measures would be being taken, or decisions being made, as to how women who are currently in the Force will still have a decent career in the Force.

SENATOR ROBERT RAY -I do not think we have restricted it specifically to women . For one thing, we have realised that it is much better to take someone already in the Services and move them from an area that is not needed to an area that is needed, than to recruit someone fresh.

SENATOR NEWMAN -I would like to feel that it was very much up-front in your consideration.

SENATOR ROBERT RAY -That is why we are not into largescale redundancies, why redeployment will be by far the best method of dealing with service personnel. By slowing down recruiting to a degree, we will be able to do those sorts of things.

SENATOR NEWMAN -I just do not have any sense of confidence tonight from the answers that I have got that it is being given any substantial guidance.

SENATOR ROBERT RAY -The guidance has been given, but not quite in the terms that you would like it put. I think it is then up to each individual service when you come to them later on to explain what role they are playing to deal with it. They know what the guidance is on it.

CHAIRMAN -I take it, Minister, that the position is that career paths will exist, will be developed and enhanced but that they will be in smaller numbers .

SENATOR ROBERT RAY -There will be smaller numbers by a factor of 15 per cent long term, but the point Senator Newman is making is a correct one that in certain areas where you civilianise career paths will be blocked off. One of the points we have to try to get through on all this is that the ADF does not exist purely for career paths. In fact, it has to be moulded as an entity to defend this country and not just be a perfectly spherical thing where each unit interacts with others and looks wonderful but cannot deliver the product at the other end.

VICE-ADM. BEAUMONT -Could I come back and provide an answer to Senator Newman' s earlier question about two ocean basing and the northern basing.

SENATOR NEWMAN -Thank you.

VICE-ADM. BEAUMONT -In 1991-92, there was an adjustment provided for two ocean basing for Navy of an increase of $5m in its operating costs; for northern basing of Army of $4m and for Air Force, which is principally two ocean basing , an increase of some $2m.

SENATOR ROBERT RAY -Senator Newman asked two questions. I know our officials were paying attention to one but you might you like to just go over them again . I think we will get you an answer on Wednesday. I have seen some rough figures here but I would like them polished. You asked a question about both the money and the manpower savings coming out of regional support and then you went on to ask a question about the logistics review.

SENATOR NEWMAN -Yes.

SENATOR ROBERT RAY -Do you simply want the manpower and savings out of that as well?

SENATOR NEWMAN -I wanted to be able to identify the savings of the RSR separately from the Logistic Command savings.

SENATOR ROBERT RAY -Okay, we will get you those figures by Wednesday.

SENATOR MACGIBBON -Minister, there is a new section called social justice in the Estimates this year. I did the Foreign Affairs Department estimates last week and it was riddled with social justice questions. My question is: was personnel management and conditions of service so bad in the ADF that we had to have this section in, because I would have thought that these objectives were met in ADF policies?

MR JONES -We were asked by the Department of Finance, in laying out the format for these program performance statements, to include a section on social justice in the beginning. You will find also in some of the programs and subprograms where it is particularly applicable it has been addressed again, so it was a request from Finance that flowed from the earlier processes of the Senate Estimates committees.

SENATOR MACGIBBON -Could I have some information on the intellectual disability access program. In the light of what the Minister said before about the Services being for the defence of Australia, where does that fit into training, or is it only for senior officers or something?

SENATOR ROBERT RAY -I understand it is a civilian package.

MR MCLEOD -The Department does have a program to encourage the employment of a certain number of persons with disabilities. They are essentially confined to the civilian area of the Department but the people we have in this capacity are employed both by the Department and in some cases by the service officers, so it is a program that is really shared between the service officers and the Department. I might mention to the Committee that last year the Department of Defence was one of the organisations in Australia nominated for the Prime Minister's award which is given annually to organisations in Australia that promote and foster support for employment of handicapped people.

SENATOR MACGIBBON -Do I take it from your answer that they are intellectually disabled, not physically disabled?

MR MCLEOD -Both, Senator.

SENATOR MACGIBBON -How many people would be in the intellectually disabled program?

MR MCLEOD -I would not have the numbers available. The numbers would be quite small in relation to the total size of the Department, but, nevertheless, it is an important demonstration program and over time we would hope to increase the numbers. It is often a labour intensive activity for managers and supervisors who are prepared to provide the additional support to help the employment of handicapped people, but it is a program that we believe is important in the context of our social equity responsibilities.

SENATOR MACGIBBON -Thank you.

SENATOR NEWMAN -What is the percentage of women in the SES in the Department?

MR MCLEOD -I do not know the percentage. I think the number is two.

SENATOR NEWMAN -Out of?

MR MCLEOD -There are 115.

SENATOR NEWMAN -You have got a way to go.

MR MCLEOD -We are not the worst.

SENATOR NEWMAN -Is that Treasury?

SENATOR ROBERT RAY -That is Treasury, but again it is partly due to the nature of the departments. I had a fairly long conversation last week with one of those SES officers who came from DITAC over to Defence and it seems there is an attitudinal problem that even she commented upon. There is a reluctance, if you are in another department, and if you are female, to come to Defence. It is not because of harassment or anything else but--

SENATOR NEWMAN -They are terrified, I know.

SENATOR ROBERT RAY -It is just because of the general image of us being, really, paid in the long term to kill people, I suppose. It is a matter which the Secretary has under consideration and if opportunities are there he will do what he can. He is by no means a sort of misogynist trying to keep females out.

SENATOR NEWMAN -Did you really mean that 24,000-odd people in the Defence Department are there to kill people?

SENATOR ROBERT RAY -Well, no, but it is just that sometimes our image in the rest of the Public Service is that we are a bit strange.

SENATOR NEWMAN -I see, thank you. So only two women have been brave enough.

SENATOR ROBERT RAY -Yes, the percentage is very low, whereas one of my previous departments, Immigration, had one of the highest rates because they found it a much more attractive job.

MR MCLEOD -Chairman, could I just correct the information. I said two female SES officers. In fact, we have five.

SENATOR NEWMAN -Thank you.

SENATOR DURACK -I think this is an appropriate point to ask a question I was going to ask under another area. It is in relation to the IDC report on Wrigley, which I have already referred to on page 28. We are talking about the tier 1 positions that the IDC on Wrigley identified and said should be open to competition immediately and tenders put out no later than the end of 1992.

In answer to a question on notice that I put in respect of the implementation of this, I was told that the tier 1 positions, in fact, will be contracted out over the decade yet I see here on the top of page 28 it says that under tier 1 Defence will open up some activities to competition immediately. Can you give me any indication of how many are being opened up immediately and whether there is now some staggering plan for it to process.

VICE-ADM. BEAUMONT -Tier 1 does involve opening up a number of those positions immediately and that is what is occurring. Over the decade I think the estimate is to open up and test about 21,000 positions altogether in Defence. Work has progressed well with tier 1 at this stage of the game and the aim is to meet the tier 1 time scale set by the Wrigley IDC and by government.

SENATOR DURACK -So if I have had an answer to a question which says that tier 1 positions were contracted out over the decade that would be wrong, would it?

VICE-ADM. BEAUMONT -In principle, yes, that would be wrong, but there may be some of those which do not meet the tender time scale for one reason or another. Perhaps we would not do it initially for some reason, and then we would have to revisit. In the overall sense, `over the decade' is probably correct but certainly the whole aim is to start with tier 1 and do that early. That is what the Wrigley IDC was about. Tier 2 is progressive over the period and tier 3 is the bottom-up approach, which is already starting.

SENATOR DURACK -I think the figure is 2,100 for tier 1 but anyway, whatever the figure is, the desire is to open it up immediately or as soon as possible. There is apparently some qualification of that. Could you tell me the extent to which that is being qualified, in figures?

VICE-ADM. BEAUMONT -No, it is on a case by case basis. As each one comes up and is tested it will be contracted out or not contracted out. Certainly those are the positions which we intend to test. How many of them will be contracted out is not clear. We have made some estimates which we have built in and they are fairly conservative estimates over the period. We would be hopeful that contracting out would be the cheapest solution.